The NLB Group in the third quarter of 2014: profit after tax totalling 47.9 million euros as a result of a thorough restructuring process
The NLB Group continues with successful performance also in the third quarter of 2014. Cumulative non-audited profit after tax for the NLB Group amounted to 47.9 million euros in the first nine months, which means an increase of almost 14 million euros in the last three months, compared with the semi-annual results. The quarterly report of the performance of the NLB Group after nine months of 2014 will be published on 19 November, pursuant to the financial calendar. It will be presented by the Management Board at a press conference.
In 2014, the operations of the NLB Group were stable and its profitability increased constantly. In the respective period last year, the result of the NLB Group was negative in the amount of -293.5 million euros, while this year, the Group generated 47.9 million euros of profit.
It is crucial that the NLB Group performed much better already prior to the establishment of the provisions, which indicates successful restructuring of the Bank and its active return on the market - on all market segments: retail operations and SME and large corporate operations. Before provisions, the NLB Group generated profit in the amount of EUR 59.7 million euros last year, while this year's result before the establishment of provisions and taxes was 158.2 million euros, i.e. a 165-percent increase over the same period last year.
The basis for such considerable improvement of performance this year was successfully completed state aid procedures at the end of 2013, and the turn to profitability was the result of the measures in the scope of Bank Transformation Programme which was launched in 2013. Above all, revenues improved in all segments, contributing 35% to the overall improvement, as well as continued cost optimisation, which contributed approximately 32% to improved performance.
Improved performance consolidated the Bank's position compared with the key competitors and strengthened its resistance to the challenges coming from the business environment. In 2014, the NLB has increased or at least reduced the market shares in all core banking activities. We increased retail lending as well as corporate loans. We granted 774.5 million euros of loans to large corporates this year and 288 million euros of transactions were performed in the area of mid corporates. With the establishment of the Entrepreneurship Centre, the Bank is approaching the small enterprises, which are gaining importance. It was established that there are not enough new investment projects and corporate restructuring programmes in the business sector, which would boost the companies' competitiveness, since many among them rely solely on financial restructuring and not enough on the improvement of business models and processes.
The results of the overall assessment, published yesterday, showed that the NLB could sustain even the most severe situation, as foreseen in the adverse scenario assumptions. Thorough restructuring measures which contributed to the structural improvement of the Bank's profitability and the previously anticipated profit at the end of 2014 will allow the NLB to cover by itself the established deficit in equity according to the adverse scenario of the overall assessment of the ECB, namely from the 2014 profit. This corresponds to the explicit explanation of the ECB in its aggregate report on the overall assessment.
The NLB continues with the set transformation programme and the implementation of the strategy focused on sustainable profitability of the Bank, thus also contributing to the stability of Slovenia.
NLB Corporate Communications