Erste Bank a.d. Novi Sad: Positive result generated through volume growth and portfolio quality enhancement; net profit at the end of second quarter up by 32 percent to 1,486 million dinars
• Loans to individuals and micro customers went up by 11.6% relative to the end of 2016 and amounted to 42.0 billion dinars; deposits of individuals and micro customers rose by 3.1% to 52.5 billion dinars.
• Corporate loans decreased by 1.7% relative to the end of 2016 to 58.4 billion dinars; corporate deposits went down by 11.4% to 26.6 billion dinars.
• Net interest income rose by 10.9% relative to the same period of 2016 to 3,109 million dinars, while net fee and commission income rose by 5.6% to 733 million dinars.
• Net profit went up to 1,486 million of dinars at the end of Q2 2017, which is a 32.1% better result relative to the same period of 2016.
• Total assets rose by 0.4%, from 142.9 billion dinars at the end of 2016 to 143.5 billion dinars at the end of Q2 2017.
• Capital adequacy is 18,87%.
• NPL ratio at the end of Q2 2017 was 5,6%.
"In line with expectations, our retail operations are still dominated by the demand for housing loans, due to a general trend interest rate reduction in the market and we are also seeing an increased demand for refinancing and cash loans. What is particularly encouraging is the fact that entrepreneurs and SMEs used the first half of the year for investment in fixed assets. Relative to the end of 2016, the total corporate loan volume remained approximately the same and due to dinar appreciation, it is 1.7% smaller, because most corporate loans are indexed to a foreign currency. The volumes of bank guarantees and deposits went up significantly. Higher portfolio quality is also reflected in a further reduction of the NPL ratio, which is currently at 5.6%", stated Slavko Carić, CEO of Erste Bank a.d. Novi Sad.
At the end of Q2 2017, total loans to individuals and micro customers went up by 11.6% relative to the end of previous year to 42.0 billion dinars. In comparison with the end of 2016, total deposits of individuals and micro customers also increased, by 3.1% to 52.5 billion dinars.
At the end of the same quarter, total corporate loans amounted to 58.4 billion dinars, which is a 1.7% decrease relative to the end of 2016. On the other hand, corporate deposits went up by 11.4% relative to the end of 2016 to 26.6 billion dinars at the end of Q2 2017.
Regarding operating results, in Q2 2017 the Bank posted 9.2% more operating income relative to the same period of last year, while operating expenses went up by 4.5%. Relative to the same period of 2016, the Bank's operating profit is 19.1% higher and amounted to 1,430 million dinars, while at the end of Q2 2016 the Bank recorded an operating result of 1,201 million dinars.
During Q2 2017, net interest income amounted to 3,109 million dinars, which is 10.9% more than in the previous year, when it was 2,803 million dinars. Net fee and commission income was 5.6% higher and amounted to 733 million dinars.
After Q2 2017 total net income amounted to 1.486 million dinars, which is as much as 32.1% better result than in the same period of 2016, when net income reached 1,125 million dinars. In addition to the increase in volume, the main reasons for the increased result are a higher-quality portfolio reflected in NPL reduction from 8.0% in June 2016 to 5.6% and a positive net income realised from the impairment of financial assets and credit risk-weighted off-balance sheet items in the second quarter of 2017.
At the end of Q2 2017 the number of digital distribution channel users was 8.2% higher than in June 2016, so now more than 223 thousand Erste Bank clients use internet and mobile banking. Erste Banka continued with the expansion of its network, which at the end of June 2017 had 82 units, while the total number of active clients was 382 thousand in June.
OUTLOOK
Erste Bank a.d. Novi Sad continues to provide comprehensive support to Serbian citizens and businesses in realising their financial needs and goals. Business principles involving a focus on continuous improvement of its customer service, as well as constant enhancement of its internal organisation and efficiency will continue to be the basis of the Bank’s operation in the future.
NOTE 1: The published results are in line with the Law on Accounting and the adopted Decision on Chart of Accounts and Contents of Accounts in Bank Chart of Accounts (Official Gazette of RS, no. 71/2014) and the Decision on Forms and Content of Items in Bank Financial Statements (Official Gazette of RS, no. 71/2014) which came into force on 31 December 2014.
NOTE 2: The published results of individual members of Erste Group are not directly comparable with published Erste Group results by segment. Due to consolidation effects at the Erste Group level, because of which certain Erste Bank a.d. Novi Sad transactions with the members of Erste Group are eliminated, and due to the distribution of certain allocated capital costs, the consolidated results of Erste Bank a.d. Novi Sad at the Erste Group level differ from the results the Bank achieved and reported at the local level.