Bank levy, provisioning for early repayment push FHB in the red in Q3
Hungary\'s FHB Mortgage Bank had consolidated after-tax losses of HUF 2.30 billion in the third quarter as against HUF 278 million after-tax profit a year earlier as the extraordinary bank sector levy and provisions against expected losses on the early repayment scheme pushed it in the red, FHB said in its unaudited consolidated IFRS report on Friday.
Profit fell even without the bank levy and the provisions despite higher operating profit and savings on costs, as losses from lending and impairment were almost 17 times of the figure in Q3 2010.
The bank levy cost FHB group HUF 605 million in Q3 and cost a combined HUF 2.22 billion in the first three quarters.
Additionally, at the end of Q3 FHB made provisions of HUF 1.9 billion against the losses expected losses on the early repayment scheme based on requests submitted by October 14. The government scheme allows retail borrowers to repay FX mortgages at a fixed preferential exchange rate.
Excluding the banking levy, the group posted a Q3 after-tax loss of HUF 1.69 billion. It posted after-tax profit of HUF 203 million in Q3, hardly more than a tenth of the figure one year earlier, if both the extraordinary bank tax and the early repayment provisions were excluded.
The Q3 loss pushed the bank group in the red for the first three quarters too as it closed the period with after-tax losses of HUF 1.37 billion.
FHB would have made a nine-month after-tax profit of HUF 850m without the banking tax, still 82.2% less than a year earlier. And the nine-month profit was HUF 2.75 billion, 42.6% lower if both the bank levy and the early repayment provisions were excluded.
Earnings per share in Q3 was a negative HUF 145.8 as against 34.9 one year earlier.
Net interest income fell 9.8% to HUF 5.71 billion. Net income from commissions and fees nearly tripled to HUF 754 million from HUF 271 million.
Net interest margin narrowed 40bp to 2.67% in Q3 2011.
Operating income rose 19.7% to HUF 6.55 billion in the third quarter and general and administrative expenses fell 24.5% to HUF 4.05 billion.
Losses from lending and impairment jumped to HUF 4.82 billion in Q3 from HUF 621 million in the previous quarter and from HUF 289 million a year earlier. Including the HUF 1.9 billion provisions on early repayments, impairments totalled HUF 31.5 billion at the end of September 2011.
The proportion of non-performing loans in the lending portfolio rose to 12.5% on September 30 from 11.5% at the end of June and from 8.8% at the end of September 2010. The NPL coverage rose to 57.8% from 54.7% at the end of June and from just 37.4% one year earlier.
The gross stock of client loans rose 18.9% in twelve months to HUF 418.1 billion at the end of September 2011 and the stock of refinanced loans fell 5.9% to HUF 242.3 billion in the period.
FHB\'s mortgage bond stock outstanding fell 17.1% to HUF 340.9 billion and the stock of other bonds rose 17.8% to HUF 102.4 billion.
Deposits rose 116.5% to HUF 153.7 billion.
The loan and especially the deposit stock reflected the acquisition of Allianz bank in the summer.
The bank’s IFRS capital adequacy ratio was 10.3% at the end of September, down from 12.3% at the end of June and from 12.0% twelve months earlier.
FHB had total assets of HUF 856.0 billion on September 30, 2011, up 6.2% from twelve months earlier. Net assets were up 11.8% at HUF 57.7 billion.
FHB is an A-category issuer at the Budapest Stock Exchange.
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