DGAP-News: UniCredit Bank Austria AG: Results for the first three months of 2011: Bank Austria starts the year with net profit of EUR 341 million
(firmenpresse) - DGAP-News: UniCredit Bank Austria AG / Key word(s): Quarter Results
UniCredit Bank Austria AG: Results for the first three months of 2011:
Bank Austria starts the year with net profit of EUR 341 million
13.05.2011 / 08:02
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Corporate News
Bank Austria's results for the first three months of 2011
Date of entry: 13 May 2011
Results for the first three months of 2011:
Bank Austria starts the year with net profit of EUR 341 million
- Operating profit up by 8 per cent to EUR 851 million compared with Q1
2010, driven by strong revenue trend in commercial banking business and
flat cost development
- Bank levies have an impact of EUR 27 million on first-quarter results
- Provisioning charge in Austria and CEE continues to decline by 14 per
cent to a total of EUR 376 million
- Net operating profit increases by 38 per cent to EUR 475 million
- Profit before tax rises to EUR 449 million, net profit (after
non-controlling interests) increases to EUR 341 million
- Core Tier 1 capital ratio improves further to 10.4 per cent
- Leverage ratio continues to decline to 13.6x
Bank Austria's CEO Willibald Cernko: 'We got off to a good start in 2011.
The upward trend seen in the past few quarters continued in the first three
months of the current year. It is particularly noteworthy that we have
further improved our performance in commercial banking business with
customers while the provisioning charge in Austria and in Central and
Eastern Europe continued to decline. On the basis of these two factors, net
operating profit increased by 38 per cent, and net profit reached EUR 341
million. Although the economy is gaining momentum, especially in our CEE
markets, we have not yet attained the pre-crisis level. We need to maintain
stringent cost discipline and further improve our productivity in order to
absorb the additional burdens resulting from the bank levies in Austria and
Hungary and to meet the new capital requirements under Basel 3.'
Items in the income statement
Net interest was EUR 1,128 million, up by 4 per cent (Q1 2010: EUR 1,081
million), and thus remained the most important income component in the
first quarter of 2011.
Net fees and commissions, which accounted for about 26 per cent of total
operating income, showed a weaker trend, falling by 2 per cent to EUR 462
million compared with the same period of the previous year (Q1 2010: EUR
470 million). The decline was due to lower activity levels in securities
business, while income from payment transactions and card transactions
supported fee income.
Net trading, hedging and fair value income was substantially higher than in
the first quarter of the previous year. The increase resulted from a
significantly stronger trading performance in customer business - in both
Austria and CEE - and from the participation in profits of the Markets
product line of UniCredit's CIB Division, which results from the sale of
CAIB and is reflected in net trading, hedging and fair value income. The
net trading performance in the first quarter of 2011 rose by 50 per cent to
EUR 114 million (Q1 2010: EUR 76 million).
Overall, operating income reached EUR 1,801 million, an increase of 6 per
cent over the figure for the first quarter of the previous year (Q1 2010:
EUR 1,695 million).
Operating costs amounted to EUR 950 million, up by 4 per cent on a year
earlier (Q1 2010: EUR 911 million). The increase is explained by higher
investment costs related to business expansion in Central and Eastern
Europe, and by the bank levies in Hungary and Austria, which are for the
first time reflected in the income statement for Q1 2011; the bank levies
totalled EUR 27 million, adding about 3 percentage points to overall costs.
Operating profit rose by 8 per cent to EUR 851 million (Q1 2010: EUR 784
million), thanks to a strong operating performance and despite the
additional burdens resulting from bank levies.
Net write-downs of loans and provisions for guarantees and commitments in
the first quarter of 2011 were EUR 376 million, significantly lower, by EUR
63 million or 14 per cent, than in the comparative period of the previous
year (Q1 2010: EUR 439 million). The provisioning charge was reduced in
Austrian customer business and in Central and Eastern Europe. In Austria,
it declined by 17 per cent to EUR 102 million (Q1 2010: EUR 122 million),
in CEE by 13 per cent to EUR 274 million (Q1 2010: EUR 316 million).
Overall, the cost of risk (provisioning charge as a proportion of average
loans to customers) declined from 142 basis points (bp) in Q1 2010 to 116
bp in Q1 2011.
Net operating profit, the key measure of operating performance, improved
significantly in the first quarter of 2011, by 38 per cent to EUR 475
million (Q1 2010: EUR 345 million). The positive trend was driven by a
favourable development of customer business and a further decline in the
provisioning charge.
