Erste Bank reported its consolidated Q1 2004 IFRS results this morning. Net profit stood at EUR 104m, thus exceeding both our estimate and the market consensus. ROE rose to 14.6% from 13.7% in 2003. The operating result of EUR 365m stood 3% above our expectations mostly due to Erste's stronger net commission income (specifically from its security and insurance businesses); other major revenue items (interest and trading income) were in line. Given the changes in the IFRS methodology, which lead to the elimination of goodwill amortization, Erste has raised its key 2005 financial targets: a net profit of EUR 600m (from EUR 500m) and a ROE of 18% (up from 16%). It also reiterated its cost/income ratio target of up to 62% next year.
Jan Hájek, Patria Finance