Erste Group posts net profit of EUR 597.3 million and stable operating result in the first 9 months
- Net interest income eased to EUR 3,968.9 million in the first nine months of 2012 (1-9 2011: EUR 4,134.1 million) driven by the continuing reduction of non-core assets and subdued credit demand as a result of the economic environment. Net fee and commission income decreased by 5.0% to EUR 1,284.3 million due to weaker securities business. At EUR 191.4 million, the net trading result was significantly higher than in the first nine months of 2011 when at EUR 37.4 million it had been weighed down by valuation effects.
- As a result, operating income slightly declined by 1.4% to EUR 5,444.6 million (1-9 2011: EUR 5,523.5 million). Strict cost management led to a decrease in general administrative expenses by 2.3% from EUR 2,891.6 million to EUR 2,826.1 million in the first nine months of 2012. The operating result was almost unchanged at EUR 2,618.5 million (1-9 2011: EUR 2,631.9 million). The cost/income ratio improved to 51.9% (1-9 2011: 52.4%).
- Risk costs amounted to EUR 1,465.3 million, or 146 basis points of average customer loans, down 21.2% versus the first nine months of 2011 (EUR 1,859.2 million). Provisioning levels declined or were stable in all core countries, with the exception of Romania and Croatia. Asset quality trends were mixed, with a continued improvement in Austria, the Czech Republic and Slovakia. Compared to the previous quarter, however, NPL formation decreased also in Romania and Hungary. Overall, the NPL ratio remained at 9.2% as of 30 September 2012 (30 June 2012: 9.2%, year-end 2011: 8.5%), while the NPL coverage ratio improved to 63.1% (year-end 2011: 61.0%).
- Other operating result increased to EUR -214.0 million in the first nine months of 2012 (1-9 2011: EUR -1,460.4 million). The strong improvement was related to considerably smaller one-off effects with an overall positive impact in 2012. In particular, the buyback of tier 1 and tier 2 instruments had a favourable effect in the amount of EUR 413.2 million. Negative influences came from the adjustment of goodwill for Banca Comercială Română (EUR 210.0 million) and a charge related to FX mortgage interest subsidy legislation in Hungary (EUR 60.6 million). Increased banking taxes levied in Austria, Hungary and Slovakia had a negative impact of EUR 173.0 million (1-9 2011: EUR 140.2 million).
- Thus, net profit after minorities1 for the first nine months of 2012 amounted to EUR 597.3 million (1-9 2011: EUR -973.0 million).
- Shareholders' equity2 increased significantly to EUR 12.9 billion (year-end 2011: EUR 12.0 billion). The rise in core tier 1 capital to EUR 11.3 billion (year-end 2011: EUR 10.7 billion) led to an increase in the core tier 1 ratio (total risk; Basel 2.5) to 10.4% (year-end 2011: 9.4%). The EBA capital ratio stood at 9.9% (year-end 2011: 8.9%). The continued improvement in capital ratios was supported by a reduction of risk-weighted assets by 4.7% to EUR 108.7 billion as of 30 September 2012 (year-end 2011: EUR 114.0 billion).
- The total balance sheet as of 30 September 2012 stood at EUR 217.0 billion, up 3.3% year to date. The rise was primarily due to deposit growth and investments in highly liquid assets while lending volume decreased slightly, by 0.9%, to EUR 133.5 billion. The loan-to-deposit ratio improved to 109.2% (year-end 2011: 113.3%).
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