Christoph Schoefboeck, predsjednik Uprave Erste&Steiermärkische Bank d.d.
„We are satisfied with the results achieved during 2022 in all business segments, with special emphasis on the growth of total loans with a steady growth of deposits, the influx of new clients, continued leading CX position on the market and the increase in the number of users of digital solutions, George on-line banking and KEKS Pay applications. With further development of these digital solutions, we have reached one of our strategic goals: to be a leader in digital innovation, having further positioned our digital strategy as the trademark of Erste brand in Croatia“, said Christoph Schoefboeck, CEO of Erste Bank Croatia, commenting on the business results achieved in 2022 and added:
„We are satisfied with the results achieved during 2022 in all business segments, with special emphasis on the growth of total loans with a steady growth of deposits, the influx of new clients, continued leading CX position on the market and the increase in the number of users of digital solutions, George on-line banking and KEKS Pay applications. With further development of these digital solutions, we have reached one of our strategic goals: to be a leader in digital innovation, having further positioned our digital strategy as the trademark of Erste brand in Croatia“, said Christoph Schoefboeck, CEO of Erste Bank Croatia, commenting on the business results achieved in 2022 and added:
Christoph Schoefboeck, predsjednik Uprave Erste&Steiermärkische Bank d.d.
„The final preparation of the Croatia’s entry into the European monetary union was certainly one of the most important events in 2022. Joining the eurozone will lead to further integration of the Croatian economy into the European financial and economic flows, positively increasing its competitiveness and attractiveness to investors, which will ultimately ensure further intensification of the process of convergence. At the same time, the demanding criteria that Croatia had to fulfil as part of the euro adoption process will positively contribute to the achievement of the basic objective — a high-quality and long-term sustainable position of the Croatian economy based on solid foundations.“
In brief
According to an unconsolidated financial report, which includes the results of the Bank excluding subsidiaries, the net profit in 2022 amounted to HRK 977.0 million, which is 15.3% higher than HRK 847.0 million in 2021. Net profit growth is the result of a further reduction in risk costs and an improved operating result, supported primarily by growth in income from transaction operations in the post-COVID period and by positive trends in the trading segment. On the other hand, the total amount of net profit achieved in 2022 was influenced by the tax expense attributable to the Addition income tax, amounting to HRK 91.0 million. Net interest income increased by 8.4%, from HRK 1,612.0 million in 2021 to HRK 1,747.0 million last year. At the same time, the net fee and commission income increased by 15.2%, from HRK 519.0 million in 2021 to HRK 598.0 million in 2022. Net trading and fair value result in 2022 reached HRK 309.0 million, 41.7% more than HRK 218.0 million in 2021.
The Bank’s total assets at the end of December 2022 were HRK 102.6 billion, or 23.9% more than at the end of 2021, when it amounted to HRK 82.8 billion. Total loans to customers as of 31 December 2022 amounted to HRK 53.6 billion, 17.3% more than HRK 45.7 billion at the end of 2021. Total deposits of the Bank's customers as of 31 December 2022 amounted to HRK 80.4 billion, which is 23.9% more than at the end of 2021, when they amounted to HRK 64.9 billion.
EBC Group’s1 net profit before minority interests amounted to HRK 1,172.0 million in 2022, 9.6% higher than HRK 1,069.0 million in 2021. ECB Group’s net interest income amounted to HRK 2,121.0 million, 5.9% higher compared to HRK 2,003.0 million in 2021. Net fee and commission income amounted to HRK 884.0 million, 9.3% more than HRK 809.0 million in 2021.
EBC Group’s total assets at the end of December 2022 amounted to HRK 112.9 billion, which is 22.3% more than at the end of 2021, when it amounted to HRK 92.3 billion. Total loans to customers as of 31 December 2022 amounted to HRK 58.1 billion, which is 16.2% more than HRK 50.0 billion at the end of 2021. Total deposits from EBC Group's customers as of 31 December 2022 amounted to HRK 84.2 billion, up 23.3% compared to the end of 2021, when they amounted to HRK 68.3 billion.
In 2022, risk costs continued to decline, while the share of the Bank’s so-called NPLs was additionally reduced from 5.5% at the end of 2021 to 3.6% at the end of December 2022. With respect to private individuals, the NPL share reached 4.8% at the end of 2022, compared to 8.2% at the end of 2021. In the corporate segment (including sovereign exposure), the NPL share was 2.7% at the end of 2022, compared to 4.4% at the end of 2021. As a responsible business entity, the Bank will continue to monitor and manage its loan portfolio, in accordance with its business policies and applicable credit risk management standards, while respecting all regulatory rules and applying a balanced approach that takes into account the objective market situation and customer needs.
1 EBC Group’s consolidated financial statement includes the following subsidiaries in addition to Erste Bank Croatia: Erste Nekretnine d.o.o., Erste&Steiermärkische S-Leasing d.o.o, Erste Bank a.d., Podgorica, Erste Card Club, Erste Group IT HR d.o.o. and Izbor Nekretnina d.o.o
Outlook
“After a prolonged period of gradual decline in interest rates, a stabilization of this trend took place in 2022, influenced by inflationary developments, consequences of monetary policy stance and global geopolitical developments. On the other hand, the benefits of the Croatian integration into the monetary union, such as the practical elimination of currency risk, have to some extent mitigated the increase in interest rates in Croatia, compared to some other European countries (especially non-Euro ones). However, in the short term, the level of interest rates will depend dominantly on the moves of monetary policymakers in the segment of raising reference interest rates, in response to the current high inflation environment and the ensuing uncertainties associated with the invasion on Ukraine“, Schoefboeck emphasized.
„Speaking of priorities for 2023, the focus should be on using the potentials of EU funds and their anticyclical capacity in an environment characterised by growth slowdown as efficiently as possible. Similarly, putting the available funds to good use is an important priority also in the context of generating opportunities for faster potential economic growth and creation of prerequisites for more sustainable income convergence, where an increased pace of structural reforms would be an asset. In this context, continual improvement of investment and legal certainty remains a fundamental prerequisite for long-term economic growth and for making use of potentials available to Croatia. Caution should be exercised while introducing new taxes for the most successful companies that generate the highest added value and are a driver of the Croatian economy and a generator of new jobs. To conclude, with positive economic trends, stable public finances and potentials of the EU funds usage, and provided that the path of strengthening legal certainty for investors continues, Croatia can take an optimistic outlook of the future“, Schoefboeck said.
“The banking system will continue to strongly support the growth and development of the Croatian economy. This, of course, includes Erste Bank Croatia, which is proud of its results achieved in 2022, which have been completed by two valuable awards presented to us: Zlatna kuna (Golden Kuna) for the most successful Croatian bank, presented by the Croatian Chamber of Economy, and the Bank of the Year Award presented by distinguished The Banker magazine. As a bank that currently holds the highest rating (A-. Fitch Ratings, 2022) among the banks and other companies on the Croatian market and taking into account our strong liquidity position and adequate capitalization, we will continue to provide support to all our clients, thus providing an adequate impulse to additional growth of the domestic economy. Our objective will remain the same: to promote the prosperity of our employees, our clients, and the Croatian society in general”, Schoefboeck concluded.