Unlike in 2011, the profit of housing savings banks has significantly increased, with ROAA (return on average assets) and ROAE (return on average equity) reaching one percent and 13 percent, respectively.
In the first half of 2012, housing savings banks reported a profit (before tax) of 38.4 million kuna, which represents an increase of 240.4 percent compared to the same period last year, according to the latest Bulletin from the HNB.
The high increase in profit for housing savings banks was primarily due to the growth in net operating income, particularly interest income from loans and income from trading in securities. One housing savings bank operated at a loss, while all others reported significantly higher profits than in the first half of 2011, the HNB emphasizes.
Net income of housing savings banks at the end of the first half of 2012 was up by as much as 21 percent, or 17.5 million kuna more than at the end of the same period last year. The largest impact on this increase came from higher net interest income, which rose by 17.6 percent or 10.1 million kuna, followed by an increase in net non-interest income of 28.3 percent or 7.4 million kuna. Unlike banks, housing savings banks increased all types of interest income, with the nominal largest increase relating to interest income from housing loans (10.2 million kuna or 12.7 percent). Non-interest income increased mainly due to profits from trading in securities, while increased commission and fee income had a smaller impact on net income. Operating expenses of housing savings banks increased moderately, with the most significant being the rise in costs of received deposits (13.7 million kuna or 16.2 percent). In terms of the amount of increase, costs of deposits received from banks stood out (8 million kuna), followed by the increase in costs of deposits from housing savers (5.6 million kuna or 6.7 percent). Operating costs, including general administrative expenses and depreciation, decreased by 3.5 percent compared to the end of the first half of 2011, with the exclusive reason for the decrease being lower employee costs.
Changes in the level of provisions for losses were primarily due to reduced investments in securities, which affected the decline in total placements in the risky group A, where the majority of securities are typically allocated, according to the HNB. This reduced the portion of placements subject to the obligation to set aside provisions for identified losses on a collective basis, which is why the abolition of provisions allowed housing savings banks to generate income, unlike in the same period last year when they reported expenses on that basis. The income from abolished provisions was greater than the increased costs of provisions for identified losses, which ultimately had a positive impact on the profits of housing savings banks.
