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 MADRID, Spain, July 29 /PRNewswire/ -- In the first half of 1993 Argentaria made Pta 57,608 million in income before tax, an increase of 14.7 percent on the same period in 1992. Net income increased at a similar rate (14.6 percent) and totalled Pta 43,144 million. This gave a return on average total assets (ROA) of 0.87 percent, compared to 0.81 percent in the first half of 1992, and a return on equity (ROE) of 15.31 percent, compared to 14.60 percent last year.
 Results for the first half of 1993 confirmed the satisfactory performance of the first quarter, and derived from the positive evolution of the different units in the group, and from the effective exploitation of their complementary features and of the synergies existing between them. The increase in ordinary income and the reduction in expenses were responsible for the increase in operating income, which was 23.7 percent higher than it had been a year earlier.
 Net interest income amounted to Pta 122,031 million, representing 2.46 percent of average total assets (ATA), an increase of 8.6 percent on the same period last year. Ordinary income rose by 9.4 percent to Pta 146,298 million, equivalent to 2.95 percent of ATA.
 Besides this increase in ordinary income, operating expenses also performed well, falling to 1.60 percent of ATA, as compared to 1.70 percent in the first half of 1992. They were 0.3 percent lower in this first half than in the first half of 1992, and this decrease can be explained by the 4.2 percent reduction in general expenses. In addition to the strict control and efficient management of these expenses, the decrease was the result of the materialization of the economies of scale available in the Group, and of the very moderate 1.8 percent increase in personnel expenses.
 These developments put the cost/income ratio, which measures how far general and personnel expenses absorb ordinary income, at 48.80 percent in the first half of the year. This compares very favorably with the ratio of 53.3 percent for the same period last year.
 Operating income amounted to Pta 66,980 million, a 23.7 percent increase on the same period in 1992. This represented 1.35 percent of ATA, compared to the 1.16 percent of the first half of last year.
 Other revenues totalled Pta 40,192 million. Nearly half of this amount, Pta 18,813 million, corresponded to the recovery of assets written off and of interest from previous years, thus illustrating the effort the group has directed at managing risk (bad debts and assets written off). This heading also includes Pta 5,432 million in profits obtained from the disposal of surplus fixed assets at several units in the group, and other income, largely deriving from treasury operations and the capital market.
 Pta 49,564 million was allocated to Provisions, a 45.6 percent increase on the first half of 1992. 91.4 percent of this went to the provision for loan losses.
 At June 30, 1993 Argentaria's balance sheet amounted to Pta 10.2 trillion, an increase of 4.9 percent over the six-month period. This result reflects how the policy aimed at restructuring the balance sheet was continued and how management is entirely focused on increasing profitability. If mutual funds and other off-balance-sheet funds managed by the group are added to the balance sheet, total resources managed amount to Pta 10.7 trillion, an increase of 5 percent since December. The balance sheet registered an increase of 7.8 percent on the figure at June 30, 1992, although this increase would have been 12 percent if the Pta 402.2 billion in assets guaranteed by the State had not been transferred to the ICO on Dec. 31, 1992.
 At June 30, 1993 loans to customers were Pta 6.3 trillion at Argentaria, a moderate increase of 0.6 percent on the figure at Dec. 31, 1992. The largest increase corresponded to loans to the institutional sector and to mortgages, very much in line with the group's leading position in both market segments. Customer funds were 6.9 percent higher than at Dec. 31, 1992, and amounted to Pta 4.7 trillion at June 30, 1993. Customer deposits warrant a special mention, since they amounted to over Pta 3.6 trillion, an increase of 7.2 percent on the December figure and of 9.6 percent on the figure for June last year.
 Stockholders' equity amounted to Pta 583,204 million at June 30, 1993, while eligible equity stood at Pta 605,000 million, giving a surplus of 51.3 percent. The BIS Ratio stood at 12.3 percent.
 At the end of the first half, the Provision for Loan Losses covered 70.9 percent of doubtful debts from residents subject to coverage, compared to 67.2 percent at the end of 1992. The ratio for bad debts on loans to residents remained at the 6.9 percent of Dec. 31, 1992, contrasting with the increase which was still observed in the system during the period.
 The public offering of 24.9 percent of Argentaria's capital on the stock market culminated with the shares starting trading on May 12, 1993. The demand for shares was 6.1 times higher than the shares being offered. The operation was very highly valued from every perspective, both in national and international financial circles and by the capital markets.
 At June 30, 1993 the price of the share was Pta 4,725 presenting a premium of 24.3 percent on its placement price. The shares have performed very favorably in comparison with the general and bank indices. The total volume of shares traded on the Madrid Stock Exchange was 17,199,257 shares at the end of the first half. On the same date, Argentaria's market capitalization amounted to Pta 592,987 million, ranking in eighth position on the Madrid Stock Exchange. On July 1, 1993 the Argentaria's stock was included in the IBEX-35 with a weighting of 5.79 percent.
 Income Statement
 (Absolute figures: millions of pesetas)
 June 30 1993 Change on June 30, 1992
 Amount Pct. ATA Absolute Percent
 Interest income 539,299 10.88 54,719 11.3
 Interest expense 417,268 8.42 45,037 12.1
 Net interest income 122,031 2.46 9,682 8.6
 Other ordinary revenues 24,267 0.49 2,858 13.3
 Ordinary income 146,298 2.95 12,540 9.4
 Operating expenses 79,318 1.60 (278) (0.3)
 Personnel expenses 51,055 1.03 895 1.8
 General expenses 20,266 0.41 (892) (4.2)
 Depreciation and others 7,997 0.16 (281) (3.4)
 Operating income 66,980 1.35 12,818 23.7
 Other revenues 40,192 0.81 10,113 33.6
 Recoveries (principal) 10,354 0.21 (483) (4.5)
 Others 29,838 0.60 10,596 55.1
 Provisions 49,564 1.00 15,534 45.6
 Loan losses 45,286 0.91 12,864 39.7
 Others 4,278 0.09 2,670 166.0
 Income before tax 57,608 1.16 7,397 14.7
 Corporate tax 14,464 0.29 1,912 15.2
 Net income 43,144 0.87 5,485 14.6
 Group 37,214 0.75 4,556 14.0
 Minorities 5,930 0.12 929 18.6
 ATA 9,909,911 -- 567,091 6.1
 Average equity 563,727 -- 47,981 9.3
 -0- 7/29/93
 /CONTACT: Jose Luis Dominguez de Posada, 34-1-537-4960; Jacobo Moreno, 34-1-537-7128; Mark Phillips, 34-1-537-6855; or in the U.S., Alvaro Badiola, 212-688-7500, all for Argentaria/

CO: Argentaria ST: IN: FIN SU: ERN

SH -- NY038 -- 7450 07/29/93 11:14 EDT
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Date:Jul 29, 1993

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