EARNINGS PERFORMANCE IN BRIEF
Net interest income increased – mainly in Austria, but also in Romania – to EUR 2,396.9 million (+2.9%; EUR 2,329.7 million). Net fee and commission income declined to EUR 956.7 million (-2.4%; EUR 980.4 million) as lower income from payment services and lending was offset only partly by higher income from other fee and commission income categories. While net trading result declined significantly to EUR -19.2 million (EUR 310.1 million), the line item gains/losses from financial instruments measured at fair value through profit or loss improved to EUR 28.5 million (EUR -140.1 million), both line items being impacted by valuation effects due to market volatility amid the Covid-19 outbreak. Operating income decreased to EUR 3,471.9 million (-3.4%; EUR 3,592.9 million). General administrative expenses declined to EUR 2,114.7 million (-1.5%; EUR 2,146.0 million). While personnel expenses rose to EUR 1,265.5 million (+0.8%; EUR 1,255.9 million, other administrative expenses were reduced to EUR 583.3 million (-6.7%; EUR 625.5 million). Almost all payments into deposit insurance schemes expected for 2020 – EUR 92.3 million (EUR 92.9 million) – are already included in other administrative expenses. Amortisation and depreciation amounted to EUR 265.9 million (EUR 264.6 million). Overall, the operating result declined to EUR 1,357.2 million (-6.2%; EUR 1,446.9 million). The cost/income ratio rose to 60.9% (59.7%).
Due to net allocations, the impairment result from financial instruments amounted to EUR -675.4 million or 82 basis points of average gross customers loans (net releases of EUR 42.8 million or 2 basis points). Allocations to provisions for loans as well as for commitments and guarantees given went up in all core markets. This marked rise in allocations to provisions was primarily driven by the deterioration in the macroeconomic outlook due to Covid-19. A positive contribution came from high income from the recovery of loans already written off in Romania. The NPL ratio based on gross customer loans improved to 2.4% (2.5%). The NPL coverage ratio increased to 91.1% (77.1%).
Other operating result improved to EUR -169.9 million (EUR -351.0 million). Expenses for the annual contributions to resolution funds included in this line item rose – in particular in Austria – to EUR 93.7 million (EUR 76.3 million). The rise in banking and transaction taxes to EUR 83.0 million (EUR 64.7 million) is primarily attributable to the doubling of banking levies in Slovakia to EUR 33.8 million (EUR 16.0 million) as the change in the law adopted in 2019 took effect as of 1 January 2020. Hungarian banking tax for the entire financial year 2020 was EUR 14.3 million (EUR 12.6 million). In the comparative period, other operating result included allocations to a provision in the amount of EUR 150.8 million set aside for losses expected to result from a supreme court decision concerning the business activities of a Romanian subsidiary.
Taxes on income declined to EUR 140.3 million (EUR 212.7 million). The minority charge decreased to EUR 76.1 million (EUR 205.2 million) due to significantly lower earnings contributions of the savings banks. The net result attributable to owners of the parent amounted to EUR 293.8 million (-59.9%; EUR 731.9 million).
Total equity not including AT1 instruments rose to EUR 19.2 billion (EUR 19.0 billion). After regulatory deductions and filtering in accordance with the CRR, common equity tier 1 capital (CET1, final) increased to EUR 16.4 billion (EUR 16.3 billion), total own funds (final) amounted to EUR 22.0 billion (EUR 22.0 billion). Interim profit is included in the above figures. Total risk – risk-weighted assets including credit, market and operational risk (CRR, final) – decreased to EUR 115.3 billion (EUR 118.6 billion). The common equity tier 1 ratio (CET1, final) increased to 14.2% (13.7%), the total capital ratio to 19.1% (18.5%).
Total assets increased to EUR 264.7 billion (EUR 245.7 billion). On the asset side, cash and cash balances rose to EUR 18.4 billion (EUR 10.7 billion), loans and advances to banks to EUR 27.4 billion (EUR 23.1 billion). Loans and advances to customers increased to EUR 163.7 billion (+2.2%; EUR 160.3 billion). On the liability side, deposits from banks grew significantly to EUR 22.0 billion (EUR 13.1 billion) as a result of increased ECB refinancing (TLTROs). Customer deposits rose again – in particular in the Czech Republic and Austria – to EUR 182.7 billion (+5.1%; EUR 173.8 billion). The loan-to-deposit ratio stood at 89.6% (92.2%).