T BANK S.A.
Press Release
Q1 2011 FINANCIAL RESULTS
Overview of T Bank Group Financials
With almost a year since the participation of T.T. Hellenic Postbank S.A. in T Bank's share capital and the change in the Bank's management and strategy, a series of actions has been implemented in order to restructure T Bank. The first results of this challenging effort, to return to a profitable base, are now beginning to show.
-The Bank's depository base has been strengthened with net inflows -on a consolidated basis- from H1 2010 until 31.03.2011 of €281 million at a time when the market as a whole faced continues net deposits outflows.
-The operating expenses reduction program is continued with staff expenses and basic operational costs decreased, a trend which is expected to become more obvious in the quarters to follow. The decrease will be supported by the Bank's redundancy plan, recently completed, with 109 participations or 11% of the Bank's staff. Upon completion of the plan T Bank's work force will be reduced by at least 15% versus the beginning Q4 2010.
-Operating expenses decreased by 9% versus Q1 2010. Since December 2010 the efforts have intensified with a drastically expected reduction on annual basis more of 24%.
The macroeconomic environment in which the Bank's program is being implemented can not be overlooked. The highlights of T Bank Group for Q1 2011 are summarized bellow reflecting the negative effects of the Greek economic crisis in the profitability and the loan portfolio quality of the Greek Banking Sector.
-Gross Loans increased by 1% to €1.93 billion yoy versus €1.91 billion in 31.03.2010 according to management aim for quality restructuring and stabilization of loan portfolio.
-Customer deposits increased by €189 million yoy or 12% to €1.74 billion versus €1.55 billion in 31.03.2010
-Total Group Equity amounted to €66.7 million
-Total operating expenses decreased by 9% to €19.4 million versus €21.4 million in Q1 2010
-Total operating income increased by 10% to €16.3 million versus €14.8 million in Q1 2010
-Loss before tax and provisions decreased by 52% to €3.1 million versus €6.5 million in Q1 2010
-Pre tax loss decreased to €9.94 million versus €14.29 million in Q1 2010 and Loss after tax and minority interests decreased to €9.91 million versus €13.48 million in Q1 2010
Review of Group Balance Sheet
Total assets increased yoy by 15% to €2.6 billion versus €2.3 billion in 31.03.2010. Such increase is due to investments in Greek Government Bonds (GGBs) and Treasury bills.
Loans net of provisions remained virtually unchanged compared to the end 2010 as well as 31.03.2010, reflecting the tighter credit standards and loan portfolio restructuring policy applied by the Bank. Gross loans increased yoy by 1% to €1.93 billion versus €1.91 billion in 31.03.2010. It is worth noting the direction that the Bank has adopted in the lending and supporting of enterprises, mainly the healthy SME's. T Bank, consistent in its support of economic activity has increased its lending facilities to healthy small and medium enterprises, despite the adverse economic environment. Business loans amount to 45% of the total loan portfolio versus 41% in 31.03.2010, increased by 10% yoy. Similarly, loans to small and medium enterprises which amount to 32% of the total loan portfolio versus 26% in 31.03.2010, increased by 24% or €120 million yoy. However, given the credit risk to which the Bank is exposed, the Bank continues to increase provisions for loan losses. Therefore, accumulated loan loss provisions after write-offs increased to €137.3 million versus €130.4 million in YE 2010 and €111.4 million in 31.03.2010.
At the same time, in order to actively manage credit risk the Bank has enhanced its overdue claims collection mechanisms. Furthermore, given the adverse economic conditions and the economic hardship that both households and enterprises are facing, the Bank has developed new restructuring debt products in order to better support borrowers with their debts. Total investments in securities (Available for Sale, Trading, Held to Maturity) increased by €416 million yoy to €467.4 million versus €51.7 million in 31.03.2010. Such increase is due to investments in Greek Government Bonds (GGBs) which amounted to €434.5 million in 31.03.2011. It is noted that investments, as compared to YE 2010, decreased by €83.7 million, a trend that will continue since the Bank is implementing a complete withdrawal program of the liquidity facility provided by the ECB.
Following the deposits net inflow -on a consolidated basis- during H1 2010 and Q1 2011 of €281 million, group customer deposits amounted to €1.74 billion, increased by 12% yoy and by 2% ytd. Following the decrease in customer deposits from Q4 2009 to H1 2010, the trend has now stabilized and continues to be positive.
Total group equity amounted to €66.7 million versus €140.4 million in 31.03.2010 and €76.7 million as at YE 2010, as a result of the accumulation of significant losses in the current and previous financial years.
