The Annual meeting of Shareholders of Bulbank, held this morning, approved the results of the Bank for 2004 with consolidated net profit of BGN 86.3 million, representing 20% of the profit of Bulgarian banking system. Bulbank announced net profit of BGN 85.9 mn, with UniCredit Leasing Bulgaria, 100% controlled by Bulbank since March 2004, contributing to consolidated results with BGN 406 thousand net profit as a result of a strong growth in 2004.

Bulbank growth in 2004 was strong with 27.9% increase in total assets, reaching BGN 3.6 billion at the end of the period. The structure of assets changes for another successive year, moving from treasury components to ones related to commercial banking. Customer deposits rose by 34% to BGN 2,917 million. Shareholders equity amounts to BGN 574 million, up by 4.4% (BGN 550 million at 2003 end). The capital adequacy remains strong with Tier 1 ratio at 20.4%, same as last year, and Loan/Deposit ratio reaching 48%. Profitability is strong, with ROA at 2.8%, ROE at 15.7% and Cost / income ratio reaching 42.4%.

Bulbank reported a revenues growth of 16.8%, with Net interest income increasing by 26.8% to BGN 134 million (BGN 106 million in 2003) and Fee income reaching BGN 39.8 million representing 20.6% increase compared to 2003. Revenues growth was sustained by strong growth of the lending operations with Total loan portfolio increasing by 55% in net terms reaching BGN 1,353 million (37% of all assets),.

Retail banking realised faster growth in 2004 with 33% growth in revenues, sustained by a 135% increase of the loan portfolio, reaching credits of BGN 243 million to individuals and small businesses. Mortgage lending to individuals alone shows fourfold increase to BGN 124 million and 12% market share. Corporate loan portfolio increased by 41%, compared to the previous year while corporate revenues are up to BGN 94 million, with 23% growth compared to 2003. Strong commercial growth is supported by significant growth in number of clients, with total clients reaching 405,000 with an increase of over 60,000 compared to 2003.

Costs grew by 26.8% to over BGN 84 million as a result of the impact of the large investment in a new IT system completed in 2004, but the Bank remain absolute leader in efficiency under all standards with a Cost/Income ratio of 42.4%.

Net operating income grew by 10.3% reaching BGN 114 million.

Provision charges reached BGN 7.7 million, in a context of improved asset quality ratios, with Non-performing loans/Gross loan ratio improving to 2.43% compared with 3.08% in 2003.

The amount of consolidated profit is 3.9% lower than the previous year, due to introduction of a more precise method for calculation of amortized costs on commercial loans, higher IT-related costs linked to the completion of the new IT system and a large non-recurring provision write-back in 2003. On a normalised basis Bulbank reports an 18.7% growth in net profit compared to 2003.

The shareholders voted BGN 59.2 million dividend for the year (69% dividend payout), representing BGN 0.355 dividend per share. The Annual General Meeting of Shareholders voted KPMG Bulgaria to be chosen for auditor of the Bank for 2005.

Bulbank is optimistic for 2005 development, with first quarter results showing strong increase of revenues and acquisition of more than 10,000 new clients. The plans of the Bank include further development of the network with opening of new outlets in Sofia and other cities plus opening of new lending centres.