T BANK S.A.
PRESS RELEASE
EARNINGS FOR Q1 2008 Overview of ASPIS BANK Group Financials for Q1 2008
-Gross loans & advances to customers increased by 17% yoy, versus 15% in March 2007, to euro2.27 billion, with accelerated growth rates in consumer and business credit, leading to a 21% yoy versus 18% in March 2007 increase of total assets to euro3.04 billion.
-Solid client base and increase of customer deposits by 17% yoy to euro2.27 billion.
-Total capital adequacy ratio maintained at high levels of 16%.
-Decrease of results after tax & minority interest to euro-2.27 million, mainly due to the liquidity crisis in international markets.
ASPIS BANK Group, is kept at a rapid growth track, with adequate liquidity, high capital adequacy ratio and confidence by its clientele in a period were the turmoil in international capital markets is sustained and the interest cost remains at high levels. The adverse conditions prevailing in the international banking markets have caused chain reactions to the Greek Banking Sector and a consequent negative impact on the bottom line results of ASPIS BANK. The negative result after tax and minority interest of euro-2.2 million was mainly affected by the compression of net interest margin, given the increases in the cost of attracting deposits and in the cost of servicing the raised Tier I and Tier II capital, and by the cost of the implementation of the Bank's restructuring programme in order to implement its strategic planning.
This negative impact on the Bank's bottom line results will not impede the implementation of its growth programme that is in process. Specifically,
-The procedures for the establishment of the first branch of ASPIS BANK abroad, in Sofia, Bulgaria, are in an advanced level.
-The shift of the Bank's strategy to SME financing and consumer credit expansion becomes evident at present. Consumer loans and credit cards grew at accelerated rates of 22% yoy in March 2008. Respectively, SME loans increased by 30% yoy, outperforming the market.
-Further to the Bank's operating restructuring, its organizational structure was modified to adapt to the new conditions aiming at the effective implementation of the Bank's strategy. New highly experienced executives have already been added to the Bank's working force. The executives and existing specialized personnel complemented by the proposed to the Extraordinary General Meeting (13.6.2008), Managing Director Mr Christos Sorotos, is certain that will boost the Bank's growth perspective and create added -value and long -term gains.
Review of Results and Financial Figures
In end-March 2008, total assets increased by 21% to euro3.04 billion driven by pure banking business growth, mainly loan growth. Loans and advances to customer net of impairments increased by 17% to euro2.23 billion. Due to the readjustment of the Bank's strategy, special emphasis was laid on the growth of activities with comparative higher yields, such as SME financing and consumer credit. The results of this shift were reflected in the growth of loans to SMEs, consumer loans and credit cards. In particular, consumer loans and credit cards increased by 23% and 21% respectively, compared to March 2007. Business loans increased by 27%, with loans to SMEs, which accounted for 70% of total business loans, increased by 30%.
The Bank's client base remained strong in a period of a lengthened crisis and remained the main source of funding for ASPIS BANK Group. In end-March 2008, customer deposits, accounted for 81% of the Group's total liabilities and increased by 17% yoy to euro2.27 billion.
Total group equity increased by 17% yoy to euro217 million, given the diversified funding sources of issued Hybrid Tier I and Lower Tier II capital in April 2007 at more favourable terms compared to the ones prevailing in markets at present -given that the markets are adequately liquid at present. The capital injection led to the preservation of the capital adequacy ratio at high levels of 16%.
The Group's credit expansion led the increase of interest income by 16% to euro39.5 million versus euro34 million in Q1 2007. Interest expenses increased at comparatively higher rates due to intense competition, increased cost of servicing of the raised funds and increased cost of attracting deposits. That rise combined with the increased interest cost not being transferred to loan interests, in favour of the Bank's clients, resulted in the decrease of net interest income to euro12 million versus euro14 million in Q1 2007. Net commission income decreased by 7.5% to euro6.5 million, mainly due to the adverse capital market conditions that led to the decrease of asset management and brokerage income. Core banking commission income (i.e. loan, fund transfer, imports-export commission income) increased in total by 6% with loan commissions increased by 16%. Results from financial transactions for the first quarter of 2008 were negative (euro-1 million), due to mark-to-market valuation losses considering the negative yields of stock and bond markets.
Total operating expenses increased by 21% compared to Q1 2007. New executives and specialized personnel complemented the Bank's human capital, increasing operating cost in the short-term, but, ultimately, adding value to the Bank in the long term.
The Chairman and Managing Director of ASPIS BANK, Mr. Constantine Karatzas, referring to the financial results of Q1 2008, stated the following: ''The negative impact and cross-reactions of the crisis that continue to strike the international markets negatively affected bottom line results of Aspis Bank for Q1 2008. This situation had timely been recognized when, at the Annual General Meeting of the Bank's Shareholders, the undersigned said that, as long as greek banks do not transfer the increased cost of deposits to loan interest rates, they face the risk to even suffer losses during 2008. That negative impact does not impede the Group's growth, as reflected in the growth of the Bank's fundamentals such as loans and deposits. ASPIS BANK is now a self-reliant, recognized and modern financial institution with solid client base and adequate liquidity. With the solid foundations having been set for the continuation of Group's growth, the new organizational structure and the change in Management will boost our vision for a strong ASPIS BANK with international presence and more attractive yields''.
