Q1 2024 preliminary results presentation
Vienna, 30 April 2024
Profit momentum continues
Willi Cernko, CEO Erste Group
Stefan Dörfler, CFO Erste Group
Alexandra Habeler-Drabek, CRO Erste Group
DISCLAIMER
Cautionary note regarding forward-looking statements
THE INFORMATION CONTAINED IN THIS DOCUMENT HAS NOT BEEN INDEPENDENTLY VERIFIED AND NO REPRESENTATION OR WARRANTY EXPRESSED OR IMPLIED IS MADE AS TO, AND NO RELIANCE SHOULD BE PLACED ON, THE FAIRNESS, ACCURACY, COMPLETENESS OR CORRECTNESS OF THIS INFORMATION OR OPINIONS CONTAINED HEREIN.
CERTAIN STATEMENTS CONTAINED IN THIS DOCUMENT MAY BE STATEMENTS OF FUTURE EXPECTATIONS AND OTHER FORWARD-LOOKING STATEMENTS THAT ARE BASED ON MANAGEMENT'S CURRENT VIEWS AND ASSUMPTIONS AND INVOLVE KNOWN AND UNKNOWN RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS, PERFORMANCE OR EVENTS TO DIFFER MATERIALLY FROM THOSE EXPRESSED OR IMPLIED IN SUCH STATEMENTS.
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THIS DOCUMENT DOES NOT CONSTITUTE AN OFFER OR INVITATION TO PURCHASE OR SUBSCRIBE FOR ANY SHARES AND NEITHER IT NOR ANY PART OF IT SHALL FORM THE BASIS OF OR BE RELIED UPON IN CONNECTION WITH ANY CONTRACT OR COMMITMENT WHATSOEVER.
Page 2
PRESENTATION TOPICS
EXECUTIVE SUMMARY
MACROECONOMIC AND BUSINESS UPDATE
OPERATING TRENDS
WHOLESALE FUNDING AND CAPITAL
FINANCIAL OUTLOOK
APPENDIX
Page 3
EXECUTIVE SUMMARY: P&L PERFORMANCE
Robust top line and moderate costs drive net profit growth
QoQ net profit development | YTD net profit development |
in EUR m
+13.8% | ||||
52 | ||||
62 | 152 | 62 | 783 | |
95 | ||||
688 | 89 | |||
Q4 23 Operating | Operating Risk costs | Other | Taxes on Minorities Q1 24 |
income | expenses | result | income |
in EUR m
+32.0% | ||||
40 | 71 | 783 | ||
148 | 20 | |||
115 | ||||
289 | ||||
594 |
1-323 Operating | Operating Risk costs | Other | Taxes on Minorities 1-324 |
income | expenses | result | income |
Operating income grows qoq
- NII consolidation near record levels, reassuring fee growth
Operating expenses decline qoq
- Seasonally lower expenses, despite (lower) upfront booking of deposit insurance contributions in all geographies
Net result also benefits from improved other result
Balanced operating income growth yoy
- NII, fees and net trading & FV result all contribute to growth
Costs benefit from lower deposit insurance contributions Risk costs remain moderate
Other result improves on lower resolution fund expenses
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EXECUTIVE SUMMARY: P&L DASHBOARD
Fully on track to deliver 2024 guidance
Net interest margin | Cost/income ratio | | Risk cost ratio | | ||||||||||
in % | in % | in bps | ||||||||||||
2.50 | 2.45 | 2.50 | 2.47 | 2.49 | G24: ~50% | G24: <25 bps | ||||||||
30 | ||||||||||||||
18 | ||||||||||||||
49.7 | 49.8 | -4 | -2 | 0 | ||||||||||
46.2 | 46.0 | |||||||||||||
44.7 | ||||||||||||||
Q1 23 | Q2 23 | Q3 23 | Q4 23 | Q1 24 | Q1 23 | Q2 23 | Q3 23 | Q4 23 | Q1 24 | Q1 23 | Q2 23 | Q3 23 | Q4 23 | Q1 24 |
Banking levies
Earnings per share | Return on tangible equity |
99
22 27
in EUR m
86
36
1.98 1.90
1.39
1.54
in EUR | in % |
20.2 19.1
17.2
14.614.7
1.87
G24: ~15%
