Semi-annual results of the NLB and the NLB Group – the trend of stable and positive performance for the sixth consecutive quarter

"Restructuring of the Bank in 2013 and 2014 has restored the clients' trust, increased the commitment of the NLB team, boosted the profitability and stability, and the 2015 already shows the results of the steps taken towards future development," said Janko Medja, President of the Management Board, at the press conference when presenting the semi-annual results. The profit after tax earned in this period totalled EUR 53.4 million, up 57 percent over the same period last year. The performance result of the NLB Group is still mainly influenced by the performance result of NLB d.d., which generated EUR 40.1 million of net profit. In the first half of the year, profit was generated also by all strategic members of the NLB Group.

The good business result compared to the first half of 2014 is chiefly due to the higher net interest income (EUR 7.7 million), lower operating costs (EUR 5.2 million) and decreased impairments and provisions (EUR -25 million). The financial result is still variable owing to the effects of disinvestment and valuation of financial instruments on account of market fluctuations. EBITDA was at the level of the first half of 2014, having increased by 25% compared to the respective period in 2014 (by EUR 21.2 million), without taking into account once-off effects of operations.

We have been increasing the volume of loans in strategic segments – more than EUR 274 million to the corporate sector and more than EUR 220 million to retail clients

In the first half of the year, numerous marketing activities were carried out, resulting in improved operations of the NLB Group. We increased the volume of loans to clients in strategic segments. In the first half of 2015, the NLB approved EUR 274.9 million of new loans to the corporate sector, of which slightly less than EUR 181 million were long-term. Newly approved loans to the retail sector totalled EUR 220.9 million, of which 42 percent housing and 58 percent consumer loans. Retail deposits stagnated compared to the end of 2014, whereas deposits by the non-banking sector decreased by 3 percent. Great success in managing liquidity for clients arises from the accepted payments for NLB Skladi products, where we hold more than a 52-percent share, making us the leading asset management company in Slovenia. In the first half of the year alone our market share in mutual fund management in Slovenia rose by 1.56 percent in terms of the volume of funds under management (from 21.82% to 23.38%).

Leading issuer of debt securities and syndicated loans

The NLB has successfully organised five issues of debt securities of Slovenian companies worth over EUR 200 million. As an agent, the NLB concluded syndicated loans with Slovenian companies in the total amount of EUR 150 million, in cooperation with other banks.

From transformation to development activities – the first half of the year was characterised by intensive development cycle of services and distribution channels

In mid 2013, the NLB started a complex process of bank transformation, with most projects already completed. In the scope of the process we established sound foundations that allow us to actively focus on our clients and maximising their satisfaction.

In the first half of the year we enabled clients - citizens purchases in instalments up to 24 months (previously 12) and as the first bank in Slovenia introduced contactless payments with NLB Maestro card. Keeping up with the times, we upgraded the Klikin mobile bank in April, which recorded already over ten thousand users at mid-year. We will continue introducing new services for clients also in the autumn.

After many years, the Bank started renovating branch offices in the entire Slovenia. The revised open concept, simplifying and intensifying communication with clients, was well received and in a few years we plan to renovate the entire branch network.

The NLB is actively contributing to the development of an environment that stimulates small enterprises as the future backbone of the Slovenian economy. The new Innovative Entrepreneurship Centre started operating at the end of May, where entrepreneurs will at a single location obtain extensive business and financial know-how in a completely different, relaxed and open area. This will also be the junction point for other stakeholders, supporters of this corporate segment. In the first five weeks alone there have been 29 events organised at the Centre, attended by more than 1,000 participants in total.

Prudent risk management

In the course of its business, the NLB Group will adopt moderate risks in line with the strategy, within the framework of long-term, sustainable target profile of risks.

In the NLB, risk management is organised as an independent unit, and decisions are based on comprehensive assessment of various risk factors. The major risk in the NLB Group remains credit risk, which is why credit processes are constantly being improved. In the first half of 2015 we started redesigning the credit process for natural persons and continued with improvements in corporate crediting. Great emphasis was on restructuring SMEs. The effects of activities in receivable restructuring at the end of the first six months in 2015 have not yet been completely apparent – for the most part they will become evident in the second half of the year and in 2016.

According to the Bank Recovery and Resolution Directive and further technical standards and guidelines, we drafted a comprehensive Rehabilitation plan of the NLB Group and submitted it to the Bank of Slovenia and the ECB. We prepared an upgraded strategy for NPL management, which covers collection, active real estate management, sale and write-down of non-collectible receivables.

Committed to social responsibility

The Bank has again become competitive, profitable, development-oriented and ready for new challenges. As such, it can contribute to the environment in which it operates.

In the scope of the supportive environment for the development of small business we offered the small business segment free lease and use of the vacated business premises of the NLB. We sponsored young athletes and in the scope of humanitarian activity alleviated everyday distress of many people. We were among the first to join the project of debt waiver for the socially disadvantaged.

We are particularly proud of our contribution to the Ljubljana Maternity Hospital in the purchase of two very much needed CTG - cardiotocographs. That way we and our clients helped Slovenian pregnant women and newborns.

We made great investments in the quality of work of all employees. By providing a stimulating work environment we wish to become one of the most attractive employers in the future.

NLB Corporate Communications