Erste Bank will release its consolidated results on Monday, March 14 at 7:30am CET. FY results should confirm the trends seen with the 9M results - strong growth in central Europe and improvement in Austria. The bank last year announced it is targeting a consolidated net profit of at least EUR 500m. We believe the bank will exceed the target and expect net profit of EUR 521m, up 47% y/y. At the top level we expect to see continuing improvement at the operating level, driven by rising net interest income and fees & commissions. Operating costs are likely going to rise y-o-y due to the Hungarian Postabank integration and slightly higher costs at some of its subsidiaries. The cost/income ratio should slightly worsen to 64.6%. Ceska sporitelna, which contributes the most to the results of the EB group (approximately 40% of the bottom line), should report a rise in net profit of almost 15% y/y to CZK 8.7bn (EUR 290m). The high profitability of the CEE subsidiaries is driven mainly by the growth in loans, especially in the retail sector, and tight cost control.
This year dividend payments should rise by almost 32% to EUR 0.5 / share, which currently corresponds to a yield of about 1.2%. The Annual General Meeting is scheduled for May 11. The stock goes ex-dividend on May 17.