53rd Supervisory Board Meeting: NLB Group recorded EUR 203.6 million of net profit in 2018 according to unaudited data
8th March 2019
Today, on 8 March 2019, the Supervisory Board of NLB d.d. met for its 53rd meeting and confirmed the unaudited results of the NLB Group for 2018. NLB Group continued its trend of profitable and stable business operations, and generated a net profit of EUR 203.6 million. All subsidiary banks in the SEE markets reported solid profitability and contributed substantially to the Group’s result. For more details on the NLB Group performance in 2018, please refer to the Unaudited Annual Financial Statements 2018 and NLB Group Presentation which were published today. On Monday, 11 March, interested stakeholders will be able to follow the presentation of results by the Management Board in a live broadcast, which will be available here.
Total net operating income amounted EUR 493.3 million, representing a 1% increase YoY (2017: EUR 487.7 million), and was driven by higher net interest income (EUR 3.6 million or 1% YoY) and higher regular net fee and commission income (EUR 5.2 million or 3% YoY). Net interest income increased due to loan volume growth and lower interest expenses. Loan growth continued to be solid with 10% YoY growth in strategic foreign markets and a 6% YoY growth in retail segment Slovenia. Group's gross loans exposure has shifted to individuals (to 49 % in 2018 from 45% in 2017) also as a consequence of favourable economic situation and consumer confidence.
Because of successful NPL resolution measures and a supportive macroeconomic environment, our loan portfolio quality continued to improve. Gross NPLs on the Group level were down EUR 222.2 million compared to December 2017, hence the NPL ratio decreased to 6.9%, while the internationally more comparable NPE ratio (based on EBA guidelines) fell to 4.7%. Overall, NLB Group recorded a negative cost of risk in 2018, with a net release of impairments and provisions in the amount of EUR 23.3 million.
The capital ratios (CET1 and total capital ratio) of the NLB Group remained strong, reaching 16.7% (including 1H’18 result), and were well above the regulatory thresholds. As already announced, NLB d.d. is in the process of examining various alternatives for issuing additional Tier2 capital.
“The Supervisory Board is satisfied with the results of NLB Group in 2018, which show that the Group continues its trend of stable and profitable business operations, leveraging on its regional presence. We are particularly pleased that in the last year all Group members remained focused on finding innovative, digital solutions that are adapted to the needs of their clients. This is the result, and at the same time proof that NLB Group truly knows and understands the environment in which it operates. The Supervisory Board would also like to take this opportunity to thank management and the Group’s team members for their contribution to another successful year,” said Primož Karpe, the Chairman of the NLB Supervisory Board.
In 2018, NLB Group continued focusing attention on finding solutions that best address client needs. NLB d.d. introduced 24/7 chat and video chat functionality through multiple channels and together with NLB Banka AD Skopje launched the mobile wallet ‘NLB Pay’ – a mobile payment solution with the potential to develop into an e-wallet platform. All banks are investing in upgrading their distribution capabilities with enhanced service offerings such as “Super Fast Cash Loan”, POS lending and more targeted sales efforts (CRM). NLB Group is committed to remaining a leader of service innovation in banking for the region.
Shareholders' Meeting to be convened within regulatory deadlines
The Bank will convene the regular Annual Shareholders’ Meeting of NLB d.d., which will decide on the profit appropriation, and presumably also the appointment of Supervisory Board members in the manner and within time periods set forth by the regulations and Articles of Association of NLB d.d. After the notice period for two members has expired, the Supervisory Board will continue with its work as is normal, with all requisite powers.
The Supervisory Board, as usual, also took note of the reports submitted by the Supervisory Board Committees, and granted consent to transactions requiring Supervisory Board approval.