Erste Group ends first half of 2022 with 24% hike in net profits

The banking group saw a net profit of EUR 1.14 bln, up 24% relative to the same period last year, due to a drop in provisions and higher revenues from interests and commissions.

Erste now wants to focus on boosting the accessibility of mortgage loans and the expansion of the built-to-rent housing model in the region, according to Profit.ro.

One of the largest banks in Central and Eastern Europe, Erste is present in Romania through BCR.

In the first 6 months of 2022, the group registered a 16% increase in net income from interest, reaching EUR 2.84 bln. The income spike was brought about by rising interest rates in countries like the Czech Republic, Hungary, and Romania, but also as a result of the increase in outstanding loans.

Net income from commissions also increased by more than a tenth to EUR 1.21 bln. Erste took a hit in trading after the revaluation of assets held. The group registered a loss of EUR 533 mln, compared to a gain of EUR 43 mln in the same period of the previous year. At the same time, revenues from financial instruments increased to EUR 517 mln.

A 24% jump in administrative costs and a 3.7% increase in salaries brought operating costs to EUR 2.29 mln, nearly 9% higher than the first half of the previous year. Operating revenues also increased by 9.4% to EUR 4.15 mln.

Overall, net income attributable to shareholders increased by 24% to EUR 1.14 bln. As a result, the bank proposed a dividend of EUR 1.6 per share.

Erste now aims to expand the Austrian model of subsidizing the construction of homes. In Austria, the group provided financing of EUR 1 bln for the construction of more than 6,000 homes. The next beneficiaries are the Czech Republic and Slovakia, but a similar concept is also being prepared for Hungary, Romania, and Croatia. In total, 15,000 affordable rental apartments would be built by 2030.

(Photo source: Jerome Cid | Dreamstime.com)