Erste Bank reported better-than-expected 2002 results yesterday

Erste Bank posted a consolidated 2002 net profit of EUR 246 mil. (+10.1% y-o-y) and an operating result of EUR 749 mil. (+5.2% y-o-y), the company announced yesterday. While its operating performance was largely in line with our estimates, net profit beat our projections by 11%. See the enclosed .pdf file for our detailed comments.

Erste announced that this year it expects (i) to post double-digit growth in consolidated net profit, (ii) to cut consolidated personal expenses, and (iii) to partially withdraw from the loss-making SME lending business on the Austrian market. The bank also reiterated its key 2005 financial targets: an ROE of around 15%, a cost/income ratio between 60-62%, and a net profit of EUR 500 mil. The board of directors will propose at the next annual general meeting (May 6) to payout a gross per-share dividend of EUR 1.24 (i.e., the same as the previous year).

Jan Hájek