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Bulgaria's Fibank lowers 2019 net profit, grows provisions

Author Mario Tanev
Bulgaria's Fibank lowers 2019 net profit, grows provisions Author: First Investment Bank Licence: All Rights Reserved

SOFIA (Bulgaria), January 20 (SeeNews) - Bulgaria's First Investment Bank [BUL:5F4] said that its net profit is expected to amount to 130 million levs ($73.8 million/66.5 million euro) in 2019, according to preliminary figures, which it plans to retain in full.

Fibank posted a non-consolidated net profit of 164.1 million levs in 2018, according to previously reported data.

The lender's profit was partially hurt by some 117 million levs in expenses for booking provisions in 2019, Fibank said in a statement on Friday.

The additional provisions were adopted to address the concerns of the European Central Bank, which in June 2019 said it has found a capital shortfall of 262.9 million euro at Fibank following a comprehensive assessment.

The bank's assets grew by 8.9% to over 10 billion levs at the end of 2019, as its loan portfolio increased by 4.5%. The company's strategy for growing its SME and retail loan portfolios, launched in 2018, led to an increase of those portfolios of 20% and 35%, respectively, over the two-year period.

Deposits at the bank also rose, by 8.3%.

Revenue from banking operations grew by 48 million levs year-on-year, backed by higher net fee and commission income.

The lender's strategy for the next two years targets a reduction of its non-performing loan ratio to under 10% at the end of 2022.

Fibank was Bulgaria's fifth largest lender by assets at the end of November, according to the latest central bank data.

The bank is currently seeking to increase its capital, offering for subscription 40 million shares. The capital increase is part of a broader effort by the lender to strengthen its capital position. Last month, Fibank placed a 30 million euro bond issue with an annual coupon of 8%, and signed deals to sell non-performing loan (NPL) portfolios with a total face value of some 538 million levs.

(1 euro = 1.95583 levs)