Another successful year: NLB Group generated EUR 193.6 million of net profit in 2019, according to unaudited data.
February 20, 2020
Today, on 20 February, the Supervisory Board of NLB d.d. met for its 60th meeting and confirmed the unaudited results of the NLB Group for 2019. Another successful year was completed for the NLB Group, generating net profit in the amount of EUR 193.6 million in 2019. Total net operating income increased by 4%, profit before impairments and provisions by 4%, while NPE ratio was reduced significantly from 4.7% to 2.7%. All subsidiary banks in the SEE markets also operated with a profit and contributed 38% to the Group’s result (2018: 37%). NLB Group is now set for further enhancing a leading position in our markets.
For more information on the NLB Group’s performance, please refer to the Unaudited Annual Financial Statements 2019 and the NLB Group Presentation which were published today. On Friday, 21 February, at 11:00 CET, interested stakeholders will be able to follow the presentation of unaudited results by the Management Board in a live broadcast, which will be available here. Let us use the opportunity to invite all investors and analysts to attend the first Investors’ Day, which will take place on 15 May 2020 at the headquarters of NLB d.d. in Ljubljana, Trg republike 2. You can register here by 15 April 2020.
Total net operating income amounted to EUR 513.6 million, representing a 4% increase YoY (2018: EUR 493.3 million), and was driven by higher net interest income (by EUR 5.6 million or 2%) due to loan volume growth and lower interest expenses, as well as higher net fee and commission income (by EUR 9.7 million or 6%).
CIR stood at 58.7%. Net interest margin in the NLB Group decreased by 0.08 p.p. YoY and amounted to 2.48%. The cost of risk was negative, -20 bps. Profit before impairments and provisions totalled EUR 212.2 million, which is 4% higher YoY.
Total assets of the NLB Group increased by EUR 1,434.1 million YoY and totalled EUR 14,174.1 million, mainly due to the continued inflows of deposits, mostly from individuals (growth by EUR 717.3 million or 9%). Net loans to customers of the NLB Group also increased by 6% YoY. The biggest increase of net loans to customers YoY was recorded in NLB Banka Beograd (a growth of 29%) and NLB Banka Prishtina (a growth of 16%).
In 2019, NLB Group continued to follow the principle of prudent risk-taking with an emphasis on diversification, which guarantees the high quality of the loan portfolio. This is reflected in its stable credit rating structure and a very low share of new NPLs formation (0.6% of the total loan portfolio). In addition, the internationally comparable NPE ratio (based on the EBA guidelines) dropped to 2.7% (2018: 4.7%), so that at the end of last year the NLB Group already exceeded the set medium-term target (4%). An important Group strength is the NPL coverage ratio, which remains high at 89.2%.
The Total Capital Ratio for the NLB Group stood at 16.3% at the end of 2019, which is above the regulatory requirements. As it is known, NLB issued subordinated Tier 2 bonds in November last year and successfully returned to the international loan capital market, thus confirming the high investor confidence.