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NKBM Happy with 2010, Announcing Expansion

Maribor, 16 March (STA) - The management and supervisors of NKBM, Slovenia's second largest bank, said on Wednesday they were happy with the EUR 11.4m and EUR 9.4m net profit reported on Tuesday for the NKBM group and the core bank respectively for 2010. NKBM is confident it can expand its operations in the future.

NKBM chairman Matjaz Kovacic told the press that 2010 had been marked by a head-on clash with the tough situation on the domestic market, especially when it comes to the construction sector and financial holdings.

"We still operated successfully, as gross profit is slightly better than the year before...The result also includes all the costs involved in the restructuring of [Serbia's] Credy Banka, which were extraordinary and are no longer expected for this year," Kovacic said.

He pointed out that profit before provisions and impairments stood at EUR 101m, which is a 7% increase on 2009.

Also rising were the bank's total assets, by 1.4% to EUR 5.9bn. The NKBM group was among the banks that secured credit growth in the business as well as household sector, Kovacic said.

He said the bank was not considering a downsizing but expansion for the future. "The situation on the market is providing opportunities to increase its market share and secure new clients."

With capital and resources being necessary to pursue this policy, Kovacic said he was happy that agreement had been reached with the supervisors on a capital increase via NKBM's listing on the Warsaw Stock Exchange scheduled for the beginning of April.

Management board member Manja Skernisak said that signs of recovery were not noticeable on the domestic market but that the increase in demand abroad was encouraging.

Andrej Plos, also a member of NKBM's board, highlighted the increase in net interest revenue as a positive sign, while identifying impairments as the main problem.

"Impairments above all involved two segments - financial holdings and the construction and real estate sector, which together accounted for more than half of all impairments," Plos said.

Chief supervisory Danilo Toplek said that he was "relatively happy" with the results given the difficult conditions, pointing out that the year ended in the black although NKBM's provisions and impairments were mostly higher than those of other banks.

NKBM reported on Tuesday an operating profit of EUR 18m for 2010, a 2% increase over 2009. The net profit of EUR 11.4m was an 11% decrease on 2009, according to unaudited results.

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