Skip to content
Subscriber Only

Erste Falls as Profit Beat Fails to Assuage Growth Concerns

  • Profit boosted by unsustainable drop in bad-debt charges
  • Loans fail to grow fast enough to boost interest income
Updated on

Erste Group Bank AG’s shares tumbled on Wednesday after the biggest lender in Austria, the Czech Republic and Romania said its first-quarter provisions for bad loans were too low to be considered a guide to the future.

“There was no corporate default of significance in the first quarter, which is a very rare situation,” Chief Risk Officer Andreas Gottschling said in a call with analysts. “There is nothing to justify the level of risk costs booked in the first quarter, so I would refrain from turning this into any kind of run-rate.”