In Q2 2022, ZABA recorded an increase in operating income of HRK 2.58bn (+7.5% YoY) and a net profit of HRK 1.04bn (+26.9% YoY).
In Q2 2022, ZABA’s net interest income amounted to HRK 1,41bn, decreased by HRK 20m (-1.4%) YoY, mainly due to lower interest margins, following the market developments. Net fee and commission income amounted to HRK 759m, an increase of HRK 103m (+15.7%). Net trading and other income and expenses segment recorded an increase of HRK 97m, amounting to HRK 408m (+31.2%) due to a higher trading result.
In total, ZABA’s operating income amounted to HRK 2.58bn, an increase of HRK 180m (+7.5%) YoY, carried by the already mentioned net fee and commission income, and trading results. On the other side, their operating expenses remained at the same level at 1,13bn with a cost-to-income ratio of 43.82%.
Going further down the P&L statement, profit before impairment and other provisions amounted to HRK 1.38bn which is an increase of HRK 185m (+15.5%) YoY, directly influenced by movements in operating income and operating expenses. Lastly, ZABA’s net profit amounted to a total of 1.04bn which is a 26.9% increase YoY.
Moving onto the balance sheet, total assets have increased to HRK 163.64bn, an increase of 3.2% since the beginning of the year. Breaking it down, we can see that the largest absolute increase comes from financial assets at amortised cost, which grew by HRK 12.75bn (13.4%) and amounted to HRK 108.1bn. Within the segment, we can see that debt securities grew from HRK3.5bn to HRK 7.08bn (102.3%), loans and advances to credit institutions grew from HRK 10.18bn to HRK 13.9bn (36.5%), and lastly, loans and advances to customers grew from HRK 81.67bn to HRK 87.12bn (6.7%).
Another notable factor in relative terms was the growth of financial assets held for trading from HRK 1.09bn to HRK 2.06bn (88.6%). Cash, cash balances at central banks, and other demand deposits contributed negatively with a decrease of HRK 4.39bn from HRK 38.7bn to HRK 34.3bn, and financial assets at fair value through other comprehensive income which declined from HRK 12.85bn to HRK 9bn since the beginning of the year.
Looking at the liabilities side, total liabilities have increased from HRK 137.17bn to HRK 143.97bn (5%) driven mostly by financial liabilities measured at amortised cost which grew by 4.5% since the beginning of the year. Deposits from credit institutions increased by HRK 3.06bn (61.1%) while deposits from customers increased by HRK 2.8bn (2.2%). Another notable increase is from financial liabilities held for trading which grew from HRK 0.87bn to HRK 1.78bn. Lastly, equity has declined from HRK 21.33bn to HRK 19.66bn since the beginning of the year.
ZABA key financials (Q2 2022 vs. Q2 2021, HRKm)
Impact of COVID-19 and the Russia-Ukraine conflict
The markets remained affected by the uncertainty of the pandemic and the extent of the economic recovery throughout the first half of the year, and still existing on 30 June 2022. ZABA’s assets were not significantly directly impacted by the conflict, however, the operations remain indirectly affected and the Group is continuously monitoring the situation for further developments.