Artea bankas (ROE1L) H1 2024 earnings summary

Executive summary

• Net profit for H1 2024 reached €43.0 million, up 4% year-over-year, with ROE at 16.2% and record net interest and fee income, driven by strong loan growth and asset management performance.

• Loan portfolio expanded 14% year-over-year, with robust asset quality, low impairment provisions, and a record low cost of risk at 0.2% in Q2 2024.

• Moody's affirmed long-term deposit rating at Baa1 with a stable outlook, the highest-ever for the bank.

• Assets under management surpassed €1.3 billion, with a new open-ended alternative investment fund launched for retail investors.

• Issued €25 million in Tier 2 bonds, nearly 4x oversubscribed.

Financial highlights

• Net interest income rose 7% year-over-year to €80.6 million; net fee and commission income up 41% to €13.7 million.

• Total revenue increased 18% year-over-year to €112.5 million; operating profit before impairment fell 5% to €57.1 million.

• Net profit grew 4% year-over-year to €43.0 million; cost/income ratio at 45.4% due to a €2.2 million one-off windfall tax adjustment.

• Total loans reached €3.19 billion (+14% YoY), total deposits €3.34 billion (+16% YoY), and total assets €5.04 billion (+20% YoY).

• Subordinated bonds of €25 million were issued in Q2, nearly 4x oversubscribed.

Outlook and guidance

• Deposit and funding costs expected to peak in H2 2024, with stabilization thereafter.

• 2024 ROE guidance exceeded (actual 16.2% vs. guidance 13.7%), with loan book and deposit CAGR targets set at 8–10% through 2026.

• Minimum payout policy of 25% via dividends and share buybacks, with ongoing review of targets and budget.

• Continued focus on operational efficiency and maintaining high asset quality amid external uncertainties.

• Asset management expected to continue strong performance, supported by positive market trends and net client inflows.