- 32% rise (y/y) in interest expense – the effect of liquidity problems at the end of 2018
- contribution to the Bank Guarantee Fund (over PLN 22 million)
Idea Bank is starting a major transformation process. A month ago, results were published for 2018, which showed the high costs that the Bank had to incur as a result of decisions taken in the past concerning its business and financial model. The Bank is currently implementing a strategy focused on restoring profitability and capital ratios, and reducing costs. In the Bank’s opinion, the process to find an investor that is currently underway is likely to be concluded by the end of June 2019. The Bank is also preparing an alternative ‘stand-alone’ scenario which would imply a significant reduction of the scope of activities and focusing on developing the lease line supported by the most effective other business areas.
The Bank’s results in Q1 2019 essentially reflect the effects of liquidity pressure that occurred at the end of 2018 being overcome. Additionally, the temporary decrease in the scale of interest income is due to the Bank withdrawing from prior ineffective business activities. In the Bank’s view, these factors are of a temporary nature and the negative effect they have on results will be eliminated over time. Hence, the Bank is concentrating its efforts on, e.g. significantly reducing financing costs after their natural rise in Q1 2019.
“In Q1 2019 there was a significant rise in interest costs. This is a derivative of the difficult liquidity situation at the end of last year. We have been constantly working on reducing interest costs to good effect.” said the President of the Management Board, Jerzy Pruski. “We know what we want to achieve, how and when. The current management know the Bank well, they are fully aware of its strong points and are ready to steer the Bank through its current problems.” added the President of Idea Bank.