Erste Group profit weighed down by provisions

In the second quarter, the Austrian retail bank posted a result of 58.9 million euros against 354.9 million for the same period in 2019.

Austrian bank Erste Group on Friday announced a plunge of more than 80% of its net profit in the second quarter over one year, weighed down in particular by large provisions for credit risks.

This retail bank, established in the Czech Republic, Slovakia, Hungary, Romania, Croatia, Serbia and Austria, posted a result of 58.9 million euros compared to 354.9 million over the same period in 2019 .

Like all banking institutions, Erste faces a skyrocketing cost of risk due to the economic damage caused by the pandemic. The Austrian group was forced to revise its provisions upwards to 613 million euros.

Due to the fall in activity and the surge in unemployment, individuals and businesses may have difficulty repaying all the loans taken out, hence the losses caused for financial institutions.

Erste claims 17 million customers and employs 47,000 people.

The group maintains its objective of distributing dividends for the 2019 and 2020 financial years, but intends to postpone their payment at least until January 2021, in accordance with the recommendation of the European Central Bank.

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.