DGAP-News: UniCredit Bank Austria AG: Bank Austria posts net profit of EUR 646 million for the first six months
(firmenpresse) - DGAP-News: UniCredit Bank Austria AG / Key word(s): Half Year Results
UniCredit Bank Austria AG: Bank Austria posts net profit of EUR 646
million for the first six months
03.08.2012 / 16:45
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Corporate News
Bank Austria's results for the first half of 2012
Date of entry: 3 August 2012
Bank Austria's results for the first half of 2012:
Bank Austria posts net profit of EUR 646 million for the first six months
- Net operating profit up by 11.1 per cent due to sound performance from
customer business, flat cost trend and further decline in net
write-downs of loans
- Lending volume rises by 3.3 per cent to EUR 136 billion, customer
deposits up by 9,4 per cent to EUR 107.4 billion
- Net write-downs of loans in Austria and CEE down by a combined 18.6 per
cent to EUR 568 million
- Charge for bank levies totals EUR 58.7 million
- Profit before tax up by 3.4 per cent to EUR 864 million
- Net profit increases by 1.2 per cent to EUR 646 million
- High loan / direct funding ratio: customer loans funded by customer
deposits and debt securities in issue to the extent of 100 per cent
Bank Austria's CEO Willibald Cernko: 'Our extensive presence in Austria and
18 countries in Central and Eastern Europe has proved to be effective also
in the volatile market environment which prevailed in the first six months.
While uncertainty on the part of investors continued and credit demand was
marked by restraint, we achieved 11.1 per cent growth in our net operating
profit. This reflects the sound development of commercial banking business
with customers and a further decline in the provisioning charge. The fact
that the volume of loans continued to grow shows that we fully meet our
core function of financing companies and private households even in
challenging times. The European environment means that we will continue to
face significant challenges: in view of the stricter regulatory
requirements we need to further improve our earnings capacity.'
Items in the income statement
Net interest in the first half of 2012 was EUR 2,249 million. In an
environment characterised by low interest rates, net interest remained the
most important revenue component, at a level which was marginally above the
figure for the same period of the previous year (H1 2011: EUR 2,241
million).
Net fees and commissions showed a weaker trend; at EUR 786 million, they
were down by 4 per cent from the first half of the previous year (H1 2011:
EUR 818 million). The decline was due to continued restraint on the part of
customers, especially in securities business, in view of the volatile
market environment.
Net trading, hedging and fair value income rose strongly compared with the
previous year. The increase is mainly explained by the gain on the buyback
of hybrid instruments in the first quarter of 2012. Overall, net trading,
hedging and fair value income for the first six months was EUR 357 million,
an increase of 31.4 per cent over the same period of the previous year (H1
2011: EUR 272 million).
Operating income in the first six months of 2012 totalled EUR 3,512 million
(H1 2011: EUR 3,501 million).
At EUR 1,947 million, operating costs were up by a moderate 2.2 per cent
from the comparative figure for the first half of the previous year (H1
2011: EUR 1,905 million); strict cost discipline and continued efficiency
enhancement in current operations kept the increase down. In total, the
charge for bank levies in Austria and in several CEE countries added up to
3 per cent of operating costs.
The total charge for bank levies payable in the Bank Austria Group in the
first half of 2012 was EUR 58.7 million, of which EUR 48.3 million relates
to Austria, EUR 4.8 million to Slovakia, EUR 0,5 million to Romania and EUR
0.4 million to Slovenia. In Hungary, the bank levy amounted to EUR 14
million, which was partly offset by a positive one-off effect of EUR 9.3
million because part of the losses resulting from the early repayment
programme for foreign currency loans may be offset against the bank levy.
Operating profit was EUR 1,565 million, only slightly lower than in the
same period of the previous year (H1 2011: EUR 1,595 million) thanks to
sound operating performance and despite the additional burdens resulting
from bank levies.
In the first half of 2012, net write-downs of loans and provisions for
guarantees and commitments were EUR 568 million, down by a substantial EUR
130 million or 18.6 per cent from the same period of the previous year (H1
2011: EUR 698 million). The provisioning charge was reduced in Austrian
customer business and in Central and Eastern Europe. In Austrian commercial
banking, the provisioning charge declined by 51.7 per cent to EUR 88
million (H1 2011: EUR 182 million), in CEE by 6.7 per cent to EUR 481
million (H1 2011: EUR 516 million). Overall, the cost of risk (net
write-downs of loans and provisions for guarantees and commitments as a
proportion of average loans to customers) declined from 108 basis points
(bp) in the first half of the previous year to 85 bp in H1 2012.
