Erste Group net profit rises to EUR 1.18 billion in 9M
Staff Writer |
Erste Group reported that its net profit increased to 1.18 billion euros in nine months.
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Net interest income declined to EUR 3,267.5 million (-1.7%; EUR 3,324.3 million), mainly due to a market environment of persistently low interest rates and the continued NPL sales not fully offset by lending growth.
Net fee and commission income decreased to EUR 1,319.8 million (-3.8%; EUR 1,372.6 million), primarily due to lower income from securities business and payment services.
Net trading and fair value result was marginally lower at EUR 191.6 million (-0.7%; EUR 193.0 million). Consequently, operating income declined to EUR 4,959.7 million (-2.6%; EUR 5,090.9 million).
General administrative expenses rose to EUR 2,963.0 million (+3.9%; EUR 2,852.4 million), driven mainly by higher IT costs and personnel expenses of EUR 1,724.7 million (+3.4%; EUR 1,667.5 million).
This resulted in a decline of the operating result to EUR 1,996.6 million (-10.8%; EUR 2,238.5 million). The cost/income ratio stood at 59.7% (56.0%).
Gains from financial assets and liabilities not measured at fair value through profit and loss (net) include a gain, posted in the second quarter, from the sale of shares in VISA Europe in the amount of EUR 138.7 million.
Net impairment loss on financial assets not measured at fair value through profit or loss dropped significantly to EUR 63.2 million or 6 basis points of average gross customer loans (-87.8%; EUR 518.4 million or 53 basis points) on the back of a substantial decline of non-performing loans and higher income from the recovery of loans already written off in Romania and Hungary.
The NPL ratio improved further to 5.5% (7.1%). The NPL coverage ratio stood at 67.7% (64.5%).
Other operating result amounted to EUR -252.4 million (EUR -377.4 million). This includes expenses for the annual contributions to resolution funds in the amount of EUR 64.6 million (EUR 56.2 million).
Banking and financial transaction taxes declined to EUR 151.7 million (EUR 187.7 million), which was attributable to the significant reduction of the Hungarian banking levies to EUR 47.4 million (EUR 74.6 million).
In Austria, banking levies declined slightly to EUR 85.6 million (EUR 95.6 million) and in Slovakia amounted to EUR 18.6 million (EUR 17.5 million).
As the earnings contributions of savings banks covered by the cross-guarantee system declined from historically very high levels, the minority charge decreased to EUR 245.6 million (EUR 275.0 million).
The net result attributable to owners of the parent rose to EUR 1,179.2 million (EUR 764.2 million). ■