Τ BANK Α.Τ.Ε.
PRESS RELEASE - EARNINGS FOR Q1 2009
Overview of ASPIS BANK Group Financials for Q1 2009
The highlights of ASPIS BANK Group, for Q1 2009 are summarized as follows:
Total assets, increased by 3% to euro 2.7 billion versus euro 2.6 billion at the end of 2008
Loans net of provisions, decreased by 3% to euro 2.07 billion versus euro 2.14 billion at the end of 2008
Customer Deposits, increased by 11% to euro 2.2 billion versus euro 2 billion at the end of 2008
The loan-to-deposit ratio reached 96%
Operating expenses decreased by 4% to euro 21 million versus euro 22 million in Q1 2008
Loss after tax and minority interests amounted to euro 12.9
Total capital adequacy ratio reached 11.68%
ASPIS BANK's priorities for Q1 2009 remained the maintenance of strong liquidity, the reduction of operating expenses and the creation of infrastructure to support Bank's new business model emphasizing to consumer credit and SMEs. Coordinated efforts in all directions were made and resulted to strong liquidity with an RMBS issue and the recovery of customer deposits which had been withdrawn in Q4 2008. As a result, ASPIS BANK has excess liquidity which will support the Bank's growth. Operating expenses decreased for the first time in two years with the first results of efforts in this direction becoming evident in Q1 2009. However, the economic conditions necessitated the containment of the Bank's growth, and hence the containment of Bank's revenues and increased provisions for loan losses. In addition to the above, the normalization of money markets and the adjustment of interest rates to lower levels were offset by the high cost of the recovered customers' deposits and had a negative impact on the results after tax and minority interest which amounted to a loss of euro 12.9 million. It is worth noting that the normalization of money markets and the stabilization of economic conditions will allow for the improvement of the ASPIS BANK's results, something which will become evident in the upcoming quarters. Indicative of the above trend is the improvement in interest margin on a monthly basis versus year-end 2008.
Events during Q1 2009
As part of its efforts to boost its liquidity, the Bank completed in February 2009 a securitization of residential mortgage loans, amounting to euro 424 million. The special purpose company Byzantium II Finance Plc to which the residential loans were transferred, issued FRNs of euro 410.25 million, the 89% of which, i.e. euro 377 million, received credit rating of AAA by Fitch Ratings. The FRNs meet the eligibility criteria of the European Central Bank and the Bank will make full use of this to cover its refinancing needs.
The rationalization and reduction of operating expenses continues at intensive rates. Currently is in progress the relocation of administrative units of the Bank and branches to owned or lower-cost sites.
The preparations for the operation of the Bank's third business center are at an advanced level. ASPIS BANK aims to operate two additional such centers in 2009 which will support expansion efforts in the field of SMEs. In February 2009, the branch network expanded, with a new branch established in Ilion, Attica.
Review of Group Balance Sheet
Total assets increased by 3% ytd, reaching euro 2.7 billion. Given the overall zero growth of Greek bank credit and the unfavorable economic climate in conjunction with depressed business sentiment and expectations during the first months of 2009, ASPIS BANK maintained its conservative lending policy. Thus, loans net of provisions decreased by 3% ytd to euro 2.07 billion. Credit cards and consumer loans, which account for 6.4% of ASPIS BANK Group loan portfolio (up from 5% yoy), increased by 2% ytd and by 19% yoy respectively. Loans to small and medium sized enterprises decreased by 5% ytd and by 11% yoy.
Customer deposits increased by 11.4% to euro 2.2 billion versus euro 2 billion at the end of 2008. The loan-to-deposit ratio reached 96%, which is satisfactory given the market conditions, and ensures the Bank's capacity for growth.
The Group total equity decreased by 8% ytd to euro 149 million. Total capital adequacy ratio reached 11.68%
Review of Group results
Despite the reduction of operating expenses by 4%, ASPIS BANK Group recorded losses after taxes and minority interests of euro 12.9 million as a result of the suppression of the net interest margin, a situation which however is gradually improving.
Net interest margin was significantly reduced, mainly due to a very substantial increase in deposit interest rates, as a result of intense competition for the attraction of new depositors to support liquidity. The de-escalation of interest rates in the interbank market did not offset the high cost of attracting deposits in Q1 2009, a situation which is expected to be reversed in the upcoming quarters. Consequently, net interest income decreased to euro 3 million versus euro 12 million in Q1 2008.
The containment of the Bank's operations has resulted in a reduction of net commission income by 37% to euro 4.1 million versus euro 6.5 million in Q1 2008. Profits from financial transactions amounted to euro1 million versus losses of euro 1 million in Q1 2008.
The first results of the intensive and ongoing efforts of operating expenses reduction were recorded in the Q1 2009 results. Administrative expenses decreased by 5% to euro 6.8 million versus euro 7.2 million in Q1 2008 mainly because of the decrease in promotion and advertising costs and other administrative expenses. Staff expenses decreased by 7% to euro 10.9 million versus euro 11.7 million in Q1 2008, given the lack of extraordinary expenses from the Bank's organizational restructuring in 2008 and the implementation of the policy to cover needs in human resources by optimizing the use of the existing resources. Depreciation increased to euro 3 million versus euro 2.7 million in Q1 2008.
