Erste Group Raises Guidance on Surging Net Interest Income

By Ed Frankl

Erste Group Bank AG on Friday raised its guidance after third-quarter net interest income surged on the back of rate rises outside of the eurozone.

The Austrian lender's quarterly net profit was 510 million euros ($497.3 million), ticking down from the EUR533.4 million in the same period last year.

The bank's net interest income rose 27% to EUR1.55 billion, while its net fee and commission income rose 7.2% to EUR615.1 million, boosted by payment services and asset management.

The lender, which focuses on central and eastern Europe, bumped up its guidance on return on tangible equity to 14%, from double-digit expectations previously. It also targets ROTE of 13%-15% in 2023.

The updated forecast was driven by a stronger economic performance over 2022 than expected in the spring, strong labor markets across central and eastern Europe, and faster-than-expected interest-rate normalization in the eurozone, the Vienna-based company said.

It also expects higher than 10% net loan growth this year, from high-single digit percentage growth under previous guidance.

Erste pushed up its expectations for net interest income to 20% growth in 2022.

Write to Ed Frankl at [e-mail]

(END) Dow Jones Newswires

11-04-22 0314ET