Are you sure?

FHB Q1 earnings plunge 89% on bank levy

Hungary’s mortgage bank FHB said first-quarter after-tax profit plunged 89% to HUF 169 million as the bank levy made deep inroads into earnings. Excluding the banking levy, after-tax profit fell by 21.6% to HUF 1.179 billion, the bank said in its consolidated IFRS report.

The HUF 169 million profit figure factors in the pro rata effect of the bank levy for the quarter, but FHB also included Q1 data adjusted to show the effect of the extraordinary tax for the full year.

FHB posted HUF 1 billion on the bank levy in Q1, including the entire annual amount for its universal bank Allianz Bank and one-quarter of the full-year amount for its other units.

Earnings per share, showing the pro rata effect of the bank levy, were down 94% at HUF 5.

Net interest income fell 10.7% to HUF 6.11 billion. Net income from commissions and fees more than tripled to HUF 739 million from HUF 229 million.

Net interest margin narrowed 62bp to 2.91%. Operating income dipped 11.1% to HUF 6.78 billion.

Losses from lending and impairment narrowed 27.8% to HUF 1.46 billion. The proportion of non-performing loans in the lending portfolio rose to 10.83% in Q1 from 9.65% in Q4 and 7.99% in Q1 2010. Lending losses as a percentage of the average lending stock fell to 1.5% from 2.1% a year earlier.

General and administrative costs were up 45.6% at HUF 4.81 billion.

Pre-tax profit, showing the pro rata effect of the bank levy, was down 77.9% at HUF 511 million.

FHB had total assets of HUF 826.9 billion – adjusted to show the pro rata effect of the bank levy ─ on March 31, 2011, up 7.1% from twelve months earlier. Net assets were up 22.5% at HUF 59.4 billion.

Deposits rose 72.4% to HUF 117.7 billion and client loans were up 9.4% at HUF 364.1 billion.

Allianz Bank, which FHB acquired in the summer of 2010, had HUF 43.6 billion of client loans and HUF 32.2b of client deposits at the end of period. The bank’s retail clients, with 107,300 accounts, made up the bulk of loans and deposits.

The bank’s IFRS capital adequacy ratio was 12.6% at the end of March, up from 11.3% twelve months earlier.

The value of FHB’s outstanding mortgage bonds was HUF 418.3 billion at the end of the period, down 14.7% from twelve months earlier. The value of collateral covering the bonds dropped 11.7% to HUF 773.2 billion to give the bank a coverage rate of 128.7%.