NLB, d. d., Ljubljana
NLB Group in 2017: net profit of EUR 225.1 million
In 2017 NLB Group improved its business result for the fourth consecutive year and achieved the highest ever net profit of EUR 225.1 million after tax, an increase of over 105 % if compared to the result at the end of the previous calendar year. In addition to the parent bank, all the core banks in NLB Group posted profit thus significantly enhancing the Group’s results by contributing 40% of the overall net profit. For the first time also the non-core members have made a positive contribution to the Group’s result. Detailed information on NLB Group’s performance in 2017 is available in NLB Group Annual Report 2017 and NLB Group presentation published today, on 16 April 2018.
Over last year NLB enjoyed substantial increase of net profit based on increase of results from key business activities, continued cost improvement and further reduction of the non-performing loans. NLB Group continued with the implementation of its strategy delivering client services by offering the right solution in the right time at the right place.
The operating result before provisions without non-recurring events has increased by 11% compared to the one achieved in 2016, which shows a continuous trend of high quality operations in all segments. Higher non-interest income from regular business operations and lower costs have more than compensated lower interest income due to persistently low interest rates in the euro zone. The positive macro environment and successful collection from NPLs have also contributed significantly to net income. Including results from positive one-off effects the return on equity (ROE after tax) increased to 14.4 percent.
In comparison to the previous year, regular costs have decreased by 2 percentage points, mainly due to lower labor and administrative costs as a result of cost discipline. The Cost-Income Ratio (CIR) dropped to 58.3%.
Loan growth was strong in retail Slovenia (7% yoy), foreign strategic markets (8% yoy), also corporate Slovenia segment was largely stable with sub-segments showing good performance (SME growth 10% yoy).
Further improvement of loan portfolio quality was shown also in the reduction of non-performing loan (NPL) volumes by 35% in 2017, exceeding the set targets. The key reason for this success lies in a sustained dedication to restructuring and workout activities. The excellent collection results in combination with a good macro outlook resulted in a net release of provisions and therefore contributed significantly to profitability.
The NPL ratio thus decreased to 9.2%, while the non-performing exposure (NPE) ratio to 6.7%. The coverage ratio stands high at 77.5%, which is a distinct advantage of the NLB Group showing that the NPL reduction process carried out over the last few years had no negative effects to the performance of both NLB d.d. and the Group. An efficient and proactive risk management function focusing on a high-quality credit portfolio and strong equity and liquidity position represent solid foundations for future growth.
The total capital ratio and core equity Tier 1 ratio were 15.9 %, which is above the regulatory requirement, testifying to the capital strength of the NLB Group.
At the right time, at the right place with the right solution
In the future banking industry, both basic and structured banking services, shall be digitalized and NLB has been following this trend. In multi-channel communication, the internet and the mobile phone have been the principal interaction channel between the client and the Bank, while the branches continue to provide the important although quite different a role, being focused on the consulting to the client and no longer on the transaction processing. Aiming to achieve even better service to the client and their experience with our services, NLB has been regularly updating its internet based and both mobile banking applications, also with the new services. Our clients can therefore access to the chat and video phone-call by NLB Klik while they can apply for the loan in the Klikin Fast Loan Service, all paperless and in couple of minutes only. Less than a month ago, NLB has introduced NLB Pay, a mobile wallet service to the public. It is planned that internet chat and video call is introduced also to the Klikin and Klikpro applications and the Fast Loan service to the Klikpro application – the corporate mobile bank.
The presented is a clear signal that NLB is determined to follow its set direction and shall also in the future continue to support simplicity, modernity and innovation of its solutions offering the clients best possible user experience.
This announcement will be available on the Bank's website (www.nlb.si) as of 16 April 2018.
NLB d.d., Ljubljana