Erste Group Bank (EBS) H2 2024 earnings summary

Executive summary

• Achieved net profit of €3,125.3 million in 2024, with all core local banks profitable and a proposed dividend of €3.0 per share.

• Operating revenues rose 5.9% year-over-year to €11,178 million, while operating expenses increased 5.2% to €5,279 million, improving the cost/income ratio to 47.2%.

• Net customer loans grew 4.9% to €218.1 billion; customer deposits increased 3.8% to €241.7 billion, maintaining a loan-to-deposit ratio of 90.2%.

• Asset quality remained strong with an NPL ratio of 2.6% and NPL coverage at 72.5%; risk costs were 18 basis points of average gross customer loans.

• CET1 capital ratio stood at 15.1%, well above regulatory requirements, supporting a €700 million share buyback plan.

• Digitalisation and sustainability remain strategic priorities, with over 10 million active users on the George platform and €5.3 billion in new sustainable corporate financing in 2024.

Financial highlights

• Net interest income increased 4.2% year-over-year to €7,528 million, driven by higher loan volumes and interest income from debt securities, especially in CEE markets.

• Net fee and commission income reached a record €2,938 million, up 11.3%, with strong growth in payment services and asset management.

• Operating result rose 6.6% to €5,900 million; net result attributable to owners of the parent increased 4.3% to €3,125 million.

• Earnings per share improved to €7.20 from €6.80 in 2023.

• Cost/income ratio improved to 47.2% from 47.6% in 2023.

• NPL ratio increased slightly to 2.6% (from 2.3%), with NPL coverage at 72.5% (down from 85.1%).

• CET1 ratio at 15.1%, total capital ratio at 19.5%.

• Dividend of €3.0 per share proposed, payout ratio 41.2%.

Outlook and guidance

• For 2025, targets include ~5% loan growth, stable net interest income, ~5% growth in fee and commission income, and a cost/income ratio below 50%.

• Risk costs expected to rise to ~25 basis points, with ROTE around 15%.

• CET1 ratio expected to increase, supporting further capital return and M&A flexibility.

• Third share buyback program planned, subject to regulatory approval.