Erste Group Bank AG

asset quality improvement gains momentum as AQR confirms solid capital base - Seite 2

Taxes on income rose to EUR 433.9 million due to a negative change in deferred taxes (net) in the amount of EUR 141.1 million. The net result attributable to owners of the parent amounted to EUR -1,484.0 million (EUR 430.6 million), in line with guidance.

Total IFRS capital declined to EUR 13.7 billion (EUR 14.8 billion). Common equity tier 1 capital (CET 1, phased-in) decreased to EUR 10.9 billion versus EUR 11.2 billion (Basel 2.5). Risk-weighted assets (phased-in) increased to EUR 100.6 billion (EUR 97.9 billion). The common equity tier 1 ratio (CET 1, phased-in) stood at 10.8% versus 11.4% (Basel 2.5), the total capital ratio (Basel 3, phased-in) 15.7% versus 16.3% (Basel 2.5).

Total assets amounted to EUR 197.0 billion (EUR 200.1 billion). Loans and advances to customers (net) increased slightly to EUR 120.5 billion (EUR 119.9 billion). The loan-to-deposit ratio stood at 100.3% (98.0%)

Outlook

* For Erste Group (consolidated): o Risk costs of EUR 2.1-2.4 billion depending on booking of Hungarian consumer loan law impact (EUR 350-400 million, EUR 360.8 million of which have already been booked) in risk costs or other operating result; any costs related to the unlikely, but still possible discounted conversion of Hungarian retail FX loans are not included in this guidance. o A net loss for 2014 of EUR 1.4-1.6 billion; o A CET 1-ratio (fully loaded, based on current definitions) of comfortably above 10.0% at year-end; o Strongly improved post-provision result and net profit (ROTE: 8-10%) in 2015, despite still disproportionate banking levies. * For the geographic segment Romania: a full normalisation of risk costs at 100-150 bps of average gross customer loans starting in 2015, accompanied by an accelerated NPL reduction already in 2014; a lower, but sustainable operating result due to a lower unwinding impact on net interest income; * For the geographic segment Hungary: a gradual normalisation of risk costs to 150-200 bps (by 2016) of average gross customer loans based on the assumption that all government actions will be completed in 2014; a lower, but sustainable operating result due to lower net interest income.



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emitter: Erste Group Bank AG address: Milchgasse 1, 1010 Wien country: Austria contact person: Thomas Sommerauer/ Simone Pilz phone: + 43 (0)5 0100 - 17741 e-mail: [e-mail] website: www.erstegroup.com

ISIN(s): AT0000652011 (share) stock exchanges: official trade in Vienna

[ source: http://www.pressetext.com/news/20141030008 ]