Fibank’s Q2’20 EPS drops 84.4% YoY due to one-off revaluation gain in the comparable period
Source: Fibank; FFBH
Fibank’s Q2’20 unconsolidated net interest income registered the first positive (+0.2% YoY, +BGN 0.1m) growth in the last 6 quarters as interest expense decreased more than interest income. The non-interest income, however, was down by 15.6% YoY (-BGN 1.1m) on lower net F&C income and net trading income, both a direct COVID-19 hit. TOI stood at BGN 82.2m, -5.3% YoY. The administrative expenses of the bank were reduced by 16.7% YoY (-BGN 9m) while net other operating expenses had significant negative effect on the profitability (-BGN 5m vs +BGN 65.5m in Q2’19). Recall that in Q2’19, the bank booked BGN 72.9m revaluation gain on investment property while this quarter it had a revaluation gain of only BGN 2.3m. As a result, pre-provisioning profit was down 67.3% YoY to BGN 32.1m. The credit provisions increased by 66% YoY reflecting the more conservative approach to credit risk assessment. All in all, net income was down 84.4% to BGN 12.2m (EPS of 0.11).
For the 6-months period net interest income was down by 1.4%, non-interest income declined by 9.8% and TOI came 4.3% lower (-BGN 7.5m) to BGN 168.1m. Similar to Q2 alone, administrative cost had positive effect on profitability by declining with BGN 10.9m while the significant one-off gain in the comparable period and the 50.3% higher provisions resulted in 77% lower net income of BGN 21.7m (EPS of BGN 0.20).
Gross loan book added 1.1% YoY (+3.0% YtD) to BGN 6.5bn. The growth was sourced mainly from consumer lending (+8.2% YoY and +2.8% YtD) and mortgages (+11.7% YoY and +2.9% YtD). The 90-days overdue loans ratio increased to 12.6% compared to 12% at end-2019 (down from 13% at end-March) while NPE ratio registered a slight increase to 25.1% from 24.2% at end-2019. After inclusion 2019 net profit in the capital base, capital adequacy improved further with total capital ratio at 19.69% (+2.3 p.p. YoY), while CET 1 was at 15.99% (+1.45 p.p. YoY).