BAWAG Group Q3 2022 Results
19 October 2022
August19 October20212022| BAWAG| BAWAGGroup AGroup AG
Highlights Q3 2022
- | Q3 '22 incorporates full write-off of City of Linz receivable of €254m in risk cost (€190m after tax) | |
- Q3 '22 (including City of Linz): Net loss of €(58)m and EPS €(0.66) | ||
EARNINGS | - | Adjusted Q3 '22 (excluding City of Linz): Net profit of €132m, EPS of €1.49, and RoTCE of 19.3% |
- Pre-provision profit of €218m (+17% vPY) and CIR at 35.1% | ||
- Risk costs of €35m, of which €12m related to ECL management overlay that stands at €82m | ||
- Average customer loans flat vPQ and +9% vPY | ||
BALANCE SHEET & | - | CET1 ratio at 13.0% … deducting €325m buyback and €207m dividend accrual (55% adjusted net profit) |
CAPITAL | - Bank positioned for rising interest rate environment that will materialize in the coming quarters |
- Solid credit performance across the business … NPL ratio 1.0% with management overlay ~1x annual risk costs | |
- Execution of €325m share buyback started on 25 July with ~65% executed as of October 18 | |
OUTLOOK | - Maintaining dry powder to address potential organic and inorganic opportunities in the coming quarters |
- Reconfirmed 2022 targets (adjusted): Profit before tax >€675m, RoTCE >17%, and CIR < 38% | |
- Updating outlook for core revenue growth to ~9% in 2022 | |
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Financial performance
P&L | € million | Q3'22 | Q3'22 | vPY | YTD '22 | YTD'22 | vPY | ||||||||
reported | adjusted | reported | adjusted | |||||||||||
Core revenues | 335 | 335 | 10% | 986 | 986 | 9% | ||||||||
Operating income | 336 | 336 | 9% | 993 | 993 | 9% | ||||||||
Operating expenses | (118) | (118) | (2%) | (357) | (357) | (2%) | ||||||||
Pre-provision profit | 218 | 218 | 17% | 636 | 636 | 16% | ||||||||
Regulatory charges | (3) | (3) | (21%) | (49) | (49) | (19%) | ||||||||
Risk costs | (290) | (35) | 64% | (340) | (86) | 15% | ||||||||
Profit before tax | (73) | 181 | 12% | 249 | 504 | 22% | ||||||||
Net profit | (58) | 132 | 7% | 186 | 377 | 19% | ||||||||
Balance Sheet & Capital | € million Total assets Interest-bearing assets (average) Customer loans (average) Customer deposits (average) Common Equity Tangible Common Equity CET1 Capital Risk-weighted assets CET1 Ratio (post dividend)
Q3'22 | Q2'22 | vPQ | vPY |
55 997 | 55 029 | 2% | 3% |
44 733 | 44 530 | - | 8% |
36 804 | 36 764 | - | 9% |
34 219 | 33 558 | 2% | 3% |
3 207 | 3 351 | (4%) | (11%) |
2 678 | 2 820 | (5%) | (12%) |
2 764 | 2 699 | 2% | (7%) |
21 343 | 21 326 | - | 5% |
13.0% | 12.7% | 0.3pts | (1.7pts) |
Ratios | Q3'22 | Q3'22 | vPY | YTD '22 | YTD'22 | vPY | ||||||
reported | adjusted | reported | adjusted | |||||||||
RoCE | (7.1%) | 16.2% | 2.3pts | 7.6% | 15.4% | 3.4pts | ||||||
RoTCE | (8.5%) | 19.3% | 2.9pts | 9.1% | 18.4% | 4.2pts | ||||||
CIR | 35.1% | 35.1% | (4.1pts) | 35.9% | 35.9% | (4.0pts) | ||||||
Risk cost ratio | 2.59% | 0.32% | 0.11pts | 1.04% | 0.26% | 0.02pts | ||||||
Earnings per share (€) | (0.66) | 1.49 | 8% | 2.10 | 4.24 | 20% | ||||||
Per share data Book value (€) Tangible book value (€) Shares outstanding (€ m)
Q3'22 | vPQ | Q3'21 | vPY |
37.57 | - | 40.46 | (7%) |
31.38 | (1%) | 34.43 | (9%) |
85.34 | (4%) | 88.86 | (4%) |
Note: All equity, capital, ratios and per share data reflect deduction of €207m dividend accrual and €325m buyback for Q3 2022 figures. "Adjusted" view excludes write-off of City of Linz receivable of €254m (€190m after tax).
