The ASPIS BANK GROUP, based on accelerating organic growth, continuous cost containment efforts and improvement of infrastructure has improved its performance in H1 2007 by achieving profit before tax of EUR 10.8 million, increased by 46% against to H1 2006.The increase in profit before tax was a result of a 6% increase of operating income accompanied by a 3% decrease of operating expenses. Accordingly, profit after tax and minority interests amounted to EUR 3.5 million against EUR 5.9 million, in H1 2006.
This decrease is mainly due to the charge of extraordinary taxes of EUR 5.5 million for previous financial years. This increased tax burden stems mainly (EUR 3.7 million) from the different tax treatment by Hellenic Tax Authorities of an amount of EUR 6.5 million, relating to the transfer of the assets and liabilities of Standard Chartered Grindlays Bank to the Bank in 2003 (recognition as taxable income instead of recognition as tax exempt provisions for impaired loans). Nevertheless, it is encouraging that organic profitability has increased and that the efficiency ratio, which has reached the lowest level of the latest years (73.4%), continuously improves. Also, during H1 2007, ASPIS BANK has raised new capital of EUR 90 million via the issue Tier 1 hybrid capital and Lower Tier 2 subordinated debt, further strengthening its capital adequacy with the corresponding ratio reaching 17% at 30.6.2007.
Core banking activities continue to support the Bank's growth, with retail banking the driving force in the increase of the Group's key figures. Assets increased, on an annual basis, by 17% to EUR 2.7 million. The growth rate of loans net of provisions increased at 20% with the outstanding balance at EUR 2 billion. Loans and advances to households increased by 16%, on an annual basis, accounting for 59% of the loan portfolio . Mortgage loans increased by 18% yoy, with new mortgage loan disbursements increased by 53%. Business loans increased by 23% yoy.
Customer deposits accounted for 78% of the total liabilities and equity of the ASPIS BANK Group, and continued to be the main funding source of the Bank's operations. Specifically, the outstanding balance of deposits increased by 19% yoy to EUR 2.1 billion.
Total operating income increased by 6%, to EUR 48.1 million, supported by recurring and steady sources of income - net interest income and commission income - that account for 88% of its total. Intense competition and the consecutive increases of the ECB base rate combined for a modest increase of net interest income by 6% to EUR 27.7 million. Loans remained the main source of interest and commission income. More specifically, interest income from loans accounted for 88% of gross interest income and increased by 22% yoy. Accordingly, commission income from loans increased by 20%.
Operating expenses decreased by 3% to EUR 35.3 million. Accordingly, the efficiency ratio improved by 7 percentage points relative to H1 2006, and stood at 73.4%.
The Chairman and Managing Director of ASPIS BANK, Mr. Constantine Karatzas, referring to the financial results of H1, stated the following: "The incidental burden of net profit with extraordinary tax of EUR 5.5 million relating to previous financial years will not slow the growth of ASPIS BANK. That is evident by the accelerating growth rates of total assets and loans as well as the continuous improvement of the efficiency ratio with simultaneous reduction of the operating cost. Additionally, our efforts for rapid growth of the Bank's operations, will be strengthened by the recent inflow of new capital that sustain the capital adequacy ratio at a high level".