Prague, 6 May 2011: PPF banka a.s. (“PPF banka”), in which a 92.96% stake is held by PPF Group N.V., announces its financial results under the Czech Accounting Standards (CAS) for the period ending on 31 March 2011.
“Net profit in excess of CZK 300 million for the first quarter of 2011 shows that the adopted strategy also helps the bank to achieve above-standard results during periods of economic slowdown.”
Petr Milev, Chairman and CEO
SUMMARY
A year-on-year growth of 54% (+ CZK 113 million) in PPF banka’s profit after tax for 1Q 2011, to CZK 324.4 million compared with CZK 211.1 million for 1Q 2010;
The bank’s equity increased by 21% year-on-year to more than CZK 4.5 billion, with an increase of 8% since the beginning of 2011;
The bank’s profitability in terms of return on equity (RoE, 36%) and also its capital adequacy ratio (CAR, 12.59%) continue to be at a high level.
BUSINESS RESULTS
PPF banka forged ahead with its strategy of providing bespoke financial solutions to financial institutions and selected commercial and municipal clients, including the PPF Group’s companies. Last but not least, it is also actively pursuing new projects such as export and structured financing and the financing of small and medium-sized enterprises. Despite the continuing economic downturn, in the first quarter of 2011 PPF banka profited from the quality of its credit portfolio and rising net interest income, and also from the increasing share of income from fees and commissions. PPF banka’s total assets dropped year-on-year from CZK 51.2 billion at the end of the first quarter of 2009 to CZK 44.7 billion at 31 March 2011 (13% drop), which is primarily attributable to the seasonal decline in municipal clients’ short-term deposits.
The volume of loans provided to clients decreased year-on-year by 13.65%, from CZK 19.3 billion to CZK 16.7 billion, and remains at a stable level in relation to total assets. Despite the relative decline in profit from financial operations, very good results were achieved with the help of the rising net income from fees and commissions and also net interest income.
Through its active work with clients that have classified loans, PPF banka reduced the share of classified loans to 6.06% of its overall loans to clients as at 31 March 2011, compared with 10.19% as at 31 March 2010, with the share of doubtful and loss-making loans in the first quarter of 2011 decreasing from 6.28% to only 3.2% of the volume of all loans to clients.
With its total assets stable, PPF banka’s capital adequacy ratio is around 12% (12.59%), while its return on average equity (ROAE) is an excellent 36% for the first quarter of 2011.
FINANCIAL RESULTS
PPF banka generated a net profit of CZK 324.4 million as at 31 March 2011, which implies a growth of 53.7% on the figure of CZK 211.1 million for the first quarter of 2010. This result is mainly attributable to the following:
on a year-on-year basis, net income from fees and commissions is seven times higher, having increased from CZK 23.5 million for the first quarter of 2010 to CZK 172.7 million for the first quarter of 2011; it therefore reached the level of the first three quarters of 2010;
net interest income grew year-on-year by 32.3% to CZK 292.4 million;
administrative costs increased only by 3% year-on-year, although the expansion of the bank’s business resulted in a 16% increase in the bank’s staffing level year-on-year.
PPF banka prepares and publishes its financial results under Czech Accounting Standards (CAS) and under International Financial Reporting Standards (IFRS). Financial results under CAS may differ from those under IFRS.
Notes for editors:
PPF banka a.s. is an integral part of the PPF international investment group. It provides its services to municipal and corporate clients, as well as investment services, including, in particular, trading in financial instruments on Czech and international markets. PPF banka is authorized to act as PPF Group’s central treasury bank and is responsible for managing the balance sheet structure of all Group companies by raising funds on the bond and capital markets and for financing companies within the Group. The bank is also a key place of business for the Group’s financial market transactions.
PPF Group is one of the largest investment and financial groups in Central and Eastern Europe, with assets of almost EUR 12 billion (at 30 June 2010). PPF Group operates in Central and Eastern Europe, Russia and CIS countries, as well as in China and Vietnam.
Important notice:
This report is not an offer to sell or a solicitation of an offer to buy any securities in any jurisdiction in which such an offer would be unlawful under applicable securities legislation, and does not constitute an offer to sell or a solicitation of an offer to buy any securities intended for or made by any persons in respect of whom such an offer would be unlawful under applicable securities legislation.
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