ΑΓΡΟΤΙΚΗ ΤΡΑΠΕΖΑ ΤΗΣ ΕΛΛΑΔΟΣ Α.Ε.
9-Month 2006 Financial Results
According to International Financial Reporting Standards (IFRS)
- Increase in Net Profit by 24.6% (34.6% on a recurrent basis)
- Net Customer Loans growth by 15% - Impressive increase of Household Lending by 46%
- Net Interest Margin keeps improving (at 3.22%)
- Cost Containment policy within the annual target of 3-4% growth (+2.2%)
- Coverage ratio at satisfactory levels (84.7%)
ATEbank has achieved further growth in profitability in the first 9-months of 2006 compared to the respective period of 2005, as consolidated profits after tax and minority interest increased by 24.6% reaching the level of Euro113.0 million versus Euro90.7 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 34.6%. It should be noted that the nine month results of 2006 were negatively affected by, firstly, a one-off tax liability of Euro29.9 million related to the dividend paid for the financial year 2005 and secondly, by the negative results of the subsidiary Hellenic Sugar Company (reduced by Euro22.6 million), following the EU decisions regarding sugar production. Net interest income reached Euro429.4 million, a 10.4% increase on a recurrent basis (excluding non-recurring interest income of around Euro60 million during the first nine months of 2005 due to loan restructuring under the law 3259/04 on "Panotokia"). The Net Interest Margin (net interest income over average interest earning assets) reached the level of 3.22%, showing a continued improvement since 30 September 2005 when it stood at 2.99% on a recurrent basis. Net fee and commission income increased by 22.8% compared to the corresponding period in 2005 reaching the level of Euro54.8 million. Other non-interest income, showed a decrease of 6,8% at Euro106,9 million mainly due to the negative effect of the increased cost of sales of the subsidiary Hellenic Sugar Company. Operating expenses reached Euro369.2 million, an increase of 2.2% compared with 30 September 2005. It should be noted that personnel expenses include a provision for the collective salary agreement increase which is expected to be finalized by the end of the year. As a result, the Group Cost Income ratio stood on a recurrent basis at 65.2% in the first nine months of the year, compared to 66.4% in the first nine months of 2005. Impairment losses on loans amounted to Euro45.0 million in the first nine months of 2006, compared to Euro112.5 million in the corresponding period in 2005 (it should be noted that at least Euro60 million of the provisions of 2005 were undertaken pursuant to the restructuring of loans under the "Panotokia law"). Total loans before provisions at the end of September 2006 reached Euro13.4 billion, an increase of 10.7% compared to end of September 2005. It should be noted that if adjusted for the Euro303 million loan write-offs during the period October 2005 to July 2006, the underlying expansion of the loan book would be 13.2%. Net customer loans were up 15% year on year. Household loan portfolio has continued its impressive growth reaching as of 30 September 2006 Euro4.5 billion compared to Euro3.1 billion as of 30 September 2005, an increase of 46%, significantly higher than the overall market growth. The successful marketing, pricing and sales policy which has been introduced during the last year had as a result the remarkable increase in new disbursements. Average mortgage lending new disbursements have gone up in the first nine months of 2006 by 135% compared to the corresponding period in 2005. Similarly, in consumer credit, the new products which were gradually introduced since March 2006 have led the average consumer lending new disbursements in the first nine months of 2006 to increase by 66% compared to the corresponding period last year. The continuous increase of the household segment as a percentage of the total loan portfolio (34% in 9M06 compared to 26% in 9M05) signifies the efforts of ATEbank to expand further its activities in sectors which can produce relatively higher returns both through interest as well as fees and commissions income. In addition, the efforts to penetrate the SMEs sector starts showing positive signs with the outstanding balances of SME''s growing at 14% y-o-y, despite the write-offs that have affected that part of the portfolio. The Euro303 million of total write-offs during the y-o-y period have helped significantly the improvement of the quality of the Bank''s loan book, with the total NPL ratio dropping from 18.8% on 30 September 2005 to 13.9% on 30 September 2006. At the same time, despite the above-mentioned write-offs, the provisioning coverage ratio increased from 80.0% as of 30 Sep 2005 to 84.7% as of 30 September 2006. Customer deposits increased by 4.6% y-o-y at Euro17.5 billion, resulting in a loans to deposits ratio of 76.3%. Such a ratio together with the comparatively low cost of funding (1.47%), in an ECB rate increases environment, is a significant advantage which the bank will continue to utilize in order to foster growth and gain market shares in high competition sectors, such as retail banking. Based on the net profit for the 9M 2006, the Return on average Assets stood at 0.8%, while the Return on average Equity was 13.3%. ATEbank sustains a robust capital adequacy. At the end of September 2006, the estimated Tier I Ratio stood at 11.4%. The turnaround of almost all of the companies in the ATEbank Group into profitability and the sustainability of the Bank?s profits are the result of an intensive effort that is being made throughout the Group at an operational and organizational level. ATEbank in the first nine months of 2006 made its initial expansive moves in the broader SEE region with the acquisition of 75% of the Romanian Mind Bank (the increase from 57% to 75% will be completed soon) and the 20% of the Serbian AIKbanka. The aim is to find opportunities for acquisition, with reasonable valuations, capable management and organization, that can grow organically, promote Group and customer synergies and provide high rates of return in these investments. ATEbank''s main goals for the future are: to increase market share in retail banking, to dynamically penetrate the SMEs segment, to further improve asset quality, to explore other possible opportunities in the SEE region, to disengage from non-financial participations and to improve the return of all companies of the Group.
