Page 6 - bne_April 2021_20210401

6 I Companies & Markets bne April 2021
Erste Bank net profit halves to €783mn in 2020
Ben Aris in Berlin
Erste Bank, the biggest multinational lender across the CEE region, reported net profit down 46.7% in 2020
at €783.1m on February 26, slightly above Reuters estimates, as it made provisions for losses from the coronavirus (COVID-19) pandemic.
The Austrian lender announced a dividend for 2020 of €0.5 per share and reserved an additional €1 per share for a potential later payment if permitted by the ECB.
Erste said its CEE markets held up better than expected in 2020, while Austria underperformed. It expects net profit
to increase this year on the back of net fees rising in the low single digits and better trading income, while net interest income should remain flat despite negative interest rates in the euro zone. It also forecasts a non-performing loan ratio
of 3-4% this year, up from 2.7% in 2020, with no significant increase in hard defaults after the expiration of debt moratoria in the region.
In 2020 net interest income increased – mainly in Austria, but also in Romania and Hungary – by 0.6% to €4.775bn, with customer deposits rising 9.9%. Growth in loans and advances to customers slowed to 3.6% to total €166.1bn, and the bank expects low to middle single-digit growth this year.
Consumer loans fell on the uncertainty during the pandemic but housing loans soared by 36%. The loan-to-deposit ratio stood at 86.9% (92.2%) and net interest margins slipped to
Volkswagen in negotiation with Czech government on building e-car battery plant
bne IntelliNews
The Czech government is negotiating with the German carmaker Volkswagen on construction of one of its electric car battery plants in Czechia, said Minister of Industry and Trade Karel Havlicek to Hospodarske Noviny (HN).
According to Havlicek, the negotiations on the Volkswagen plant are tied to the previously announced project of the semi- state energy group CEZ to build a battery factory in northern
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2.08% from 2.18%. It expects loan growth in the low to mid- single-digit range in 2021.
Net fee and commission income fell by 1.2% to €1.977bn, though with higher demand for security products continuing. The net trading result declined significantly to €138mn.
General administrative expenses declined 1.5% to €4.221bn, giving an unchanged cost/income ratio of 59.0%. The rollout of its online banking system George in Hungary and Croatia should be completed in 2021, enabling customers to access George in its six largest core markets, including Austria, Czechia, Slovakia and Romania. The number of customers using George rose 14% to 6.2mn.
Impairments rose sharply from €39mn (or 7 basis points of gross customer loans) to €1.295bn (78 basis points). Erste believes that in 2021 risk costs will not exceed 65 basis points of average gross customer loans.
The non-performing loan ratio climbed slightly to 2.7% (2.5%), but the NPL coverage ratio rose to 88.6% (77.1%). Some €1.9bn of net loans are supported by state guarantees during the pandemic (1.1% of the total), while €1.3bn are benefiting from a payment moratorium (2.7%).
Total assets rose to €277.4bn (€245.7bn) and the common equity tier 1 ratio (CET 1) increased to 14.2% (13.7%). Return on equity halved to 4.7% from 10%.
Bohemia. Together with investors from the automotive industry, CEZ wants to utilize lithium from the Cinovec area in the Ore Mountains for the production of batteries.
Volkswagen, a parent company of the biggest Czech carmaker Skoda Auto, presented earlier this week its technology roadmap for batteries and charging up to 2030, and it plans to build six battery factories in Europe, one of them probably in Czechia.