Q1 2015 confirms stability of Erste grupa's business

Key financial highlights for Erste grupa[1]:

• Total assets as of 31 March 2015 amounted to HRK 70.5 billion, 1.1% up compared to 31 December 2014, when they had amounted to HRK 69.8 billion
• Total loans as of 31 March 2015 amounted to HRK 47.3 billion, 1.2% less compared to HRK 46.7 billion as of 31 December 2013.
• Total  deposits  at  the  end  of  March  2015 amounted to HRK 39.0 billion and were down by 2.5% compared to the end of 2014, when they amounted to HRK 38.0 billion.
• Net profit in Q1 2015 was 94.2 million, compared to HRK 84.1 million in the same period of 2014.
• Key performance indicators: Return on Assets (RoA) was 4.8%, Return on Equity (RoE) 4.3%, while the Cost/Income ratio was 52.7% on 31 March 2015.

Zagreb/Rijeka, 10 June 2015 – Stability of Erste grupa's business operation was once again confirmed in Q1 2015, as evident from the consolidated financial statement of Erste&Steiermärkische Bank d.d. and its subsidiaries (Erste Nekretnine d.o.o., Erste&Steiermärkische S-Leasing d.o.o, Erste Bank a.d. Podgorica, Erste Card Club grupa and Erste Factoring d.o.o).

In that period, Erste grupa has achieved optimal financial results in line with the business plan and the targets for 2015. Erste grupa's total assets at the end of Q1 2015 amounted to HRK 70.5 billion and were up by 1.1 % compared to the end of 2014, when they had amounted to HRK 69.8 billion. Net profit in the first three months of 2015 reached HRK 94.2 million, up 12.0% compared to HRK 84.1 million in the same period last year. The ROA in Q1 2015 was 4.8 %, ROE was 4.3 %, and the cost/income ratio was 52.7 %.

The non-consolidated financial statement for Erste&Steiermärkische Bank d.d., without subsidiaries, also confirms a stable position in Q1 2015. The bank's total assets as of 31 March 2015 amounted to HRK 61.4 billion and were up 2.0% compared to the end of 2014, when they had amounted to HRK 60.2 billion. The bank’s total loans as of 31 March 2015 stood at HRK 40.3 billion and were up by 1.8 % compared to the end of 2014, when they had stood at HRK 39.6 billion. Total deposits as of 31 March  2015 amounted to HRK 37.8 billion and were up by 1.7 % compared to the end of 2014, when they amounted to HRK 37.2 billion.

The bank's net profit in Q1 2015 was 16.7 million, compared to HRK 12.5 million in the same period of 2014. In addition to a very challenging market environment, the bank's net profit in Q1 2015 was impacted by the decision of the Swiss National Bank of 15 January 2015 to discontinue maintaining a minimum CHF to EUR exchange rate, as well as amendments to the Consumer Credit Act adopted at the end of January 2015, which fixed the exchange rate for repayment of CHF-denominated loan receivables. In accordance with International financial reporting standards, Erste bank has fully incorporated all the effects resulting from said decisions in its Q1 2015 financial statement.

Outlook for 2015

The rest of 2015 will be characterised by a challenging market environment which will impact the bank's operating results. Erste Bank will continue to adhere to its basic strategic guidelines in its activities, which include following the financial needs of Croatian citizens, focusing intensively on the SME segment, and supporting quality projects  driving  the  development  of  the  real  economy  and  employment. We continue to see new lending perspectives in renewable energy sources and energy efficiency, agriculture and EU fund-related infrastructure projects, tourism and export-oriented production.

The Bank's long-term business policies are focused on growth above the market average, increased internal efficiency,  and  rational  cost  management. Erste  Bank’s  ambition is to close this  year  with  another increase in its market shares, and it will continue to lay a special emphasis on improving the quality of its services and its communication with its clients and on understanding their specific needs in current market conditions.

[1] Erste grupa's consolidated financial statement includes the following subsidiaries in addition to Erste & Steiermärkische Bank d.d.: Erste Nekretnine d.o.o., Erste & Steiermärkische S-Leasing d.o.o, , Erste Bank a.d., Podgorica, Erste Card Club group and Erste Factoring d.o.o. 

Profit and loss statement as of 31 March 2015