29 August 2007
FIRST HALF 2007 FINANCIAL RESULTS
· Increase in Net Profit by 61.9% (36.8% on a recurrent basis)
· Net Customer Loans growth by 20.7% - Household Lending growth well above market (+28.5%)
· Customer Deposits increase by 10.2%, with deposit cost at low levels (1.84%)
· Net Interest Margin remains at high levels (3.34%)
· Cost to Income ratio continues to decline (at 55.1% - 57.3% on a recurrent basis)
· NPLs below 10% for the first time (9.6%)
· ROE : 19.5% & ROA : 1.20%
ATEbank has achieved significant growth in profitability in the first 6-months of 2007 as consolidated profits after tax and minority interest increased by 61.9% reaching the level of €133.0 million versus €82.1 million in the corresponding period of the previous year. On a recurrent basis, if adjusted for one-off items, profits after tax and minority interest increased by 36.8%.
Net interest income reached €310.6 million a 10.7% increase, mainly due to growth in the interest income from loans. The Net Interest Margin (net interest income over average interest earning assets), despite increasing competition, remains at high levels, at 3.34%, compared to 3.15% in 30 June 2006.
Net fee and commission income increased by 15.9% compared to the corresponding period in 2006, reaching €43.1 million. Other non-interest and non-fee income showed an increase of 46.4%, on a reported basis, driven by the profitability of the trading portfolio (net income of €44.5m compared to losses of €5.2m in H1 2006). On a recurrent basis (excluding €18.5 million trading gains from the disposal of part of the available for sale portfolio in H1 2007 and €24.6 million non-recurring items in H1 2006), other non-interest and non-fee income showed an increase of 74,7%.
Operating expenses reached €264.7 million, an increase of 11.0% from H1 2006. As already mentioned in the previous quarter’s results, the higher than targeted percentage increase is seasonal and is expected to be reduced significantly by the end of 2007. The Group cost income ratio was reduced significantly to 55.1% on a reported basis compared to 59.0% in H1 2006. On a recurrent basis, cost to income ratio fell to 57.3% from 62.8%.
Impairment losses reached €44.1million, of which €42.2million for impairment losses on loans and €1.8 million for impairment losses on assets.
Total loans before provisions at the end of June 2007 reached €15.8 billion, an increase of 20.7% compared to the end of June 2006. It should be noted that if adjusted for the €395 million loan write-offs during the period July 2006 to June 2007, the underlying expansion of the loan book would have been 23.7%.
Household loan portfolio continued to increase with rates significantly higher than the market and as of 30 June 2007 reached €5.4 billion compared to €4.2 billion as of 30 June 2006, an increase of 28.5%. The introduction of new attractive retail products combined with intense marketing campaigns kept loan disbursements at high levels. The outstanding mortgage portfolio increased by 29.7% reaching €4.5 billion while the outstanding consumer portfolio increased by 35.5% reaching €607 million.
The strategy of the bank is to continue to target household lending (now 34% of the total loan portfolio) and to expand further its market share. The focus on this lending segment together with the ongoing expansion into the SMEs is expected to transform significantly the customer profile of the bank, increasing the group synergies and its overall profitability.
Total NPL ratio, in H1 2007, dropped for the first time below 10% at 9.6% from 14.3% in H1 2006. This proves that the steady efforts and effective approaches ATEbank follows in dealing with an old problem are yielding positive results. The provisioning coverage ratio, remained at the satisfactory level of 85.2%, despite the €395 million of loan write-offs.
Customer deposits increased by 10.2% y-o-y to €19.1 billion, resulting in a loans to deposits ratio of 82.8% compared to 75.6% at the end of June 2006. The cost of deposits remains one of the lowest amongst Greek banks at 1,84%, despite the increases from the continuous raises in ECB rates and the competition in the Greek market for deposits.
Based on the net profit during H1 2007, the Return on average Assets stood at 1.20% (1,08% on a recurrent basis), while the Return on average Equity was 19.54% (17.59% on a recurrent basis).
ATEbank sustains a robust capital adequacy. At the end of June 2007, the estimated Tier I Ratio was 11.0%.
The results during H1 2007 are very much in line with the targets set in the 2007-2009 business plan. ATEbank benefits from a growing Greek market for banking products, from its extensive network (second largest) and client base (particularly amongst less banked customers), and from the continuous efforts made by its staff and management.
For more information: http://www.atebank.gr/english
Presentation 1st Half 2007 results presentation