“The key drivers behind this result were unchanged and all too familiar: the persistently low-interest-rate environment, subdued loan demand and substantial banking and transaction taxes in Austria, Hungary, and Slovakia,” said Andreas Treichl, chief executive officer of the Austrian bank.
Net interest income declined 6.1% to EUR1.1 billion, mainly due to subdued loan demand in a persistently low-interest-rate environment and FX translation effects, Erste said in its first-quarter financial report.
While net fee and commission income rose slightly to EUR452.1 million driven by the securities business, the net trading and fair value result improved markedly to EUR50.4 million. As a result, operating income amounted to EUR1.7 billion, down 3.3% on the year.
Strict cost management reduced general administrative expenses by 2.7% to EUR963.3 million, thus contributing to a decrease by only 4.1% in the operating result, to EUR727.3 million
Total assets amounted to EUR203.9 billion at the end of March, up 11.5% from EUR200.1 billion on December 31, 2013.
In 2014, Erste Group anticipates a slow start to the year but aims to keep operating profit stable (± 2%) at about EUR3.1 billion.
Erste, which is the owner of BCR, Romania’s largest bank, is listed on Vienna, Prague and Bucharest stock exchanges. In Bucharest, Erste closed up 3.2% Tuesday.