The Slovenia Times

NLB bank reports 70% higher half-year profit


The parent bank increased net profit by 48% in the period to EUR 105.3m, the bank announced in a regulatory filing on Friday after the results had been reviewed by the supervisory board.

The bank said it had been operating at a profit for the 14th consecutive quarter, which the board said confirmed the bank's strategy was correct.

The NLB group's profit before impairments and provisions rose by 2% year-on-year to EUR 102m. Net operating income was down 1% to EUR 241.1m; net interest revenue fell by 5% to EUR 148.6m, while net non-interest revenue rose by 7% to EUR 92.5m.

Return on equity (ROE after tax) increased to 15.5% from 9.4% in the first half of 2016. Total capital ratio and common equity tier 1 ratio were at 16.5%.

The parent bank posted EUR 51m in profit before impairments and provisions, down 12% year-on-year. Net income dropped by 8.1% to EUR 136m with net interest revenue down 12.6% to EUR 76m.

Demand for loans increased in Slovenia and abroad, in particularly in the retail segment. Retail loans in Slovenia increased by 3% from the end of 2016. NLB kept its leading position in the domestic market with a retail loan share of 23.4 and a deposit market share of 30.3%.

The volume of new loans in the first half of the year was 24% higher than in the same period a year ago, and gross loan portfolio rose by 3% from the end of 2016 to EUR 2.05bn.

The bank saw a record half-year growth of home loans with as much as 52% more new loans approved than in the first half last year.

Its corporate market share remained stable at 22.3% with gross loans of EUR 1.2bn at the end of June; a higher growth was recorded in the segment of small companies and sole traders at 14.4%.

The volume of non-performing loans at the group level fell from EUR 1.3bn at the end of 2016 to EUR 1.18bn, and the share of non-performing loans decreased to 12.6% from 13.8% at the end of 2016.

The share of non-performing exposures (NPE ratio in line with the European Banking Authority's guidelines) dropped from 10% to less than 9%.

The bank attributes the improvement in the loan portfolio to upgraded standards in approving new loans put into effect in 2014, and consequently rather low volume of new non-performing loans in this period.


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