Net operating profit - i.e. operating profit less net write-downs of loans
and provisions for guarantees and commitments, the key measure of operating
performance - improved strongly in the first half of 2012, by 11.1 per cent
to EUR 997 million, compared with the same period of the previous year (H1
2011: EUR 898 million). This favourable development was driven by a sound
operating performance from customer business and by a further decline in
the provisioning charge.
Among the non-operating items, provisions for risks and charges were EUR 67
million, significantly higher than in the same period of the previous year
(H1 2011: EUR 31 million). The increase was partly due to substantial
provisions for the credit card bonus points programme in Turkey and also to
provisions for legal proceedings.
The net result from investments was negative, at minus EUR 63 million,
representing a significantly larger burden than in the same period of the
previous year (H1 2011: minus EUR 29 million). The increase is mainly due
to write-downs on Greek, Spanish and Portuguese bonds.
Profit before tax for the first half of 2012 was EUR 864 million, up by 3.4
per cent on the figure for the same period of the previous year (H1 2011:
EUR 836 million).
Income tax for the period was EUR 185 million, up by 65 per cent on the
first half of the previous year. As a result, profit for the period
declined by 6.1 per cent to EUR 679 million (H1 2011: EUR 723 million).
After deduction of non-controlling interests and goodwill impairment, net
profit attributable to the owners of Bank Austria rose by 1.2 per cent to
EUR 646 million (H1 2011: EUR 638 million).
The following key financial data have been calculated on the basis of the
above-mentioned results:
- Return on equity before tax was 9.8 per cent.
- Return on equity after tax was 7.5 per cent.
- The cost/income ratio rose slightly, to 55.4 per cent (H1 2011: 54.4
per cent).
- The risk/earnings ratio (provisioning charge as a percentage of net
interest income) declined to 24.3 per cent (H1 2011: 29.8 per cent).
- The total capital ratio (based on all risks) was 11.73 per cent.
- The Tier 1 capital ratio (based on all risks) was 10.17 per cent.
- The Core Tier 1 capital ratio (based on all risks) was 9.97 per cent.
Francesco Giordano, Chief Financial Officer of Bank Austria: 'Bank Austria
has a sound balance sheet structure: although total assets increased, the
leverage ratio (Footnote 1) continued to decline, to 12.6, a level which
reflects our strong equity capital position and our conservative business
model. At the same time, thanks to an increase in deposits, we also further
improved our liquidity position. The loan / direct funding ratio is exactly
100 per cent. This means that all of our customer loans are covered by
customer deposits and the bank's debt securities in issue.'
Results of the Divisions
Bank Austria reports its results in four Divisions: Family&SME Banking
(F&SME), Private Banking, Corporate&Investment Banking (CIB) and the CEE
Banking Division. The bank also shows results for its Corporate Center.
Profit before tax generated by the Family&SME Banking Division in the
first six months of 2012 was EUR 62 million, an increase of about 92 per
cent over the first six months of the previous year (H1 2011: EUR 32
million). The improvement resulted from the sound development of customer
business and especially from a substantial decline in the provisioning
charge, which was down by 54 per cent to EUR 46 million (H1 2011: EUR 101
million). The cost/income ratio was 80.6 per cent (H1 2011: 78.3 per cent).
The Private Banking Division's profit before tax for the first half of 2012
amounted to EUR 20 million, an increase of 7.5 per cent over the same
period of the previous year (H1 2011: EUR 19 million) which was achieved
despite continued uncertainty and restraint on the part of investors. The
cost/income ratio was 71.6 per cent (H1 2011: 72.5 per cent).
In the first half of 2012, the Corporate&Investment Banking (CIB)
Division recorded a profit before tax of EUR 277 million, an increase of
9.3 per cent over the same period of the previous year (H1 2011: EUR 253
million). Contributions to this improvement came from the sound revenue
trend in customer business and from the substantial decline of 47.4 per
cent, to EUR 41 million, in net write-downs of loans and provisions for
guarantees and commitments. The cost/income ratio was 34.7 per cent (H1
2011: 36.6 per cent).
