BAWAG Group (BG) Q2 2024 earnings summary

Executive summary

• Q2 2024 net profit was €175 million, with EPS of €2.22 and ROTCE at 24.3%; H1 2024 net profit totaled €342 million, ROTCE 24.0%.

• Pre-provision profit for Q2 was €263 million, flat year-over-year; cost-income ratio at 32.6%.

• Two strategic acquisitions (knab bank and Barclays Consumer Bank Europe) signed in 2024, expected to add over €250 million pre-tax profit by 2027.

• CET1 ratio increased to 16.5% post-dividend accrual, with €770 million excess capital.

• Strong asset quality maintained, with NPL ratio at 1.1%.

Financial highlights

• Net profit of €175 million in Q2, up 5% from prior quarter, down 3% year-over-year.

• Pre-provision profit of €263 million, flat year-over-year; cost-income ratio at 32.6%.

• Net interest income for Q2 was €309.7 million; net commission income €81.7 million, up 7% year-over-year.

• CET1 ratio at 16.5%, up 90 bps from prior quarter; liquidity coverage ratio at 220%.

• Customer loans averaged €33.5 billion, down 1% sequentially; customer deposits up 1% quarter-over-quarter.

Outlook and guidance

• 2024 guidance: profit before tax target over €920 million, ROTCE above 20%, cost-income ratio under 34%.

• Net interest income and core revenues expected to grow 1% in 2024; operating expenses to increase around 3%.

• Risk cost ratio expected between 25-30 bps for 2024.

• Muted customer loan growth expected in 2024, with normalization in mortgage volumes anticipated in 2025.

• Outlook excludes M&A contributions; Barclays Consumer Bank Europe acquisition expected to close Q4 2024/Q1 2025.