19 October 2022 | BAWAG Group AG
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Capital development and distribution
QUARTERLY CAPITAL DEVELOPMENT
0.1% | (0.1%) | 13.3% | ||||
(0.3%) | 13.0% | |||||
0.6% | ||||||
12.7% | f | |||||
CET1 Target: | ||||||
12.25% | ||||||
Capital | ||||||
requirement: | ||||||
9.14% | ||||||
Q2 2022 | Earnings | City of Linz | OCI/other | Q3 2022 | Capital | Pro-forma |
a | b | c | distribution | Q3 2022 |
YTD CAPITAL DEVELOPMENT
CAPITAL DEVELOPMENT
-a Gross capital generation ~+60bps in Q3 '22 / +180bps YTD '22 -b Write-off fully provisioned in regulatory capital in prior years -c OCI primarily related to widening credit spreads and volatility -d RWA increase due to organic business growth and FX
M&A and CAPITAL DISTRIBUTION
e- Acquisition of Sberbank assets (consumer loan & bond portfolio) -f Accrual based on dividend payout ratio of 55%* (dividend policy) g- Share buyback of €325m in 2022 … ~65% completed
15.0% | 1.8% | 0.1% | (0.5%) | (0.5%) | 15.8% | (0.3%) | EXCESS CAPITAL | |||||
f | (1.0%) | |||||||||||
13.0% | ||||||||||||
g | (1.5%) | ‒ | CET1 ratio 13.0% post buyback of €325m | |||||||||
‒ | Excess capital of ~€150m to our management target of 12.25% | |||||||||||
‒ Maintain dry powder for potential organic and inorganic | ||||||||||||
opportunities in coming quarters | ||||||||||||
FY 2021 | Earnings | City of Linz | OCI/other | RWA | Q3 2022 | M&A | Capital | Pro-forma | *based on adjusted net profit | |||
a | b | c | d | e | distribution | Q3 2022 | ||||||
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Retail & SME
Financial performance | Customer development |
€ million | Q3'22 | Q3'21 | vPY | Q2'22 | vPQ | |||||
Core revenues | 255.8 | 229.8 | 11% | 254.1 | 1% | |||||
Net interest income | 190.5 | 165.4 | 15% | 184.1 | 3% | |||||
Net commission income | 65.3 | 64.4 | 1% | 70.0 | (7%) | |||||
Operating income | 257.6 | 230.5 | 12% | 254.7 | 1% | |||||
Operating expenses | (85.5) | (87.6) | (2%) | (85.2) | - | |||||
Pre-provision profit | 172.1 | 142.9 | 20% | 169.5 | 2% | |||||
Regulatory charges | (1.4) | (0.9) | 56% | (6.0) | - | |||||
Risk costs | (23.4) | (15.5) | 51% | (20.4) | 15% | |||||
Profit before tax | 147.3 | 126.5 | 16% | 143.1 | 3% | |||||
Net profit | 110.5 | 94.9 | 16% | 107.3 | 3% | |||||
Ratios
in % | Q3'22 | Q3'21 | vPY | Q2'22 | vPQ | |||||
RoCE | 28.3% | 24.3% | 4.0pts | 27.5% | 0.8pts | |||||
RoTCE | 33.3% | 28.2% | 5.1pts | 32.5% | 0.8pts | |||||
CIR | 33.2% | 38.0% | (4.8pts) | 33.5% | (0.3pts) | |||||
NPL ratio | 1.9% | 1.9% | - | 1.9% | - | |||||
Risk cost ratio | 0.42% | 0.30% | 0.12pts | 0.37% | 0.05pts | |||||
€ million | Q3'22 | Q3'21 | vPY | Q2'22 | vPQ |
Housing loans | 16 160 | 15 602 | 4% | 16 109 | - |
Consumer and SME | 6 348 | 5 204 | 22% | 6 244 | 2% |
Total assets | 22 508 | 20 806 | 8% | 22 353 | 1% |
Total assets (average) | 22 488 | 20 618 | 9% | 22 049 | 2% |
Risk-weighted assets | 9 500 | 8 055 | 18% | 9 452 | 1% |
Customer deposits | 28 075 | 26 882 | 4% | 28 045 | - |
Customer deposits | 27 823 | 27 069 | 3% | 28 145 | (1%) |
(average) | |||||
Q3 '22 net profit of €111m, up 17% vPY due to higher pre-provision profits … average net asset growth +9% vPY driven by consumer loans and housing loans
Pre-provision profit of €172m for Q3 '22, up 21% vPY ... Core revenues up 11% and operating expenses down (2%)
Risk costs of €(23)m in Q3 '22, up 51% vPY … €(17)m core run rate with addition of Sberbank consumer loan portfolio in Q2 '22… Added €(6)m management overlay to address future uncertainty
Continuing to execute on various operational and strategic initiatives to drive efficiency and disciplined profitable growth across our Retail & SME franchise
Subdued loan growth vPQ given overall cautious consumer sentiment and significant movement in rates
19 October 2022 | BAWAG Group AG | 5 |
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BAWAG Group AG published this content on 19 October 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 21 October 2022 21:19:17 UTC.