Erste Group Bank

Preliminary results 2016, guidance for 2017 confirmed - Seite 2

As the earnings contributions of savings banks covered by the cross-guarantee system declined slightly from historically very high levels, the minority charge decreased to EUR 272.0 million (-11.4%; EUR 307.0 million). The net result attributable to owners of the parent rose to EUR 1,264.7 million (+30.6%; EUR 968.2 million).

Total equity - adjusted for additional tier 1 capital - increased to EUR 16.1 billion (EUR 14.8 billion). After regu-latory deductions and filtering according to the CRR, common equity tier 1 capital (CET1, Basel 3 phased-in) rose to EUR 13.6 billion (EUR 12.1 billion); total eligible own funds (Basel 3 phased in) amounted to EUR 18.8 billion (EUR 17.6 billion). Total risk, i.e. risk-weighted assets including credit, market and operational risk (Basel 3 phased-in) rose to EUR 101.8 billion (EUR 98.3 billion). The common equity tier 1 ratio (CET 1, Basel 3 phased-in) stood at 13.4% (12.3%), the total capital ratio (Basel 3 phased-in) at 18.5% (17.9%).

Total assets increased to EUR 208.2 billion (EUR 199.7 billion), driven mainly by an increase in cash and cash balances, including in particular cash balances at central banks, to EUR 18.4 billion (EUR 12.4 billion). Loans and receivables to customers (net) rose to EUR 130.7 billion (+3.8%; EUR 125.9 billion). Securities held for trading declined to EUR 8.0 billion (EUR 8.7 billion). On the liability side, customer deposits grew substantially - particularly in the Czech Republic, Austria and Romania - to EUR 138.0 billion (+7.9%; EUR 127.9 billion). Deposits from banks were higher at EUR 14.6 billion (+3.0%; EUR 14.2 billion). Debt securities in issue, mainly bonds and mortgage covered bonds, declined to EUR 27.2 billion (-8.3%; EUR 29.7 billion). The loan-to-deposit ratio stood at 94.7% (98.4%).

OUTLOOK

Erste Group expects a return on tangible equity (ROTE) of more than 10% in 2017. The anticipated solid macro-economic development in the core markets Czech Republic, Slovakia, Hungary, Romania, Croatia, Serbia and Austria, the unchanged very positive assessment of the bank's risk profile and the significant reduction of banking tax in Austria should be supportive factors to achieve this target. On the other hand, the persistent low interest rate environment, the non-recurrence of one-off effects such as the sale of VISA shares and potential - and as yet unquantifiable - political risks might jeopardize it.