Idea Bank – another profitable quarter

  • In Q3 2019, Idea Bank recorded a profit at both the consolidated and individual levels (PLN 12.3 million and PLN 4.5 million, respectively)
  • The Bank is consistently reducing administrative costs (reduction in baseline costs of PLN 13 million or approx. 18% Q3/Q2, and in balance sheet terms of PLN 38 million or 37%) and financing costs (decrease of PLN 28 million or approx. 20% Q3/Q2, with a decrease in the deposit balance of 10%)
  • The TCR solvency ratio increased slightly, continuing the positive trend that emerged in Q2 2019 (2.22% in the Idea Bank Group and 3.54% at the Bank itself)
  • The Bank is maintaining a strong liquidity position
  • Idea Bank does not have assets covered by CJEU judgments which are important for the Polish banking sector
  • The Bank is open to talks with potential investors
Thanks to consistently implemented self-remedial measures, Idea Bank closed Q3 2019 with a profit, both at the consolidated level and at the Bank's level. This means a continuation of the positive trend that appeared in the Bank's results for the previous quarter of this year. The profit generated, combined with a gradual reduction in the balance sheet total, adjusted to the pace of the Bank's recovery, enabled a further slight improvement in capital ratios, which at the Capital Group level increased by 0.11 p.p. and at the Bank's level by 0.06 p.p.

Our strategy, which can be described in short as "through profitability to equity", has brought effects for the second quarter in a row.” emphasizes Idea Bank President, Jerzy Pruski. “We have a clean foreground, because we conducted a critical analysis of assets and business model in the first half of this year, and the CJEU judgments, which everyone has been talking about recently, hardly concern us at all. Thanks to this, we can build a new bank step by step, reliable, profitable, focused on building a solid offer for micro and small enterprises.” adds President Pruski.

Compared to the previous quarter, Idea Bank reduced its financing costs by 20%, while maintaining a strong liquidity position. This means the successful completion of the process of stabilizing the costs of acquiring liabilities, which significantly increased at the end of 2018 and the beginning of 2019. Administrative costs were also further reduced. Restructuring activities translated into a fall in these costs of PLN 13 million, i.e. 18% at baseline level, and PLN 38 million and 37% on a balance sheet basis. The new loan risk costs also remain lower, which is a result of previously implemented changes in the credit risk management model leading to more selective product sales.

Idea Bank is continuing the employment restructuring started in the middle of the year, simultaneously implementing sweeping changes in the sales network. The Bank estimates that the total effects of the restructuring activities will bring annual savings of about PLN 100 million. In Q3 2019, the Bank started a process to change the model of customer services in branches towards non-cash service. At the same time, the Bank's branches are gradually being moved to locations with lower costs, but which guarantee our customers comfort of service. To date, these changes have already covered 10 Idea Bank outlets.

As announced, Idea Bank has completely moved away from offering investment products and is focusing on serving business clients (wide range of products) and individual clients (attractive savings offer). It is worth noting that despite the very fast pace and depth of the restructuring process, Idea Bank is still receiving awards. In September 2019, in the ranking of corporate accounts published by Money.pl, the account offered by the Bank was deemed the best on the market. The ranking included 17 banks and 11 parameters were assessed, including: charges for keeping accounts, for debit cards, fee-free withdrawals from "third-party" ATMs, mobile applications and the possibility of benefiting from an activity bonus. In the Forbes ranking published in October 2019 for the "Most Friendly Bank for Business" in 2019, Idea Bank was ranked 5th, as in the previous year.

Idea Bank's main priority is to achieve sustainable profitability and rebuild capital ratios. The path to achieving these aims is defined and includes cost reduction with simultaneous development of an attractive, profitable product offering, taking into account risk costs. An important element of this path is also a reduction in the balance sheet total in such a way that the process is optimized in accordance with the Bank's recovery plan.” concludes Jerzy Pruski.