Erste Group Bank (EBS) Q3 2024 earnings summary

Executive summary

• Q3 2024 delivered record revenues and net profit, with NII, fee, and trading income at all-time highs, and costs well contained; net profit for the first nine months reached EUR 2,516 million, up 8.9% year-to-date.

• Return on tangible equity (RoTE) approached 20% in Q3, with year-to-date RoTE at nearly 18% and 2024 target upgraded to above 16%.

• No material one-offs impacted results; performance was driven by core business strength, especially in Central and Eastern Europe.

• Operating expenses remained stable quarter-on-quarter, with cost growth contained at 3.7% and improved efficiency.

• Guidance for 2024 was upgraded, reflecting strong operating performance and robust income momentum.

Financial highlights

• Net interest income for 1-9/2024 was EUR 5,591 million (+3.1% year-over-year), with fee income up 11.4% and total revenues reaching approx. €2.8bn in Q3.

• Cost/income ratio improved to 44.7% in Q3 and 45.8% for 1-9/2024, with FY24 guidance at or below 48%.

• Risk cost ratio was 16-18 bps in Q3, with NPL ratio stable at 2.4% and NPL coverage at 78.7%.

• CET1 ratio (pro forma, fully loaded) at 15.6% as of September 2024; total capital ratio at 19.2%.

• Customer loans up 2.7% and deposits up 3.0% year-to-date; loan/deposit ratio at 87.9%-89.0%.

Outlook and guidance

• 2024 guidance upgraded: NII to grow more than 2% year-over-year, fee income about 10%, costs about 5%, CIR ≤48%, and RoTE above 16%.

• Loan growth target for 2024 is about 5%, with capital position strong and CET1 ratio target above 14%.

• Risk costs expected at 20 basis points of average gross customer loans.

• 2025 outlook constructive, with stable NII and fees, moderate risk costs, and controlled expenses; mid-term RoTE guidance for 2025 is around 15%.