In 2018, NLB observed a 1% increase in net operating income, a 2% decrease in earnings before tax, and a 10% decrease in net income.
| wdt_ID | Key Indicators | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 1 | L/D ratio (%) | 143 | 123 | 114,4 | 105,6 | 104,7 | 86,2 | 75,9 | 75,1 | 74,2 | 70,2 | 68,3 |
| 2 | NPL ratio (%) | 3,8 | 9 | 14,5 | 21,3 | 28,2 | 25,6 | 25,5 | 19,3 | 13,8 | 9,2 | 6,9 |
| 3 | ROE* (%) | 3,1 | n/a | n/a | n/a | n/a | n/a | 4,8 | 6,6 | 7,4 | 14,4 | 11,8 |
| 4 | Net interest margin (%) | n/a | 2,4 | 2,3 | 2,4 | 2,24 | 1,7 | 2,7 | 2,9 | 2,7 | 2,57 | 2,56 |
| 5 | Cost of risk (bps) | n/a | 200 | 255 | 315 | n/a | n/a | 171 | 75 | 38 | -62 | -43 |
*From 2009 – 2013 ROE is noted as “n/a”, as their net income was negative
As NLB published a short overview of their preliminary 2018 results, we are bringing you some key takes from it. According to the report, NLB has observed an increase in net interest income of 1% YoY, amounting to EUR 312.9m. This increase could be attributed to a rise in loan volume growth (mostly in retail) and lower interest expenses. Further, net non-interest income has also increased by 1%, amounting to EUR 180.4m, which can be attributed to a rise in fees and commissions. As a result the Group observed an increase in net operating income of 1%, amounting to EUR 493.3m.
When observing the company’s earnings before tax, they recorded a decrease of 2%, amounting to EUR 223.3m. Meanwhile, net income amounted to EUR 203.6m, which represents a decrease of 10%.The decrease in NLB’s net income could be attributed the lower release of credit impairments and provisions and higher income tax.
NLB Net Income (2008 – 2018)
Turning our attention to loans and deposits, since 2013, loans have mostly been decreasing, while deposits have continued to increase each year. This has resulted in each year lower L/D ratio, which amounts to 68.3%. Note that NLB’s management has set a target of L/D ratio to be below 95% for the years 2019 – 2023.
Furthermore, NLB continues the trend of the declining NPL ratio, which amounted to 6.9%, representing a decrease of -2.3 p.p. YoY. The management attributes the decrease to successful resolution measures and supportive macroeconomic environment.
NLB NPL ratio (2008 – 2018) (%)
The company notes that the unaudited report FY2018 is planned to be published on 8 March 2019.
