Consolidated, unaudited financial results of Slovenská sporiteľňa as of 30 June 2018 according to International Financial Reporting Standards (IFRS).
“The first half of this year was marked by the launch of George, the modern electronic banking and at the same time the largest digital investment of Slovenská sporiteľňa in the recent past. George will soon have as many as half a million users and our clients are already executing more payments on this platform than on the old version of internetbanking. The positive financial results of our bank were supported by the improving client experience which we are systematically working on – we are delivering more and more services in a user friendly way for clients, for example by equipping all the desks in our branches by tablets or by communication in the digital environment,” Peter Krutil, Chairman of the Board of Directors and CEO of Slovenská sporiteľňa commented on the results.
FINANCIAL HIGHLIGHTS AS OF 30 JUNE 2018 (Y/Y COMPARISON)
- Net interest income went down by 0.2% y/y from EUR 218 million to EUR 217.6 million
- Net fee and commission income increased by 6.6% y/y from EUR 54.8 million to EUR 58.4 million
- Operating profit went down by 1.3% y/y from EUR 147.1 million to EUR 145.1 million
- Net profit after tax increased by 2.8% y/y from EUR 86.5 million to EUR 89.0 million
- Volume of loans and receivables to customers grew by 12.0% y/y from EUR 11.0 billion to EUR 12.3 billion
- Deposits from customers increased by 9.8% y/y from EUR 12.1 billion to EUR 13.3 billion
- Cost income ratio reached 48.6%• Capital adequacy reached 17.2% and considerably exceeds the limit stipulated by the law (according to ECB/NBS, Basel III and IRB approach)
- Loan-to-deposit ratio increased y/y from 90.6 % to 92.4 %
BUSINESS PERFORMANCE OVERVIEW OF SLOVENSKÁ SPORITEĽŇA AS OF 30 MARCH 2018
Net interest income went down slightly by 0.2% from EUR 218 million to EUR 217.6 million. Despite the strong pressure from competition and low interest rates, net interest income from loan products remained on comparable level. Last year, several bonds matured and as a result, the bank recorded a lower interest income which was offset by an adjustment of interest rates for deposit products.
Net fee and commission income increased by 6.6% y/y from EUR 54.8 million to EUR 58.4 million. The increase of fee and commission income was mainly achieved from mediation of insurance products and loan business. Fees for transactional banking and securities transactions recorded a decrease.
The share of net fee and commission income on total operating income went down slightly y/y and reached 20.7%. The net profit in the amount of EUR 4.7 million in the area of net trading and fair value result is mainly related to the development of the valuation of derivate instruments and lower by 45.0% compared with the first half of 2017 (EUR 8.6 million). This decrease is mainly the result of lower yields from market positions of the mother company Erste Group Bank AG.
General administrative expenses went up slightly by 0.8% in y/y comparison and reached EUR 137.3 million (in 2017 it was EUR 136.2 million). The increase in general administrative expenses was related to activities of the bank focusing on improvement of client service quality and increased personal costs. On the other hand, amortisation costs slightly decreased. Cost income ratio changed from 48.1% to 48.6% y/y as a result of the lower operating income.
Total risk costs of the bank reached EUR 11.7 million, i.e. a decrease by 26.5% compared with the comparable period of 2017. The share of defaulted loans on total loan volume decreased from 4.1% to 3.5% while the coverage with provisions went up from 75.3 to 79.9%.
Consolidated profit after tax went up by 2.8% and reached EUR 89 million.
The bank levy went up by 10.8% to EUR 14.8 million. The annual contribution into the Single Resolution Fund reached an estimated amount of EUR 2.8 million (EUR 2.8 million in 2017). The contribution into the Deposit Protection Fund increased by 8.4% y/y to EUR 0.9 million (EUR 0.8 million in 2017). Total levies of the bank are at EUR 18.4 million.
The volume of loans to customers increased by 12.0% y/y and achieved EUR 12.3 billion. Retail loans were the major driving force; they increased by 11.0% y/y (by EUR 1.0 billion) compared with the first quarter of 2017. Slovenská sporiteľňa again confirmed its position as market leader in retail loans; its market share reached 27.2% at the end of the first half of 2018. The main growth driver were housing loans which grew by 11.6% (EUR 800 million in absolute terms) and consumer loans which grew by 8.9% (by EUR 100 million). Loans to corporate clients (including factoring and leasing products) increased by 21.5% y/y (by EUR 600 million) and reached EUR 3.1 billion.
Retail deposits increased from EUR 10.0 billion to EUR 10.7 billion, providing a solid base for financing and room for further growth of the bank. Deposits from customers rose from EUR 12.1 billion to EUR 13.3 billion compared with the first half of 2017.