PPF banka a.s.: Financial results for 3 quarters 2011 – growing balance sheet total as well as loans volume
PPF banka a.s. (“PPF banka”), in which a 92.96% stake is held by PPF Group N.V., announces its financial results under the Czech Accounting Standards (CAS) for the period ending on 30 September 2011.
“The Bank continues to grow. The number of its clients increased by 60% year on year, the volume of client loans grew 38% and the balance sheet total grew 33%. We are pleased to note the high quality of the loan portfolio and the stable capital adequacy ratio above 10%. However, revenue from financial instruments declined over the period due to the adverse developments in financial markets and the continuing crisis in the euro zone”.
Petr Milev, Chairman and CEO
• PPF banka’s balance sheet total grew 33% (+CZK 18.0 billion) year on year to CZK 71.9 billion as of 30 September 2011, compared to CZK 53.9 billion as of 30 September 2010.
• The volume of loans to clients grew 38% year on year to CZK 19.2 billion.
• The bank’s equity increased by 12% year-on-year to more than CZK 4.58 billion.
• The bank’s profitability in terms of return on equity (RoE) reached 12.4% and its capital adequacy ratio (CAR) was 10.5%.
• For the first time in the bank’s history, total client deposits exceeded CZK 50 billion.
PPF banka forged ahead with its strategy of providing bespoke financial solutions to corporate clients, financial institutions and municipal and public sector clients, including the PPF Group’s companies. It is also actively developing export and structured financing and the segment of products for small and medium-sized enterprises. PPF banka’s balance sheet total increased year on year by one-third to 71.9% as of the end of the 3rd quarter of 2011, due primarily to the increased deposits of corporate and municipal clients. For the first time in the bank’s history, the total client deposits exceeded CZK 50 billion as of 30 September 2011.
The volume of loans provided to clients increased year-on-year by 38%, from CZK 13.9 billion to CZK 19.2 billion, and its growth for the 3rd quarter was 4.8%. In spite of a quarterly loss from financial operations, very good results were achieved with the help of the rising net income from fees and commissions and also net interest income.
Despite the persisting economic crisis, through its active work with clients that have classified loans, PPF banka maintained the share of non-standard, doubtful and loss-making loans at 2.64% of its overall loans to clients in the 3rd quarter 2011, the same as in the preceding quarter.
With its balance sheet total significantly increased, PPF banka’s capital adequacy ratio is around 10%, while its return on average equity (ROAE) is a robust 12.4% for the 3rd quarter of 2011.
PPF banka generated a net profit of CZK 382.3 million as of 30 September 2011, which implies a 30.8% decline from the CZK 552.5 million profit recorded in the 3rd quarter of 2010. This is mainly attributable to the following:
• on a year-on-year basis, net income from fees and commissions is 86.2% higher, having increased from CZK 173.1 million at the third quarter of 2010 to CZK 322.3 million, thereby outperforming the level of the entire FY 2010 by almost 50%;
• net interest income grew year-on-year by 23.1% to CZK 837 million;
• the loss from trading on financial and capital markets was CZK 289.4 million for the 3rd quarter of 2011, reducing year-on-year the profit from the bank’s operating and financing activities by 15.8% to CZK 854.7 million for the 3rd quarter of 2011;
• administrative costs increased by 2.5% year-on-year in connection with the expansion of the bank’s business, which led to a 15% increase in the bank’s staffing level year-on-year and to new investments in the bank’s infrastructure with a 74% year-on-year increase in depreciation. Taken together, administrative costs and depreciation increased by CZK 21 million, i.e. 6.22%.
PPF banka prepares and publishes its financial results under Czech Accounting Standards (CAS) and under International Financial Reporting Standards (IFRS). Financial results under CAS may differ from those under IFRS.