31. 7. 2024

Results for the first half of 2024

Economic activities in the first half of 2024 unfolded amidst a 1.2% increase in gross domestic product and an inflation rate stabilizing between 3.5% and 3.8%. However, there was a decline in country exports, impacting especially the activities of the corporates in the whole banking sector. Interest rates remained at a relatively high level - globally and on the level of the domestic economy, while in June was noticed the first slight decrease in Eurozone interest rates, with a forecast that the trend will continue from September onwards. The geopolitical situation remains unchanged, considering the military conflict between Russia and Ukraine, Israel and Palestine, which have their own impact on financial and political dynamics.
In the analyzed period, parliamentary and presidential elections were took place, anticipating the establishment of new policies and regulations. In such an environment, Stopanska Banka AD Skopje enjoyed a successful start to the year, capitalizing the development opportunities rooted in the bank's robust foundation, evident across all key indicators.

Profit before taxes and provisions amounted to EUR 44.6m, which represents an increase of 18% compared to the same period of the previous year. Aligned with the Group's strategy and the Bank's commitment for maintaining high assets quality and minimizing non-performing loans rate, the Bank has allocated impairment of the value of the financial assets and a special reserve for off-balance sheet exposure, on net basis, in the amount of EUR 12.4m – which is 16% increase compared to the previous year. Besides NPL portfolio, these adjustments encompassed risk coverage as well as the regular portfolio as safeguards against unforeseen fluctuations.

Thus, the Bank's profit before taxation for the first half of the year amounts to EUR 32.2m, driven by organic asset growth and effective business lines management within an acceptable risk appetite framework.

Key financial highlights include:

Net interest income amounts to EUR 50.4m, an increase of 19% compared with the same period last year, primarily bolstered by interest earnings from credit activities as well as from liquidity positions (interbank placements, deposits and investments in securities).
Net fee and commission income amount to EUR 7.0m, remaining relatively stable compared to the same period previous year.
Despite ongoing inflationary pressures and price fluctuations, the Bank maintained operational efficiency as a result of exceptional cost controlling. Operating expenses and costs for employee amounted to EUR 8.3m and EUR 9.1m, respectively – both, 11% higher than the same period last year.
The Bank's commitment to maintaining credit portfolio quality and managing credit risk remained paramount, evidenced by allocated impairment of the value of the financial assets and a special reserve for off-balance sheet exposure, on net basis, in the amount of EUR 12.4m, as of mid-2024.

In conclusion, the Bank's achieved profit before taxes and provisions of EUR 44.6m, while the profit before taxes for the first half of the year amounts to EUR 32.2m, demonstrating a 19% year-on-year increase.

Total assets of the Bank reached EUR 2.2bn, a 2% increase compared to year-end figures, or higher by EUR 43.9m.

Capital and reserves amounted to EUR 446.7m, which represents an increase by 7% as compared with the end of 2023. Additionally, the Bank allocated EUR 40m from the retained earnings of previous years into a profit restricted for future distribution to shareholders, thereby bolstering equity and capital adequacy, which stood at 19%. In compliance with the Decision on the profit distribution for 2023, adopted by the Assembly of Shareholders hold on 31.05.2024, the profit from the previous year was distributed in the retained earnings available for future distribution in the amount of EUR 41,8m and retained earnings for investments in the amount of EUR 14,6m. Furthermore, the Bank remains dedicated to generating profits that will serve as a capital generator.
Looking ahead, the continuation of business activities is expected in accordance with the defined business plan of the Bank, focusing on client support, prudent risk management and maintaining high stability, reliability and efficiency across all operational segments. Also, the Bank continues with the implementation of the started projects, first of all, in the area of digitization and transformation for better service to customers, more efficient internal operation and optimization of processes, offering new services and strengthening the competitive position in the market. Of course, the focus remains on the regular and efficient execution of basic business activities, maintaining the leading market share of about 27% in the segment of retail lending, with a focus on further increasing the market share in the segment of corporate lending.

This year marks the Bank's 80th anniversary, promising numerous innovations and surprises for its clients, employees, and the broader community.
The Bank continues its tradition of supporting societal, healthcare, environmental, and social initiatives, by intensifying efforts to create a better environment, foster inclusivity, and contribute to a better world for all.

Stopanska banka AD - Skopje
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