Erste Group: Slight Increase in Profits Expected

Published: April 27, 2011; 07:54 · (Vindobona)

UniCredit and RCB expect a slight rise in profits for Erste Group, despite bank taxes in Austria and Hungary.

Erste Group: Slight Increase in Profits Expected / Picture: © Erste Group / Christian Wind

The interest surplus is estimated to amount to € 1.34bn in the first quarter of 2011. In the period of the previous year, the interest surplus was at € 1.32bn.

Lending is expected to grow by 1.3% in the first three months of 2011. The NPL ratio should amount to 7.8%, RCB states. UniCredit´s estimation is 7.5%. Both analysts forecast a stable NPL-ratio. However, risk provision are declining, RCB and UniCredit emphasize. After risk provisions of € 531m in Q1/2010, the figure should decrease by 16% down to € 447m in Q1/2011. Profits before taxes should rise by 1.2% in Q1/2011. The estimation is at € 402m. The estimation of the consensus is € 397m. Despite higher taxes, expected profits after taxes amount to € 276.5m, which is a rise by 8.4%. Due to the additional bank tax in Austria and Hungary, the estimated overall tax burden goes up from € 50m to € 103m.

Regarding Erste Group´s foreign markets, UniCredit states that the Czech Republic and Slovakia will perform well. On the other side, Romania and Hungary are still below the expectations.

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