Neutral results, Bank targets EUR 500 mln share buyback
- Erste’s net income came to EUR 688 mln in Q4, down by 16% q-o-q and up by 34% y-o-y while the figure came 3% ahead of consensus and slightly below our estimate. The market beat came from provisioning mainly as the Bank released FLI provisions in the amount of EUR 200 mln in the Other Austria Segment. Risk cost was allocated mainly at savings banks due to SME and medium-sized real estate projects.
- NII declined 3% q-o-q due to moderately rising deposit pass-through rates, interest rate caps in HU and RS, while lack of minimum reserve payment also had a hit on NII. This was compensated by another strong quarter in fees as securities fees were exceptionally sound. In the quarter, other gains and losses were a negative item to the tune of EUR 128 mln.
- Loan volumes increased by 1% q-o-q while deposits were down with the same tune, resulting in a LTD ratio of 89%.
- Erste’s CET1 ratio reached7% and target rate is 14%.
Erste Group is a financial services provider based in Austria. As of Dec 31 2015, Co.'s total assets amounted to Euro199,743 million and the number of customers was approximately 16.5 million. Co.'s key business is the retail business, covering the entire spectrum from lending, deposit and investment products to current accounts and credit cards. In addition to providing financial services to private individuals, Co.'s core activities also include advisory services and support for corporate clients in financing, investment and access to international capital markets, public sector funding and interbank market operations.
Concorde Securities Ltd. is Hungary’s leading independent company engaged in investment banking activities. It provides its clients with integrated financial services, including securities trading, research, corporate financing advisory, capital market transactions, wealth management and investment advisory. The operational management of the company is the responsibility of the CEO, while the owners/managers (who control one-third of the company through their shares and options) are in charge of its strategic governance. Concorde Securities Ltd. is a member of the Budapest, Frankfurt, Warsaw and Bucharest stock exchanges, as well as of the Hungarian Association of Investment Service Providers.
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