DGAP-News: UniCredit Bank Austria AG: Bank Austria starts the year with net profit of EUR 285 million
(firmenpresse) - DGAP-News: UniCredit Bank Austria AG / Key word(s): Quarter Results
UniCredit Bank Austria AG: Bank Austria starts the year with net
profit of EUR 285 million
13.05.2013 / 08:36
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Corporate News
Bank Austria's results for the first quarter of 2013
Date of entry: 13 May 2013
Results for the first quarter of 2013:
Bank Austria starts the year with net profit of EUR 285 million
- Growth in customer business compared with the previous year
- Lending volume up by 4.8 per cent to EUR 136.4 billion
- Deposits from customers increase by 7.9 per cent to EUR 110.4
billion
- Charges for bank levies (Austria and CEE) and financial transaction tax
in Hungary total EUR 64.4 million
- Net write-downs of loans declining in Austria and rising in CEE;
overall, they have increased by 20.4 per cent to EUR 298 million
- Special effects influence the comparison with the first quarter of the
previous year:
- The buyback of hybrid instruments in the first quarter of the
previous year resulted in a one-off gain of EUR 124 million. Such a
gain was not included this year
- The provision of EUR 64 million made after a judgment by the Swiss
Federal Supreme Court impacted results for the first quarter of
2013 on the cost side
- Provision of EUR 64 million following a judgment by the Swiss Federal
Supreme Court impacts results
- Net profit of EUR 285 million down by EUR 117 million or 29.1 per cent
from the previous year reflecting special effects
- Excellent Core Tier 1 capital ratio of 10.8 per cent
Bank Austria's CEO Willibald Cernko: 'The operating environment continues
to be characterised by low interest rates and moderate economic growth. In
these circumstances, Bank Austria got off to a good start in 2013 with a
net profit of EUR 285 million. Growth in loans and deposits is a positive
factor, while the higher total charge of almost EUR 65 million for bank
levies and the newly introduced financial transaction tax in Hungary and
additional provisions of EUR 64 million for the court judgment in
Switzerland impacted the bank's results. The continued strong performance
in Central and Eastern Europe and in Austrian corporate banking provides a
sound basis for a positive development. With the strategic decision to
implement Smart Banking Solutions as a new customer service approach in
business with private individuals, we are pioneers in the Austrian market.
Finally, we are well positioned to meet the regulatory requirements with a
Core Tier 1 capital ratio of 10.8 per cent and direct funding totalling
almost 102 per cent of our lending volume.'
Items in the income statement (Footnote 1)
Net interest in the first quarter of 2013 was EUR 1,103 million. In an
environment characterised by low interest rates, net interest remained the
most important revenue component, at a level which was slightly higher, by
3.1 per cent, than for the same period of the previous year (Q1 2012: EUR
1,070 million).
Net fees and commissions developed favourably - contrary to the general
trend - for the first time since the onset of the financial crisis, rising
by 12 per cent to EUR 418 million from a low level (Q1 2012: EUR 373
million).
Net trading, hedging and fair value income fell by 50.7 per cent to EUR 144
million (Q1 2012: EUR 293 million). The sharp decline is largely due to a
positive one-off effect recorded in the same period of the previous year,
when the buyback of hybrid instruments resulted in a gain of EUR 124
million.
Overall, operating income amounted to EUR 1,737 million, a figure which was
only 1.6 per cent lower than in the first quarter of the previous year (Q1
2012: EUR 1,765 million).
Operating costs rose by 6.7 per cent to EUR 1,007 million (Q1 2012: EUR 944
million). The increase resulted from two developments: costs associated
with operating activities increased only slightly, reflecting business
expansion in growth markets as well as strict cost discipline; and bank
levies had an adverse impact on costs. Without the negative effect of the
significantly higher charge for the bank levy in Hungary, the rate of cost
growth is 3.7 per cent, 3 percentage points lower.
The charge for bank levies payable by the Bank Austria Group was EUR 56.3
million, of which EUR 24.2 million relates to Austria and EUR 32.1 million
to CEE. Within CEE, the bank levies amounted to EUR 28 million in Hungary,
where the full-year amount was paid in advance, EUR 3.5 million in
Slovakia, EUR 0.4 million in Slovenia and EUR 0.3 million in Romania. In
addition, the charge for the newly introduced financial transaction tax in
Hungary was EUR 8.1 million.
Operating profit was EUR 730 million, down by EUR 91 million or 11.1 per
cent from the same period of the previous year (Q1 2012: EUR 821 million).
This decline is due to the positive effect of EUR 124 million resulting
from the buyback of hybrid instruments in the first quarter of the previous
year.
Net write-downs of loans and provisions for guarantees and commitments in
the first quarter of 2013 were EUR 298 million, up by EUR 50 million or
20.4 per cent from the same period of the previous year (Q1 2012: EUR 247
million). While the provisioning charge in Austria continued to decline, by
11 per cent to EUR 58 million, net write-downs of loans and provisions for
guarantees and commitments in Central and Eastern Europe rose by 31.6 per
cent to EUR 240 million, in line with the objective of raising the coverage
ratio. The increase in Central and Eastern Europe also reflects unusually
low levels in several countries in the same period of the previous year.