The net operating profit generated by the CEE Division in the first half of
2012 amounted to EUR 752 million, up by 3.5 per cent from the comparative
figure for the first half of the previous year (H1 2011: EUR 727 million).
At constant exchange rates, net operating profit increased by 6.2 per cent.
This growth clearly reflects a sound performance in customer business as
well as another strong decrease in net write-downs on loans and provisions
for guarantees and commitments. At the same time profit before tax was EUR
747 million, 1.7 per cent below the first half of 2011, mainly due to
higher provisions for the bonus points programme for Turkish credit card
holders and a positive one-off back in 2011. At constant exchange rates and
adjusted for the one-off in the first half of the previous year, profit
before tax increased by 12.2 per cent. Despite the Division's continued
business expansion, its cost/income ratio remains at an outstanding level
of 47.4 per cent (H1 2011: 46.6 per cent).
Within UniCredit, Bank Austria is the sub-holding company for operations in
the region of Central and Eastern Europe. Its banking network comprises
around 2,700 branches and roughly 51,000 employees (Footnote 2) in 18
countries. The Group continues to see itself as a long-term investor in the
CEE region and aims to expand its leading market position through sustained
organic growth in the coming years.
Despite the persistence of the Western European sovereign debt crisis and
the prospect of a more gradual recovery in the region, CEE is still set to
significantly outperform the euro zone with expected GDP growth of 2.6 per
cent this year and 3.4 per cent in 2013. With a plus of only 0.4 per cent
qoq, the first three months of 2012 were the weakest quarter since Q2 2009,
but the second quarter is shaping up better. As industrial production is
improving,the growth outlook remains determined by uncertain prospects for
external demand and continued weakness of internal demand. Overall Central
and Eastern Europe is in a much better fiscal shape than many EMU
countries.
'The CEE countries are currently facing some headwinds caused by the
ongoing EMU crisis. Nevertheless, the long-term outlook for regional
economic convergence remains unchanged, with local growth differentials
being wider than in the past. In the mid-term we expect the region to grow
at an above 2 per cent margin compared to Western Europe', says Gianni
Franco Papa, Bank Austria's Deputy CEO and Head of CEE Division, 'A sound
customer business with growing deposits and loan volumes on the one hand,
and shrinking cost of risk on the other hand, clearly reaffirm our
commitment to the region, which the Group considers as its 'engine for
growth'. We will continue with our business expansion and selective
investments in promising markets such as the Czech Republic, Russia and
Turkey.'
Financial position
Bank Austria's total assets as at 30 June 2012 were EUR 202.9 billion, up
by EUR 3.7 billion from the end of the previous year (31 December 2011: EUR
199.2 billion).
On the assets side, loans and receivables with customers amounted to EUR
136 billion as at 30 June 2012 (31 December 2011: EUR 134.9 billion) and
loans and receivables with banks totalled EUR 25.5 billion (31 December
2011: EUR 25.6 billion).
On the liabilities side, deposits from customers rose by 2.6 per cent to
EUR 107.4 billion (31 December 2011: EUR 104.7 billion) and debt securities
in issue declined slightly, to EUR 28.5 billion (31 December 2011: EUR 29.9
billion). Primary funds - the sum total of deposits from customers and debt
securities in issue, i.e. funding from commercial banking sources -
amounted to EUR 135.9 billion or 67 per cent of total liabilities and
equity. This means that customer loans were fully covered by primary funds.
The loan / direct funding ratio, i.e. the ratio of loans to deposits and
own issues, is currently 100 per cent (31 December 2011: 100.2 per cent).
As at 30 June 2012, IFRS equity was EUR 18.7 billion, up by EUR 1 billion
or 6.2 per cent on the year-end 2011 level (31 December 2011: EUR 17.7
billion).
At the end of June 2012, the Tier 1 capital ratio (which by definition does
not include net profit for a period of less than one year) was 10.17 per
cent, slightly lower than at year-end 2011 (31 December 2011: 10.88 per
cent). The decline reflects the buyback of hybrid instruments and the
increase in risk-weighted assets. The Core Tier 1 capital ratio based on
all risks was 9.97 per cent, comfortably above the regulatory requirements.
