First of all, Q1 2023 represents the best quarter in HPB’s history. HPB Group recorded a net interest income of EUR 34.7m (more than 2x YoY), net fee and commission income amounted to EUR 7.7m (from EUR 5.8m), op. income more than doubled, and a net profit of EUR 20.3m, an increase of almost 5x. Consequently, HPB’s share price rose 6.1% after yesterday’s trading session.
First, we note that 2022 was marked as the best year on record for HPB Group, supported by solid organic growth, but also by the acquisition of Sberbank’s subsidiary in Croatia (renamed Nova hrvatska banka) back in April 2022, which due to the circumstances of the agreement, boosted the bottom line significantly.
Coming back to Q1 2023, the same trend continues. Net interest income more than doubled on a YoY basis and amounted to EUR 34.7m. However, net interest income also grew by as much as 19.1% compared to the previous quarter. This growth came due to the increase in the reference risk-free interest rates of the ECB, as well as the effective management of interest costs. Net fee and commission income amounted to EUR 7.7m, an increase of 26% YoY, or EUR 1.6m. Consequently, the cost-to-income ratio improved significantly.
Together, this resulted in more than doubling of operating income, which amounted to EUR 42.5m (from EUR 20.4m). Moving on to operating expenses, it amounted to EUR 25.3m, an increase of 54.3% YoY. The biggest share in OPEX are Employee expenses of EUR 12.1m and Administrative expenses of EUR 10m, which combined make up the majority of OPEX (c. 90%). Here we can see both the inflationary pressures, but also the costs of integration of Nova hrvatska banka. Due to the higher amount of assets received after the acquisition, amortization also increased, growing by c. 50% and amounting to EUR 3.6m.
HPB also recorded a decrease in provisions, which decreased from EUR 0.6m to EUR -6m, which had a positive influence on net profit to further amplify a better operating result. As s result of everything mentioned, the net profit after tax of the Group amounted to EUR 20.3m, an increase of almost 5x YoY. This came as a result of the aforementioned operating profitability, along with high-quality credit portfolio management.
Finally, looking at the balance sheet in Q1 2023, total assets are at the 2022 level and in line with market trends after the introduction of the euro. HPB noted an increase in securities due to the purchase of government bonds. Finally, Capital adequacy at the consolidated level stands at 19.1%.
HPB key financials (Q1 2022 vs. Q1 2023, EURm)
Source: HPB, InterCapital Research