55th Supervisory Board Meeting:
NLB Group posts EUR 57.9 million net profit in Q1 2019
Today, on 24 May, the Supervisory Board of NLB d.d. met at its 55th meeting and discussed the NLB Group operations in the first three months of this year. The trend of stable and profitable operations in the NLB Group continues. The Group generated EUR 57.9 million net profit, which is comparable to last year's Q1 net profit (Q1 2018: EUR 57.7 million). The contribution of subsidiary banks in the SE European Markets to the NLB Group result was 33.7%. For more details on the NLB Group operations in Q1, please refer to the Interim NLB Group Report, which was published today. On Tuesday, 28 May, at 17:00 all interested stakeholders can follow a webcast presentation of financial results live on this link.
Total net operating income amounted to EUR 133.8 million, representing a 3% increase YoY (Q1 2018: EUR 130.4 million). The increase is based on higher net interest income (6% increase YoY), and net fee and commission income (2% increase YoY). Net interest income has grown in all banks of the Group as a result of loan volume growth and lower interest expenses. Net loans to customers were 2% higher than at the end of 2018, while the net interest margin remained stable. The cost of risk was also negative in Q1 (-23 bps).
Total costs amounted to EUR 69.0 million and were 1% lower YoY. The Cost-to-Income Ratio (CIR) stood at 51.6%.
The volume of gross non-performing loans dropped by EUR 43.1 million YtD (-7%). The NPL share dropped to 6.3%, while the internationally comparable NPE ratio (in line with the EBA guidelines) dropped to 4.3% and was close to the mid-term target.
Capital ratio (CET1, Tier 1, and Total capital ratio) for the NLB Group at the end of March remained high, reaching 16.6%, which is above all regulatory requirements. As already published, on 6 May 2019 the Bank successfully issued Tier 2 bonds in the total nominal value of EUR 45 million, which additionally strengthened and optimised its capital on individual and consolidated basis.
The Supervisory Board welcomed NLB's second credit rating upgrade to investment grade. Standard and Poor's acknowledged the efforts to stabilise business results and the decisive steps taken to improve asset quality. This is an important milestone adding to the greater confidence of all stakeholders, and confirming the ambitions of NLB to become the main regional bank in the countries it operates in. The Supervisory Board also established that despite the challenging economic environment of low interest rates the NLB Group is on the right track to meet its medium-term targets.
Members of the Supervisory Board also took note of the reports for Q1 submitted by the Bank's experts and granted consent to transactions requiring Supervisory Board approval.
