ZABA published their FY 2019 results yesterday, showing a flat net income from banking activities which amounted to HRK 4.9bn. Meanwhile net profit went down 13.8% YoY to HRK 1.8bn.

In FY 2019 ZABA recorded HRK 3.5bn in net interest income which represents an increase of 1.3% YoY. The increase came as a result of changes in the balance sheet structure, combined with a stable average loan volume and lower costs of financing. Meanwhile, net income from fees and commissions went down by 1.2% YoY to HRK 1.4bn. Net trading income and other income plummeted to HRK 359m (-29.3% YoY) due to one-offs expenses.

Going further down the P&L, operating expenses are down 1.4% YoY, amounting to HRK 2.3bn. As a result, CIR stands at 44.6%, which represents a decrease of 2.7 p.p. YoY.

A major influence on ZABA’s bottom line performance were large expenses for value adjustments and provisions, totalling HRK 809.9m. Of that, provisions account for HRK 443.8m, which is 5 times higher compared to last year. Such a high increase can be attributed to higher provisions for lawsuits to (former) debtors on loans in Swiss francs.

Finally, net profit went down by 13.8% YoY to HRK 1.8bn as a result of one-offs and higher provisions.

Turning our attention to the balance sheet, total assets amounted to HRK 145.6bn, representing an increase of 5.1% YoY. Of that loans to customers amount to HRK 83.38bn, which represents a 2.3% YoY increase, mostly due to the increase of loans issued to retail clients.

Deposits from customers saw a 10.6% YoY increase, amounting to HRK 113.31bn, while deposits to other financial institutions fell 39.2% YoY to HRK 8.26bn. Consequently, L/D ratio stands at 68.6%.

ZABA’s Key Financials (HRK m)