The Slovenia Times

NLB Group net profit down 22% to EUR 73.7m in H1


Net operating income in the first six months of the year remained flat at EUR 260 million and profit before impairments and provisions was almost unchanged as well, dropping by 1% compared to the same period last year to EUR 115.2 million.

Impairments and provisions reached EUR 33.2 million in January-June this year, while they stood at EUR 5.5 million in the same period last year.

The decrease in net profit can be attributed mainly to the impairments and provisions related to the Covid-19 outbreak in the first quarter of 2020, which the group partially offset by divesting approximately EUR 330 million of debt securities, which brought in EUR 17.2 million, and by successfully closing the NLB Vita sale in the second quarter with a contribution of EUR 11.0 million.

NLB's subsidiaries from SE Europe did well too, contributing 40% to the group's profit in the first half of the year.

Net interest income of the group decreased by 6% year on year "mostly due to tactical shifts in balance sheet positions" during the pandemic.

Core revenues from loan books remained stable despite a weaker loan production during the pandemic. The group's net interest margin thus decreased by 35 base points to 2.19%.

Net non-interest income was up by 10% due to non-recurring income and only slightly lower net fee and commission income, which dropped by 1%. Costs remained stable.

The total assets of the NLB Group increased to EUR 14.89 billion, mostly due to increased deposit inflows.

Gross loans to customers at the group level were up by 4%.

The group's total capital ratio increased by 4.2 percentage points to 20.5% and was "well above the regulatory thresholds, mostly due to the inclusion of EUR 240 million of subordinated Tier 2 instruments in 2020 and EUR 157.5 million in 2019 undistributed profit", NLB said.

"We are pleased with the group's responsible approach towards business and its understanding of the needs of the environment in which it operates," said chairman of the supervisory board, Primož Karpe.

CEO Blaž Brodnjak added that regardless of the adverse impact COVID-19 pandemic has had on the economy in NLB's markets, "our business results demonstrate the robustness of our group in terms of capitalisation, liquidity, and above all highly responsive and responsible interactions with key stakeholders, especially clients and employees".

"We have proven to be one of the main pillars of local societies, while we have also accelerated implementation of our strategic initiatives to build a sustainable long-term value for our investors," he said.


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