Other provisions for risks and charges, an item to be deducted from net
operating profit, amounted to EUR 32 million and were down by EUR 39
million from the comparative figure for the previous year. Other
non-operating items are the unchanged integration costs and net income from
investments, which was EUR 8 million, down by EUR 14 million from the Q1
2010 figure, which included exceptional gains on the sale of shares of a
subsidiary (card complete).
As the net amount of non-operating items to be deducted was lower than in
the previous year, profit before tax rose more strongly than net operating
profit, by 52 per cent to EUR 449 million (Q1 2010: EUR 296 million).
Income tax was EUR 89 million, more than double the figure for the same
period of the previous year, giving an effective tax rate of 19.8 per cent
(Q1 2010: 12.1 per cent).
After deduction of income tax, profit for the period was EUR 360 million,
an increase of 38 per cent over the previous year (Q1 2010: EUR 260
million). After deduction of non-controlling interests, net profit
(attributable to the owners of Bank Austria) amounted to EUR 341 million,
up by 41 per cent on the same period of the previous year (Q1 2010: EUR 242
million).
The following key financial data have been calculated on the basis of the
above-mentioned results:
- Return on equity before tax was 10.3 per cent.
- Return on equity after tax was 8.0 per cent.
- The cost/income ratio was 52.8 per cent.
- The risk/earnings ratio (provisioning charge as a percentage of net
interest income) was 31.9 per cent.
- The total capital ratio (based on all risks) rose to 12.33 per cent
(12/2010: 12.13 per cent).
- The Tier 1 capital ratio (based on all risks) improved to 10.71 per
cent (12/2010: 10.35 per cent).
- The Core Tier 1 capital ratio (based on all risks) improved to 10.38
per cent (12/2010: 10.04 per cent).
Results of the Divisions
Bank Austria reports its results in four Divisions: Family&SME Banking
(F&SME), Private Banking (PB), Corporate&Investment Banking (CIB) and CEE
Banking (Central Eastern Europe). The bank also shows results for its
Corporate Center.
In the first quarter of 2011, the Family&SME Banking Division generated a
profit before tax of EUR 29 million, an increase of 16 per cent over the
same period of the previous year (Q1 2010: EUR 25 million). The increase
resulted from a steady favourable development in customer business and from
strict cost management as well as a significant decline of 20 per cent in
the provisioning charge. The cost/income ratio was lower than in the two
preceding quarters while rising slightly, to 72.1 per cent, compared with
the first quarter of the previous year (Q1 2010: 71.2 per cent).
The Private Banking Division generated an increase in net interest in the
first quarter of 2011. However, net fees and commissions declined compared
with the previous year, reflecting investors' restraint in view of
persistent uncertainty in the overall environment. The Division's profit
before tax for the first quarter of 2011 was EUR 10 million, slightly lower
than in the previous year (Q1 2010: EUR 11 million). The cost/income ratio
rose slightly, to 70.9 per cent (Q1 2010: 69.0 per cent).
The Corporate&Investment Banking (CIB) Division generated a profit before
tax of EUR 146 million for the first quarter of 2011, an increase of 40 per
cent over the previous year (Q1 2010: EUR 104 million). Apart from a slight
increase in net interest, a positive trading performance and very moderate
cost growth, the significant decline in net write-downs of loans and
provisions for guarantees and commitments also contributed to profit
growth. The cost/income ratio declined to 32.7 per cent (Q1 2010: 36.0 per
cent).
The CEE Division recorded a profit before tax of EUR 354 million for the
first quarter of 2011, generating a significant increase of 32 per cent
over the same period of the previous year (Q1 2010: EUR 267 million).
Contributions to this growth came from a strong operating performance in
customer business, reflected in a 7 per cent increase in operating income,
and from the provisioning charge, which was down by 13 per cent. The
cost/income ratio declined to 45.9 per cent (Q1 2010: 46.5 per cent).
Within UniCredit Group, Bank Austria is the sub-holding company for the
leading banking network in Central and Eastern Europe with over 51,500
employees and more than 2,700 branches. The economic situation in Central
and Eastern Europe continued to improve in the first three months of 2011.
UniCredit's analysts expect the region's economy to grow by almost 4 per
cent this year. For the first time in four years, all countries covered by
UniCredit's banking network will probably achieve economic growth. This
view is also supported by the Purchasing Managers' Index for the
manufacturing sector in CEE, which has recently risen to an unprecedented
high.
'During the crisis our attention focused on risk. Now we are looking ahead
again and are ready for new organic growth,' says Gianni Franco Papa,
Deputy CEO and Head of Bank Austria's CEE Banking Division. 'Against the
background of the economic upswing I see significant potential, especially
in cross-border business with corporate customers. In retail banking we
will strongly expand our branch network and intensify multi-channel
banking.'
