Consolidated, audited financial results of Slovenská sporiteľňa as of 31 December 2020 according to International Financial Reporting Standards.

“Last year was one that will probably change us fundamentally. Especially in terms of respecting our health. In banking, ongoing trends have been accelerated even further, especially digitalisation and focus on efficiency. When I look at our financial results, I can say that we were doing quite fine considering the circumstances; our operating profit remained almost at last year’s level. Our business was also doing fine. We aided companies in difficult times, funding their business activities and via state guarantee schemes. In addition, we also helped people get a new housing and offered loan deferrals. On top of that, we proved that we are a strong digital leader. Almost all the applications were processed automatically via George. Thanks to our approach and deferral of loan payments the share of non-performing loans is at an all-time low. However, deferral of loan payments and an uncertain situation were the reasons why we had to create more than EUR 100 million in provisions as safety cushion in 2020. This had a major impact on our business results, even though the bank maintains a high level of operating profit. The good news is that most people have no difficulties to get back to regular loan repayment. That is also why I am hopeful when looking at the year 2021 and I believe that we will get back to normal soon.,” said Peter Krutil, Chairman of the Board of Directors and CEO of Slovenská sporiteľňa.

Financial highlights as of 31 December 2020 (Y/Y comparison)

• Net interest income went up by 0.7% y/y from EUR 430.7 million to EUR 433.6 million
• Net fee and commission income increased by 1.4% y/y from EUR 145.2 million to EUR 147.2 million
• Operating profit went down by 1.1% y/y from EUR 308.3 million to EUR 304.7 million
• Net profit after tax decreased to EUR 108.0 million (2019: EUR 180.0 million)
• Volume of loans and receivables grew by 5.7% y/y from EUR 13.8 billion to EUR 14.6 billion
• Deposits from customers increased by 3.3% y/y from EUR 14.4 billion to EUR 14.9 billion 
• Cost income ratio reached 48.5%
• Capital adequacy reached 18.73% and continues to considerably exceed the limit stipulated by the law (according to ECB/NBS, Basel III and IRB approach)
• Loan-to-deposit ratio increased y/y from 95.8% to 98.1%

Business performance overview of Slovenská sporiteľňa as of 31 December 2020

Net interest income went up by 0.7% from EUR 430.7 million to EUR 433.6 million even in times of extremely low interest rates and related decrease of interest income from loans. However, Interest income from financial liabilities with negative interest (TLTRO) had a positive effect on net interest income.

Net fee and commission income increased slightly by 1.4% y/y from EUR 145.2 million to EUR 147.2 million. While income dropped slightly (0.7%), fee and commission expense went down by EUR 3.3 million (by 12.6%). Net income in the area of customer resources distributed but not managed (mainly commissions from mediation of sales of mutual funds and insurance) had a strong positive impact; it grew by EUR 6.8 million y/y. 

The bank recorded a net profit of EUR 12.2 million in the area of net trading and fair value result which is mainly attributable to derivative transactions.

General administrative expenses went down moderately by 0.5% y/y to EUR 287.1 million (in 2019 it was EUR 288.5 million). The increase in the area of personal expenses by 6.3%, by EUR 9.4 million was fully offset by lower write-offs and significantly lower depreciation, as one of the information systems was fully written off.

Operating profit went down by 1.1% to EUR 3.5 million which is a positive result considering the adverse market situation. Cost income ratio remained almost unchanged, as it went up just by 16 basis points to 48.5%.

In Slovenská sporiteľňa, the impact of the pandemic is mainly reflected in creation of loan loss provisions. Net impairment of financial assets went up 2.5 times to EUR 107.9 million compared with the year 2019. Risk costs, i.e. impaired loans/gross loans ratio reached 0.7%; it was 0.3% the year before. However, it must be said that in most cases it was a prudent approach to provisioning for expected and not incurred losses.

The share of defaulted loans on total loan volume decreased from 2.9% to 2.4% while the coverage with provisions improved from 80.8% to 107.0%.

Total levies of the bank went up by 6% y/y from EUR 36.6 million to EUR 38.8 million. Thereof the bank levy amounted to EUR 33.8 million, the annual contribution into the Single Resolution Fund reached EUR 4.0 million and the contribution into the Deposit Protection Fund reached EUR 1.1 million.

Consolidated profit after tax reached EUR 108.0 million. Return on equity (ROE) nearly halved; from 11.6% to 6.2%.

The volume of loans to customers increased by 5.6% y/y and achieved EUR 14.9 billion. Retail loans were the major driving force; they increased by 3.3% y/y (by EUR 0.4 billion) compared with 2019. The market share of Slovenská sporiteľňa in retail loans reached 25.4% in 2020. The main growth driver were housing loans which grew by 6.7% (EUR 0.5 billion in absolute terms), while consumer loans went down by 11.6% y/y (EUR 0.2 billion in absolute terms). 

Loans to corporate clients (including factoring and leasing products) increased by 12.1% y/y (by EUR 0.5 billion) and reached EUR 4.3 billion.

Retail deposits increased from EUR 12.1 billion to EUR 13.3 billion, providing a solid base for financing and room for further growth of the bank. Deposits from customers rose from EUR 14.4 billion to EUR 14.9 billion compared with the year 2019.