DGAP-News: UniCredit Bank Austria AG: Results for the first three months of 2010 - Bank Austria posts net consolidated profit of EUR 242 million in Q1
(firmenpresse) - UniCredit Bank Austria AG / Quarter Results
12.05.2010 08:21
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Corporate News
Bank Austria's results for the first three months of 2010
Date of entry: 12 May 2010
Results for the first three months of 2010:
Bank Austria posts net consolidated profit of EUR 242 million in Q1
- Stable trend in operating income and flat cost trend resulted in
operating profit of EUR 778 million
- Provisioning charge declined for the first time in a year, to EUR 439
million
- Profit before tax rose significantly, to EUR 290 million, compared with
the two preceding quarters
- Net profit without minorities reached EUR 242 million, almost double
the figure for Q4 2009
- Core Tier 1 capital ratio rose to 10 per cent following capital
increase
- Leverage (ratio of equity to total assets) improved to 11.6
Bank Austria's CEO Willibald Cernko: 'We again achieved a sound performance
in an environment which has remained challenging. The downward trend seen
in the second half of 2009, in particular, was stopped and results for the
first quarter of 2010 significantly exceeded those for the two preceding
quarters. It remains to be seen whether this is the first sign of a
sustained turnaround, but various indicators suggest that the environment
is improving: the provisioning charge declined for the first time in a
year, the CEE countries as a region have regained international confidence,
and volume in commercial banking business with customers is rising again in
Austria and CEE. As a result of the capital increase through funds provided
by UniCredit, our parent company, Bank Austria's Core Tier 1 capital ratio
rose to a very strong 10 per cent. We are thus well placed to continue to
fulfil our core function of providing loans to companies and private
households in Austria and Central and Eastern Europe.'
Items in the income statement
In a persistently difficult environment, revenues generated by Bank Austria
have been very stable over the past few quarters. Operating income in each
of the past three quarters more or less matched the pre-Lehman levels. In
the first quarter of 2009, Bank Austria achieved an exceptionally strong
performance which was in contrast to prevailing economic trends. The strong
revenue performance in the first quarter of the previous year was based on
the fact that volume in Central and Eastern Europe was initially
maintained, driven by the growth momentum in preceding quarters;
additionally, the bank benefited from the unusual market environment to
generate significant net interest income and net trading income from
financial market activities. Later on, the full impact of the recession was
reflected in declining credit demand and rising provisioning charges. These
factors should be noted when analysing results for the first quarter of
2010. For this reason the following comments include references to business
developments in the third and fourth quarters of 2009, in addition to the
comparative figures for Q1 2009, to provide a better understanding of
performance in early 2010.
Net interest income for the first quarter of 2010 was EUR 1,118 million,almost matching the Q4 2009 figure (down by 1 per cent), but 16 per cent
lower than in Q1 2009, a development which is due to the market environment
prevailing a year ago. At that time the expansionary monetary policy course
led to a sharp fall in market rates, which fed through to net interest
income (Q1 2009: EUR 1,335 million).
Net fees and commissions showed a different trend, reaching EUR 470
million, which was 5 per cent down from the Q4 2009 level but up by 3 per
cent on the first quarter of the previous year (Q1 2009: EUR 457 million).
This improvement was due to slightly higher activity levels in securities
and asset management business.
Net trading, hedging and fair value income was EUR 76 million, 14 per cent
lower than in the preceding quarter and down by 60 per cent from the first
quarter of the previous year (Q1 2009: EUR 190 million). This strong
year-on-year decline reflects the large trading profit in CEE in the first
quarter of 2009; as the market environment returned to normal, net trading
income in CEE was lower in subsequent quarters.
Overall, operating income totalled EUR 1,695 million, down by only 3 per
cent from the fourth quarter of 2009 but 16 per cent lower than in the
first quarter of the previous year (Q1 2009: EUR 2,018 million) due to the
factors described above.
Operating expenses continued to show a flat trend: at EUR 916 million, they
were 1 per cent lower than in the preceding quarter and only 3 per cent
higher than in the first quarter of the previous year (Q1 2009: EUR 892
million).
Operating profit was EUR 778 million, down by 5 per cent from the fourth
quarter of 2009 and 31 per cent lower than the exceptionally high figure
for the first quarter of the previous year (Q1 2009: EUR 1,126 million).
The year-on-year decline reflects the trend in net interest income
generated by Markets operations and in net trading income of the CEE
Division.
Net writedowns of loans and provisions for guarantees and commitments
declined in the first quarter of 2010, for the first time in a year. At EUR
439 million, the provisioning charge was significantly lower, by up to
one-third, than in the two preceding quarters and 2 per cent lower than in
the first quarter of the previous year (Q1 2009: EUR 446 million).
