Citi Hungary's 2012 performance remained strong in a challenging environment with a ROA of 1.2%.
Citi Hungary’s after-tax profits were down 13.6% to HUF 9.4 billion in 2012 from HUF 10.8 billion in the previous year. Net interest income dropped 3.1% to 30.8 billion. Citi Hungary attributed the decline to lower net interest margins. ROA dropped 30 basis points to 1.2%. Pre-tax profit decreased almost 20% to HUF 13.2 billion.
“We want to highlight our commitment for lending,” Citi Hungary Batara Sianturi said at a press conference on Thursday. “Because of that, we have increased our loan-to-deposit ratio to 40% from 35%,” he added. However, this is still one of the lowest LTD ratio in the Hungarian banking sector.
Overall loan portfolio grew by 8% 154.1 billion driven by a 13% growth in corporate lending with flat retail lending. Total corporate loans reached HUF 95.4 billion, while the stock of consumer loans exceeded HUF 58.7 billion last year. The bank’s NPL ratio remained flat at 2.5% in 2012 driven primarily by the credit card portfolio. This compares to an average 13.7% NPL ratio in the entire Hungarian banking sector. Sianturi stressed that Citi Hungary’s Credit Loss Rate is also way better than the sector average, at 1.6%, which represents a slight increase from the previous year’s 1.4%.
Total deposits dropped 5.4% to HUF 382.7 billion in 2012. Within that, corporate deposits declined by 7.9% to HUF 262.8 billion, while consumer deposits practically remained flat, at HUF 120 billion.
Citi Hungary aims to remain a market leader in the credit card business, said Sianturi. The bank has issued 225,000 credit cards, while the number of retail accounts is only 75,000.
Citi Hungary’s cost to income ratio is close to 50%. As top line is very challenging due to the market environment, banks have to carry out reengineering at the second line, which represents costs and at the third line, which represents the cost of credit, noted Sianturi.