E: BKS Bank: No Loan Dilemma, more Savings Deposits
21.08.2009
„Naturally we too are feeling the effects of the financial crisis and economic slowdown. Liquidity costs are still high despite low interest rates, the securities business is only picking up slowly and the risk of loan default is, as expected, on the increase. However, we are well anchored in the market and our time-honored conservative, low-risk business policies have proven to be the right ones in times like these. We’re looking towards the future positively and are well armed for the challenges. Even in the difficult first 6 months of 2009 we were able to increase the balance sheet total group-wide by 1,6% to over € 6 billion. This shows that our customers continue to place their trust in us and value the BKS Bank as their business partner“, explains Dr. Heimo Penker, CEO of the BKS Bank.
Savings Deposits and Issues in Demand
Penker emphasized that there’s no sign of the heavily cited loan dilemma at the BKS Bank. „We have expanded our loan volume to € 4,3 billion. This demonstrates that we are extending loans to both private and business customers.“ The fact that the BKS Bank has ample primary funds (€ 3,6 billion) available to it, makes the refinancing of the majority of customer requirements possible. Penker especially underlines the high amount of savings deposits: „Our customers have entrusted us with savings deposits in the amount of over € 1,7 billion – an amount we are very proud of.“ The CEO is also very pleased with the placement of own issues. „Our customers have subscribed to BKS Bank bonds in the amount of approximately € 100 million since the beginning of the year.“ At the reporting date of June 30, 2009, the BKS Bank group had an available equity ratio which was considerably above and beyond the legal requirements of 10,71%; the net equity income amounted to € 91,6 million.
Positive Trend with Net Income for the Period
Dr. Herta Stockbauer, Management Board Director of the BKS Bank also sees a positive tendency in the result ratios. “The net income for the period of the second quarter is considerably higher than that of the first quarter. In total, we generated an annual net income of € 18,4 million after taxes in the first half year.“ The loan provisions proved to be a substantial contribution to this result as well as did the results from payment transactions which, at € 4,6 million resp. € 7,5 million, exceeded the positive development from the year before and consequently was able to cushion the sinking earnings from net commission income on securities transactions. At the same time, a rigid cost management kept the rise in administrative costs to only 3,4 %, amounting to € 43,3 million.
New Branches Opened
The expansion course was continued. „We have opened two new branches since the beginning of the year. We have an interesting new location right at the door to Vienna in Perchtoldsdorf, which already has developed magnificently during the first few months. The second new branch is in Slovenian Celje“, reports Stockbauer. Additionally, a new branch will be opened in Neusiedl at the end of the year. Internationally, the BKS Bank is currently pushing the expansion of the product range. The introduction of securities business is being actively pursued in Slovenia, a step which will complete the product range there. New products for retail customers are being created in the Croatian subsidiary BKS Bank d.d., as up to now the focus there has been limited to corporate business. „We have been very successful with our strategy of expanding our product range little by little. We know the market and know which products really are in demand and through this successive expansion, we reduce our risk to a minimum“, explains Stockbauer.
