Expensive Expansion: Bank Audi's profits affected by Turkey launch
Bank Audi’s net profits declined by 5.5 percent in the first nine months of 2013 compared to the same period last year due to an increase in operating expenses following the launch of a network of 20 branches. The move was part of the bank’s expansion strategy in Turkey.
Bank Audi posted net earnings of $261 million in the first nine months of 2013 compared to $277 million in the corresponding period of 2012, according to a statement released Sunday.
“This performance was realized despite the launch of the fully owned subsidiary in Turkey encompassing a network of 20 branches in 11 months, with the subsequent normal time lag between immediate operating expenses and expected revenues,” the statement said.
“When adjusting the group’s net earnings to Odeabank’s results, Bank Audi would have recorded a net earnings growth of 5.9 percent amid challenging domestic and regional operating conditions, reflecting the group’s large earnings’ flexibility,” it added.
Audi’s consolidated assets rose by $3.2 billion during the first nine months of the year to reach $34.5 billion at the end of September and $43.9 billion when accounting for fiduciary deposits, security accounts and assets under management with the Turkish subsidiary posting a growth of $4.6 billion over the same period.
Odeabank has $6.6 billion in assets, $4.9 billion in customers’ deposits and $4.2 billion in loans, by the end of September 2013, according to the bank statement, which highlighted a deposits growth of $3.5 billion for the Turkish subsidiary.
The contribution of entities abroad to the bank’s consolidated assets rose to 40.6 percent, the statement added.
Consolidated customer deposits rose 9.9 percent to reach $29.5 billion at end-September 2013, an increase of $2.7 billion, while consolidated net loans increased from $10.4 billion at end-December 2012 to $13.6 billion at end-September 2013, translating to a loans-to-deposits ratio of 46 percent.
The bank allocated additional net provisions of $61 million in the first nine months of 2013 with gross doubtful loans accounting for 2.2 percent of gross loans.
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