Thanks to solid earnings and lower risk costs, Erste Group significantly increased its earnings in the first six months. Net profit more than tripled from 294 to 918 million euros and thus also exceeded the value from the first half of 2019 of 732 million euros.
The operating result rose by 24 percent to 1.69 billion euros. The bank sees several factors responsible for this: net interest income, growth in commission income and an increase in trading and fair value earnings.
In the first half of the year, the risk environment was once again friendlier. This let the risk provisions for bad loans melt from 675 to 83 million euros.
Due to the positive development, Erste Group intends to return to a “progressive dividend policy”, announced CEO Bernhard Spalt at the presentation of the half-year figures. The bank did not pay a dividend for 2019; for 2020 it was already 0.5 euros per share. Now there should be a catch-up dividend of one euro per share for the past year.
“Keep an eye on inflation”
Spalt also went into the development of inflation. You have to “keep a close eye on them”. Higher raw material prices and a shortage of skilled workers indicated upward price pressure. With real estate there is sometimes an “overheating” in Austria, said the manager.
Jane Stock is a technology author, who has written for 24 Hours World. She writes about the latest in technology news and trends, and is always on the lookout for new and innovative ways to improve his audience’s experience.
