Erste Bank: 60% Less Profit in the First Nine Months

Erste Bank's profit after tax for the first nine months of this year was 59.2% lower than last year at HUF 18.3 billion, while lending continued to grow, CEO Jelasity Radovan said at a press conference in Budapest on Wednesday.

He added that the rise in costs and public charges, as well as accounting settlements and provisioning, resulted in a worse year-on-year result on a pro-rata basis.

The bank is operating stably in an uncertain market environment and its capital adequacy is excellent, the CEO underlined. He also indicated that the quality of the loan portfolio is stable despite the financial difficulties faced by customers, and the bank's resilience to shocks is high.

He said that operating income was 5.6% higher than in the same period last year, rising to HUF 144.3 billion. Costs increased by 26.7% to HUF 76.9 billion, mainly due to the extra OBA payment due to the Sberbank compensation. The cost/income ratio deteriorated to 53.3% from 44.4% in the previous year. Operating profit was down 11.3% year-on-year to HUF 67.3 billion.

The volume of new financing increased by 44% to 493 billion forints in the first nine months of this year, while the stock of loans and bonds to customers grew by 15.5% to 2,286 billion forints in a year, he said. The non-performing loan (NPL) ratio fell to 2.5% from 2.9% a year earlier.