The bank’s net interest income declined to EUR4.86 billion in 2013, from EUR5.24 billion the year before, which was mainly due to subdued credit demand and the low interest rate environment.
Operating income amounted to EUR6.96 billion, down 3.7% on the year, while general administrative costs fell 2.7% to EUR3.65 billion. As a result, the operating profit was at EUR3.3 billion, 4.7% lower than in 2012.
“Risk costs showed a positive trend and declined by 10.9% to EUR1.76 billion … mainly due to the substantial decline of risk costs in Romania,” Erste said in a statement.
However, other operating result amounted to minus EUR1.08 billion, from minus EUR724.3 million in 2012. “The decline by EUR357.6 million was largely due to the non-recurrence of a positive one-off effect in the amount of EUR413.2 million from the buyback of tier 1 and tier 2 instruments in 2012,” the statement reads.
“Negative influences in 2013 came from the sale of the Ukrainian subsidiary (EUR76.6 million) and a goodwill write-down in a total amount of EUR383 million, including EUR283.2 million in Romania and EUR52.2 million in Croatia. Banking and financial transaction taxes levied in Austria, Hungary and Slovakia had an additional negative impact of EUR311 million,” Erste said.
Erste is the majority stockholder of BCR, Romania’s largest bank, which reported Friday a net profit of 591.2 million lei, versus a loss of RON1.22 billion in 2012, mainly due to lower risk costs and an improved operating performance.
Erste said the total assets declined 6.5% to EUR199.9 billion at the end of 2013.
The bank proposed a dividend of EUR0.2 per share, halved from EUR0.4 per share it paid last year. As a result, Erste shares took a dive, losing more than 7% in Vienna. On the Bucharest market, Erste shares were down 7.2% at around 11:30 am.