10/30/2008
J&T BANKA has Record High Profit
In the first 9 months of 2008, J&T BANKA, a. s. generated a profit of CZK 353 million, which is CZK 188 million more year on year. These record-high results reflect the bank’s growing Total Assets (up by 25% to CZK 39 billion year on year), improving the operating efficiency and greater interest margins on credit transactions. With Profit After Tax of SKK 175 million as of September 30, 2008 (up by 68% year on year), our Slovak branch office considerably contributed to the bank’s overall successful performance. The Total Assets of our Slovak branch office reached SKK 17.1 billion, having grown by 32% since October 2007.
“Our efficiency growth is natural. Our bank operates with a fairly narrow cost base, and with the Total Assets growing we reap economies of scale,” said Štěpán Ašer, a member of J&T Banka’s Board of Directors. In a year-on-year comparison, the Net Interest Income grew more than 30% to CZK 682 million, whereas Operating Expenses grew only 12.6% over the same period. On the other hand, Fee and Commission Income for financial market services decreased. This decline is primarily attributable to lower traded volumes and lower fees for asset management and for investments in mutual funds, due to the current market development.
Throughout the year J&T BANKA has gradually increased its liquid reserves. These were up more than 40% year on year, reaching nearly CZK 10 billion. “In view of the potential macroeconomic risks, we decided early this year to limit the growth of our credit portfolio,” Ašer explained.
At the end of Q3, the bank’s capital adequacy ratio was 10.23%, remaining high above the minimum regulatory requirement. “With a sufficient liquidity and capital, we are prepared to help our clients solve their potential lack of capital due to financing restrictions on the part of other banks. In the upcoming period, we are going to focus on supporting our existing credit transactions and, in general, our existing clients,” Ašer added.
The bank does not depend on the interbank market in terms of financing. For several years, the bank’s investments in securities have been significantly restricted and limited only to quality and transparent securities, mostly money market instruments. The effects of the ongoing financial crisis have thus impacted J&T BANKA only indirectly.
According to J&T BANKA’s Board of Directors, the main long-term risk potentially arising from the current crisis is a non-functioning credit market. Such a situation may lead to a temporary drop in the prices of real assets used as collateral, similar to what we can observe today in stock markets. “It’s now clear that the limited credit activity of banks will affect the real economy and result in a lower GDP growth. The severity of the slowdown will primarily depend on the governments’ ability to get the financial sector moving again, as it’s presently constrained by distrust and waiting,” Ašer comments.
Since every country approaches the crisis in the financial sector differently, the Slovak branch office of J&T BANKA, a. s., based in Bratislava, decided to change its deposit insurance policy and accede to the Slovak Insurance System. This step should accommodate the needs of our clients, for whom the deposit insurance level in Slovakia is now more beneficial. The bank is also preparing for the potential interest of its Czech clients in deposit transfers.
J&T BANKA, a.s. focuses strategically on clients and trades requiring a highly individual approach. In addition to comprehensive private banking services, the bank provides specialized financing for real estate projects and enterprise acquisitions and trades in securities for major private investors. The bank serves both private clients and institutions. Apart from the Czech J&T Banka, the J&T Group also includes a branch office in Slovakia, the Swiss-based J&T Bank Switzerland Ltd., J&T Bank zao based in Russia, and Bayshore Bank & Trust Corporation seated in Barbados.
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Main Balance Sheet Items |
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September 30, 2008 |
September 30, 2007 |
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Total Assets |
39 630 831 |
31 637 550 |
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Cash and Deposits with Banks |
9 076 516 |
6 034 101 |
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Receivables from Clients |
29 330 608 |
24 324 545 |
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Liabilities to Clients |
33 828 699 |
25 362 594 |
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Shareholders’ Equity |
3 166 930 |
2 759 850 |
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Capital Adequacy |
10,23% |
11,31% |
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Main P/L Statement Items |
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September 30, 2008 |
September 30, 2007 |
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Interest Income |
1 728 723 |
1 079 002 |
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Interest Expense |
1 046 460 |
557 642 |
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Net Interest Income |
682 263 |
521 360 |
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Fee and Commission Income |
57 840 |
101 301 |
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Administrative Costs |
272 359 |
241 933 |
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Profit Before Tax |
445 342 |
216 275 |
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Income Tax Expense |
91 436 |
51 107 |
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Profit After Tax |
353 907 |
165 167 |
Contact: Petr Málek, Marketing Director, malek@jtfg.com , +420 606 622 821
author: Petr Málek