Statement of financial position
Bank Austria's total assets as at 31 March 2011 were 190.3 billion, down by
1.4 per cent from the end of the previous year (31 December 2010: EUR 193.0
billion).
On the assets side, loans and receivables with customers amounted to EUR
128.6 billion at the end of March 2011 (31 December 2010: EUR 130.1
billion), and loans and receivables with banks were EUR 18.3 billion (31
December 2010: EUR 19.7 billion).
On the liabilities side, deposits from customers declined slightly to EUR
98.5 billion (31 December 2010: EUR 100.3 billion), while debt securities
in issue rose by 6.3 per cent to EUR 29.3 billion (31 December 2010: EUR
27.6 billion). Primary funds - i.e. the sum total of deposits from
customers and debt securities in issue, representing funding from
commercial banking sources - totalled EUR 127.8 billion or 67.1 per cent of
total liabilities and equity. This means that loans and receivables with
customers were covered by primary funds to the extent of 99.4 per cent.
Capital ratios as at 31 March 2011 improved further compared with the
year-end 2010 figures. The Tier 1 capital ratio based on credit risk rose
to 12.05 per cent (31 December 2010: 11.68 per cent). The Tier 1 capital
ratio based on all risks improved to 10.71 per cent (31 December 2010:
10.35 per cent), and the Core Tier 1 capital ratio - Tier 1 capital without
hybrid capital - based on all risks rose to 10.38 per cent (31 December
2010: 10.04 per cent).
Staff numbers in the Bank Austria Group including the employees of
UniCredit subsidiaries (Footnote 1) in Austria totalled 62.522 as at 31
March 2011 (FTEs; 31 December 2010: 63,218 FTEs). Of this total, 10.943
FTEs were employed in Austria and 51,579 FTEs in CEE countries.
Footnote 1:
Administration Services (now UniCredit Business Partner), Pioneer
Investments Austria, WAVE (now UGIS), UniCredit Leasing and UniCredit CAIB
were transferred on an intra-group basis.
in Euro mn Q1 Q1 Change in Change RESTATED -Notes:
2011 2010 Euro mn in % change in %
Net interest 1,128 1,081 46 4% 6%
Dividend income and
other income
from equity investments 50 36 14 39% 38%
Net fees and
commissions 462 470 -8 -2% -2%
Net trading, hedging
and fair value income 114 76 38 50%>100%
Net other expenses/
income 47 31 16 52% 32%
Operating Income 1,801 1,695 106 6% 10%
Payroll costs -496 -480 -16 3% 6%
Other administrative
expenses -386 -359 -27 7% 9%
Recovery of expenses 0 0 -0 -38% -39%
Amortisation,
depreciation and
impairment losses on
intangible
and tangible assets -69 -72 3 -4% -4%
Operating costs -950 -911 -40 4% 7%
Operating profit 851 784 66 8% 14%
Net write-downs of loans
and provisions
for guarantees/
commitments -376 -439 63 -14% -14%
NET OPERATING PROFIT 475 345 130 38% 54%
Provisions for risks and
charges -32 -71 39 -54% -54%
Integration costs -1 -1 0 -20% -19%
Net income from
investments 8 22 -15 -65% -64%
PROFIT BEFORE TAX 449 296 154 52% 74%
Income tax for the
period -89 -36 -53>100%>100%
Profit for the period 360 260 101 39% 52%
Non-controlling
interests -13 -14 1 -6% -6%
NET PROFIT ATTRIBUTABLE
TO THE OWNERS OF
BANK AUSTRIA BEFORE PPA 347 246 101 41% 56%
Purchase Price
Allocation effect -4 -4 1 -13% -13%
Goodwill impairment -3 0 -3 n.a. n.a.
NET PROFIT ATTRIBUTABLE
TO THE OWNERS OF
BANK AUSTRIA 341 242 99 41% 56%
1. Restated: Q1 2010 adjusted to the current Group structure. At overall
bank level, the restated figures mainly exclude UniCredit CAIB AG which
was sold within UniCredit in June 2010.
2. Purchase Price Allocation (PPA) effects for Kazakhstan, Ukraine, Russia
and Aton.
in Euro bn 31.03.2011 31.12.2010Issuer:
Total assets 190.3 193.0
Equity 17.4 17.5
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:
XS0592044597 Luxemburg
XS0343689377 Luxemburg
XS0372532514 Luxemburg
AT000B048988 Vienna
AT000B049010 Wien
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 WienÖsterreich
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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124408 13.05.2011Unternehmensinformation / Kurzprofil:
Datum: 13.05.2011 - 08:02 Uhr
Sprache: Deutsch
News-ID 34092
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