BAWAG GROUP REPORTS Q3 2022 ADJUSTED NET PROFIT OF € 132 MILLION, EPS OF €1.49, AND ROTCE OF 19.3%
- Q3 ’22 incorporates full write-off of City of Linz receivable of € 254 million in risk costs
- Q3 ’22 (including City of Linz): Net loss of € (58) million and EPS of € (0.66)
- Adjusted Q3 ’22 (excluding City of Linz): Net profit of € 132 million, EPS of € 1.49, and RoTCE of 19.3%
- Adjusted Q1 - Q3 ‘22: Net profit of € 377 million, EPS of € 4.24, RoTCE of 18.4%
- Pre-provision profit of € 636 million (+16% vPY) and CIR at 35.9%
- Adjusted risk costs of € 86 million … continued to build up our ECL management overlay to € 82 million
- Completed approximately 65% of € 325 million share buyback program as of October 18
- CET1 ratio of 13.0% post-deduction of Q1 - Q3 ‘22 dividend accrual and € 325 million share buyback
- 2022 targets (adjusted) reconfirmed: Profit before tax > € 675 million, RoTCE > 17%, and CIR < 38%
- Updating outlook for core revenue growth to ~9% in 2022
VIENNA, Austria – October 19, 2022 – BAWAG Group today released its results for the third quarter 2022, reporting a net profit (excluding City of Linz) of € 132 million, € 1.49 earnings per share, and a RoTCE of 19.3%. For the first nine months, BAWAG Group reported a net profit (excluding City of Linz) of € 377 million, € 4.24 earnings per share, and a RoTCE of 18.4%.
The third quarter 2022 incorporated the full write-off of the City of Linz receivable. In August, the Austrian Supreme Court ruled that the swap contract entered between BAWAG and the City of Linz 15 years ago was invalid. As a result of the ruling, we took a pre-tax write-off of € 254 million, equal to € 190 million impact after tax, related to the City of Linz receivable on the balance sheet. Including this write-off, net profit for the first nine months 2022 was € 186 million with an RoTCE of 9.1%.
The operating performance of our business was strong during the first nine months 2022 with pre-provision profits of € 636 million and a cost-income ratio of 35.9%. Total risk costs (excluding City of Linz write-off) were € 86 million. Despite our low NPL ratio of 1.0% and robust credit performance across our business to-date, we decided to remain prudent in our provisioning given the current market environment and potential headwinds building up, increasing our management overlay provisions by € 21 million to a total of € 82 million.
Average customer loans were flat versus prior quarter and up 9% versus prior year. At the end of September
2022, the CET1 ratio was at 13.0%. We generated approximately 180 basis points of gross capital from earnings during the first nine months 2022. The CET1 ratio considers the deduction of a share buyback of € 325 million
(65% completed as of October 18) as well as € 207 million dividend for the first nine months 2022 (55% payout based on an adjusted net profit).
Anas Abuzaakouk, CEO, commented: “In the first nine months 2022 we delivered a strong set of results with
adjusted net profit of € 377 million, EPS of € 4.24, an RoTCE of 18% and a cost-income ratio of 36%. Additionally, we remained prudent in our provisioning, increasing our management overlay by € 21 million during the first nine months, which currently stands at € 82 million, equal to almost one year of normalized risk costs. Our actions stem from an abundance of caution, which is the same prudence and conservatism that underpins how we’ve run our business over the past decade. We have an incredible team and resilient business that will deliver results across all cycles allowing us to consistently support our customers and local communities despite the potential headwinds building up.”
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