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    EBS   AT0000652011

ERSTE GROUP BANK AG

(EBS)
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Real-time Estimate Tradegate  -  01:45 2022-10-04 pm EDT
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Erste Group 1st Half Profit Rose on Increased Rates, Loan Growth -- Update

08/01/2022 | 03:11am EDT

By Ed Frankl

Erste Group Bank AG said Monday that its first-half profit grew as it took advantage of increasing interest rates in eastern Europe on the back of on solid loan growth.

The Austrian lender said its net profit came to 1.14 billion euros ($1.17 billion) in the six months to the end of June, up from EUR918 million in the same period last year.

Net interest income rose to EUR2.84 billion, from EUR2.45 billion in 1H 2021, helped by interest-rate increases in Czech Republic, Hungary and Romania, the bank, which focuses on central and eastern Europe, said.

Loan volume growth rose 6.3% to EUR191.5 million, helped especially by its corporate segment and for mortgage loans, it said.

"The geopolitical situation and high inflation are clouding the outlook in Europe. Nevertheless, the economies in the eastern part of the EU have so far shown resilience," recently appointed Chief Executive Willi Cernko said.

Mr. Cernko took over from Bernd Spalt after he said he wouldn't renew his contract over disagreements on the long-term direction of the Vienna-based bank.

The net profit rise was also due to a strong operating result, which grew 10% to EUR1.86 billion, and release of provisions, Erste said.

The company released EUR132 million from provisions surrounding Covid-19, legal risks related to Romanian consumer-protection legislation and other geopolitical issues.

Its common equity tier 1 capital ratio, a measure of financial strength, was 14.2%

Erste said it now expects net loan growth in the high single-digit percentage range for the full year. At its first-quarter earningsin April, it said it expected growth in the mid-single digits.

It kept its full-year guidance for double-digit return on tangible equity, though its outlook was based on the assumption that its core markets could import adequate quantities of gas from Russia this year.

The company added that it plans to pay a dividend of EUR1.90 a share in 2022.


Write to Ed Frankl at edward.frankl@dowjones.com


(END) Dow Jones Newswires

08-01-22 0310ET

Stocks mentioned in the article
ChangeLast1st jan.
ERSTE GROUP BANK AG 5.73% 24 Delayed Quote.-45.10%
US DOLLAR / RUSSIAN ROUBLE (USD/RUB) 1.71% 59.0113 Delayed Quote.-19.64%
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Financials
Sales 2022 8 370 M 8 234 M 8 234 M
Net income 2022 2 042 M 2 008 M 2 008 M
Net Debt 2022 - - -
P/E ratio 2022 4,89x
Yield 2022 8,37%
Capitalization 9 173 M 9 024 M 9 024 M
Capi. / Sales 2022 1,10x
Capi. / Sales 2023 1,02x
Nbr of Employees 44 773
Free-Float 70,4%
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Mean consensus BUY
Number of Analysts 16
Last Close Price 22,70 €
Average target price 40,75 €
Spread / Average Target 79,5%
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Managers and Directors
Willibald Cernko Chief Executive & Retail Officer
Stefan D÷rfler Chief Financial Officer
Friedrich R÷dler Chairman-Supervisory Board
David O'Mahony Chief Operating Officer
Andreas Lachs Member-Supervisory Board
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