Erste Group Bank (EBS) Q3 2024 earnings summary

Executive summary

• Achieved record financial performance in Q3 2024, with strong revenue growth, record net interest income (NII), and fee income, and disciplined cost management.

• Net profit for the first nine months of 2024 reached EUR 2,516 million, up 8.9% year-over-year, with RoTE nearing 18% and robust CEE contributions.

• NII, fees, and trading all set new quarterly records; total revenues reached approximately €2.8bn.

• Operating expenses remained stable quarter-on-quarter, with cost growth contained at 3.7% year-to-date.

• Upgraded 2024 guidance: NII expected to grow >2%, cost growth at ~5%, cost/income ratio at or below 48%, and RoTE above 16%.

Financial highlights

• Q3 2024 posted record NII of €1.9 billion, with net interest income for 1-9/2024 at EUR 5,591 million (+3.1% year-over-year); fee income grew nearly 11% year-over-year.

• Operating income for 1-9/2024 was EUR 8,319 million (+5.9%), with operating result at EUR 4,510 million (+7.9%).

• Cost/income ratio improved to 44.7% in Q3 2024 and 45.8% for 1-9/2024; FY24 guidance upgraded to ≤48%.

• Net profit for the first nine months exceeded €2.5 billion, with EPS at EUR 5.87 and RoTE at 19.1% in Q3 2024.

• NPL ratio stable at 2.4%; CET1 ratio at 15.6% pro forma as of September 2024.

Outlook and guidance

• 2024 guidance raised: NII to grow >2%, fee income ~10%, costs ~5%, CIR ≤48%, RoTE >16%.

• Loan growth target unchanged at ~5% for 2024, contingent on Austria and FX trends.

• CET1 ratio target remains >14.0%; second €500m share buyback underway.

• Initial 2025 RoTE forecast set at ~15%, with stable NII and moderate risk costs expected.

• Risk cost guidance for 2024 remains below 20 basis points; 2025 expected at similar moderate levels.