Q1 23 | Q2 23 | Q3 23 | Q4 23 | Q1 24 | Q1 23 | Q2 23 | Q3 23 | Q4 23 | Q1 24 | Q1 23 | Q2 23 | Q3 23 | Q4 23 | Q1 24 |
Page 5
EXECUTIVE SUMMARY: BALANCE SHEET PERFORMANCE
Moderate volume growth, as expected
YTD total asset development
in EUR bn
+1.6% | |||||||
0.3 | 0.0 | 0.2 | 342.7 | ||||
337.2 | 9.4 | ||||||
7.3 | |||||||
2.9 | |||||||
31/12/23 | Cash | Trading, | Loans to | Net loans Intangibles | Miscella- | 31/03/24 | |
financial | banks | neous | |||||
assets | assets |
YTD equity & total liability development
in EUR bn
342.7 | ||
0.8 | ||
1.1 | ||
337.2 | 4.8 | |
0.5 | ||
3.2 | 2.5 | |
31/12/23 Trading | Bank | Customer | Debt Miscellaneous Equity 31/03/24 |
liabilities | deposits | deposits | securities liabilities |
Customer loans flat ytd in euro terms
- Marginal increase in Retail offset by marginal decrease in Corporate segments
- Slow start to the year at minority-owned savings banks
Seasonally higher interbank lending volumes
Customer deposits increase by 1.1% in Q1 24
- Core deposits (Retail, SME, Savings Banks) broadly stable
- Large Corporate business stable
Debt securities driven by start-of-year issuance activity
- Primarily covered bond issuance and increased CD business as well as selected local MREL issuance (CZ, HR)
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EXECUTIVE SUMMARY: BALANCE SHEET DASHBOARD
Balance sheet metrics remain strong
Loan/deposit ratio | Loan & deposit growth | Asset quality | ||||||||||||
in % | yoy, in % | in % | ||||||||||||
G24: ~5% | 94.3 | 96.7 | 96.7 | |||||||||||
9.4 | ||||||||||||||
85.1 | 83.7 | |||||||||||||
7.0 | ||||||||||||||
89.3 | ||||||||||||||
87.4 | 88.4 | |||||||||||||
3.7 | ||||||||||||||
85.1 | 7.1 | 6.9 | 2.8 | 2.7 | ||||||||||
85.0 | ||||||||||||||
2.3 | 2.3 | |||||||||||||
3.9 | 2.1 | 2.0 | 2.0 | |||||||||||
1.4 | ||||||||||||||
-1.2 | ||||||||||||||
Q1 23 | Q2 23 | Q3 23 | Q4 23 | Q1 24 | Q1 23 | Q2 23 | Q3 23 | Q4 23 | Q1 24 | Q1 23 | Q2 23 | Q3 23 | Q4 23 | Q1 24 |
Loan growth | Deposit growth | NPL coverage ratio | NPL ratio | |||||||||||
Capital ratios (final) | Liquidity ratios | Leverage ratio | ||||||||||||
19.9 | in % | in % | in % | |||||||||||
19.0 | 19.2 | |||||||||||||
18.7 | ||||||||||||||
18.0 | ||||||||||||||
7.1 | ||||||||||||||
146.0 | 148.7 | 153.4 | 152.8 | 6.6 | 6.6 | 6.8 | ||||||||
15.7 | 142.1 | 6.3 | ||||||||||||
15.2 *) | ||||||||||||||
14.9 | ||||||||||||||
14.0 | 14.5 | |||||||||||||
144.6 | ||||||||||||||
141.8 | 142.4 | 141.6 *) | ||||||||||||
140.0 | ||||||||||||||
Total capital ratio | Liquidity coverage ratio | |||||||||||||||||||||
CET 1 ratio | Net stable funding ratio | |||||||||||||||||||||
Q1 23 | Q2 23 | Q3 23 | Q4 23 | Q1 24 | Q1 23 | Q2 23 | Q3 23 | Q4 23 | Q1 24 | Q1 23 | Q2 23 | Q3 23 | Q4 23 | Q1 24 | ||||||||
*) Q1 24 pro forma CET1 at 15.5%. | *) NSFR as of 02/24. | |||||||||||||||||||||
Page 7
PRESENTATION TOPICS
EXECUTIVE SUMMARY
MACROECONOMIC AND BUSINESS UPDATE
OPERATING TRENDS
WHOLESALE FUNDING AND CAPITAL
FINANCIAL OUTLOOK
APPENDIX
Page 8
MACROECONOMIC AND BUSINESS UPDATE: ECONOMIC FORECASTS *
Moderate economic recovery projected for 2024
Real GDP growth | Consumer price inflation | Unemployment rate | ||||||||||||||||||||||||