Among the other 'non-operating' items between operating profit and profit
before tax, net income from investments was EUR 22 million, significantly
lower than in the same period of the previous year (Q1 2009: EUR 47
million). This was mainly due to the contractual expiry of Bank Austria's
participation in current profits of the Polish UniCredit banking subsidiary
at the end of 2009.
Profit before tax was EUR 290 million, more than double the figure for Q4
2009 (up by 161 per cent) but down by 60 per cent from the first quarter of
the previous year, as a result of the factors described above.
After deduction of income tax, net profit amounted to EUR 255 million, an
increase of 92 per cent over the fourth quarter of 2009 and a decrease of
55 per cent from Q1 2009. Deducting also the minorities, the net profit
attributable to the parent company amounted to EUR 242 million, an increase
of 87 per cent over the fourth quarter of 2009 but 56 per cent below Q1
2009.
The following key financial data have been calculated on the basis of the
above-mentioned results:
- Return on equity before tax was 7.4 per cent.
- Return on equity after tax was 6.4 per cent.
- The cost/income ratio came to 54.1 per cent.
- The risk/earnings ratio (provisioning charge as a percentage of net
interest income) was 39.3 per cent.
- The Tier 1 capital ratio (based on all risks) improved to 10.35 per
cent under Basel II (footnote 1), as a result of the EUR 2 billion
capital increase
- The Core Tier 1 capital ratio (based on all risks) improved to 10.01
per cent.
Footnote 1)
Capital components held in non-consolidated companies are deducted from
Tier 1 capital under Basel II and from total capital under Basel I.
Results of the Divisions
Bank Austria reports its results in four Divisions: Retail, Private
Banking, Corporate&Investment Banking (CIB) and Central Eastern Europe
(CEE). The bank also shows results for its Corporate Center.
In the first quarter of 2010, the Retail Division generated a profit before
tax of EUR 20 million. This figure is significantly higher than the average
for the second, third and fourth quarters of 2009, reflecting an increase
in securities business and strict cost management. But it is lower than in
the first quarter of 2009 (Q1 2009: EUR 37 million) due to narrower
interest margins and a slight increase in the provisioning charge. The
cost/income ratio rose slightly to 72.8 per cent (Q1 2009: 69 per cent).
Profit before tax in the Private Banking Division rose to EUR 11 million
(Q1 2009: EUR 6 million) as demand for securities investments increased
slightly. The cost/income ratio declined to 69 per cent (Q1 2009: 79.5 per
cent).
The Corporate&Investment Banking (CIB) Division's profit before tax in
the first quarter of 2010 reached EUR 154 million, a figure which was
significantly higher than in Q4 2009 and more or less matched the figures
for the second and third quarters of the previous year. Lower net interest
income from financial market activities was the main reason why profit
before tax was lower than in the first quarter of the previous year (Q1
2009: EUR 379 million) The cost/income ratio was 36.3 per cent (Q1 2009:
20.9 per cent).
The CEE Division achieved a profit before tax of EUR 259 million in the
first quarter of 2010. At this level, it was significantly higher than in
the two preceding quarters but lower than in the first quarter of the
previous year (Q1 2009: EUR 383 million). Almost all of the decrease was
due to the decline in net trading income as the market environment returned
to normal. The cost/income ratio was 46.9 per cent (Q1 2009: 39.9 per
cent).
Bank Austria is the hub for UniCredit Group's leading banking network in
Central and Eastern Europe, with more than 51,700 employees and around
2,700 branches. The economic environment in CEE started to stabilise and
recovery is in sight, reflected by the upwards revision of the regional GDP
forecast to 2.8 per cent for 2010, being three times as high as the
forecast for the euro area (0.9 per cent). The CEE region again achieved
positive results, proving that the trust in the region's potential had been
right. Given the slow recovery, the provisioning charges flattened and were
covered by the operating profit.
'The CEE region remains the growth engine for Europe and we have already
selectively started to invest again in our network by opening new branches.
Altogether 100 branches are going to be opened in 2010, to the benefit of
our customers who can rely on an extensive network with deep local roots in
the region', says Federico Ghizzoni, Deputy CEO of Bank Austria.
Balance sheet
Bank Austria's total assets as at 31 March 2010 were EUR 201 billion, up by
3.3 per cent on the level at the end of the previous year (31 December
2009: EUR 194.5 billion).
