8/6/2008

J&T BANKA Doubled its Profit Year-on-Year

During the first half of 2008, J&T BANKA increased its profit by more than CZK 140 million, to CZK 278 million. This result is partially attributable to one-time transactions connected with the release of provisions for repaid loans. Operating profit, which does not include the aforementioned one-time transactions, grew by more than 50% year-on-year.
The main driving factor behind the higher earnings was the growth of total assets and the related increase in net interest income. Client deposits grew by more than 60% to CZK 34 billion year-on-year. The bank was again successful in acquiring mostly stable term deposits; current account balances accounted for merely 10% of the total client deposits. In contrast to deposits, the loan portfolio showed a slower growth, with the value of loans to clients up by 29% year-on-year.
“The slower growth of loans is subsequently reflected in excess cash. We now have over a quarter of our total assets in liquid reserves; that is more than what would be optimal in terms of resource utilization efficiency. However, we remain cautious in view of the situation on the global markets,” explains Štěpán Ašer, a member of J&T Banka’s Board of Directors. “We’re still considering a number of attractive financing opportunities, yet if the intended project does not have arrangements to fully finance the business plan, we’re very prudent in granting loans. On the other hand, the existing situation allows us to improve our interest margins or, if relevant, apart from interest we may as well claim shares of the earnings generated by the projects we finance,” he added.
Compared to the same period of 2007, the bank’s fee and commission income declined. The total net fee income reached CZK 38 million compared to CZK 56 million the year before. The fee income from securities trading and the income for portfolio management decreased. “The decline reflects the overall situation in the capital markets. While the first half of last year was very volatile and many clients reacted to the higher volatility by trading actively, this year the situation is much more peaceful in this respect,” Ašer comments.
The significant profit growth can also be attributed to some extent to better operating efficiency. In a year-on-year comparison, operating expenses showed a slower growth than the total assets and operating income. Total operating expenses reached CZK 204 million, up by 25%. “Although we plan higher expenses in the second half of the year due to internal projects that we have launched and due to the adoption of the euro in Slovakia, we are on a good track to achieve the financial targets we have set for this year,” Ašer added.
J&T BANKA, a.s., is a member of the J&T Group. It focuses strategically on clients and trades that require a highly individual approach. In addition to comprehensive private banking services for selected clients, the bank provides specialized financing for real estate projects and enterprise acquisitions and trades in securities for major private investors. The bank has operated in the Czech Republic since 1998, and it has also established a presence in Slovakia. In addition to the Czech Republic and Slovakia, the J&T Group does also business in banking in Switzerland, Russia and Barbados.

Petr Málek
Director of Marketing for J&T Group
Pobřežní 14, 186 00 Praha 8
Tel.: +420 221 710 206