Staff numbers in the Bank Austria Group including the employees of
UniCredit's subsidiaries (Footnote 3) in Austria totalled 61,023 (full-time
equivalents) as at 30 June 2012 (30 June 2011: 62,034 FTEs). Of this total,
10,410 FTEs were employed in Austria and 50,613 FTEs in CEE countries.
Footnote 1: Leverage ratio = total assets less intangible assets / equity
less intangible assets
Footnote 2: Figures without Poland
Footnote 3: Administration Services / UniCredit Business Partner, BAGIS,
WAVE (all now integrated in UBIS), UniCredit Leasing, Pioneer Investments
Austria and UniCredit CAIB were transferred on an intra-group basis.
in Euro mn 1H12 1H11 Change over Change overn.m. = not meaningful
previous previous
year year
in Euro mn in %
Net interest 2,249 2,241 7 0.3%
Dividend income and other
income
from equity investments 86 103 -16 -16.1%
Net fees and commissions 786 818 -33 -4.0%
Net trading, hedging and
fair value income 357 272 85 31.4%
Net other expenses/income 35 67 -32 -47.9%
Operating Income3,512 3,501 11 0.3%
Payroll costs -997 -992 -5 0.5%
Other administrative expenses -814 -781 -33 4.2%
Recovery of expenses 1 0 0 46.8%
Amortisation, depreciation and
impairment losses on intangible
and
tangible assets -137 -132 -5 3.5%
Operating costs -1,947 -1,905 -42 2.2%
Operating profit 1,565 1,595 -30 -1.9%
Net write-downs of loans and
provisions
for guarantees and commitments -568 -698 130 -18.6%
NET OPERATING PROFIT 997 898 100 11.1%
Provisions for risks and
charges -67 -31 -36 115.0%
Integration/restructuring costs -3 -2 -2 85.9%
Net income from investments -63 -29 -33 n.a.
PROFIT BEFORE TAX 864 836 29 3.4%
Income tax for the period -185 -112 -73 65.0%
Profit for the period 679 723 -44 -6.1%
Non-controlling interests -18 -25 7 -27.7%
NET PROFIT ATTRIBUTABLE TO THE
OWNERS OF BANK AUSTRIA BEFORE
PPA 661 698 -37 -5.3%
Purchase Price Allocation
effect -8 -7 0 6.6%
Goodwill impairment -7 -53 46 -86.7%
NET PROFIT ATTRIBUTABLE TO THE
OWNERS OF BANK AUSTRIA 646 638 8 1.2%
Notes:
1- Bank Austria's income statement as presented in this table is a
reclassified format corresponding to the format used for segment
reporting.
2- 2011 recast: The comparative figures for 2011 have been recast to
reflect the consolidation perimeter, business structure and
methodology.
3- Purchase Price Allocation (PPA) effects for Kazakhstan, Ukraine, Russia
and Aton.
in Euro bn 30.06.2012 31.12.2011Issuer:
Total Assets 202.9 199.2
Equity 18.7 17.7
UniCredit Bank Austria AG
Schottengasse 6-8, 1010 Vienna, Austria
e-mail: investor.relations(at)unicreditgroup.at
Internet: http://ir.bankaustria.at
Largest bonds by volume issued:
ISIN: Stock exchanges:
XS0343689377 Luxemburg
XS0372532514 Luxemburg
XS0379307258 Luxemburg
AT000B048988 Vienna
AT000B049010 Vienna
Further stock exchanges where bonds are admitted to listing:
Frankfurt, Stuttgart, Paris, Zurich, Munich
Contact:
Günther Stromenger
Corporate Relations - Bank Austria
phone: +43 (0) 50505 - 57232
e-mail: guenther.stromenger(at)unicreditgroup.at
End of Corporate News
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Language: English
Company: UniCredit Bank Austria AG
Schottengasse 6 - 8
1010 Wien
Austria
Phone: 0043 (0) 50505 - 57232
Fax: 0043 (0) 50505 - 8957232
E-mail: investor.relations(at)unicreditgroup.at
Internet: www.bankaustria.at
ISIN: AT0000995006
WKN: 99500
Listed: Foreign Exchange(s) Luxembourg, Wien (Amtlicher Handel /
Official Market)
End of News DGAP News-Service
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