On the assets side, loans and receivables with customers amounted to EUR
126.5 billion as at the end of March 2010, an increase of 2.3 per cent over
the figure at the end of the previous year (31 December 2009: EUR 123.6
billion). Loans and receivables with banks increased slightly, by 1.4 per
cent, to EUR 23.4 billion (31 December 2009: EUR 23.1 billion).
On the liabilities side, deposits from customers rose by 0.6 per cent to
EUR 97.6 billion (31 December 2009: EUR 97 billion) and debt securities in
issue increased by 2.9 per cent to EUR 29.6 billion (31 December 2009: EUR
28.8 billion). Primary funds - i.e. the sum total of deposits from
customers and debt securities in issue, representing funding from sources
of commercial banking business - totalled EUR 127.2 billion or 63.3 per
cent of the balance sheet total. This means that loans and receivables with
customers were covered by primary funds to the extent of 101 per cent.
Equity was EUR 17.4 billion, up by 20.8 per cent on the year-end 2009 level
as a result of the EUR 2billion capital increase through funds provided by
UniCredit Group (31 December 2009: EUR 14.4 billion). Leverage (the ratio
of equity to total assets) thus improved from 13.5 at the end of 2009 to
11.6 at the end of the first quarter of 2010.
Capital ratios as at 31 March 2010 improved significantly compared with
year-end 2009. The Tier 1 capital ratio based on credit risk under Basel II
rose to 11.69 per cent (31 December 2009: 9.76 per cent). The Tier 1
capital ratio based on all risks improved to 10.35 per cent (31 December
2009: 8.68 per cent). The Core Tier 1 capital ratio (Tier 1 capital ratio
without hybrid capital) based on all risks rose to 10.01 per cent (31
December 2009: 8.33 per cent).
Staff numbers in the Bank Austria Group including the employees of
UniCredit Group subsidiaries (footnote 2) in Austria totalled 62,815
(full-time equivalents) as at 31 March 2010 (31 March 2009: 66,181
employees). Of this total, 11.066 FTEs were employed in Austria and 51,749
FTEs in CEE countries.
Footnote 2)
UniCredit Leasing, AS (Administration Services), BTS (Banking Transaction
Services) and Pioneer Investments Austria were transferred on an
intra-group basis.
in Euro mn Q1 10 Q4 09 Q1 09
Net interest 1,081 1,091 1,312
Dividend income 1 18 11
Other income from equity investments 35 25 13
Net interest income 1,118 1,133 1,335
Net fees and commissions 470 497 457
Net trading, hedging and fair value
income/loss 76 89 190
Net other expenses/income 31 21 36
Net non-interest income 577 606 683
OPERATING INCOME 1,695 1,739 2,018
Payroll costs -480 -464 -487
Other administrative expenses -359 -370 -324
Recovery of expenses 0 1 0
Amortisation, depreciation and
impairment losses on tangible
and intangible assets -78 -89 -81
OPERATING EXPENSES -916 -922 -892
OPERATING PROFIT 778 817 1,126
Goodwill impairment 0 -18 0
Provisions for risks and charges -71 -64 -4
Restructuring costs -1 -4 -1
Net writedowns of loans and
provisions for guarantees
and commitments -439 -655 -446
Net income from investments 22 34 47
PROFIT BEFORE TAX 290 111 722
Income tax -34 22 -150
NET PROFIT 255 133 572
Net profit attributable to
the parent company 242 129 547
Minorities 14 4 25
in Euro bn 31.03.2010 31.12.2009Enquiries:
Total assets 200.9 194.5
Equity 17.4 14.4
Günther Stromenger
Investor Relations - Bank Austria
phone: +43 (0) 50505 - 87230
e-mail: guenther.stromenger(at)unicreditgroup.at
Issuer:
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:
XS0372532514 Luxemburg
XS0343689377 Luxemburg
Further stock exchanges where bonds are admitted to listing:Vienna, Frankfurt, Stuttgart, Paris, Zurich
Contact:
Günther Stromenger
Investor Relations - Bank Austria
phone: +43 (0) 50505 - 87230
e-mail: guenther.stromenger(at)unicreditgroup.at
12.05.2010 08:21 Ad hoc announcement, Financial News and Media Release distributed by DGAP. Medienarchiv atwww.dgap-medientreff.deandwww.dgap.de---------------------------------------------------------------------------
Language: English
Company: UniCredit Bank Austria AG
Schottengasse 6-8
1010 WienÖsterreich
Phone: 0043 (0) 50505 - 87230
Fax: 0043 (0) 50505 - 8987230
E-mail: investor.relations(at)unicreditgroup.at
Internet: www.bankaustria.at
ISIN: AT0000995006
WKN: 99500
Listed: Foreign Exchange(s) Wien, Luxembourg
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