POSTBANK KEPT ITS BGN17MN PROFIT
The general meeting of Postbank decided not to distribute dividends and to add its entire profit for 2004, amounting to BGN17MN, to the equity capital of the credit institution. This is one more confirmation of the forecast, made by the BANKER weekly last March, that most of the big banks would not distribute dividends to their shareholders in order to increase their capital. In this way they will raise their potential for extending loans as the maximum amount they allocate depends on their equity capital. The reason is that all credits except housing ones are estimated as 100% risky and this forms a bank's general risk component. The equity capital of a credit institution is divided into that risk component to calculate the most important indicator of a bank - its capital-to-assets ratio. In other words, the bigger its capital, the more loans it can extend. And credits are the main bait for attracting new clients and expanding its positions on the financial market. For that reason most of the big Bulgarian banks refrained from distributing dividends. The shareholders of HVB Bank Biochim and of HEBROSBANK were the first who did that.Their example was followed by the owners of United Bulgarian Bank (UBB), Allianz Bulgaria, and UNIONBANK. Now the same decision was made by the participants in Post Bank's general meeting. They are: ALIKO CEH Balkan Holdings, in whose hands are 96.74% of the bank's equity and which is sole ownership of the Greek EFG Eurobank Ergasias; Bulgarian Posts and the Bulgarian Telecommunications Company (BTC) - holding 1.4% of the shares, and the National Palace of Culture (NDK) - with a 0.46% stake in the Bulgarian credit institution. At the general meeting of shareholders Postbank's CEO Anthony Hassiotis announced that its 2004 profit was 47% higher than in 2003, specifying it was the credit institution's best financial result since its privatisation in 1998.Postbank's assets increased by 30% in 2004, reaching BGN1.2BN in the year-end. The total amount of credits launched within 12 months rose by 40% - from BGN544.7MN to BGN753.9MN.Mr. Hassiotis underlined that EFG Eurobank Ergasias maintains its long-term commitment to assist Bulgaria's economic development. The investments made by our parent company - the second largest bank in Greece in terms of market capitalization - are a part of a wider regional policy for the Balkans. The aim is that by 2009 the subsidiaries of the EFG Eurobank group in South East Europe should account for 20% of its consolidated net profit, Mr. Hassiotis said.According to expectations, in 2005 Postbank's assets will exceed BGN1.5BN and its net profits will reach BGN20MN.