Consolidated, unaudited financial results of Slovenská sporiteľňa as of 30 June 2019 according to International Financial Reporting Standards (IFRS).
“The development over the last months resulted in three positive facts. As the first and only large bank in Slovakia we provide our clients with the opportunity to pay with their smartphones via Google Pay and Apple Pay. We believe that a modern Slovakia needs accessible digital services. We were also awarded as the Best bank in Slovakia by the British magazine Euromoney. And I really value this award as it recognizes our long-term excellent results. These results were also achieved thanks to useful digital innovations offered for our clients. And last but not least, we were able to increase our operating profit in an environment of lowest interest rates ever,” Peter Krutil, Chairmand of the Board of Directors and CEO of Slovenská sporirteľňa commented on the results.
Financial highlights as of 30 June 2019 (Y/Y comparison)
- Net interest income went down by 1.1% y/y from EUR 217.6 million to EUR 215.1 million
- Net fee and commission income increased by 16.3% y/y from EUR 58.4 million to EUR 68.0 million
- Operating profit went up by 7.8% y/y from EUR 145.1 million to EUR 156.4 million
- Net profit after tax increased by 7.9% y/y from EUR 89.0 million to EUR 96.0 million
- Volume of loans and receivables to customers grew by 7.6% y/y from EUR 12.3 billion to EUR 13.3 billion
- Deposits from customers increased by 4.6% y/y from EUR 13.3 billion to EUR 13.9 billion
- Cost income ratio reached 47.0%
- Capital adequacy reached 18.9% 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 95.0%
Busines performance overview of Slovenská sporiteľňa as of 30 June 2019
Net interest income went down slightly by 1.1% from EUR 217.6 million to EUR 215.1 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 16.3% y/y from EUR 58.4 million to EUR 68.0 million. The increase of fee and commission income was mainly achieved from mediation of insurance products (increase by EUR 6.6 million). Net fee income related to loan activities recorded an increase by EUR 2.4 million. The share of net fee and commission income on total operating income went up to 23% y/y.
The net profit in the amount of EUR 9.4 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 0.9% to EUR 138.5 million (in 2018 it was EUR 137.3 million). Cost income ratio improved from 48.6% to 47.0% 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 18.6 million in the first half of 2019 (it was EUR 11.7 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 3.2% while the coverage with provisions went down from 79.9% to 77.7%.
Consolidated profit after tax went up by 7.9% y/y and reached EUR 96.0 million.
The bank levy went up by 8% to EUR 16.0 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 20.0 million.
The volume of loans to customers increased by 7.6% y/y and achieved EUR 13.2 billion. Retail loans were the major driving force; they increased by 5.0% y/y (by EUR 0.5 billion) compared with the first half 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 first half of 2019. The main growth driver were housing loans which grew by 4.5% (EUR 0.3 billion in absolute terms) and consumer loans which grew by 2.6% (by less than EUR 0.1 billion). Loans to corporate clients (including factoring and leasing products) increased by 16.0% y/y (by EUR 0.5 billion) and reached EUR 3.6 billion.
Retail deposits increased from EUR 10.7 billion to EUR 11.6 billion, providing a solid base for financing and room for further growth of the bank. Deposits from customers rose from EUR 13.3 billion to EUR 13.9 billion compared with the first half of 2018.