- Increase in Net Profit by 24.6% (34.6% on a recurrent basis)
- Net Customer Loans growth by 15% - Impressive increase of Household Lending by 46%
- Net Interest Margin keeps improving (at 3.22%)
- Cost Containment policy within the annual target of 3-4% growth (+2.2%)
- Coverage ratio at satisfactory levels (84.7%)
ATEbank has achieved further growth in profitability in the first 9-months of 2006 compared to the respective period of 2005, as consolidated profits after tax and minority interest increased by 24.6% reaching the level of Euro113.0 million versus Euro90.7 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 34.6%. It should be noted that the nine month results of 2006 were negatively affected by, firstly, a one-off tax liability of Euro29.9 million related to the dividend paid for the financial year 2005 and secondly, by the negative results of the subsidiary Hellenic Sugar Company (reduced by Euro22.6 million), following the EU decisions regarding sugar production. Net interest income reached Euro429.4 million, a 10.4% increase on a recurrent basis (excluding non-recurring interest income of around Euro60 million during the first nine months of 2005 due to loan restructuring under the law 3259/04 on "Panotokia"). The Net Interest Margin (net interest income over average interest earning assets) reached the level of 3.22%, showing a continued improvement since 30 September 2005 when it stood at 2.99% on a recurrent basis. Net fee and commission income increased by 22.8% compared to the corresponding period in 2005 reaching the level of Euro54.8 million. Other non-interest income, showed a decrease of 6,8% at Euro106,9 million mainly due to the negative effect of the increased cost of sales of the subsidiary Hellenic Sugar Company. Operating expenses reached Euro369.2 million, an increase of 2.2% compared with 30 September 2005. It should be noted that personnel expenses include a provision for the collective salary agreement increase which is expected to be finalized by the end of the year. As a result, the Group Cost Income ratio stood on a recurrent basis at 65.2% in the first nine months of the year, compared to 66.4% in the first nine months of 2005. Impairment losses on loans amounted to Euro45.0 million in the first nine months of 2006, compared to Euro112.5 million in the corresponding period in 2005 (it should be noted that at least Euro60 million of the provisions of 2005 were undertaken pursuant to the restructuring of loans under the "Panotokia law"). Total loans before provisions at the end of September 2006 reached Euro13.4 billion, an increase of 10.7% compared to end of September 2005. It should be noted that if adjusted for the Euro303 million loan write-offs during the period October 2005 to July 2006, the underlying expansion of the loan book would be 13.2%. Net customer loans were up 15% year on year. Household loan portfolio has continued its impressive growth reaching as of 30 September 2006 Euro4.5 billion compared to Euro3.1 billion as of 30 September 2005, an increase of 46%, significantly higher than the overall market growth. The successful marketing, pricing and sales policy which has been introduced during the last year had as a result the remarkable increase in new disbursements. Average mortgage lending new disbursements have gone up in the first nine months of 2006 by 135% compared to the corresponding period in 2005. Similarly, in consumer credit, the new products which were gradually introduced since March 2006 have led the average consumer lending new disbursements in the first nine months of 2006 to increase by 66% compared to the corresponding period last year. The continuous increase of the household segment as a percentage of the total loan portfolio (34% in 9M06 compared to 26% in 9M05) signifies the efforts of ATEbank to expand further its activities in sectors which can produce relatively higher returns both through interest as well as fees and commissions income. In addition, the efforts to penetrate the SMEs sector starts showing positive signs with the outstanding balances of SME''s growing at 14% y-o-y, despite the write-offs that have affected that part of the portfolio. The Euro303 million of total write-offs during the y-o-y period have helped significantly the improvement of the quality of the Bank''s loan book, with the total NPL ratio dropping from 18.8% on 30 September 2005 to 13.9% on 30 September 2006. At the same time, despite the above-mentioned write-offs, the provisioning coverage ratio increased from 80.0% as of 30 Sep 2005 to 84.7% as of 30 September 2006. Customer deposits increased by 4.6% y-o-y at Euro17.5 billion, resulting in a loans to deposits ratio of 76.3%. Such a ratio together with the comparatively low cost of funding (1.47%), in an ECB rate increases environment, is a significant advantage which the bank will continue to utilize in order to foster growth and gain market shares in high competition sectors, such as retail banking. Based on the net profit for the 9M 2006, the Return on average Assets stood at 0.8%, while the Return on average Equity was 13.3%. ATEbank sustains a robust capital adequacy. At the end of September 2006, the estimated Tier I Ratio stood at 11.4%. The turnaround of almost all of the companies in the ATEbank Group into profitability and the sustainability of the Bank?s profits are the result of an intensive effort that is being made throughout the Group at an operational and organizational level. ATEbank in the first nine months of 2006 made its initial expansive moves in the broader SEE region with the acquisition of 75% of the Romanian Mind Bank (the increase from 57% to 75% will be completed soon) and the 20% of the Serbian AIKbanka. The aim is to find opportunities for acquisition, with reasonable valuations, capable management and organization, that can grow organically, promote Group and customer synergies and provide high rates of return in these investments. ATEbank''s main goals for the future are: to increase market share in retail banking, to dynamically penetrate the SMEs segment, to further improve asset quality, to explore other possible opportunities in the SEE region, to disengage from non-financial participations and to improve the return of all companies of the Group.