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FHB Q4 profit rises on book value of Allianz Bank acquisition

After-tax profit of Hungary's FHB came to HUF 8.23 billion in Q4, rising sharply from HUF 1.55 billion in the same period a year earlier as FHB booked the difference between the purchase price and the nominal value of an acquisition it made, the bank said in its consolidated IFRS report for the period.

The difference between the price FHB paid for Allianz Bank and Allianz Bank's book value added about HUF 8.0 billion to FHB's “other revenue” line. In Q4 2009, FHB booked a loss of HUF 906 million on the line.

FHB agreed to buy Allianz Bank from insurer Allianz Hungary last July. FHB acquired Allianz Bank for 1,829,864 FHB shares - worth about HUF 2.2 billion at market value - and HUF 1.1 billion in cash. When the parties announced the deal in July, they put the value of the transaction at HUF 3.8 billion.

Fourth-quarter earnings per share came to HUF 175.

FHB's net interest revenue fell 30.7% to HUF 6.75 billion. Net revenue from commissions and fees rose 85.8% to HUF 809m.

Gross financial profit climbed 43.9% to HUF 12.74 billion.

FHB's lending losses improved to HUF 832m from HUF 2.82 billion.

Excluding the effect of an extraordinary bank levy introduced in 2010, FHB said its after-tax profit would have risen to HUF 9.0 billion.

FHB's after-tax profit for the full year climbed 60.3% to HUF 11.3 billion, also lifted by the book value of Allianz Bank.

Net interest revenue for the full year fell 3.1% to HUF 26.63 billion. Net revenue from commissions and fees rose 14.9% to HUF 1.65 billion.

Gross financial profit was up 4.3% at HUF 32.83 billion.

Lending losses narrowed to HUF 5.0 billion in 2010 from HUF 7.72 billion in 2009.

ROA rose to 1.4% from 0.9%. ROE climbed to 21.7% from 15.5%.

Without the effect of the bank levy, after-tax profit would have risen 95.5% to HUF 13.78 billion, FHB said.

FHB had total assets of HUF 873.2 billion on December 31, 2010, up 9.0% from twelve months earlier. Lending stock was up 8.4% at HUF 646.9 billion.

The book value of FHB mortgage bonds outstanding fell 8.7% to HUF 400.1 billion.