PPF banka a.s. (“PPF banka”), 92.96% of which is owned by PPF Group N.V., is posting its results for the period ending on 30 September 2010 in accordance with Czech Accounting Standards (CAS).
“The profit of CZK 550 million for the first 3 quarters of 2010 has confirmed the trend of the previous periods, indicating that the chosen strategy allows PPF banka to achieve above-standard results even during the economic crisis.”
Petr Milev, Chairman of the Board of Directors and Chief Executive Officer
PPF banka’s total assets grew by 24.7% (CZK +10.7 billion) for Q3 2010 to CZK 53.9 billion from CZK 43.3 billion at the end of 2009.
The bank’s equity has grown 18% year-on-year to more than CZK 4 billion, with a 16% growth rate since the beginning of 2010.
The bank’s profitability ratio measured as return on equity (RoE, 24.7%) and the capital adequacy ratio (CAR, 12.20%) remain high.
PPF banka continued its strategy of providing solutions “tailored” to financial institutions and selected commercial and municipal clients including PPF Group companies. Despite the continuing economic crisis, PPF banka benefited from the quality of its credit portfolio and from the revenue on capital and finance markets with an increasing percentage of revenue from charges and commissions in the first three quarters of 2010. PPF banka’s total assets grew from CZK 43.3 billion at the end of 2009 to CZK 53.9 billion on 30 September 2010 (a 24% increase). The total liabilities vis-à-vis clients grew 20% from CZK 29.6 billion at the end of 2009 to CZK 35.3 billion as of 30 September 2010.
The amount of credit provided to clients has decreased slightly in year-on-year terms from CZK 14.9 billion to CZK 13.9 billion and remains stabilised. Despite a relative drop in profit on financial operations and a reduction of net interest revenue, the increasing net earnings from charges and dissolution of provisions for repaid credit allowed very solid results.
Despite the ongoing economic crisis, PPF banka has reduced the rate of classified credit in total client credit to 7.08% on 30 September 2010 as opposed to 12.21% on 31 December 2009, thanks to active work with clients with classified credit, so that the percentage of bad and non-performing loans for Q3 2010 decreased from 7.17% to just 4% of the amount of all credit provided to clients.
With stable total assets, PPF banka’s capital adequacy ratio ranges around 12% (11.81%) and the return on average equity ratio (ROAE) for the first 3 quarters has been a very good 24.8%.
As of 30 September 2010, PPF banka had generated a net profit of CZK 552.5 million, a decrease of 26.5% compared with CZK 751.4 million for the third quarter of 2009. The principal reasons for this result are as follows:
The profit from financial operations dropped to CZK 169.1 million, a year-on-year decrease of CZK 332.2 million from CZK 501.3 million, i.e., down to one-third. This is CZK 350.5 million more than for Q3 2008.
Net revenue from charges and commissions has doubled year-on-year from CZK 85.6 million to CZK 173.1 million.
Net interest revenue decreased 14.2% year-on-year to CZK 679.8 million.
PPF banka prepares and presents its financial results in accordance with Czech Accounting Standards (CAS) and the International Financial Reporting Standards (IFRS). Financial results based on the CAS may differ from the financial results prepared in accordance with the IFRS.
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