The following is a summary of the Erste Group Bank AG (EBKDY) Q4 2023 Earnings Call Transcript:
Financial Performance:
Erste Group Bank AG reported record net interest income, fees, and low risk costs in 2023, with a net profit offering excellent return on tangible equity of 17.2%.
A record dividend of €2.7 per share is on offer, with a second share buyback of €500 million ongoing after the completion of the first one worth €300 million.
The CET1 capital ratio reached a record of 15.7% at the end of 2023, signalling possible increased capital return and M&A activities.
Projected for 2024, there might be a small decline in net interest income of about 3% with inflation slowing to approximately 5%.
The bank expects a moderate risk costs, less than 25 basis points in 2024, influenced only by minor deterioration in asset quality.
Business Progress:
Erste Group Bank saw its retail business increase by 3.7% year-on-year and by 5.6% in its corporate business in 2023.
With an expectation of loan growth in 2024 due to lower rates and the predicted moderate economic recovery, the bank aims to reach a growth target of 5%.
The bank has planned another round of share buyback for 2024 in the sum of €500 million and anticipates fee income growth to continue at a mid-single-digit level as a part of their key strategic goals.
In preparation for higher than expected inflation rates for 2023, the bank has negotiated and set sights on adjusted bargaining averages for an Austrian roundabout and is prepared for any potential changes regarding financial regulations in 2024.
More details: ERSTE GROUP BANK AG ADR EACH REP 0.5 ORD NPV SPON IR
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