Review of Group results
Q1 2011 group results reflect the continuous efforts towards drastic reduction of operating expenses and the development of alternative sources of income. Coordinated actions in both directions resulted in the containment of loss before tax and provisions by 52% to €3.1 million and loss after tax and minority interest by €3.6 million to €9.91 million.
Total operating income increased by 10% to €16.3 million due to investments in Greek Government Bonds (GGBs). Interest income increased by 38% yoy to €31.4 million with loan interest income increased by 2% to €22.6 million and bond loans interest increased by 8.3% to €8.7 million due to investment in high yielding GGBs. Interest income increase offset the increase of interest expense to €20.1 million due to the high cost of recovering deposits in an effort to increase the Bank's liquidity. Therefore, net interest income increased by 20% to €11.3 million versus €9.4 million in Q1 2010. Accordingly, net commission income marginally increased by 1% to €2.73 million versus €2.69 million in Q1 2010. Profits from financial transactions amounted to €275K.
Total operating expenses decreased by 9% yoy to €19.4 million mainly due to reduced staff expenses. Staff expenses decreased by 9% yoy to €10.7 million versus €11.8 in Q1 2010. Staff leaving the Bank and its subsidiaries caused that reduction versus 31.03.2010 which will become more evident in the quarters to follow. We note that that the Q1 2011 results do not reflect, the positive effect of the recently completed Bank's redundancy plan. Administrative expenses decreased by 9% to €6.1 million due to the Bank's basic operating expenses falling by 12% (lease, branch and premises maintenance, postal and communications and other consumables) and the Bank's contribution to the Deposit Guarantee Fund also reduced. The ongoing rationalization plan of administrative and staff expenses after the successful completion of Bank's redundancy plan is expected to further reduce costs. Fixed assets depreciations decreased by 11% to €2.6 million.
As a result, loss before tax and provisions contained significantly by €3.4 million or 52% amounted to €3.1 million. Loan impairments sustained in high levels to €6.9 million versus €7.7 million in Q1 2010 due to the Bank's credit risk resulting from the recession in the economy. Pre tax losses restrained to €9.94 million versus €14.29 in Q1 2010 and losses after tax and minority interest by 27% to €9.91 million versus €13.48 million in Q1 2010.
Overview of T Bank Group Financials
With almost a year since the participation of T.T. Hellenic Postbank S.A. in T Bank's share capital and the change in the Bank's management and strategy, a series of actions has been implemented in order to restructure T Bank. The first results of this challenging effort, to return to a profitable base, are now beginning to show.
-The Bank's depository base has been strengthened with net inflows -on a consolidated basis- from H1 2010 until 31.03.2011 of €281 million at a time when the market as a whole faced continues net deposits outflows.
-The operating expenses reduction program is continued with staff expenses and basic operational costs decreased, a trend which is expected to become more obvious in the quarters to follow. The decrease will be supported by the Bank's redundancy plan, recently completed, with 109 participations or 11% of the Bank's staff. Upon completion of the plan T Bank's work force will be reduced by at least 15% versus the beginning Q4 2010.
-Operating expenses decreased by 9% versus Q1 2010. Since December 2010 the efforts have intensified with a drastically expected reduction on annual basis more of 24%.
The macroeconomic environment in which the Bank's program is being implemented can not be overlooked. The highlights of T Bank Group for Q1 2011 are summarized bellow reflecting the negative effects of the Greek economic crisis in the profitability and the loan portfolio quality of the Greek Banking Sector.
-Gross Loans increased by 1% to €1.93 billion yoy versus €1.91 billion in 31.03.2010 according to management aim for quality restructuring and stabilization of loan portfolio.
-Customer deposits increased by €189 million yoy or 12% to €1.74 billion versus €1.55 billion in 31.03.2010
-Total Group Equity amounted to €66.7 million
-Total operating expenses decreased by 9% to €19.4 million versus €21.4 million in Q1 2010
-Total operating income increased by 10% to €16.3 million versus €14.8 million in Q1 2010
-Loss before tax and provisions decreased by 52% to €3.1 million versus €6.5 million in Q1 2010
-Pre tax loss decreased to €9.94 million versus €14.29 million in Q1 2010 and Loss after tax and minority interests decreased to €9.91 million versus €13.48 million in Q1 2010
Review of Group Balance Sheet
Total assets increased yoy by 15% to €2.6 billion versus €2.3 billion in 31.03.2010. Such increase is due to investments in Greek Government Bonds (GGBs) and Treasury bills.
