The net profit of Erste Bank in Serbia in the first half of 2023 was 3.22 billion dinars, which is 86 percent more than in the same period last year.
Operating profit increased by 66.7 percent to 3.85 billion dinars, while profit before tax jumped by as much as 88 percent year-on-year to 3.5 billion dinars.
The main contribution to profitability growth was made by net interest income, which jumped by 42.8 percent to 6.87 billion dinars for the first six months of this year.
Net income from fees and commissions increased by eight percent to 1.7 billion dinars in the period from the beginning of the year to the end of June compared to the same period last year. In this period, a slight decrease in loans to households and micro clients was recorded by 0.8 percent compared to the end of 2022, while loans to the economy increased by 5.6 percent.
The entire Erste Group also recorded a strong increase in profit. As it was said at the presentation of the financial results in Vienna, the half-year profit of the entire group amounted to 1.49 billion euros, which is an annual growth of 31 percent.
At the level of the group operating in seven CEE countries, net interest income amounted to 3.56 billion euros with an annual growth of 25.5 percent, while net income from fees increased by 4.9 percent.
According to Willy Cernk, CEO of Erste Group, the countries where they are present will have faster growth than the Eurozone in the coming years.
In this year, it is expected that the average GDP growth of the region will be one percent, and that of the Eurozone will be 0.5 percent. Also, Erste’s forecast for Serbia this year is 1.6 percent and 3.8 percent in 2024.
“To a large extent, growth in the region depends on economic development in Germany, which entered a technical recession, and is now practically at zero. For next year, we have positive signals and a significantly faster growth of the region than the Eurozone”, said Chernko.
He added that the countries’ budget deficits show that aid measures are running out and that the measures are now much more targeted than before. Inflation in the region is on a downward trend, but according to him, interest rates will remain at a high level for a longer period.
He also estimated that in 2024 we could see the beginning of a reduction in interest rates.
At the group level, the growth of corporate loans slowed down, and the volume of newly approved housing loans in the second quarter of this year compared to the same period last year was 60 percent lower.
However, the total volume of housing loans has increased slightly over the last year.
Chernko argued for tax breaks for citizens’ investments in securities, stressing that investment in the green transition should be encouraged. He also assessed that the immigration of highly qualified workers should be facilitated.
Regarding the consolidation process in the banking sector, Chernko emphasized that the bank’s priority is organic growth, but also that they are open to acquisitions if they will bring profit in the medium term.