Bolzano – Volksbank closes the 2020 financial year with a solid net profit of 16 million euros
Capital ratios.
The Board of Directors today approved the 2020 draft balance sheet, which confirms the solidity of the bank, which can therefore support families and companies, particularly in the difficult environment of the pandemic: The core capital ratio CET1 ratio increases from 12.7 percent in 2019 to 14.6 percent a year 2020; the coverage ratio for problem loans increases from 53.2 percent to 55.7 percent and the coverage ratio for loans “in bonuses” from 0.83 percent to 1.02 percent.
Volksbank will restore its profitability in 2020 and confirm its sustainable profitability despite the Covid 19 crisis. Thanks to a business model that is firmly anchored in the territory and excellent service quality, which was certified as “Italy’s best – service winner 2020/2021” in the survey by the German Institute for Quality and Finance, Volksbank was able to contain the economic effects of the pandemic.
The results show how strongly the Volksbank has supported the economy in the entire catchment area: new loans amounting to 1.2 billion euros were granted and total assets of 11.6 billion euros were reached. Direct customer deposits also rose from EUR 7.6 billion to EUR 8.1 billion. The number of customers increased to over 280,000.
Indirect deposits developed very positively over the course of the year and reached 3.6 billion euros, an increase of 12.6 percent compared to the end of 2019 (3.2 billion euros), driven by the increase in investment funds and life insurances, which were supported by the The excellent results of the new subscriptions and a volatile but generally growing financial market environment in 2020 benefited.
The interest and services business increased by 3.4 percent from 254.9 million euros at the end of 2019 to 263.5 million euros, thanks to a good stability of the interest margins and the growth of the treasury margin, which limited the physiological decline in the commission business due to the More than compensated for doing business during the lockdowns.
Personnel costs fell by 1.6 percent to 93.0 million euros and other administrative costs (after deducting contributions to the banking system) fell by 1.0 percent to 52.8 million euros. This improved efficiency more than absorbed the increase in contributions to the banking system, especially as they rose from nine million euros in 2019 to almost twelve million euros in 2020 – due to the rescue measures taken by the deposit insurance and liquidation funds.
The cost / income ratio is 60.2 percent compared to 63.1 percent in 2019. In 2020, the bank recorded credit risk costs of 90 basis points and charged the income statement with 65.7 million euros. As a result of the excellent management of the problem loans portfolio, the gross balance fell from 555 million euros in 2019 to just over 490 million euros gross at the end of 2020. As a result, the NPL ratio fell from 7.3 percent gross in 2019 to 6.4 percent gross in 2020, while the net NPL ratio changed from 3.5 percent in 2019 to 2.9 percent in 2020 and the Texas ratio improved from 54.1 percent to 48.1 percent.
The strengthening of the credit quality continues: The coverage ratio of the loans “in bonis” is 1.02 percent compared to the 0.83 percent in December 2019; the coverage ratio of the Soffers will increase from 61.3 percent in 2019 to 65.8 percent in 2020; The classified problem loans will increase from 37.8 percent in 2019 to 40.2 percent in 2020.
The net result closes at 16.0 million euros, despite higher Covid-19 provisions in the loans “in bonis” portfolio, with the Forward Looking component including the Covid-19 scenarios and the default risks resulting from positions affected by the lockdown could arise.
Equity was strengthened by around two percent over the course of the year – well above the requirements and expectations of the supervisory authorities – with the core capital ratio CET1 ratio phased-in at 14.6 percent (12.7 percent in 2019) and the total capital ratio 17.1 percent (14.9 percent in 2019).
President Lukas Ladurner explains: “Volksbank reacted to the uncertain social and economic scenario and the change in leadership in the bank by strengthening its assets and generating solid and sustainable income and closed all four quarters with a profit. Thanks to the commitment and flexibility of its employees, Volksbank has been strengthened and is able to overcome the crisis in the best possible way. It is still our intention to actively support families and companies in the catchment area in hopefully quickly resuming their business operations. As recommended by the European and Italian banking regulators due to the COVID-19 crisis, the Board of Directors will propose to the Annual General Meeting not to distribute dividends. This decision increases the equity at the end of the 2020 financial year to EUR 764 million, which increases the accounting price of the share to EUR 15.4. With the strengthening measures implemented in 2020 and the new strategic plan adopted in December, the implementation of which we are already working intensively, we have created the conditions to achieve the planned business results in 2021 so that a dividend can be paid out again. “
General Director Alberto Naef adds: “In 2020, Volksbank made an important contribution to helping customers cope with the effects of the pandemic. I would particularly like to highlight the employees who processed two billion euros in deferrals, who supported customers with digital and virtual payments, and who provided professional advice in the areas of finance, investment and insurance. In addition, we have improved the liquidity, the capital and the coverage ratio of the problem loans, thereby laying important foundations for further developing our business model, processes and bank organization in line with the strategic plan. “
From: bba
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