Loans net of provisions remained virtually unchanged compared to the end 2010 as well as 31.03.2010, reflecting the tighter credit standards and loan portfolio restructuring policy applied by the Bank. Gross loans increased yoy by 1% to €1.93 billion versus €1.91 billion in 31.03.2010. It is worth noting the direction that the Bank has adopted in the lending and supporting of enterprises, mainly the healthy SME's. T Bank, consistent in its support of economic activity has increased its lending facilities to healthy small and medium enterprises, despite the adverse economic environment. Business loans amount to 45% of the total loan portfolio versus 41% in 31.03.2010, increased by 10% yoy. Similarly, loans to small and medium enterprises which amount to 32% of the total loan portfolio versus 26% in 31.03.2010, increased by 24% or €120 million yoy. However, given the credit risk to which the Bank is exposed, the Bank continues to increase provisions for loan losses. Therefore, accumulated loan loss provisions after write-offs increased to €137.3 million versus €130.4 million in YE 2010 and €111.4 million in 31.03.2010.
At the same time, in order to actively manage credit risk the Bank has enhanced its overdue claims collection mechanisms. Furthermore, given the adverse economic conditions and the economic hardship that both households and enterprises are facing, the Bank has developed new restructuring debt products in order to better support borrowers with their debts. Total investments in securities (Available for Sale, Trading, Held to Maturity) increased by €416 million yoy to €467.4 million versus €51.7 million in 31.03.2010. Such increase is due to investments in Greek Government Bonds (GGBs) which amounted to €434.5 million in 31.03.2011. It is noted that investments, as compared to YE 2010, decreased by €83.7 million, a trend that will continue since the Bank is implementing a complete withdrawal program of the liquidity facility provided by the ECB.
Following the deposits net inflow -on a consolidated basis- during H1 2010 and Q1 2011 of €281 million, group customer deposits amounted to €1.74 billion, increased by 12% yoy and by 2% ytd. Following the decrease in customer deposits from Q4 2009 to H1 2010, the trend has now stabilized and continues to be positive.
Total group equity amounted to €66.7 million versus €140.4 million in 31.03.2010 and €76.7 million as at YE 2010, as a result of the accumulation of significant losses in the current and previous financial years.
Review of Group results
Q1 2011 group results reflect the continuous efforts towards drastic reduction of operating expenses and the development of alternative sources of income. Coordinated actions in both directions resulted in the containment of loss before tax and provisions by 52% to €3.1 million and loss after tax and minority interest by €3.6 million to €9.91 million.
Total operating income increased by 10% to €16.3 million due to investments in Greek Government Bonds (GGBs). Interest income increased by 38% yoy to €31.4 million with loan interest income increased by 2% to €22.6 million and bond loans interest increased by 8.3% to €8.7 million due to investment in high yielding GGBs. Interest income increase offset the increase of interest expense to €20.1 million due to the high cost of recovering deposits in an effort to increase the Bank's liquidity. Therefore, net interest income increased by 20% to €11.3 million versus €9.4 million in Q1 2010. Accordingly, net commission income marginally increased by 1% to €2.73 million versus €2.69 million in Q1 2010. Profits from financial transactions amounted to €275K.
Total operating expenses decreased by 9% yoy to €19.4 million mainly due to reduced staff expenses. Staff expenses decreased by 9% yoy to €10.7 million versus €11.8 in Q1 2010. Staff leaving the Bank and its subsidiaries caused that reduction versus 31.03.2010 which will become more evident in the quarters to follow. We note that that the Q1 2011 results do not reflect, the positive effect of the recently completed Bank's redundancy plan. Administrative expenses decreased by 9% to €6.1 million due to the Bank's basic operating expenses falling by 12% (lease, branch and premises maintenance, postal and communications and other consumables) and the Bank's contribution to the Deposit Guarantee Fund also reduced. The ongoing rationalization plan of administrative and staff expenses after the successful completion of Bank's redundancy plan is expected to further reduce costs. Fixed assets depreciations decreased by 11% to €2.6 million.
As a result, loss before tax and provisions contained significantly by €3.4 million or 52% amounted to €3.1 million. Loan impairments sustained in high levels to €6.9 million versus €7.7 million in Q1 2010 due to the Bank's credit risk resulting from the recession in the economy. Pre tax losses restrained to €9.94 million versus €14.29 in Q1 2010 and losses after tax and minority interest by 27% to €9.91 million versus €13.48 million in Q1 2010.