CEO Bernd Spalt assumes higher net income and announces possible acquisitions.
In front of a journalist this morning, CEO Bernd Spalt said he was satisfied with the business development of his listed Erste Group in 2020. As was announced earlier this morning, operating profit fell slightly by 1.3 percent to 2.9 billion euros, while net profit slumped 46.7 percent to 783 million euros – which is primarily due to the high risk provisions. While this was 39 million euros in 2019, it was 1.3 billion euros for 2020. The hard equity ratio rose from 13.7 to 14.2 percent.
According to the recommendation of the ECB, a dividend of 50 cents will be proposed to the general meeting. In addition, precautions have been taken to be able to distribute an additional euro per share later if the ECB revokes its recommendations. The fact that “despite the crisis-ridden environment” will be able to “present a stable operating result” was anything but certain in the “course of 2020”, said CFO Stefan Dörfler.
“Rebound of an entire region”
Erste Group CEO Spalt is optimistic for 2021. The year will be that of the economic “rebound of an entire region”. Once the vaccines are well administered, people's need to consume, travel, and meet people will “be great”.
He does not anticipate a wave of bankruptcies in 2021. Of course, there will be “follow-up effects”, also because business models would change as a result of the pandemic. A few weeks ago, Spalt had assumed an increase in the insolvency rate of 15 to 20 percent compared to the ORF. For his bank there will be a “significantly better profit result” than in 2021. When asked by journalists, Spalt did not want to commit to an amount.
Consolidation expected
Like many of his colleagues, Spalt also expects a consolidation in the banking sector – and explained that they are looking at opportunities for acquisitions in all markets. “Also in Austria”. Details will be communicated as soon as a takeover is fixed. It will be “nothing big, transformative”, but “interesting possibilities that we are examining”.
