Profits in the first six month of the year are almost 70 percent lower than a year ago.
In the first half of this year, Zagrebačka Banka recorded net profits after tax in the amount of 246 million kuna, which is almost 70 percent less than in the same period last year. This decrease has been caused by a rise in the cost of value adjustments of loans provided to corporate clients and reserves for losses, which are almost three times higher than last year, reports tportal.hr on 28 July 2017.
The net profits of the group at the end of June were 68.5 percent lower than in the first half of 2016 and amounted to 246 million kunas. At the same time, the cost of value adjustments and reserves for losses grew by as much as 192.4 percent, from 302 million kunas last year to 883 million kunas at the end of the first half of this year.
These trends in the downward profitability of Croatian banks were forecast recently by the Croatian National Bank (HNB), which explained the significant drop with the systemic negative impact of the crisis in Agrokor, which was evident as early as the first quarter of this year. “In the second quarter, we can see that the banks continued to recognise the risks associated with Agrokor and its affiliates, which means that they have increased their reserves, which will negatively affect their profitability. However, the stability of the banking system is not endangered. Stability is excellent and that ensures that they can easily survive these problems,” said HNB Governor Boris Vujčić declared last week.
The result of Zagrebačka Banka from operating business, which means before value adjustments and reserves for losses, amounted to 1.15 billion kuna, which is 8 percent better than in the same period last year. Business revenues were down by 3.9 percent to 2.06 billion kunas, while total operating costs grew by 2 percent to 911 million kunas.
There was a slight, one percent decrease in loans issued, which stood close to 65 billion kunas at the end of June, while the fall in deposits was somewhat more substantial and amounted to 4.4 percent, so the total deposits at the end of June were slightly less than 73 billion kunas.
At the level of the Zagrebačka Banka Group, which includes UniCredit Bank from Mostar in Bosnia and Herzegovina and 16 other companies in Croatia and Bosnia and Herzegovina, the profits were 60.8 percent lower than in the first six months of last year. Still, the report states that all group members achieved positive business results.
Translated from tportal.hr.
