Erste Group posts 2012 earnings

Erste Group says net interest income declined to EUR 5,235.3 million in 2012 (2011: EUR 5,569.0 million), which was mainly due to the economic environment and the subdued credit demand as well as the continuing reduction of noncore assets. Net fee and commission income decreased from EUR 1,787.2 million to EUR 1,720.8 million due to weaker lending and securities business. At EUR 273.4 million, the net trading result was significantly higher than in the previous year (EUR 122.3 million).

Operating income totalled EUR 7,229.5 million (-3.3% versus 2011: EUR 7,478.5 million). Strict cost management reduced general administrative expenses by 2.4% from EUR 3,850.9 million to EUR 3,756.7 million in 2012. This led to an operating result of EUR 3,472.8 million (2011: EUR 3,627.6 million).

The cost/income ratio was stable at 52.0% (2011: 51.5%). Risk costs showed a positive trend and declined by 12.7% to EUR 1,980.0 million, or 148 basis points of average customer loans, in 2012 from EUR 2,266.9 million, or 168 basis points, in 2011. Provisioning levels declined or were stable in all core markets, with the exception of Romania and Croatia. For the second consecutive quarter the NPL volume declined while the NPL ratio remained stable and stood at 9.2% as of 31 December 2012 (year-end 2011: 8.5%). The NPL coverage ratio improved to 62.6% (year-end 2011: 61.0%).

Other operating result amounted to EUR -724.3 million (2011: EUR -1,589.9 million). The strong improvement was attributable to considerably smaller one-off effects in 2012: In particular, the buyback of tier 1 and tier 2 instruments had a favourable effect in the amount of EUR 413.2 million.

Negative influences came from the adjustment of goodwill, including EUR 469.4 million for Banca Comercial? Român?. Banking taxes levied in Austria, Hungary and Slovakia had a negative impact of EUR 244.0 million (2011: EUR 132.1 million). Erste Group's net profit after minorities amounted to EUR 483.5 million for 2012 despite net negative one-off effects of EUR 360.7 million.