HIGH RISK PROVISIONING IMPACTS RESULT
Overall, the operating result declined by 1.3% to 2.9 billion euros, while the cost/income ratio was unchanged at 59.0%. Due to net allocations, the impairment result from financial instruments amounted to -1.3 billion euros or 78 basis points of average gross customers loans (2019: -39.2 million euros or 7 basis points). The marked rise in allocations to provisions for loans 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, primarily in Romania and Hungary. The NPL ratio based on gross customer loans deteriorated to 2.7% (2.5%), the NPL coverage ratio rose to 88.6% (77.1%).
Other operating result improved to -278 million euros (-628 million euros). The expenses for the annual contributions to resolution funds included in this line item rose – in particular in Austria – to nearly 94 million euros. The decline in banking and transaction taxes to 118 million euros is primarily attributable to the abolition of banking tax in Romania. In the previous year, other operating result included allocations to a provision in the amount of 153 million euros set aside for losses expected from a supreme court decision concerning the business activities of a Romanian subsidiary, as well as the write-off of goodwill in Slovakia in the amount of 165 million euros.
Taxes on income declined to 343 million euros. The minority charge fell by 45% to 242.3 million euros due to significantly lower earnings contribution of the savings banks. The net result attributable to owners of the parent (net profit) declined by 46.7% to 783.1 million euros.