Saturday, August 8, 2020

Austrian money house Erste Group withdraws outlook

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Head office of Erste Group Bank in Vienna.

Vienna Erste Group bank withdraws its outlook for the current financial year. The Austrian institute announced on Wednesday that the forecast would only be updated as soon as the economic effects of the crisis were more quantifiable.

“This decision is based on evidence that has been increasing for weeks that the coronavirus-induced exit restrictions, despite cushioning measures by politicians, central banks and regulators, have led to a significant deterioration in the economic outlook,” said the bank, which is active in many countries in Eastern Europe.

Measures such as loan repayment moratoriums could have a negative financial impact, it said. Accordingly, it can also be assumed that risk costs will increase and credit quality will probably deteriorate, albeit from very favorable starting values.

The bank had already reviewed the dividend for the past financial year last week. According to previous plans, the institute wanted to distribute 1.50 euros per share. The Annual General Meeting, originally planned for May 13, was postponed to a later date.

Previously, Austria’s largest money house announced an increase in operating income (EBIT) for 2020. In the past financial year, an operating result of almost three billion euros was achieved. In addition, the return on equity (ROTE) should be over ten percent, the bank announced as part of its capital market last autumn.

More: This is how the banks in Greece, Italy and Spain are doing

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