Erste Bank Hungary pre-tax profit up slightly in 2018

MNB

Erste Bank Hungary had pre-tax profit of HUF 61.3 billion in 2018, up more than HUF 1 bln from the previous year, even as write-backs and other one-off items improving results fell by more than HUF 10 bln from a year earlier, Chairman-CEO Radován Jelasity said Friday.   

Ersteʼs cost-to-income ratio improved to 48.8% at the end of 2018, from 54.1% a year earlier, Jelasity said.

The bankʼs loan-to-deposit ratio was 74.5% last year, as deposits amounted to HUF 1.73 trillion and the stock of loans came to HUF 1.29 tln. Client deposits grew 12.3%, while client loans were up 14.8%.

Operating revenues rose 10%, while expenditures were almost unchanged. As a result, operating profit rose 22.4% to HUF 71 bln.    Non-performing loans (NPLs) fell to a record low of 3.6%, from 5.1% a year earlier.

László Harmati, head of the bankʼs retail division, said retail loans grew 7.1% to HUF 730 bln last year. The bankʼs market share of new mortgage loan disbursements rose from 8% to 10%. Erste projects a 10% increase in home loan placements this year, he added.

In new personal loan outlays, the bankʼs market share rose to 15%, from 10% a year earlier, Harmati noted.

Retail client assets managed by the Erste Group in Hungary, including investments and deposits, grew more than 11% to HUF 2.6 tln, with investments accounting for 60% of the total.

Richárd Szabados, head of Ersteʼs corporate division, said the bankʼs stock of corporate loans grew 21% to more than HUF 600 bln in 2018, compared to the market-average growth of 14%. Ersteʼs market share in corporate lending rose to more than 7%, from 4% three years earlier. The bank aims to become one of the top three biggest providers of corporate loans in 2-3 years.

In the SME segment, new placements grew 16%, which resulted in a 23% increase in the total volume, Szabados said. The ratio of NPLs in the corporate sector remains below 1%, he added.

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