Erste Group closed the first half of 2015 with positive results, reflected in strong improvements in profitability, asset quality, lending and capital.
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The group reported net profit of EUR 487.2 million in H1 2015, compared to a negative result of EUR -929.7 million in the similar period last year; all countries except Hungary made a positive contribution to this development.
Total assets increased to EUR 197.5 billion, compared to EUR 196.3 billion at the end of 2014. This balance sheet growth reflects a 2.2% advance in net lending to customers compared to the end of 2014, to EUR 123.5 billion, supported by the 1.7% growth in loans to households, 2.0% to SMEs and 5.9% to large corporates.
The deposit base increased by 1.6% in H1 2015 to EUR 124.5 billion, demonstrating Erste’s strong deposit-gathering capabilities and supporting the financial independence of the group.
The asset quality continued to register a steady improvement in all key segments (retail, SMEs and large corporate), with the overall rate of bad loans (relative to total gross loans) decreasing notably to 7.7% at the end of June 2015, compared to 8.5% at the end of last year.
Total equity also strengthened significantly from EUR 13.4 billion at 31 December 2014 to EUR 14.0 billion at the end of June 2015, with the total capital ratio up from 15.7% to 16.8%. The common equity tier 1 ratio improved at 11.6% (10.6%).
The Group’s efficiency was proven in the first half of the year by the solid cost/income ratio of 55.8% (H1 2014: 55.4%), as administrative expenses remained stable at EUR 1,896.8 million despite the slightly higher personnel numbers.
The operating income declined marginally, by -0.7%, to EUR 3,399.4 million, on the back of persistently low interest rates across CEE markets. The operating result amounted to EUR 1,502.6 million (H1 2014: EUR 1,525.3 million).
Operating environment anticipated to be conducive to credit expansion. Real GDP growth is expected to be between 2% and 4% in all major CEE markets, except Croatia, driven by solid domestic demand. For Austria, a real GDP growth below 1% is forecast. ■