“We are pleased with our 2018 results. Stable operation, new loan growth in both segments, retail and corporate, along with responsible risk policy management, provide a confirmation that we are following the right business model. Furthermore, the Bank remained a market leader in customer satisfaction and had stable capital adequacy parameters. The list of the characteristics of the Bank’s successful operations in 2018 is fulfilled by a balanced loan-deposit ratio“, said Christoph Schoefboeck, Chairman of the Management Board of Erste Bank Croatia, commenting on the business results for H1 2018, and added: “During 2018, we also witnessed the first tangible responses to the growing challenges of digitalization. The processes of acceleration of time-to-market, more frequent changes and adaptations of existing products, and comprehensive digital business transformation will continue in 2019 at a faster pace.”

IN BRIEF

According to the non-consolidated financial report for Erste Bank Croatia (the Bank), net profit in 2018 was HRK 829.7 million, up 27.7% from HRK 649.5 million in 2017. Lower provision costs in comparison with 2017, partly a result of the general positive portfolio trends and the lower NPL share, and partly a result of the fact that provision costs increased in 2017 due to the situation of the Agrokor conglomerate and its associate companies, were the main driver of the increase in net profit. In 2018, net interest income maintained a stable trend and amounted to HRK 1,651.9 million, down 0.3% from HRK 1,657.3 million in 2017, while net fee and commission income was up 4.6%, from HRK 444.7 million in 2017 to HRK 464.9 million in 2018. The Bank’s total assets on 31/12/2018 were HRK 61.4 billion, up 7.4% from HRK 57.2 billion at 2017YE. As of 31/12/2018, total loans to customers were HRK 39.9 billion*, up 9.3% from HRK 36.5 billion at 2017YE. Total deposits from customers as of 31/12/2018 were HRK 47.0 billion, up 11.1% from HRK 42.3 billion at 2017YE.

In 2018, the bank continued to record positive trends in the segment of new loans. In the retail segment, new loans grew by around 21%, from around HRK 4.25 billion in 2017 to around HRK 5.14 billion in 2018. New loans in micro-companies segment were up 24%, from HRK 350.2 million in 2017 to HRK 434.9 million in 2018. Positive trends were also recorded in the corporate segment, where new loans were up around 20%, from around HRK 7.21 billion in 2017 to around HRK 8.65 billion in 2018. 

EBC Group’s** net profit in 2018 was HRK 1.0 billion, up 125.5% compared to HRK 457.1 million in 2017. Increase in net profit is largely due to the substantially lower provision costs compared to the previous year, when provision costs had been impacted by the situation in the Agrokor conglomerate and its associated companies. EBC Group’s net interest income was up 0.04%, from HRK 2,072.2 million in 2017 to HRK 2,073.1 million in 2018. Net fee and commission income was up 2.6%, from HRK 715.0 million in 2017 to HRK 733.4 million in 2018. EBC Group’s total assets on 31/12/2018 were HRK 69.7 billion and were up 5.7% from HRK 65.9 billion at 2017YE. Total loans to customers as of 31/12/2018 were HRK 46.5 billion***, up 7.3% from HRK 43.3 billion at 2017YE. EBC Group’s total deposits from customers on 31/12/2018 were HRK 49.2 billion and were up 10.9% from HRK 44.3 billion at 2017YE.

OUTLOOK

“Positive characteristics include the maintenance of positive trends on the fiscal consolidation side and further announcements about Croatia joining the Eurozone, particularly against a backdrop of stronger involvement in the European integration space, long-term stability of the economy, and reduction of currency risk for citizens and businesses. However, introduction of the euro is not and should not be a goal in itself. In this context, implementing true structural reforms, finding an adequate answer to the emigration problem, reinforcing legal and political stability, and increasing the level of investment security become even more important“, Schoefboeck underlined.

“We want our success to be sustainable and long-term, to result from the quality selection and financial backing of those projects that are sound and profitable, development of innovative products and services, and to be based on partnership relations that we maintain with our clients and other stakeholders in the social community. Apart from the financial segment of our business operations, as well as our important role on both domestic and regional financial markets, we will continue to support and stimulate the development of different segments of society through a wide spectrum of our so-called non-financial activities, which are directed toward the well-being of clients and the greater social community. Our common goals are success, satisfaction, and prosperity – of our clients, of our employees and of society in Croatia as a whole“, concluded Schoefboeck.

* In year 2018, finance lease receivables and trade and other receivables are separately disclosed while in year 2017 they are part of position loans to and receivables from customers
** EBC Group’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, Erste Factoring d.o.o., Erste Group IT HR d.o.o. and Izbor Nekretnina d.o.o.
*** In year 2018, finance lease receivables and trade and other receivables are separately disclosed while in year 2017 they are part of position loans to and receivables from customers