Erste sees potential for new lending in energy, tourism….

Erste&Steiermärkische Bank d.d. maintained a positive and stable business trend in the first quarter of 2013, despite extremely challenging market conditions, the bank reports.

-The bank continues to share the burden of the seriousness of the overall economic situation considering the general conditions and the current state of the economy, which is evident from the financial indicators for the first quarter of 2013. However, the achieved financial result is in line with the set goals as such a development had been previously anticipated and incorporated into the business plans for 2013, the statement reads.

The total assets of the bank as of March 31, 2013, amounted to 58.1 billion kuna, which is a decrease of 0.7% compared to the end of 2012, when it amounted to 58.5 billion kuna. Net profit was lower compared to the same period in 2012, amounting to 76.7 million kuna, thus the bank maintained a stable level of profitability. Total loans of the bank as of March 31, 2013, amounted to 38.7 billion kuna, which is a decrease of 0.5% compared to the end of the previous year, when they amounted to 38.8 billion kuna. The decrease in total loans is a result of generally reduced demand for new lending in the market, which is a consequence of the current market conditions and the objective economic situation. Total deposits recorded stable growth and at the end of March 2013 amounted to 32.3 billion kuna, which is an increase of 2.0% compared to the end of 2012, when they amounted to 31.6 billion kuna. The return on assets in the first quarter of 2013 was 0.5%, return on equity 4.4%, while the cost-to-income ratio as of March 31, 2013, was 39.3%.

-The beginning of 2013 indicates a continuation of unfavorable economic trends which inevitably affects the operations of banks. In such a very demanding market environment, we have maintained a positive business trend and are satisfied with the financial results achieved by the bank in the first quarter of 2013. We will continue to be a reliable partner to our clients, supporting healthy entrepreneurial initiatives aimed at growing the real sector and increasing employment within it, as well as addressing the financial needs of citizens, emphasized the CEO of Erste Bank, Petar Radaković.

According to the consolidated financial report of the Group for the first quarter of 2013, which includes not only Erste Bank but also the following subsidiaries: Erste DMD d.o.o., Erste Nekretnine d.o.o., Erste Delta d.o.o., Erste Bank a.d., Podgorica, Erste Card Club d.d., Erste Factoring d.o.o., total assets amounted to 65.4 billion kuna, which is a decrease of 0.8% compared to the end of 2012, when it amounted to 65.9 billion kuna. The Group’s net profit reached 118.9 million kuna, which is a decrease of 26.9% compared to 2012, when it amounted to 162.6 million kuna. The return on assets of the group in the first quarter of 2013 was 0.7%, return on equity 6.2%. The Group’s cost-to-income ratio decreased from 42.5% at the end of the first quarter of 2012 to 42.0% at the end of the same period in 2013.

Monitoring the financial needs of citizens, intensively focusing on the small and medium-sized enterprise segment, and tracking quality projects that promote the development of the real sector and employment growth will continue to be the fundamental strategic guidelines of Erste Bank’s operations, they say.

The bank continues to see potential for new lending in the following areas: renewable energy sources and energy efficiency, agriculture and infrastructure projects related to EU funds, tourism, and production intended for export, and will pay additional attention to these segments in the upcoming period. As they state, the long-term business policies of the bank are always aimed at achieving growth above the market average, increasing internal efficiency, and rational cost management. The bank aims to finish 2013 with an increase in its market shares, as has been the case in previous years. A special emphasis will continue to be placed on improving the quality of service to clients, communication with them, and understanding their specific needs in the current market environment, they say from Erste.