-Gross loans & advances to customers increased by 17% yoy, versus 15% in March 2007, to euro2.27 billion, with accelerated growth rates in consumer and business credit, leading to a 21% yoy versus 18% in March 2007 increase of total assets to euro3.04 billion.
-Solid client base and increase of customer deposits by 17% yoy to euro2.27 billion.
-Total capital adequacy ratio maintained at high levels of 16%.
-Decrease of results after tax & minority interest to euro-2.27 million, mainly due to the liquidity crisis in international markets.
ASPIS BANK Group, is kept at a rapid growth track, with adequate liquidity, high capital adequacy ratio and confidence by its clientele in a period were the turmoil in international capital markets is sustained and the interest cost remains at high levels. The adverse conditions prevailing in the international banking markets have caused chain reactions to the Greek Banking Sector and a consequent negative impact on the bottom line results of ASPIS BANK. The negative result after tax and minority interest of euro-2.2 million was mainly affected by the compression of net interest margin, given the increases in the cost of attracting deposits and in the cost of servicing the raised Tier I and Tier II capital, and by the cost of the implementation of the Bank's restructuring programme in order to implement its strategic planning.
This negative impact on the Bank's bottom line results will not impede the implementation of its growth programme that is in process. Specifically,
-The procedures for the establishment of the first branch of ASPIS BANK abroad, in Sofia, Bulgaria, are in an advanced level.
-The shift of the Bank's strategy to SME financing and consumer credit expansion becomes evident at present. Consumer loans and credit cards grew at accelerated rates of 22% yoy in March 2008. Respectively, SME loans increased by 30% yoy, outperforming the market.
-Further to the Bank's operating restructuring, its organizational structure was modified to adapt to the new conditions aiming at the effective implementation of the Bank's strategy. New highly experienced executives have already been added to the Bank's working force. The executives and existing specialized personnel complemented by the proposed to the Extraordinary General Meeting (13.6.2008), Managing Director Mr Christos Sorotos, is certain that will boost the Bank's growth perspective and create added -value and long -term gains.
Review of Results and Financial Figures
In end-March 2008, total assets increased by 21% to euro3.04 billion driven by pure banking business growth, mainly loan growth. Loans and advances to customer net of impairments increased by 17% to euro2.23 billion. Due to the readjustment of the Bank's strategy, special emphasis was laid on the growth of activities with comparative higher yields, such as SME financing and consumer credit. The results of this shift were reflected in the growth of loans to SMEs, consumer loans and credit cards. In particular, consumer loans and credit cards increased by 23% and 21% respectively, compared to March 2007. Business loans increased by 27%, with loans to SMEs, which accounted for 70% of total business loans, increased by 30%.
The Bank's client base remained strong in a period of a lengthened crisis and remained the main source of funding for ASPIS BANK Group. In end-March 2008, customer deposits, accounted for 81% of the Group's total liabilities and increased by 17% yoy to euro2.27 billion.
Total group equity increased by 17% yoy to euro217 million, given the diversified funding sources of issued Hybrid Tier I and Lower Tier II capital in April 2007 at more favourable terms compared to the ones prevailing in markets at present -given that the markets are adequately liquid at present. The capital injection led to the preservation of the capital adequacy ratio at high levels of 16%.
The Group's credit expansion led the increase of interest income by 16% to euro39.5 million versus euro34 million in Q1 2007. Interest expenses increased at comparatively higher rates due to intense competition, increased cost of servicing of the raised funds and increased cost of attracting deposits. That rise combined with the increased interest cost not being transferred to loan interests, in favour of the Bank's clients, resulted in the decrease of net interest income to euro12 million versus euro14 million in Q1 2007. Net commission income decreased by 7.5% to euro6.5 million, mainly due to the adverse capital market conditions that led to the decrease of asset management and brokerage income. Core banking commission income (i.e. loan, fund transfer, imports-export commission income) increased in total by 6% with loan commissions increased by 16%. Results from financial transactions for the first quarter of 2008 were negative (euro-1 million), due to mark-to-market valuation losses considering the negative yields of stock and bond markets.
Total operating expenses increased by 21% compared to Q1 2007. New executives and specialized personnel complemented the Bank's human capital, increasing operating cost in the short-term, but, ultimately, adding value to the Bank in the long term.
The Chairman and Managing Director of ASPIS BANK, Mr. Constantine Karatzas, referring to the financial results of Q1 2008, stated the following: ''The negative impact and cross-reactions of the crisis that continue to strike the international markets negatively affected bottom line results of Aspis Bank for Q1 2008. This situation had timely been recognized when, at the Annual General Meeting of the Bank's Shareholders, the undersigned said that, as long as greek banks do not transfer the increased cost of deposits to loan interest rates, they face the risk to even suffer losses during 2008. That negative impact does not impede the Group's growth, as reflected in the growth of the Bank's fundamentals such as loans and deposits. ASPIS BANK is now a self-reliant, recognized and modern financial institution with solid client base and adequate liquidity. With the solid foundations having been set for the continuation of Group's growth, the new organizational structure and the change in Management will boost our vision for a strong ASPIS BANK with international presence and more attractive yields''.