Erste Group Bank AG
Erste Group Bank AG: Erste Group posts net profit of EUR 472 million in H1 2010 on higher operating income and lower costs
Erste Group Bank AG / Half Year Results/Half Year Results 30.07.2010 07:31 Dissemination of an Ad hoc announcement, transmitted by DGAP - a company of EquityStory AG. The issuer is solely responsible for the content of this announcement. --------------------------------------------------------------------------- Vienna, 30 July 2010 Erste Group posts net profit of EUR 472 million in H1 2010 on higher operating income and lower costs Highlights: - Erste Group continued its strong start to FY 2010, posting a robust operating result of EUR 1,991.4 million in H1 2010, up 12.1% on H1 2009, and net profit of EUR 471.9 million, down 4.1% on H1 2009. The cost/income ratio improved to 48.8%, from 52.5% in H1 2009. - The operating result was driven by record operating income, which rose by 4.1% to EUR 3,889.8 million, and a decline in operating expenses, which fell by 3.2% to EUR 1,898.4 million. Net interest income grew by 7.2% to EUR 2,684.8 million on the back of an improving net interest margin, which rose to 3.04%, from 2.92% in H1 2009. Net commission income performed strongly, growing by 8.6% to EUR 965.0 million in H1 2010, due to increased fees from securities business and payment transfers. Net trading result declined by 30.0% to EUR 240.0 million compared to an exceptional H1 2009. - Risk costs rose to EUR 1,084.2 million or 167 basis points of average customer loans (H1 09: EUR 892.1 million and 141 bps, respectively), albeit at a markedly slowing pace of 21.5% compared to the previous year. - Following strong deceleration in NPL growth seen in the second half of 2009, new NPL formation in H1 2010 remained at this lower level. As a result, the NPL ratio in relation to customer loans reached 7.3%, following 5.9% at 30 June 2009. The NPL coverage ratio improved significantly to 59.7%, compared to 55.2% at 30 June 2009. - Net profit after minorities* declined by 4.1%, from EUR 492.1 million to EUR 471.9 million in H1 2010, on the back of a weaker other operating result and increased net profit attributable to minorities. Cash return on equity decreased from 9.7% in FY 2009 to 7.5% as a result of the significantly enlarged capital base. - Total assets increased by 3.7% year-to-date to EUR 209.1 billion. This was mainly due to rising interbank and financial asset volumes, driven by strong growth in customer deposits (+4.0% year-to-date to EUR 116.6 billion). The loan-to-deposit ratio was 112.4% (year-end 2009: 115.3%). - Erste Group's shareholders' equity** continued to improve in H1 2010, driven by rising quarterly earnings and a positive change in the AfS reserve. In H1 2010, Erste Group's equity therefore rose by EUR 0.2 billion to EUR 12.9 billion. Alongside stagnant loan volumes, risk-weighted assets declined from EUR 106.4 billion at year-end 2009 to at EUR 104.9 billion. Prior to the inclusion of retained earnings, this resulted in a tier 1 ratio (credit risk) of 11.2%, compared to 10.8% at year-end 2009 and a core tier 1 ratio (total risk) of 8.6%, up from 8.3% at year-end 2009. * The term 'net profit after minorities' corresponds to the term 'net profit attributable to owners of the parent'. ** The term 'shareholders' equity' corresponds to the term 'total equity attributable to owners of the parent'. 30.07.2010 Ad hoc announcement, Financial News and Press Release distributed by DGAP. Media archive at www.dgap-medientreff.de and www.dgap.de --------------------------------------------------------------------------- Language: English Company: Erste Group Bank AG Graben 21 1010 Wien Österreich Phone: +43(0)5 0100 - 10100 Fax: +43(0)5 0100 9 - 10100 E-mail: info@erstegroup.com Internet: www.erstegroup.com ISIN: AT0000652011 WKN: 909943 Listed: Freiverkehr in Berlin, München, Stuttgart, Hamburg; Open Market in Frankfurt; Foreign Exchange(s) Wien (Amtlicher Handel / Official Market) End of News DGAP News-Service ---------------------------------------------------------------------------
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