2024 | in % | avg, in % | avg, in % | |||||||||||||||||||||||
2025 | ||||||||||||||||||||||||||
3.9 | 5.9 | 8.8 8.6 | ||||||||||||||||||||||||
3.2 | 3.4 3.1 | 3.3 3.5 | 4.7 | 4.3 | 6.0 | |||||||||||||||||||||
2.7 | 2.6 | 2.6 | 4.0 | 5.2 5.1 | 5.7 5.7 5.6 5.6 | 5.7 | ||||||||||||||||||||
1.5 | 2.0 | 2.0 | 3.4 | 3.0 3.0 | 3.7 | 3.1 | 2.9 | 4.5 | ||||||||||||||||||
1.2 | 2.5 | 2.4 | 2.7 | 3.3 3.9 | 3.9 | |||||||||||||||||||||
2.2 | ||||||||||||||||||||||||||
0.4 | ||||||||||||||||||||||||||
AT | CZ SK | RO | HU HR | RS | ||||||||||||||||||||||
AT | CZ SK RO | HU | HR | RS | AT | CZ SK RO | HU HR RS |
Economic growth expected to rebound on stronger household consumption
Disinflation to continue and approach central banks' targets in 2024
Current account balance | General government balance | Public debt | ||||||||||||||||||
% of GDP | % of GDP | % of GDP | ||||||||||||||||||
2.1 2.3 0.5 0.9 | 0.4 0.7 0.6 0.1 | 76 77 | 58 60 | 73 72 | 61 59 | |||||||||||||||
50 50 | 51 51 | 60 | ||||||||||||||||||
-1.2-0.4 | -1.7-1.5 | -3 | 45 46 | |||||||||||||||||
-2.7-2.8 | -2.4 | -2.3 | ||||||||||||||||||
-3.9 | -4.8 | -4.2 | -2.5 | |||||||||||||||||
-2.8 | -5.0 | -5.0 | ||||||||||||||||||
-6.9-6.8 | -6.0 | -5.2 | ||||||||||||||||||
AT CZ SK | RO HU HR RS | -6.2 | ||||||||||||||||||
AT | CZ SK | RO HU | HR RS | |||||||||||||||||
AT | CZ SK | RO | HU HR RS | |||||||||||||||||
Labour markets expected to remain robust in 2024
Current account balances sustainable in most countries, high fiscal deficit countries set to improve in 2025
* Source: Erste Group Research.
Page 9
MACROECONOMIC AND BUSINESS UPDATE: RETAIL BUSINESS
Retail business on a good track
Slightly growing loan book in FX-adjusted terms
- Housing loan volumes started to rebound in local currency (esp. in CZ and HU), first rate cuts support new sales; sustainable growth trend likely to be triggered by lower interest rates
- New business volumes for consumer loans remain at high levels (particularly strong in RO and HR); online offers further strengthen sales
- Risk profile of the retail loan portfolio remains very good
Broadly stable retail deposit base
- NII growth mostly liability-driven on the back of euro zone interest rate hikes
Stock of securities savings plans increased further in Q1 24
- Strategic focus on long-term savings plans pays off - increase across all markets
- Constant inflow of new assets under management
Retail digital platform George continues to grow
- 10 million users onboarded to George across 6 markets
- Continued focus on driving digital adoption among our retail customers
- Digital sales reach 51%, supported by assisted digital sales initiatives in CZ, HR, RO and SK
Fee income growth driven by securities, insurance brokerage and payment fees
Housing and consumer loans
in EUR bn
72.3 73.2 72.9 72.9 72.3
12.5 13.0 13.0 13.1 13.3
Q1 23 | Q2 23 | Q3 23 | Q4 23 | Q1 24 | ||
Housing loans | Consumer loans | |||||
Securities savings plans
in thds, eop
+23.9%
997 1,060 1,110 1,165 1,235
Q1 23 | Q2 23 | Q3 23 | Q4 23 | Q1 24 |
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Erste Group Bank AG published this content on 30 April 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 April 2024 05:38:10 UTC.