PPF banka a.s. (“PPF banka”), 92.96% owned by the PPF Group N.V., announces its financial results for the period ending 30 June 2010 in compliance with the Czech accounting standards (CAS).
“Profit at the level of CZK 400 million for the first half or 2010 confirms that the Bank’s strategy has allowed the Bank to reach results that exceed the standard even in a period of economic crisis.”
Petr Milev, Chairman of the Board of Directors and CEO
SUMMARY
PPF banka’s balance sheet total for the first half of 2010 increased by 23% (CZK +9.9 billion) to CZK 53.2 billion, up on CZK 43.3 billion disclosed at the end of 2009.
PPF banka’s equity grew 20% year on year to almost CZK 4 billion, and was 11.7% higher than at the beginning of 2010.
The Bank’s profitability, measured by return on equity (RoE, 20.3%), as well as its capital adequacy ratio (CAR, 12.20%), remains high.
BUSINESS RESULTS
PPF banka continued its strategy of providing tailored financial solutions to financial institutions and to selected commercial and municipal clients, including the PPF Group. During the first half of 2010, in spite of the continuing economic crisis, the PPF banka capitalised on the quality of its loan portfolio, on profits in the capital and financial markets, and on the increasing income from fees and commissions. PPF banka’s balance sheet total grew from CZK 43.3 billion at the end of 2009 to CZK 53.2 billion in the mid 2010 (23% increase). The total liabilities to clients grew 22% from CZK 29.6 billion at the end of 2009 to CZK 36.1 billion as at 30 June 2010.
The volume of loans provided to clients increased from CZK 11.4 billion to CZK 13.7 billion year on year. In spite of the relative decrease in profit from financial transactions and the lower interest income, very solid results were achieved thanks to the growing net income from fees and commissions and to the reversal of the provisions for loans that had been repaid.
PPF banka works intensively with its classified loan clients and therefore even in the continuing crisis it has been able to reduce the classified loan portion of the total loans granted to clients to 7.72% as at 30 June 2010, compared to 12.21% as at 31 December 2009. The proportion of doubtful and bad debts decreased from 7.17% to a mere 4% of the total volume of all loans granted to clients.
PPF banka’s capital adequacy (at a stable balance sheet total) slightly increased to 12.20% and the return on average equity (ROAE) for the first half of 2010 is at the very solid level of 20.3%.
FINANCIAL RESULTS
As at 30 June 2010, PPF banka’s net profit was CZK 411.7 million, which was 20% less than the net profit of CZK 587.5 in the first half of 2009. The key factors behind this result are as follows:
Profit from financial transactions decreased to CZK 104,1 million, which was CZK 277.6 million less year on year (down from CZK 381.7 million, i.e., a decrease to one-fifth). This is 2.5 times more than in the first half of 2008.
Net fee and commission income grew CZK 45.9 million to CZK 100.4 million year on year.
Net interest income dropped 17.1% to 447.2 million year on year.
PPF banka prepares and presents its financial results in accordance with the Czech Accounting Standards (CAS) and International Financial Reporting Standards (IFRS). Financial results based on the CAS may differ from the financial results prepared in accordance with the IFRS.
Important:
This report is not an offer to sell or a solicitation of an offer to buy any security in any jurisdiction in which such an offer would be unlawful under the securities legislation in force, and is not an offer to sell or a solicitation of an offer to buy any security intended for or made by any persons in respect of whom such an offer would be unlawful under the securities legislation in force.
This report does not constitute a public offer of securities or any public offer announcement in any jurisdiction, nor does it constitute an offer or invitation to offer or buy any securities in any jurisdiction.
The information contained in this material is not for release, publication or distribution to persons in the United States of America. This information should not be forwarded or transmitted within or to the United States of America. The securities to which this material refers are not and will not be registered in accordance with the US Securities Act of 1933, as amended (hereinafter the “Securities Act”) and may not be offered or sold without registration under the Securities Act or pursuant to an available exemption therefrom.
These materials are not intended for direct or indirect distribution in the United States of America (including its territories and possessions, all US States and the District of Columbia). These materials do not constitute an offer or invitation to buy or subscribe to securities in the United States of America. The stock referred to herein is not and will not be registered under the Securities Act.
This announcement is not an invitation and is not meant as an intention to pursue investment activities within the meaning of Section 21 of the Financial Services and Markets Act of 2000 (hereinafter the “FSMA”). To the extent as this announcement does not represent an intention to engage in investment activities, it is intended solely for: (i) persons outside the United Kingdom, (ii) persons in the United Kingdom to whom the definition of professional investors applies within the meaning of Section 19 (5) of the FSMA (Financial Promotion) Order 2005; and (iv) any other persons to whom such an announcement may legally be made under Section 21 of the FSMA (hereinafter all such persons referred to as “relevant persons”). Any person who is not a relevant person should not act in accordance with this announcement or rely on it.
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