In the first semester of 2019, Idea Bank Group S.A. (www.idea-bank.ro, www.idealeasing.ro) continued its organic growth and brand consolidation on the market. The half year results mirror a comfortable liquidity position, an adequate control of cost of risk and encouraging profitability.
The main financial indicators of Idea Bank S.A. at 30 June 2019 at individual and consolidated level, according to the International Financial Reporting Standards (IFRS):
- Balance sheet. Steady expansion in total assets (+15.5% YoY Bank / +11.3% Group) on the back of the net loan portfolio increase (+11.5% YoY Bank / +6.9% Group) in a pace faster than the banking system’s. The growth of the Group loan portfolio was generated especially by the increase of the financial leasing contracts for the SME sector by 19.5% YoY, followed by the retail segment (+8.2% YoY). The SME loans showed an increase by 2.5% vs. December 2018, signaling the Bank’s strategy to expand finance solutions to this segment, supported by the EaSI guarantees through EU Programme for Employment and Social Innovation, sustained by the European Union and the European Fund for Strategic Investments (EFSI).
- Profitability. On the background of new fiscal obligations and regulatory contributions, Idea Bank Group recorded a net profit of RON 3,071 thousands for the Bank / RON 7,120 thousands for the Group, with ROE of 3.7% Bank / 7.6% Group. The profitability is preserved at a level superior to the Bank’s peers and is supported by NIM of 3.2% for Bank / 3.7% for Group, and COR of 1.2% for Bank / 1.4% COR for Group. Both net interest income as well as net fee and commission income recorded a positive dynamic at Group level, growing by 7.5% YoY and, respectively, by 5.6% YoY, reflecting a healthy expansion of the loan portfolio. To the rise of the operating income by 8.7% for the Bank / by 6.8% for the Group in the first semester of 2019, the increase of net trading income (+38.2% for the Bank / +13.8% for the Group) had a noteworthy contribution. Operational efficiency is superior to Idea Bank peers (cost-to-income (CIR) 75.6%).
- Asset quality. Loan portfolio quality broadly in line with the market, due to strict control of risk and scoring models designed using machine learning technology, which substantially improve credit risk predictability. NPL rate is 5.2% Bank / 5.1% Group at 30 June 2019, while cost of risk of 1.2% Bank / 1.4% Group reflects an adequate control of credit quality, as origination of non-performing loans is offset by a superior collection capacity.
- Liquidity and funding. The liquidity position remains at comfortable levels, with Loan / deposit ratio 79.9% at 30 June 2019, in line with the market, and LCR indicator well above the threshold of 100% at 231.9%. The deposits from customers, accounting for 93% of Bank’s liabilities (80% at Group level) increased by 15.4% YoY compared to June 2018.
- Capital adequacy. Adequate capitalization (CAR 15.59% Bank / 15.21% Group), though below market, but well above the minimum required by NBR. The Group successfully placed in December 2018 on the Bucharest Stock Exchange a first issue of subordinated bonds, EUR-denominated, which strengthened the Group’s capital position through Tier 2 instruments.
“The half year results of Idea Bank Group confirm the Group’s capacity to conserve optimum liquidity, under superior profitability compared to peer group banks, given a good employee productivity which makes the lending process simple and practical for our clients. Our team led to the next level our objectives of digital transformation, through the launch of Idea::WebDepo si Idea::Web Credit platforms, and of balanced financial intermediation through the resources and capabilities of our leasing subsidiary, thus ensuring an optimized customer experience and satisfaction”, said Mioara Popescu, CEO of Idea Bank S.A.
The main commercial trends of Idea Bank S.A. in the first semester of 2019 are expressed by an increase by 3.3% of the clients’ base compared to 31 December 2018 and by 8.2% compared to 30 June 2018. The number of transactions concluded by clients in the first half on 2019 exceeded with 20.3% the one in the first half of 2018. Idea Leasing IFN. S.A. financed in the first semester of 2019 a number of 2,749 leasing contracts, with a value of RON 278.2 million.
Over the course of 2019, Idea Bank continues its digital transformation process, in order to optimize its client service: the Bank launched Idea::WebDepo, an online depo platform with very simple flow and end to end process, and Idea::WebCredit, an online credit platform with online loan pre-scoring, integrating collaboration with fintechs in its digital strategy. A new internet banking application for SMEs and individuals will follow by the end of the year. Moreover, Idea Bank advanced from classic scoring models to using machine learning technology for optimizing the decision making process in the credit risk area, aiming to a digitized risk function.
Going forward, the Group will continue to invest in its team and in digitalization as to improve customer experience, to further develop the growth potential of a balanced financial intermediation on the market provided by the Idea Bank – Idea Leasing collaboration and to grow organically, with an optimum control of risks and operational costs.
Idea Bank operates a network of 33 branches and agencies (Idea Bank Group has 45 branches and agencies).
Idea Bank Group is part of Getin Holding Group, an international financial group operating in banking, financial intermediation, insurance and leasing sectors in Poland, Ukraine, Russia and Belarus. Getin Holding offers a wide range of financial services to big companies, small and medium sized enterprises and retail clients. Idea Bank Group accounts for 9% of total assets of Getin Holding Group and for 49% of the international assets of Getin Holding Group.
The report for the 1st Semester of 2019, prepared in accordance with the provisions of art. 65 of Law no. 24 of 2017 regarding the issuers of financial instruments and market operations, is available on the Idea Bank website, section Investor Relations, on 30 September 2019.