Erste Group posts net profit of EUR 301.2 million for first half of 2013; risk costs decline
- Net interest income decreased to EUR 2,431.2 million in H1 2013 (H1 2012: EUR 2,651.7 million) against the backdrop of a continuing challenging environment with subdued credit demand and low market interest rates. Net fee and commission income rose from EUR 865.5 million in H1 2012 to EUR 895.9 million and the net trading result from EUR 121.5 million to EUR 160.5 million on the back of higher income from the securities business.
- Operating income amounted to EUR 3,487.6 million (-4.2% versus H1 2012: EUR 3,638.7 million). Strict cost management reduced general administrative expenses by 2.4%, from EUR 1,887.4 million to EUR 1,842.9 million in H1 2013. This led to an operating result of EUR 1,644.7 million (H1 2012: 1,751.3 million) and a cost/income ratio of 52.8% (H1 2012: 51.9%).
- Risk costs showed a positive trend and declined by 15.3% to EUR 831.8 million, or 128 basis points of average customer loans in H1 2013, from EUR 981.8 million, or 146 basis points, in H1 2012. The NPL ratio rose to 9.7% as of 30 June 2013 (year-end 2012: 9.2%), driven by the decline in the loan book and NPL inflows in the commercial real estate business. The NPL coverage ratio stood at at 61.7% (year-end 2012: 62.6%).
- Other operating result amounted to EUR -397.7 million versus EUR -68.1 million in H1 2012. This development was largely attributable to the non-recurrence of - on balance - positive one-off effects in H1 2012 as well as to negative one-off effects (sale of Ukraine subsidiary, extraordinary tax and advance payment of banking tax in Hungary) in the amount of EUR 115.4 million in H1 2013. Banking and financial transaction taxes levied in Austria, Hungary and Slovakia had a negative impact of EUR 184.6 million (H1 2012: EUR 114.5 million). Taxes on income benefited from a positive one-off effect in the amount of EUR 127.7 million in Romania.
- Net profit after minorities1 amounted to EUR 301.2 million in H1 2013 versus a profit of EUR 453.6 million in the previous year that had been driven by one-off effects.
- Shareholders' equity2 remained almost unchanged at EUR 12.8 billion. Core tier 1 capital amounted to EUR 11.9 billion as of 30 June 2013 (year-end 2012: EUR 11.8 billion). The reduction of risk-weighted assets to EUR 100.9 billion (year-end 2012: EUR 105.3 billion) was primarily due to the deconsolidation of the Ukrainian subsidiary and lower exposure. The core tier 1 ratio (total risk; Basel 2.5) stood at 11.8% (year-end 2012: 11.2%); adjusted for the effects of the capital increase and the redemption of the participation capital it amounted to 10.7%.
- The balance sheet total as of 30 June 2013 was EUR 210.2 billion. The slight decline year to date was primarily attributable to valuation changes, but also to declines in the customer business. The deposit base was largely stable at EUR 122.5 billion while loans and advances to customers declined to EUR 129.8 billion year to date. The latter reflected subdued loan demand in most business lines. The loan-to-deposit ratio improved to 105.9% as of 30 June 2013 (year-end 2012: 107.2%).
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