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ASPIS BANK S.A.
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YEAR-END 2006 FINANCIAL RESULTS
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February 28, 2007 YEAR-END 2006 FINANCIAL RESULTS Overview of ASPIS BANK's Financial Results for FY2006: - Profit before tax increased by 21% to Euro18.3 million. - Profit after tax & minority interest increased by 9% to Euro12.3 million. - Operating income increased to Euro90.25 million from Euro89.6 million in 2005. - Net interest income increased to Euro53.8 million from Euro51.3 million in 2005. - Net commission income increased to Euro26.3 million from Euro25.25 million in 2005. - Operating expenses decreased by 4%. - Gross loans & advances to customers increased by 14% to Euro1.9 billion. - Customer deposits & repos increased by 23% to Euro1.9 billion. 2006 was another positive year for ASPIS BANK and its subsidiaries, as it achieved high profits for a second consecutive year, with Shareholders' profit amounting to Euro12.3 million. Profitability was combined with a 14% increase in total assets, further expansion of the branch network to 6 additional cities in Greece, and the launch of new retail banking programs. The continuous expansion and growth has continued at an undiminished pace, supported by strong capital adequacy, high loan portfolio quality and operating cost containment. Furthermore, following an increase of the share capital by Euro52.7 million in December of 2006, the capital base was further strengthened. Review of Results and Financial Figures: Growth in all sectors of activity of the Group and successful cost containment efforts led to the increase of profit after tax & minority interests by 9%, with net income from retail banking increased by 15%. Moreover, corporate banking net profit grew considerably by a 49% generating a total 26% increase in core banking net profit. Operating income reached Euro90.25 million, reflecting the emphasis given to the growth of core banking activities, which account for 91% of operating income. Net interest income increased by 5% to Euro53.8 million, mainly driven by loan interest income growth. Interest income from lending increased by 18% accounting for 89% of gross interest income. Net commission income increased by 4% to Euro26.3 million. The main source of commission income were customer loans, which increased by 14%. Furthermore, based on the favourable climate which prevailed in the capital markets, commissions from brokerage services and asset management increased by 11%, accounting for 33% of commission income. In parallel with the increase of operating income, cost containment efforts were also successful in 2006. Operating expenses fell by 4% due to a complete program of infrastructure updating, streamlining of administrative processes in the Bank's network and rationalization of facilities management expenses. Specifically, administrative and personnel expenses fell by 6% and 3% respectively. Depreciation increased by 2%, mainly due to the expansion of the branch network to 6 new locations. As a result, the efficiency ratio improved to 76.7%, a decrease by 3.5 points in comparison with 2005. The improvement of the Bank's performance was supported by the growth of its main activities as loans net of provisions increased by 15% to Euro1.9 billion, combined with prudent credit policies and modern, effective risk management. Loans to households increased by 17%, accounting for 66% of the loan portfolio . The credit expansion towards households was mainly driven by mortgage lending, which increased by 19%, with new mortgage loans disbursements increased by 24%. Commercial loans increased by 10% and brokerage loans advances increased by 10%. Customer deposits continued to be the basic source of funding for the Bank's operations, accounting for 77% of total liabilities and group equity. Deposits increased by 23% on an annual basis to Euro1.9 billion. In accordance with the policy of strengthening the capital base in order to fund further growth of its activities, ASPIS BANK proceeded with a share capital increase via cash amounting to Euro52.7 million, with pre-emptive rights in favour of existing Shareholders at a ratio of 3 new shares for every 10 old shares at a subscription price of Euro3.60. The share capital increase was completed with success on December 2006, oversubscribed by 1.13 times. As a result, group equity increased by 61% to Euro184.6 million at the end of 2006, with the return on average equity (after tax & minority interests) standing at 8%. Prospects: Targeting the continuation of healthy and self-reliant growth, and the further strengthening of ASPIS BANK's position in the Greek Banking Sector, the Bank acquired 51% of the shares of FBB-First Business Bank. The acquisition will accelerate the Bank's penetration in the Greek market, enhancing its market share in shipping and tourism finance, key sectors of the Greek economy where the Bank's presence is up to date limited. Strategic priorities of ASPIS BANK remain organic growth via the creation of new complete banking solutions based on the needs of its clientele, the constant reduction of operating expenses and the further exploitation of synergies between the Bank and the insurance companies of ASPIS Group. The Chairman and Managing Director of ASPIS BANK, Mr. Constantine B. Karatzas, referring to the strategy for the future, stated the following: Based on the solid foundations which we have built until today, we are prepared to face the challenges of the future. Our goal remains the continuance of the healthy, stable and self-reliant growth of ASPIS BANK via the strengthening of our position in the Greek Banking Sector and the constant creation of value towards the interests of our Shareholders, always within the demands of effective and modern corporate governance.
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