Erste Bank reported its consolidated FY2003 IFRS results this morning. Net profit stood at EUR 353m, which was roughly in line with our estimate; ROE rose to 13.7% from 12.7% in 2002. Profit before provisions of EUR 1,168m lagged 2% behind our expectations due to Erste's weaker trading results; other major revenue items (interest and fee income) were in line. Overall, we see the results as largely neutral.
Erste also reiterated its key 2005 financial targets: net profit of EUR 500m and a cost/income ratio of up to 62%. It has raised its ROE target for 2005 to 16% (previously 15%); we expect ROE slightly above 15% over 2005-06. For 2004, Erste expects a double-digit growth in consolidated net profit, which is in line with our projections. The management also reiterated it will recommend the AGM to approve a dividend increase of 21% to EUR 1.50 per share from EUR 1.24 last year.
A teleconference will be held today at 4 p.m. CET and will be hosted by A. Treichl, CEO of Erste. Tomorrow, March 18, Erste will hold an analyst and fund-manager presentation in London, also hosted by Mr. Treichl.
|
IFRS consolidated
(EUR m)
|
|
|
|
|
2003
|
2002
|
% change
|
|
Net interest income
|
2,587
|
2,463
|
5.0
|
|
Operating revenues
|
3,798
|
3,575
|
6.2
|
|
Operating expenses
|
2,461
|
2,432
|
1.2
|
|
Operating result
|
1,337
|
1,143
|
17.0
|
|
Other operating result
|
-169
|
-72
|
134.7
|
|
Profit before
provisions
|
1,168
|
1,071
|
9.1
|
|
Provisioning
|
-406
|
-406
|
0.0
|
|
Pretax profit
|
762
|
665
|
14.6
|
|
Net profit
|
353
|
255
|
38.4
|
|
|
|
|
|
|
EPS (EUR)
|
5.95
|
4.73
|
25.8
|
Jan Hájek, Patria Finance