Morningstar | EBS Updated Forecasts and Estimates from 17 Jan 2019
Erste Bank Group posted good third-quarter results as healthy net interest income and fee generation more than offset slightly higher personnel expenses compared with last year. Net profits for the period came in at EUR 574 million versus EUR 467 million last year. Income generation was supported primarily by operations in the Czech Republic and Romania, where higher interest rates formed a tailwind, as well as gains of financial instruments measured at fair value that offset weak trading results. Net interest income for the group grew 7% to EUR 1.2 billion while fee and commission income followed suit with 5% growth to EUR 471 million year over year. Expenses increased primarily owed to 3% higher personnel expenses, but the stronger income generation meant that the cost to income ratio improved 180 basis points to just below 60% relative to the same period last year. Return on equity of 12.5% was good and prompted management to lift full-year guidance to 12% or above. We maintain our no-moat rating and fair value estimate of EUR 40 per share.Year to date, customer loan and deposit growth of about 6% depicts a healthy business environment for Erste, which expects 3%-4% real GDP growth in its core markets for the full year. It’s non-performing loan ratio declined to 3.5% from 4% last quarter, while the phased-in common equity Tier 1 ratio stood at 12.5%.
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.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.
Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
We have operations in 27 countries.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.