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    EBS   AT0000652011

ERSTE GROUP BANK AG

(EBS)
  Report
Delayed Wiener Boerse  -  11:36:48 2023-01-31 am EST
34.75 EUR   +3.05%
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Erste Group Shares Jump on Guidance Raise After Rate Hikes Boost 3Q

11/04/2022 | 04:14am EST

By Ed Frankl


Shares in Erste Group Bank AG rose Friday as it raised part of its full-year guidance after interest income surged in the third quarter on the back of rate rises.

At 0835 GMT shares were up 5.3% to EUR26.67.

The Austrian bank, which focuses on central and eastern Europe, pushed up its expectations for net interest income to 20% growth in 2022, from a low-double digit rise under previous guidance.

It came after net interest income--the difference between how much a bank earns on clients' loans and how much it pays them for their deposits--rose 27% in the third quarter to 1.55 billion euros ($1.51 billion), driven by interest rate hikes outside the eurozone.

It also expects higher than 10% net loan growth this year, from high-single digit percentage growth under previous guidance.

A potential share buyback will also be considered in spring 2023, Erste added.

The updated forecast was driven by a stronger economic performance over 2022 than previously expected in the spring, strong labor markets across central and eastern Europe and faster-than-expected interest-rate normalization in the eurozone, the Vienna-based company said.

The lender also updated its guidance on return on tangible equity--a measure of profitability--to 14%, from double-digit expectations previously. It also targets ROTE of 13%-15% in 2023.

Meanwhile, net profit in the quarter was EUR510 million, ticking down from the EUR533.4 million in the same period last year. That beat consensus by around 3%, driven by revenue, net interest income, and better cost management, partially tempered by higher-than-expected provisions, Citi analyst Simon Nellis said in a research note.

The provisions, primarily on overlay provisions to industries affected by rising energy prices, was mostly due to a cautious approach to creating general provisions prior to the coming slowdown, Mr. Nellis said.


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


(END) Dow Jones Newswires

11-04-22 0514ET

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Analyst Recommendations on ERSTE GROUP BANK AG
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Financials
Sales 2022 8 534 M 9 269 M 9 269 M
Net income 2022 2 034 M 2 210 M 2 210 M
Net Debt 2022 - - -
P/E ratio 2022 7,09x
Yield 2022 5,40%
Capitalization 14 150 M 15 369 M 15 369 M
Capi. / Sales 2022 1,66x
Capi. / Sales 2023 1,52x
Nbr of Employees 45 078
Free-Float 70,4%
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Technical analysis trends ERSTE GROUP BANK AG
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Mean consensus BUY
Number of Analysts 16
Last Close Price 34,75 €
Average target price 41,65 €
Spread / Average Target 19,8%
EPS Revisions
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
Sector and Competitors