2 August 2012
36th regular meeting of the Supervisory Board of the NLB
The NLB operates at profit in the first half of 2012
Today, the Supervisory Board of the NLB met at its 36th regular meeting at which it acknowledged, among other, the report on the operations of the NLB and the NLB Group in the first half of the year. In the first half of 2012 the NLB recorded profit in the amount of EUR 19.7 million.
The achieved result arises mainly from high profits from early redemption of subordinated hybrid instruments at a discount, from which the Bank generated EUR 105 million of profit. Compared to the end of 2011, the Bank's total assets grew by 1%. The Bank maintained high liquidity all the time.
Considering the structure of portfolio, the NLB established impairments and provisions in the amount of EUR 164.5 million in the first half of the year. The bulk is provisions and impairments of the credit portfolio with an additional negative impact due to the impairments of equity securities and capital investments in subsidiaries. In the first half of 2012, profit before provisions amounted to EUR 215.8 million.
The NLB has continued disinvesting by selling its investments on non-strategic markets and structuring of the Bank's internal costs. Labour costs totalled EUR 7.6 million, down by 6% from the same period of the last year. Labour costs which account for more than one half of all costs decreased by 9%, operating costs by 3%, while the costs of authorisation dropped by 5% compared to the same period of last year.
The Bank is still operating in a very difficult economic environment where companies are facing liquidity problems, which is why the Bank's portfolio can still experience negative impacts by the end of the year.
Operations of the NLB Group in the first half of the year
Due to the positive effect of the early redemption of capital instruments at a discount in June this year, the NLB Group also recorded positive result after tax in the amount of EUR 32.3 million. Profit before provisions amounted to EUR 230.6 million; however, provisions and impairments were established in the amount of EUR 166.5 million due to the situation on the market which has not yet improved.
Risk management capital of the NLB Group as at 30/06/2012 totalled EUR 1,533.9 million and was EUR 33.8 million higher than at the end of 2011. On the same day, capital adequacy ratio (CAR) was 12.1% which is by 1.0 percentage point less than at the end of last year. The Tier 1 capital ratio is 10.6% and increased by 3.4 percentage points compared to the end of 2011, while the Core Tier 1 stood at 9.94%.
Janko Medja is Chairman of the Supervisory Board
From among themselves, the members of the Supervisory Board elected Janko Medja Chairman of the Supervisory Board and Riet Docx and Stephan Wilcke his deputies.
At the meeting, the Supervisory Board members also appointed members to three of its committees, namely: the Audit Committee, the Risk Committee and the Appointment and Remuneration Committee and agreed on future work.
The Supervisory Board also acknowledged the summary report of the due diligence review in the Bank and the information on procedures related to the restructuring programme for the European Commission.
Afterwards, the Supervisory Board issued its approval to certain Bank's operations, as required. As usually, the SB also acknowledged the current recommendations of the Bank of Slovenia. The SB started establishing the starting points for the appointment of a new President of the Management Board of the NLB.
The details on the performance of the NLB and the NLB Group in the first quarter of 2012 will be evident from the Semi-annual report which will be published on SEOnet and the Bank's website tomorrow.
Janko Medja
Chairman of the Supervisory Board of NLB