P&L 2019 compared with 2018; balance sheet as of 31 December 2019 compared with 31 December 2018.
Net interest income increased – mainly in the Czech Republic, but also in Romania and Hungary – to EUR 4,746.8 million (+3.6%; EUR 4,582.0 million). Net fee and commission income rose to EUR 2,000.1 million (+4.8%; EUR 1,908.4 million), driven mainly by higher payment fees, insurance brokerage fees and asset management fees. While net trading result improved significantly to EUR 318.3 million (EUR ‑1.7 million), the line item gains/losses from financial instruments measured at fair value through profit or loss declined to EUR ‑24.5 million (EUR 195.4 million). The development of both line items was driven by valuation effects due to market interest rate volatility. Operating income increased to EUR 7,255.9 million (+4.9%; EUR 6,915.6 million). The increase in general administrative expenses to EUR 4,283.3 million (+2.4%; EUR 4,181.1 million) was mainly attributable to a rise in personnel expenses to EUR 2,537.1 million (+2.5%; EUR 2,474.2 million). Payments to deposit insurance systems included in other administrative expenses rose to EUR 104.8 million (EUR 88.6 million). The increase in amortisation and depreciation to EUR 541.0 million (EUR 472.0 million) is attributable to the first-time application of the new financial reporting standard for leases (IFRS 16) as of 1 January 2019, while a corresponding positive effect was recorded in other administrative expenses. Overall, the operating result increased to EUR 2,972.7 million (+8.7%; EUR 2,734.6 million) and the cost/income ratio improved to 59.0% (60.5%).
Due to net allocations in Austria and Slovakia in both the retail and the corporate segments, the impairment result from financial instruments amounted to EUR‑39.2 million or, adjusted for net allocations to provisions for commitments and guarantees given, 7 basis points of average gross customer loans (net releases of EUR 59.3 million or ‑3 basis points). Positive effects came from substantial income from the recovery of loans already written off, primarily in the Czech Republic, Hungary and Romania, as well as from releases of provisions for commitments and guarantees given in Austria, the Czech Republic and Romania. The NPL ratio based on gross customer loans improved again to 2.5% (3.2%), the NPL coverage ratio to 77.1% (73.4%).
Other operating result amounted to EUR -628.2 million (EUR‑304.5 million). The deterioration is attributable to a provision in the amount of EUR 153.3 million set aside for losses expected from a supreme court decision concerning the business activities of a Romanian subsidiary as well as goodwill impairment in Slovakia in the amount of EUR 165.0 million. The expenses for the annual contributions to resolution funds included in this line item rose – in particular in the Czech Republic – to EUR 75.3 million (EUR 70.3 million). Levies on banking activities increased to EUR 128.0 million (EUR 112.2 million), including a EUR 11.0 million banking tax payable in Romania for the first time in the reporting year.
The minority charge rose due to significantly better results from the savings banks to EUR 440.9 million (EUR 369.1 million). The net result attributable to owners of the parent declined to EUR 1,470.1 million (‑18.0%; EUR 1,793.4 million) due to the one-off effects.
Total equity not including AT1 instruments rose to EUR 19.0 billion (EUR 17.9 billion). After regulatory deductions and filtering in accordance with CRR, common equity tier 1 capital (CET1, CRR final) amounted to EUR 16.3 billion (+4.9%; EUR 15.5 billion), total own funds (CRR final) to EUR 22.0 billion (EUR 20.9 billion). Total risk (risk-weighted assets including credit, market and operational risk, CRR final) rose to EUR 118.6 billion (EUR 115.4 billion). The common equity tier 1 ratio (CET 1, CRR final) stood at 13.7% (13.5%), the total capital ratio at 18.5% (18.1%).
Total assets rose to EUR 245.7 billion (EUR 236.8 billion). On the asset side, cash and cash balances decreased substantially to EUR 10.7 billion (EUR 17.5 billion), while loans and advances to credit institutions increased to EUR 23.1 billion (EUR 19.1 billion). On the back of continuing loan growth in all core markets, loans and advances to customers rose to EUR 160.3 billion (+7.3%; EUR 149.3 billion). On the liability side, deposits from banks declined to EUR 13.1 billion (EUR 17.7 billion) while customer deposits increased again markedly – across all Erste Group markets – to EUR 173.8 billion (+6.9%; EUR 162.6 billion). The loan-to-deposit ratio stood at 92.2% (91.8%).