Consolidated, unaudited financial results of Slovenská sporiteľňa as of 30 September 2019 according to International Financial Reporting Standards (IFRS). 

“The easing of the European Central Bank policy has a considerable impact on bank business and this is reflected in interest income. Although the volume of our loans is dynamically increasing, interest income is slightly decreasing. The good news is that clients are benefiting from this situation. Thanks to the ECB policy we were able to lower the interest rates for housing loans to the lowest level ever. This goes hand in hand with our concept to provide quality financial advisory services and at the same time we are focusing on attracting new young clients with this attractive offer. We are able to offset the declining interest income with a wider range of services, mainly in the area of insurance” Peter Krutil, Chairman of the Board of Directors and CEO of Slovenská sporiteľňa commented on the results.

FINANCIAL HIGHLIGHTS AS OF 30 SEPTEMBER 2019 (Y/Y COMPARISON)

• Net interest income went down by 1.7% y/y from EUR 328.3 million to EUR 322.7 million
• Net fee and commission income increased by 9.1% y/y from EUR 96.9 million to EUR 105.7 million
• Operating profit went up by 2.9% y/y from EUR 227.4 million to EUR 233.9 million
• Net profit after tax remained unchanged y/y and achieved EUR 141.7 million (2018: EUR 141.6 million)
• Volume of loans and receivables to customers grew by 7% y/y from EUR 12.6 billion to EUR 13.5 billion
• Deposits from customers increased by 3.2% y/y from EUR 13.6 billion to EUR 14.1 billion
• Cost income ratio reached 47.3%
• Capital adequacy reached 18.15% and continues to considerably exceed the limit stipulated by the law (according to ECB/NBS, Basel III and IRB approach)
• Loan-to-deposit ratio increased y/y from 92.4% to 95.8%

BUSINESS PERFORMANCE OVERVIEW OF SLOVENSKÁ SPORITEĽŇA AS OF 30 SEPTEMBER 2019

Net interest income went down slightly by 1.7% from EUR 328.3 million to EUR 322.7 million. This decrease is the result of the continuing demand for low interest rates on loan products and strong competition.

Net fee and commission income increased by 9.1% y/y from EUR 96.9 million to EUR 105.7 million. The increase of fee and commission income was mainly achieved from mediation of insurance products (increase by EUR 3.6 million). Net fee income related to loan activities recorded an increase by EUR 2.8 million. The share of net fee and commission income on total operating income went up to 23.81% y/y.  

The net profit in the amount of EUR 12.4 million in the area of net trading and fair value result is mainly related to the development of the valuation of derivate instruments.

General administrative expenses went up slightly by 1.6% to EUR 210.3 million (in 2018 it was EUR 207.0 million). This increase was mainly recorded in the area of personal expenses.

Cost income ratio improved from 47.7% to 47.3% y/y as a result of operating income growing faster than costs.

Despite a massive growth of loan portfolio, total risk costs of the bank reached EUR 28.0 million in three quarters of 2019 (it was EUR 17.3 million in comparable period of 2018). Higher risk costs are mainly related to the portfolio of loans and leasing agreements acquired from the company S Slovensko.

The share of defaulted loans on total loan volume decreased from 3.5% to 3.3% while the coverage with provisions went down from 80.7% to 77.6%.   

Consolidated profit after tax remained unchained y/y and reached EUR 141.7 million.

The bank levy went up by 8% to EUR 24.2 million. The annual contribution into the Single Resolution Fund reached an estimated amount of EUR 3.1 million (EUR 2.7 million in 2018). The contribution into the Deposit Protection Fund increased by 11% y/y to EUR 1.0 million (EUR 0.9 million in 2018). Total levies of the bank are at EUR 28.2 million.

The volume of loans to customers increased by 7% y/y and achieved EUR 13.5 billion. Retail loans were the major driving force; they increased by 5.5% y/y (by EUR 0.5 billion) compared with the third quarter of 2018. Slovenská sporiteľňa again confirmed its position as market leader in retail loans; its market share reached 26.2% at the end of the third quarter of 2019. The main growth driver were housing loans which grew by 5.7% (EUR 0.4 billion in absolute terms) and consumer loans which grew by 1.3% (by less than EUR 0.1 billion). Loans to corporate clients (including factoring and leasing products) increased by 11.5% y/y (by EUR 0.4 billion) and reached EUR 3.7 billion.

Retail deposits increased from EUR 10.9 billion to EUR 11.8 billion, providing a solid base for financing and room for further growth of the bank. Deposits from customers rose from EUR 13.6 billion to EUR 14.1 billion compared with the third quarter of 2018.