Provisions as a result of the readjustment of provisioning policy and the adverse economic climate were more than doubled and reached to a total of euro 5.6 million versus euro 2 million in Q1 2008.
The highlights of ASPIS BANK Group, for Q1 2009 are summarized as follows:
Total assets, increased by 3% to euro 2.7 billion versus euro 2.6 billion at the end of 2008
Loans net of provisions, decreased by 3% to euro 2.07 billion versus euro 2.14 billion at the end of 2008
Customer Deposits, increased by 11% to euro 2.2 billion versus euro 2 billion at the end of 2008
The loan-to-deposit ratio reached 96%
Operating expenses decreased by 4% to euro 21 million versus euro 22 million in Q1 2008
Loss after tax and minority interests amounted to euro 12.9
Total capital adequacy ratio reached 11.68%
ASPIS BANK's priorities for Q1 2009 remained the maintenance of strong liquidity, the reduction of operating expenses and the creation of infrastructure to support Bank's new business model emphasizing to consumer credit and SMEs. Coordinated efforts in all directions were made and resulted to strong liquidity with an RMBS issue and the recovery of customer deposits which had been withdrawn in Q4 2008. As a result, ASPIS BANK has excess liquidity which will support the Bank's growth. Operating expenses decreased for the first time in two years with the first results of efforts in this direction becoming evident in Q1 2009. However, the economic conditions necessitated the containment of the Bank's growth, and hence the containment of Bank's revenues and increased provisions for loan losses. In addition to the above, the normalization of money markets and the adjustment of interest rates to lower levels were offset by the high cost of the recovered customers' deposits and had a negative impact on the results after tax and minority interest which amounted to a loss of euro 12.9 million. It is worth noting that the normalization of money markets and the stabilization of economic conditions will allow for the improvement of the ASPIS BANK's results, something which will become evident in the upcoming quarters. Indicative of the above trend is the improvement in interest margin on a monthly basis versus year-end 2008.
Events during Q1 2009
As part of its efforts to boost its liquidity, the Bank completed in February 2009 a securitization of residential mortgage loans, amounting to euro 424 million. The special purpose company Byzantium II Finance Plc to which the residential loans were transferred, issued FRNs of euro 410.25 million, the 89% of which, i.e. euro 377 million, received credit rating of AAA by Fitch Ratings. The FRNs meet the eligibility criteria of the European Central Bank and the Bank will make full use of this to cover its refinancing needs.
The rationalization and reduction of operating expenses continues at intensive rates. Currently is in progress the relocation of administrative units of the Bank and branches to owned or lower-cost sites.
The preparations for the operation of the Bank's third business center are at an advanced level. ASPIS BANK aims to operate two additional such centers in 2009 which will support expansion efforts in the field of SMEs. In February 2009, the branch network expanded, with a new branch established in Ilion, Attica.
Review of Group Balance Sheet
Total assets increased by 3% ytd, reaching euro 2.7 billion. Given the overall zero growth of Greek bank credit and the unfavorable economic climate in conjunction with depressed business sentiment and expectations during the first months of 2009, ASPIS BANK maintained its conservative lending policy. Thus, loans net of provisions decreased by 3% ytd to euro 2.07 billion. Credit cards and consumer loans, which account for 6.4% of ASPIS BANK Group loan portfolio (up from 5% yoy), increased by 2% ytd and by 19% yoy respectively. Loans to small and medium sized enterprises decreased by 5% ytd and by 11% yoy.
Customer deposits increased by 11.4% to euro 2.2 billion versus euro 2 billion at the end of 2008. The loan-to-deposit ratio reached 96%, which is satisfactory given the market conditions, and ensures the Bank's capacity for growth.
The Group total equity decreased by 8% ytd to euro 149 million. Total capital adequacy ratio reached 11.68%
Review of Group results
Despite the reduction of operating expenses by 4%, ASPIS BANK Group recorded losses after taxes and minority interests of euro 12.9 million as a result of the suppression of the net interest margin, a situation which however is gradually improving.
Net interest margin was significantly reduced, mainly due to a very substantial increase in deposit interest rates, as a result of intense competition for the attraction of new depositors to support liquidity. The de-escalation of interest rates in the interbank market did not offset the high cost of attracting deposits in Q1 2009, a situation which is expected to be reversed in the upcoming quarters. Consequently, net interest income decreased to euro 3 million versus euro 12 million in Q1 2008.
The containment of the Bank's operations has resulted in a reduction of net commission income by 37% to euro 4.1 million versus euro 6.5 million in Q1 2008. Profits from financial transactions amounted to euro1 million versus losses of euro 1 million in Q1 2008.
The first results of the intensive and ongoing efforts of operating expenses reduction were recorded in the Q1 2009 results. Administrative expenses decreased by 5% to euro 6.8 million versus euro 7.2 million in Q1 2008 mainly because of the decrease in promotion and advertising costs and other administrative expenses. Staff expenses decreased by 7% to euro 10.9 million versus euro 11.7 million in Q1 2008, given the lack of extraordinary expenses from the Bank's organizational restructuring in 2008 and the implementation of the policy to cover needs in human resources by optimizing the use of the existing resources. Depreciation increased to euro 3 million versus euro 2.7 million in Q1 2008.
Provisions as a result of the readjustment of provisioning policy and the adverse economic climate were more than doubled and reached to a total of euro 5.6 million versus euro 2 million in Q1 2008.