…share price breaks above EUR 7 level
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Laiki Bank Pcl (CPB) beat market expectations lifting first nine month profits by 105.4% year-on-year to CYP 62.6 mln or EUR 108.5 mln as the Group managed to increase total income by 23%, while cost increases were kept at 7%. For the first time in five years, the share price broke above EUR 7 or CYP 4 level, closing Tuesday trading at EUR 7.08 per share.
Total income surged 23.1% YoY to CYP 227 mln or EUR 393 mln in the first nine month period as all activities of the Group showed an improvement compared to the same period last year. The net interest margin was maintained at 2.80% against 2.92% at the end of 2005.
The Group’s insurance operations realised an increase of 198% in profit after tax which amounted to CYP 6.5 mln. Excluding the goodwill impairment of CYP900K, which was charged to the results of the corresponding nine-month period of 2005, the profit after tax rose by 107%.Â
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Expenses under control
Operating expenses rose by 7% to CYP 118.6 mln or EUR 205.7 mln compared to the corresponding period of 2005. The increase includes the expenses of the Group’s acquired bank in Serbia from January 2006. Staff costs were up 12% to CYP 78 mln, depreciation and goodwill charge were down 27% at CYP 8.7 mln while other operating expenses were up 8% at CYP 31.71 mln.
The cost to income ratio thus fell to 52.2% end of September 2006 compared to 58.8% end of 2005.
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Provisions
The provision for impairment of advances was lower by 4.7% to CYP 32.5 mln or EUR 56.4 mln despite an 18% growth in the Group’s advances portfolio. The ratio of non-performing loans to total loans was reduced from 10.8% on 30.09.2005 to 9.3% on 30.09.2006, despite the introduction of the new stricter regulations by the Central Bank of Cyprus on 01.01.2006 which dictate the classification as non-performing of all loans which are in arrears for more than 3 months, as against 6 months which applied before. The total provision charge in the books end of September amounted to CYP 347.16 mln.
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Bumper profits
Laiki Group results were helped by CYP 5.7 mln in profit from investment gains, up 318% compared to CYP 1.3 mln a year ago, while the share of profits from associate companies was up at CYP 1.08 mln or EUR 1.88 mln.
Pre-tax profits were up 89.6% YoY to CYP 77.02 mln or EUR 133.55 mln while net profits attributable to shareholders after deduction of minority interest surged by 105.4% YoY to CYP 62.613 mln or EUR 108.57 mln in the first nine months of 2006 from CYP 30.48 mln or EUR 52.85 mln a year ago in the same period.
Earnings per share jumped to 19.6 cent or 34 euro cent.
In the third quarter period from July to September, Laiki reported net profit of CYP 24.41 mln or EUR 42.33 mln compared to CYP 12.36 mln or EUR 21.4 mln in the third quarter a year ago.
The Banking operations contributed CYP 53.8 mln in pre-tax profits, the insurance operations CYP 7.3 mln and the financial & other services CYP 15.89 mln of the total pre-tax profits of CYP 77.02 mln.
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ROE at 19.5%
The increase in the shareholders interest from the revaluation in the reserves of the Group’s financial assets available for sale and the profit for the period amounted to CYP 79.2 mln.
Total shareholders funds’ end of the period amounted to CYP 465.2 mln or EUR 807 mln, boosted by the rights issue which increased capital by CYP 25 mln and the share premium account by CYP 35.7 mln, less the CYP 1 mln rights issue costs. The total also includes the dividend payment of 6 cent per share for 2005, which cost CYP 21.44 mln.
The Return on Equity by the end of September on an annualised basis increased to 19.5% from 13.1% end of 2005.
Total advances at Group level were up 18% to CYP 4.88 bln, with Cyprus advances increasing 17% to CYP 2.8 bln and Greece advances up 17% to CYP 1.44 bln and other countries up 29% at CYP 646k.
Total deposits at Group level were up 22% to CYP 6.5 bln, with Cyprus deposits up 28% at CYP 4.5 bln, deposits in Greece rising 9% to CYP 1.45 bln and other countries up 18% at CYP 541k.
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Competition clearance
Meanwhile the Greek Commission for the Protection of Competition approved the business consolidation of Popular Bank, Marfin Financial Group and Egnatia Bank, as a result of the acquisition of shares of Marfin Financial Group and Egnatia Bank by Popular Bank via the submission of public offers.
