NLB Group 2Q 20 - Higher bottom line on lower risk and operating costs
NLB reported a 2Q 20 net profit of EUR 55 mn, topping our estimates by 11% (18% beat on pre-tax line) mainly on lower risk costs and surprisingly good cost discipline.Revenues: Both core revenues, NII and F&CI were fully in line vis-a-vis our projections. The NIM erosion from previous quarters has continued however the 10 bps drop vs. 1Q was just a half of the 1Q dive of 20 bps with SL and RS operations most at pressure. The yoy NIM decline of 35 bps has been explained by the Tier 2 issuance, weak loan sales and higher cash balances. Within F&CI drop of 8% qoq, only retail segment in SL has managed to stay flat. Other result remained somewhat south of RCBe; the indicated positive one-offs (tactical bond sales gains, NLB Vita disposal) totalled EUR 28.2 mn and were ca. EUR 2 mn below our rough estimates.
NLB dd is a Slovenia-based company, which is primarily involved in the financial services industry. The Company operates as a parent company of NLB Group and has a number of subsidiaries, such as NLB Banka Banja Luka, NLB Banka Sarajevo, NLB Banka Prishtina, NLB Nov penziski fond Skopje, NLB Tutunska Banka Skopje, NLB Bank Podgorica, Bankart, Nova ljubljanska banka, NLB Skladi, NLB Vita, NLB Banka Belgrade, NLB Srbija Beograd, NLB Leasing Sarajevo, Prvi Paktor Sarajevo, NLB Leasing Sofia, Optima Leasing Zagred, among others. The Company operates in such countries, as Slovenia, Bosnia and herzegovina, Kosovo, Macedonia, Montenegro, Serbia, Bulgaria, Croatia, Czech Republic, Germany, Italy, Switzerland, among others.
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