Overall, the cost of risk (provisioning charge as a proportion of average
loans to customers) increased slightly year-on-year, from 76 to 89 basis
points.
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 - for the first quarter of 2013 was EUR 432 million, 24.6 per
cent lower than in the same period of the previous year (Q1 2012: EUR 574
million). The decrease resulted mainly from the above-mentioned positive
effect of the buyback of hybrid instruments and from higher net-write downs
of loans.
Among the items to be deducted from net operating profit, provisions for
risks and charges amounted to EUR 74 million. Almost all of the increase of
EUR 66 million over the first quarter of the previous year is due to the
judgment by the Swiss Federal Supreme Court, the court of final instance,
in the lawsuit against the German Bundesanstalt für vereinigungsbedingte
Sonderaufgaben (BvS), for which a provision of EUR 64 million was made.
This means that the first quarter reflects two special effects which
totalled EUR 188 million: the buyback of hybrid instruments in the past
year, and the court judgment in Switzerland. Results for the first quarter
of 2013 are therefore not directly comparable with those for the same
period of the previous year.
Profit before tax for the first quarter of 2013 was EUR 355 million, down
by 33.1 per cent (Q1 2012: EUR 531 million). After deduction of the effects
from the write-down on capitalised intangible assets from the former
Purchase Price Allocation and of the goodwill impairment charge, and taking
into account the total profit or loss from discontinued operations (ATFBank), net profit attributable to the parent company was EUR 285 million,
down by 29.1 per cent or EUR 117 million from the same period of the
previous year (Q1 2012: EUR 402 million).
The following key financial data have been calculated on the basis of the
above-mentioned results:
- Return on equity before tax was 8.3 per cent.
- Return on equity after tax was 6.8 per cent.
- The cost/income ratio excluding bank levies was 54.7 per cent.
- The risk/earnings ratio (provisioning charge as a percentage of net
interest income) was 26.2 per cent.
- The total capital ratio (based on all risks) was 12.9 per cent.
- The Tier 1 capital ratio (based on all risks) was 11.0 per cent.
- The Core Tier 1 capital ratio (based on all risks) was 10.8 per cent.
Results of the Divisions
Bank Austria reports its results in four Divisions: Retail&Corporates,
Corporate&Investment Banking (CIB), Private Banking and Central Eastern
Europe (CEE). The bank also shows results for the Corporate Center.
In the first quarter of 2013, profit before tax of the Retail&Corporates
Division was stable, at EUR 51 million, compared with the same period of
the previous year (Q1 2012: EUR 51 million). This performance was supported
by a slight increase of 0.6 per cent in operating income and especially by
the significant decline in net write-downs of loans, which were 24.6 per
cent lower than in the first quarter of the previous year. The cost/income
ratio excluding bank levies was 72.2 per cent (Q1 2012: 68.3 per cent).
Profit before tax generated by the Corporate&Investment Banking (CIB)
Division in the first quarter of 2013 was EUR 55 million, down by 15.6 per
cent from the same period of the previous year (Q1 2012: EUR 65 million).
Results in the Markets subsegment were lower than in the previous year, and
net write-downs of loans and provisions for guarantees and commitments were
higher, though remaining at a moderate level. Costs were reduced by a
significant 9.9 per cent through consistent strict cost management. As a
result, the cost/income ratio excluding bank levies declined slightly, to
38.2 per cent (Q1 2012: 40.9 per cent).
The Private Banking Division generated a profit before tax of EUR 11
million in the first quarter of 2013, a 40.3 per cent increase over the
same period of the previous year (Q1 2012: EUR 7 million). Operating income
rose by 11.5 per cent, mainly driven by net fees and commissions, which
were about 19 per cent higher than in the previous year. This reflects
investors' response to the current environment of low interest rates. The
cost/income ratio excluding bank levies declined slightly, to 71.6 per cent
(Q1 2012: 75.2 per cent).
The Central Eastern Europe (CEE) Division generated a profit before tax of
EUR 403 million for the first quarter of 2013, an increase of 7.4 per cent
over the same period of the previous year (Q1 2012: EUR 375 million).
Contributions to this favourable trend came from a sound operating
performance in customer business, which was accompanied by strong growth of
net interest income, particularly in Turkey and Russia, net fees and
commissions and net trading income. Costs are well contained across the
region, while loan loss provisions remained at a high level to further
improve the coverage ratio. The cost/income ratio - excluding bank levies -
declined significantly, to 44.5 per cent (Q1 2012: 48.3 per cent).
Bank Austria is UniCredit's sub-holding company for operations in Central
and Eastern Europe (CEE), managing the leading banking network in CEE with
around 47,000 employees and about 2,500 branches in 16 countries.
