VUB Group net profit of EUR 105.6 mil., +11.2% y-o-y

Bratislava, October 29, 2010 – VUB Group, the member of international banking group Intesa Sanpaolo, earned in the first three quarters of 2010 operating profit of EUR 193 mil. and net profit of EUR 105.6 mil., 11.2% y-o-y. The Group’s net loan portfolio exceeded EUR 6.2 bn, representing 5.5% y-o-y growth.

VUB Group gross operating income in first three quarters of 2010 reached the level of EUR 362.1 mil., representing modest 1.0% increase y-o-y. On one hand, this was positively driven by higher volumes in both, deposits as well as loans areas. On the other hand, gross operating income growth was held back by negative performance of the leasing subsidiary due to the enduring consequences of the economic crisis. In terms of net fee income, this was up 10.8% y-o-y, driven by increased contributions from sale of mutual funds and insurance products, as well as increased loan volumes.

Operating expenses recorded a nominal increase by 2.7%, only due to the fact that in the first quarter of 2009 VUB Group released litigation reserves created in prior years in amount of EUR 11.5 mil. Without this extraordinary effect, operating expenses would show in fact a decrease of 4% y-o-y. This was achieved through higher cost efficiencies Group wide, which allowed further reduction of cost/income ratio to 46.6%, compared to 49% the year before (without extraordinary effects).

The consolidated operating profit before impairment and provisions reached EUR 193.4 mil., which represents minor 0.5% nominal drop y-o-y, again due to the above mentioned extraordinary effect. Without this effect the Group profit from operations would increase by 5.8%. Profit before tax reached level of EUR 133.5 mil., recording a considerable 12.7% y-o-y hike (25%, without the extraordinary effect), due to considerably lower cost of risk (21% less than year before).

“VUB performance as of end of 3Q2010 shows an even improved trend compared with end of previous quarter, characterised by comparably higher revenue growth and stable cost development. Cost efficiency and healthy loan portfolio remain the strong defining factors of the Bank’s ability to deliver sustainable positive performance over time. We managed to increase the market share in both, loans and deposits (based on August data,) while recording one of the lowest shares of non-performing loans in the Slovak market, well below the sector average. With a cost/income ratio of 46.6% (down 243bps y-o-y) we continue to be one of the most efficient Slovak banks,” said Ignacio Jaquotot, CEO of VUB Bank.

The volume of VUB Group net loan portfolio exceeded EUR 6.2 billion representing 5.5% actual y-o-y growth mainly due to 16.3% increase of mortgage loan volumes, with other retail loans also increasing in volume. Deposits reached volume of EUR 7.2 billion representing 8.9% y-o-y increase. This strong increase is mainly connected with large corporate and State deposits growth. VUB Group also managed to improve its market position in asset management by increasing the NAV of funds under administration by 34% y-o-y.

Selected financial indicators from the consolidated income statement:

Selected indicators from the consolidated balance sheet:

The VUB Group comprises VUB bank and its 100% subsidiaries: Consumer Finance Holding, VUB Asset Management, VUB Factoring, VUB Leasing and Recovery. The consolidation perimeter also includes VUB Generali DSS (50% share).