In the fourth quarter of 2010, the bank posted net result of EUR244.9 million, while the full-year profit stood at EUR878.7 million.
“By returning to profitability in the fourth quarter we have proven that our business model – being the bank for retail and corporate clients in the eastern part of the European Union – works even as economic conditions remain challenging,” said Andreas Treichl, chief executive officer of Erste Group.
“In the financial year 2011, net profit was up in almost all countries. In Hungary and Romania we have strengthened the top management and taken action to return to a successful development,” he added.
BCR, Erste’s Romanian unit, reported a net profit of 71 million lei (EUR16.3 million) in 2011, down 85% on the year.
Erste said a slight decline in operating revenue and a moderate increase in operating expenditure determined a 4.2% decline of the operating result to EUR3.62 billion, from EUR3.78 billion in 2010.
Operating income reached EUR7.48 billion (from EUR7.6 billion), as net interest income rose 2.4% to EUR5.57 billion and net fee and commission income dropped 3% to EUR1.79 billion. However, net trading revenue fell 62% to EUR122.3 million.
General administrative costs widened by 0.9% to EUR3.85 billion, from EUR3.81 billion, which brings the cost to income ratio at 51.5% in 2011, from 50.2% in 2010.
According to Erste’s statements, risk costs increased by 12.2% last year, to EUR2.26 billion from EUR2.02 billion.
Net asset value widened by 2.1% in the timeframe analyzed, to EUR210 billion.
The solvency ratio improved to 14.4% at the end of 2011, compared to 13.5% at the end of 2010, Erste also said.