Ad hoc Information 2012
31.07.2012 Erste Group posts net profit of EUR 453.6 million in first half of 2012 and increases EBA capital ratio (excluding retained earnings) to 9.9%
- Net interest income eased 1.9% to EUR 2,651.7 million in H1 2012 driven by the reduction of non-core assets and subdued credit demand. Net fee and commission income amounted to EUR 865.5 million in H1 2012, down 4.5% on H1 2011 due to weaker securities business. The deterioration in net trading result from EUR 288.8 million in H1 2011 to EUR 121.5 million in H1 2012 was due to valuation gains in H1 2011, which did not recur in H1 2012.
- Driven by the lower net trading result, operating income was down 6.7% to EUR 3,638.7 million (H1 2011: EUR 3,898.8 million). Effective cost management resulted in a 2.0% drop in general administrative expenses from EUR 1,926.3 million in H1 2011 to EUR 1,887.4 million in H1 2012. Thus, the operating result amounted to EUR 1,751.3 million (H1 2011: EUR 1,972.5 million). The cost/income ratio stood at 51.9% (H1 2011: 49.4%).
- Risk costs rose 6.6% from EUR 920.8 million in H1 2011 to EUR 981.8 million in H1 2012, or to 146 basis points of average customer loans. With the exception of Romania and Croatia, the provisioning level for the core countries declined or remained stable. Asset quality was mixed, with Austria, the Czech Republic and Slovakia showing improving trends while Romania, Hungary and Croatia deteriorated. Overall, the NPL ratio increased to 9.2% as of 30 June 2012 (year-end 2011: 8.5%), while the NPL coverage ratio improved to 61.2% (year-end 2011: 61.0%).
- Other operating result improved to EUR -68.1 million in H1 2012 compared to EUR -260.2 million. This was mainly due to a EUR 413.2 million contribution from the buy-back of tier 1 and tier 2 instruments, which was partly offset by a goodwill adjustment of EUR 210.0 million for Banca Comercială Română as well as a EUR 60.6 million charge related to the FX mortgage interest subsidy legislation in Hungary (booked as risk costs in Q1 2012 and now presented as other operating result). A banking tax charge of EUR 114.5 million continued to weigh on this position in H1 2012.
- Thus, net profit after minorities (2) declined by 12.9% to EUR 453.6 million in H1 2012.
- Core tier 1 capital improved significantly to EUR 11.3 billion (year-end 2011: EUR 10.7 billion), resulting in a rise of the core tier 1 ratio (total risk; Basel 2.5) to 10.4% (year-end 2011: 9.4%). The EBA capital ratio increased to 9.9% (year-end 2011: 8.9%). Including retained earnings, the EBA capital ratio reached 10.4%. The continued improvement in capital ratios was supported by a decline in total risk-weighted assets of 4.4% to EUR 109.0 billion as of 30 June 2012 (year-end 2011: EUR 114.0 billion). Shareholders’ equity (3) rose substantially to EUR 12.6 billion (year-end 2011: EUR 12.0 billion).
- Driven by deposit growth and investments into highly liquid assets, total assets grew by 2.5% to EUR 215.2 billion versus EUR 210.0 billion at year-end 2011. The loan-to-deposit ratio improved to 109.6% as of 30 June 2012 (year-end 2011: 113.3%).