- Significant Increase in Net Profit by 93.9% (+23.4% on a recurrent basis)
- Customer Loans grow by 16.1%, despite write-offs of ?398m - Household Lending growth well above market (+26.0%)
- Customer deposits grow satisfactorily (+9.5%), while the deposit cost is at 1.97%
- Net Interest Margin remains at satisfactory levels (3.33%)
- Cost to Income ratio declines (at 54.0%)
- NPL ratio significantly lower (at 9.9% vs 13.9% in Q306)
- ROE : 21.3% & ROA : 1.32%
- Interim Dividend of euros 0.05 per share
ATEbank's profitability has grown substantially during the first nine months of 2007 with consolidated profits after tax and minority interest increasing by 93.9% and reaching ?219.1 million versus 113.0 million euros 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 23.4%.
Net interest income reached 467.1 million euros, an 8.8% increase, mainly due to growth in the interest income from loans (+25%). The Net Interest Margin (net interest income over average interest earning assets) reached 3.33%, showing a significant improvement compared to 30 September 2006 when it stood at 3.22%.
Net fee and commission income reached 62.4 million euros, an increase of 13.8% compared to the first 9-months of 2006. Other non-interest income and non-fee income, increased on a reported basis by 96.3%, mainly due to the capital gains from the sale of available for sale shares (80,6 million euros, +247%) and the impressive performance of net trading income (at 42.5 million euros compared to losses of 6.8m euros in 9M 2006). On a recurrent basis, other non-interest and non-fee income showed an increase of 57.1%.
Operating expenses reached 399.5 million euros, an increase of 8.2% compared to 30 September 2006. The higher than targeted percentage increase is seasonal due to the timing of salary increases for 2006 (which actually took place in early 2007). The cost growth is expected to be lower by the end of 2007. Furthermore, we have to note that operating expenses were affected by a one-off amount of ?3m which represents ATEbank's donation to the fire victims in Greece. Despite the above, the Group cost income ratio was reduced, on a reported basis, to 54.0% compared to 62.5% in September 2006. On a recurrent basis, cost to income ratio stood at 60.2% from 65.2% in 9M 2006.
Impairment losses were 62.4 million euros for the first 9-months of 2007, of which 60.6 million euros were for impairment losses on loans and 1.8 million euros for impairment losses on assets.
Total loans before provisions as of 30 September 2007 stood at 15.5 billion euros, an increase of 16.1% compared to the end of September 2006. It should be noted that if adjusted for the 398 million euros loan write-offs during the period October 2006 to September 2007, the underlying expansion of the loan book would have been 19.1%. Total Loans after provisions increased by 21.0%.
Loans to households continued to grow above market rates, at 26.0%, reaching 5.7 billion euros from 4.5 billion euros at the end of the third quarter of 2006. The mortgage loan portfolio reached 4.8 billion euros, a growth of 25.8%, while the increase of the consumer loan portfolio accelerated further, to 39.5%, reaching 675.1 million euros.
The steady growth of the household loan portfolio as a percentage of the total loan portfolio (now 37%) indicates both the determination and the ability of ATEbank to expand its activities and increase its market share in the retail market. The aim is to leverage the extensive network as much possible in order to gain further market share in sectors which can produce relatively higher returns both through interest as well as fees and commissions income. In this respect, the efforts to penetrate the SMEs sector, although still not impressive in outstanding volumes due to significant write-offs of old legacy loans, are showing positive signs (growth adjusted for write-offs is 11.5%) and both management and staff will continue their efforts to grow further this segment.
Total NPL ratio at the end of September 2007 stood at 9.9% from 13.9% as of 30 September 2006. The provisioning coverage ratio, despite the ?398 million of write-offs, stands at the satisfactory level of 81.8%.
Customer deposits increased by 9.5% y-o-y to ?19.2 billion, keeping the loans to deposits ratio at the advantageous level of 80.9%, which enables the bank to finance its loan expansion from its deposits. The cost of deposits remains one of the lowest amongst Greek banks at 1.97%, 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 the first nine-months of 2007, the Return on average Assets stood at 1.3% (0.9% on a recurrent basis), while the Return on average Equity was 21.3% (14.2% on a recurrent basis).
ATEbank sustains an adequate capital adequacy. At the end of September 2007, having applied the new directives by the Bank of Greece, the estimated Tier I Ratio stood at 9.4%.
The sound performance of the first nine months proves that ATEbank is capable to play a significant role in an extremely competitive Greek banking market. The turnaround of all of the Group's companies into profitability and the sustainability of the Banks profits from its core lending and non-lending activities are the result of continuous efforts made throughout the Group at an operational and organizational level.
As a result of the very satisfying and sustainable performance, the Board of Directors of ATEbank has decided to distribute an interim dividend of 0.05 euros per share to its shareholders. ******************* For more information: http://www.atebank.gr/english