Financial results for 2014
Tatra banka Group finished 2014 year with consolidated profit of € 114.64 mill. Loans to customers grew approx. by 10 %, while the share of non-performing loans decreased. Deposits from customers grew slightly.
„I see 2014 as a very successful year. Increase in individual clients by 17 thousands confirms that our strategy to bring clients innovations that significantly simplify their daily banking is right. Loans grew by approximately 10 per cent, mostly because of activity of corporate clients as well as increase of housing loans. Besides sustainable growth of business we kept precautious cost policy that was reflected in 18 per cent net profit growth of Tatra banka Group. Last year was also influenced by preparation for asset quality review and stress tests by European Central Bank where Tatra banka also took part as one of three systemically significant financial institutions in Slovakia. Tatra banka performed all requested criteria established by ECB without additional need for its own resources, whereas consolidated capital adequacy ratio significantly exceeds limits set by NBS and ECB," said Igor Vida, CEO and Chairman of the board of Tatra banka.
Summary of Consolidated Performance
The consolidated after-tax profit of the Tatra banka Group increased 18.0 per cent year-on-year, from € 97.17 million in 2013, to € 114.64 million. The higher profit was achieved due to an increase in net interest income combined with decrease in general administrative expenses. The growth in operating income and decrease in operating expenses led to improvement of the cost-income ratio to 49.9 per cent from last year's 55.8 per cent.
Development of income and expenses
Net interest income increased as a result of a higher volume in the bank's loan portfolio and decreasing interest expense on term deposits. The decrease of interest expense was associated with the decline of interest rates on financial markets in previous years, which was reflected in term deposits with some delay after their expiration and renewal. Both these effects contributed to the increase in net interest income by 3.2 per cent to € 305.2 million. General administrative expenses decreased by 7.6 per cent to € 226.7 million.
Development of assets
The consolidated assets of the Tatra banka Group increased 2.2 per cent to € 9.68 billion. Loans to customers grew 9.5 per cent to a total of € 7.20 billion. The share of non-performing loans in the total portfolio decreased to 4.8 per cent, which is better than the entire banking sector and shows the better quality of the bank's loan portfolio. The growth in client loans was mainly affected by loans to corporate segment and housing loans.
Development of liabilities and equity
Deposits from customers increased to € 7.34 billion. The growth was recorded particularly in current accounts. There was a decrease in term deposits and loans received from other banks. The consolidated ratio of loans to deposits was 98.1 per cent as of 31 December 2014.
The consolidated capital adequacy ratio as of 31 December 2014 increased year-on-year by 297 basis points to 19.6 per cent, which is significantly more than the level required by the National Bank of Slovakia and the European Central Bank.
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