Erste Group Reports Earnings Results for the Fourth Quarter and Year Ended December 31, 2017; Provides Earnings Guidance for the Year 2018
February 27, 2018
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Erste Group reported earnings results for the fourth quarter and year ended December 31, 2017. For the quarter, the company reported net interest income of EUR 1,123.9 million against EUR 1,107.0 million a year ago. Operating income was EUR 1,732.1 million against EUR 1,731.5 million a year ago. Operating result was EUR 587.5 million against EUR 664.4 million a year ago. Net result attributable to owners of the parent was EUR 328.6 million against EUR 85.6 million a year ago. Return on equity was 9.1% against 2.8% a year ago.
For the year, the company reported net interest income of EUR 4,353.2 million against EUR 4,374.5 million a year ago. Net interest income declined, mostly due to lower interest income from the government bond portfolio and a lower unwinding effect. Operating income was EUR 6,669.0 million against EUR 6,691.2 million a year ago. Operating result was EUR 2,510.8 million against EUR 2,663.0 million a year ago. Net result attributable to owners of the parent was EUR 1,316.2 million against EUR 1,264.7 million a year ago. Return on equity was 10.1% against 10.8% a year ago.
The company expects return on tangible equity (ROTE) of more than 10% in 2018. In 2018, net interest income should also be slightly up on the back of rising short and long-term interest rates, primarily in the Czech Republic and Romania, but also globally, and therefore declining margin pressure from sovereign bond reinvestments. Operating income should grow slightly in 2018.
Erste Group Bank AG is one of the leading Austrian banking groups. Net interest income by activity breaks down as follows:
- retail banking (42.4%);
- corporate banking (24.7%)
- investment, finance and market banking (8.4%);
- other (24.5%).
At the end of 2022, the group was managing EUR 222.6 billion in current deposits and EUR149.3 billion in current loans.
Products and services are marketed through a network of 2,029 branches located in Austria (797), Czech Republic (398), Romania (321), Slovakia (190), Croatia (133), Hungary (102) and Serbia (88).
Net interest income breaks down geographically as follows: Austria (44.7%), Europe (52.8%) and other (2.5%).