30.04.2014 Erste Group posts net profit of EUR 103.3 million for the first quarter of 2014, customer loan volume stable
- Net interest income declined to EUR 1,123.9 million (EUR 1,196.7 million), mainly due to subdued loan demand in a persistently low interest rate environment and FX translation effects. While net fee and commission income rose slightly to EUR 452.1 million (EUR 447.4 million) driven by the securities business, the net trading and fair value result improved markedly to EUR 50.4 million (EUR 30.7 million). Operating income amounted to EUR 1,690.6 million (-3.3%; EUR 1,748.0 million).
- Strict cost management reduced general administrative expenses by 2.7% to EUR 963.3 million (EUR 989.9 million). This led to an operating result of EUR 727.3 million (-4.1%; EUR 758.1 million) and an almost unchanged cost/income ratio of 57.0% (56.6%).
- Net impairment loss on financial assets (net) declined by 2.0% to EUR 364.2 million or 114 basis points of average customer loans (EUR 371.8 million or 113 basis points, which was mainly attributable to the significant decline in the commercial real estate business. On an unchanged volume of customer loans, the NPL ratio was stable at 9.6% in the first quarter of 2014 (9.6%). The NPL coverage ratio declined slightly to 62.6% (63.1%).
- Other operating result amounted to EUR -119.8 million (EUR -98.2 million) upon recognition of the full amount of the annual banking tax in Hungary. Overall, levies on banking activities amounted to EUR 99.8 million (EUR 71.6 million): EUR 30.4 million (EUR 41.6 million) in Austria, EUR 10.3 million (EUR 10.5 million) in Slovakia, and EUR 59.1 million (EUR 19.5 million) in Hungary. Loss from financial assets and liabilities not measured at fair value amounted to EUR 3.7 million versus a gain of EUR 22.0 million.
- The tax rate rose to 41.6%, in line with expectations, as the Austrian tax group did not recognise any deferred tax assets. This also had an impact on Erste Group’s net result: Net result attributable to owners of the parent amounted to EUR 103.3 million (EUR 176.6 million).
- Total capital rose to EUR 15.1 billion (EUR 14.8 billion). Common equity tier 1 capital (CET 1, phased-in) stood at EUR 11.3 billion versus EUR 11.2 billion (Basel 2.5). The rise in risk-weighted assets by 4.4% to EUR 102.2 billion (EUR 97.9 billion) was largely the result of the first-time application of Basel 3 rules. The common equity tier 1 ratio (CET1, phased-in) stood at 11.1% versus 11.4% (Basel 2.5).The total capital ratio (Basel 3, phasedin) amounted to 15.4% versus 16.3% (Basel 2.5).
- Total assets amounted to EUR 203.9 billion. Loans and advances to customers (net) were stable at EUR 119.8 billion (EUR 119.9 billion). The loan-to-deposit ratio stood at 100.3% (98.0%).