After covering its credit loss from 2015, Komercijalna banka realized a profit of almost RSD 1.5 bn at the end of the first quarter 2016. This result is a clear signal that the Bank's high local and regional ambitions, announced for 2016, are resting on solid foundation, which sends a good message to the Bank, its shareholders, clients and employees.

Successful start of 2016 came after a one-off impairment of NPLs, which are the scourge of the whole banking sector, also pointed out in the AQR conducted by the National Bank of Serbia in 14 banks, including Komercijalna banka. The bookings of adjusted asset classification and collateral impairment (mortgaged real estate) in the amount of almost RSD 13 bn, while raising the coverage of bad loans (NPLs) to over 71% i.e. cleansing the assets, were the key factors that contributed to a loss of RSD 6.3 bn in 2015, but will greatly relieve the Bank's operation in the upcoming period and make management of bad loans more efficient. Therefore, the Bank is entering 2016 with its assets 'cleansed' from credit and other risks.

Despite the loss in 2015, the Bank's stability is firmly secured thanks to the reserves of RSD 25 bn, which, having reached RSD 7.2 bn at the end of 2015, are higher than the total required reserves for estimated losses prescribed by the NBS. The most important indicator of the Bank's stability and safety - its capital adequacy, is 22.7% which is considerably higher than the prescribed 12% and higher than the banking sector average. Current operating parameters prescribed by the Law on Banks were positive in 2015 also, and all this time the Bank settled all its liabilities in a usual and timely manner, while also ensuring high and stable liquidity.

In the upcoming period the Bank will remain focused on maintaining its stability and reputation, raising the value of the Bank in the face of the upcoming privatisation and on sustainable growth of the Bank's business and profitability.

The Bank has prepared a new Business Plan for the period 2016-2018. It features dynamic development aimed at securing for the Bank a truly leading position in Serbia and even in the region in terms of innovation and quality. The task of both the management and the employees will be to raise the Bank's long-term quality and value.

Komercijalna banka is one of the leaders in the local banking market with a market share of over 13%. More than 900,000 clients have placed their trust in the Bank and savings in the Bank have reached record EUR 1.6 bn in early 2016. The largest shareholder of the Bank is the Republic of Serbia, followed by the European Bank for Reconstruction and Development (EBRD), IFC, DEG, SwedFund...

Komercijalna banka AD issued this content on 31 March 2016 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 31 March 2016 12:43:31 UTC

Original Document: http://www.kombank.com/information/2016-03-31/high-profit-at-the-start-of-2016-high-reserves-and-capital-adequacy-despite-a-loss-in-2015