Compared to the same period of last year, the result was somewhat lower because of the relatively low share of financial operations in 2015 (EUR -1.2 million) compared to 2014 (EUR +10.2 million), completely due to once-off events in both periods. Profitability of regular operation improved in the first quarter of 2015 compared to the first quarter of 2015. The amount of impairments and provisions in the portfolio has been stable throughout the first quarter of 2015, totalling EUR 21.2 million, which is the same as last year. Cost regulation is still the focus of attention of both the Bank and the Group; at the Group level, total costs were reduced by 2% and at the Bank level by 5%.

The key marketing activities that influenced the results of operations in the first quarter

In the first quarter of 2015 NLB d.d. managed to increase its market share in non-bank loans by 0.2 percentage point, of which 0.2 percentage point in the area of corporate loans. The scope of gross loans to the non-bank sector in the NLB Group dropped by EUR 9,108 million and the y-o-y growth was EUR 54.3 million or 1% Positive growth of the credit portfolio was achieved in both key segments - corporate and retail.

The Bank preserved its leading role in the process of Slovenian economy restructuring and consolidates co-operation and activities aimed at improving the institutional environment for company restructuring. In the first quarter of 2015, the NLB actively participated in several restructuring projects and provided agency services according to the signed restructuring agreements. NLB d.d. co-operated with other banks as the agent and signed loans in total amount of EUR 112 million, as well as organised an issue of commercial notes in the amount of EUR 20 million.

Structured approach to the management of NPLs in the Group and reduction of the non-core portfolio
 

The share of non-performing loans is stable and accounted for slightly over 25% in the first quarter of 2015. In line with the adopted strategy, the Bank pursued the systematic approach to the management of NPLs with several measures and initiatives that usually comprise restructuring, collection and potential write-offs. Net NPLs dropped by almost EUR 30 million in the first quarter.  The portfolio of non-core investments is also reduced. In the first quarter of 2015, we managed to reduce the assets in the non-core part of the NLB Group by 2.2%, to EUR 892 million.

The Transformation Programme is nearing completion: it is planned to be completed this autumn

Also in 2015, the NLB Group continues with the thorough transformation process, initiated in 2013, with the aim of analysing the existing business model, while also defining and planning the introduction of appropriately adjusted target business models for each transformed area. It consists of 23 projects and three business initiatives, of which 15 projects have already been completed, as well as all three business initiatives.

This announcement will be available on the Bank's website (www.nlb.si) as of 18 May, 2015.