VUB Group net profit of EUR 67.1 mil., +9.2% y-o-y

Bratislava, July 28, 2010 – VUB Group, the member of international banking group Intesa Sanpaolo, earned in the first half of 2010 operating profit of EUR 125 mil. and net profit of EUR 67.1 mil., +9.2% y-o-y. The Group’s net loan portfolio exceeded EUR 6 bn, representing 4.7% y-o-y growth.

VUB Group gross operating income in first half of 2010 reached the level of EUR 237.2 mil., representing minor 1.9% decrease y-o-y, mainly as a result of lower interest rates as well as negative performance of the leasing subsidiary due to the enduring consequences of the economic crisis. On the other hand, net fee income was up 11.7% 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 4.1%, 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 6% y-o-y. This was achieved through higher cost efficiencies Group wide, which allowed further reduction of cost/income ratio to 47.3%, compared to 49.3% the year before (without extraordinary effects).

The consolidated operating profit before impairment and provisions reached EUR 125 mil., which represents 6.8% nominal drop y-o-y, again due to the above mentioned extraordinary effect. Without this effect the Group profit from operations would increase by 2%. Profit before tax reached level of EUR 85 mil., recording a considerable 11.7% y-o-y hike (32%, without the extraordinary effect), due to considerably lower cost of risk (30% less than 1H2009).

“VUB had a positive 1H2010 performance, with overall profitability growth supported as usual by advanced risk policies, efficient processes and healthy loan portfolio. We managed to increase the net loans market share by almost 1% to 17.9% (based on May 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 47.3.% (down 200bps 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 billion representing 4.7% actual y-o-y growth mainly due to 15.8% increase of mortgage loan volumes, with other retail loans also increasing in volume. Deposits reached volume of EUR 7.7 billion representing 14.6% 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 50.3%.

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).