2. Results of operations
At EUR 7,092 thousand, the Group’s profit from ordinary activities in the second quarter of 2007 improved significantly as against the same period of the previous year (EUR 4,942 thousand). This is primarily attributable to the two key components of operating profit, namely net fee and commission income and net trading income, which increased substantially year-on-year from EUR 20,259 thousand to EUR 24,119 thousand. Net interest income also improved significantly by EUR 202 thousand to EUR 360 thousand.
All in all, the profit from ordinary activities for the first six months of 2006 was positively impacted by gains from the disposal of available-for-sale financial assets in the amount of EUR 4.9 million. The non-recurrence of this extraordinary effect, together with higher administrative expenses, means that the profit from ordinary activities for the first half of 2007 amounted to EUR 18,905 thousand compared with EUR 23,160 thousand in the same period of the previous year.
After taxes in the amount of EUR 4,915 thousand and minority interests of EUR 13 thousand, consolidated net profit for the period amounted to EUR 13,977 thousand (previous year: EUR 17,010 thousand). Earnings per share amounted to EUR 0.31 after EUR 0.38 in the corresponding prior-year period.
The increase in administrative expenses from EUR 33,691 thousand to EUR 38,604 thousand is largely directly attributable to the growth in the Bank’s workforce, which increased by approximately 50 employees. This is reflected in the staff costs of EUR 23,455 (previous year: EUR 21,135 thousand), as well as non-labour operating costs of EUR 11,915 thousand (previous year: EUR 9,494 thousand). The intensification of the Group’s activities in business areas that will only become profitable in the future, such as foreign markets, MiFIS and alternative investments, and the resulting expansion of the Group will serve to heighten the demands made in terms of staff capacities and the technical infrastructure.
3. Net assets
Total assets increased slightly by 3.5% to EUR 256,223 thousand as of 30 June 2007, compared with EUR 247,589 thousand as of 31 December 2006. This is primarily due to the increase in loans and advances to other banks, which rose from EUR 63,439 thousand to EUR 75,271 thousand, while assets held for trading and loans and advances to customers decreased significantly. The EUR 1,461 thousand increase in equity-accounted investments is attributable to the acquisition and realisation of proportional gains from investment funds in which the Bank holds an interest of more than 20%, as well as the reversal of an impairment loss on an investment. Other assets increased significantly as a result of the prepayment on the convertible bond issued by Parsoli Corporation Ltd., among other things. Deferred tax assets declined as a result of the partial utilisation of tax loss carryforwards.
The Group’s shareholders’ equity amounted to EUR 157,437 thousand as of 30 June 2007 (31 December 2006: EUR 152,626 thousand), corresponding to an equity ratio of 61.4%. The increase in shareholders’ equity is primarily attributable to the strong earnings performance in the first six months of the current financial year, although this was offset to an extent by the dividend distribution in June 2007.
4. Financial position
At 30 June 2007, short-term loans and advances to other banks and available-for-sale marketable securities in the amount of EUR 132,029 thousand were offset by current liabilities of EUR 45,011 thousand, resulting in a net liquidity surplus of EUR 87,018 thousand. The Group’s liquidity was secured at all times during the period under review.