In the first quarter of this year we recorded the largest quarterly profit in the nearly twenty-year history of the bank.
“From a business perspective, the first quarter was slightly affected by the new regulatory capital framework, however, lending, especially for mortgages, gained momentum at the end of the first quarter.. The shareholder interest in the Czech market is confirmed by their decision to increase the bank’s capital in the second quarter by all of last year’s profit,” commented CEO and Chairman of the Board of Directors Lubor Žalman.
NET PROFIT AND REVENUE - The net profit of the bank increased year over year by 52% to 884 million crowns. Due to lower margins, net interest income declined year over year by 5.9 percent to 1.65 billion CZK, net revenues from fees (mostly because of an upturn in the business sector and increase in transactions) rose 5.7 % to 539 million crowns. Other bank revenues also increased significantly, while the share of fee revenue in total revenue declined slightly to 20.8%.
CAPITAL - Bank equity increased by 18% year over year to 17.1 billion crowns. The capital adequacy of the bank at the end of March reached 13.18 %, while a year earlier it had been 10.59 %. The bank’s General Meeting at the end of April approved the allocation of all of last year’s earnings to equity, so after entering this change in the Register of Companies, bank equity will increase by more than two billion crowns
DEPOSITS AND LOANS - Total assets increased 2.4 % year over year reaching 198.1 billion crowns. Loan volume increased a modest 0.3 percent from last year to 157.9 billion crowns. The slow rate of growth is due to the partial restriction of loans during the first months of this year. In the second quarter the bank has been lending without restriction and would like to continue its loan growth. For this reason, in May the bank decided not to sell a small portion of its mortgage portfolio as originally intended, but to the contrary mortgages will remain a priority product. Deposit volume increased 9.7% to 138.5 billion CZK, with most of this increase seen in savings accounts.
NO RISKY BONDS IN THE PORTFOLIO - In its portfolio, Raiffeisenbank no longer holds any bonds from any of the risk countries of Europe (Portugal, Italy, Ireland, Greece, and Spain). Nearly 99 % of the bank’s investment goes into government bonds of the Czech Republic, with the remainder going to bonds of large Czech companies.
RISK MANAGEMENT – Provisioning declined 35.4% year over year to 252 million crowns. The decline was seen primarily in the company sector. The good performance was also due to successful debt collection.
COSTS – Operating costs declined 8% year over year to 1.2 billion crowns. This drop was mostly due to bank savings in non-personnel areas with other administrative costs falling nearly 12 percent.