'The ongoing EMU crisis has left the long-term potential of Central and
Eastern Europe intact. Nevertheless, from a bank's perspective this
environment calls for a more focused approach rather than doing things in a
big way', says Gianni Franco Papa, Deputy CEO and Head of the CEE Division
of Bank Austria, 'In line with the Strategic Plan we decided to refine our
CEE presence and to exclusively provide leasing services in theBaltics in
the future, to implement a project to merge our subsidiaries in Czech
Republic and Slovakia, to sell our Kazakh bank to a local investor and to
purchase additional retail assets in Romania. As for our branch network, we
need to reinforce those profitable micro-markets where customer demand is
located.'
Financial position
Bank Austria's total assets as at 31 March 2013 were EUR 205.8 billion,
down by 0.9 per cent or EUR 1.8 billion from the end of the previous year
(31 December 2012: EUR 207.6 billion).
On the assets side, loans and receivables with customers rose by 3 per cent
or about EUR 4 billion to EUR 136.4 billion (31 December 2012: EUR 132.4
billion Euro) while loans and receivables with banks declined by 18.3 per
cent to EUR 23 billion (31 December 2012: EUR 28.1 billion).
On the liabilities side, deposits from customers remained stable, at EUR
110.4 billion, as at 31 March 2013 (31 December 2012: EUR 110.6 billion),
as did debt securities in issue at EUR 28.3 billion (31 December 2012: EUR
28.1 billion).
Primary funds - i.e. the sum total of deposits from customers and debt
securities in issue, representing direct funding - totalled EUR 138.6
billion or 67.4 per cent of total liabilities and equity. This means that
customer loans were covered by primary funds to the extent of 101.6 per
cent.
As at 31 March 2013, capital ratios continued to improve compared with the
year-end 2012 levels. The total capital ratio based on all risks was 12.9
per cent (31 December 2012: 12.5 per cent). The Tier 1 capital ratio based
on all risks rose to 11.0 per cent (31 December 2012: 10.8 per cent) and
the Core Tier 1 capital ratio (excluding hybrid capital) based on all risks
was 10.8 per cent (31 December 2012: 10.6 per cent).
Staff numbers in the Bank Austria Group including the employees of
UniCredit's subsidiaries (Footnote 2) in Austria totalled 60,792 (full-time
equivalents) as at 31 March 2013 (31 March 2012: 62,075 FTEs). Of this
total, 10,165 FTEs were employed in Austria and 50,627 FTEs in CEE
countries.
Footnote 1: To ensure comparability, the comparative figures for 2012 are
shown on an adjusted basis: results from ATF Bank are now presented in the
item 'Total profit or loss after tax from discontinued operations' and
segment reporting has been adjusted to the new structure.
Footnote 2: Mainly UniCredit Business Integrated Solutions Austria GmbH
(UBIS Austria), Pioneer Investments Austria and UniCredit Leasing.
in Euro mn 1Q13 1Q12 Change over Changen.m. = not meaningful
over
previous previous
year year
in Euro mn in %
Net interest 1,103 1,070 33 3%
Dividend income and other income
from equity investments 35 30 5 18%
Net fees and commissions 418 373 45 12%
Net trading, hedging and
fair value income 144 293 -148 -51%
Net other expenses/income 38 0 38 n.m.
Operating Income 1,737 1,765 -28 -2%
Payroll costs -495 -490 -5 1%
Other administrative expenses -445 -388 -57 15%
Recovery of expenses 0 0 0 27%
Amortisation, depreciation and
impairment
losses on intangible and
tangible assets -67 -66 -2 2%
Operating costs -1,007 -944 -63 7%
Operating profit 730 821 -91 -11%
Net write-downs of loans and
provisions
for guarantees and commitments -298 -247 -50 20%
NET OPERATING PROFIT 432 574 -141 -25%
Provisions for risks and charges -74 -8 -66>100%
Integration/restructuring costs -2 0 -2>100%
Net income from investments -1 -34 33 -97%
PROFIT BEFORE TAX 355 531 -176 -33%
Income tax for the period -65 -108 43 -40%
Total profit or loss after tax
from discontinued
operations 8 -5 13 n.m.
Profit for the period 299 419 -120 -29%
Non-controlling interests -11 -10 -1 13%
NET PROFIT ATTRIBUTABLE TO THE
OWNERS OF BANK AUSTRIA BEFORE
PPA 288 409 -121 -30%
Purchase Price Allocation effect 0 -2 2 -100%
Goodwill impairment -3 -4 2 -42%
NET PROFIT ATTRIBUTABLE TO THE
OWNERS OF BANK AUSTRIA 285 402 -117 -29%
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) 2012 recast: The comparative figures for 2012 have been recast to
reflect the consolidation perimeter and the business structure in 2013.
3) Purchase Price Allocation (PPA) effects for acquisition of banks in
Russia and for Aton.
in Euro bn 31.03.2013 31.12.2012Issuer:
Total Assets 205.8 207.6
Equity 18.5 18.2
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) Luxemburg, Wien (Amtlicher Handel /
Official Market)
End of News DGAP News-Service
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