GB00_erste lage_E - Erste Group

❚ Operating income
❚ General administrative
expenses
Management Report
and Financial Review of the Erste Bank Group
Consolidated results in brief
In 2000 the Erste Bank Group (including Česká spořitelna, a.s., which was consolidated in the
accounts effective 3 August 2000) posted operating income, consisting of net interest income,
net commission income and the net trading result, of EUR 1,474.7 million, a robust increase of
25.8% year-on-year. Eliminating the effects of first-time consolidation of Česká spořitelna, a.s.
(Česká spořitelna’s operating income from August to December plus Erste Bank’s costs for funding
the acquisition) puts the growth rate at 5.8%.
Net interest income and net commission income were particularly strong components of this
marked increase.
Operating income and general administrative expenses (in EUR million)
1,172.2
841.6
1,172.3
(0.0%)
821.7
(– 2.4%)
1998 1999 2000
w/ ČS
1,474.7
(+ 25.8%)
1,001.0
(+ 21.8%)
2000
w/o ČS (pro forma)
1,240.6
(+ 5.8%)
832.7
(+ 1.3%)
General administrative expenses, encompassing personnel expenses, other administrative ex-
penses and depreciation and amortisation of fixed assets, climbed 21.8% in the reporting period
to EUR 1,001.0 million; stripped of the effects of Česká spořitelna, a.s. there was only a minor
increase of 1.3%. Although these figures obviously do not yet reflect the staff cuts already initiated
at Česká spořitelna, a.s., they do reveal the enormous potential these measures hold.
This puts the operating result (operating income less general administrative expenses) at EUR
473.7 million, a jump of 35.1% over the previous year (adjusted increase: 16.3%). This is solid
proof that the Česká spořitelna, a.s. acquisition has already had a positive impact on Erste Bank’s
income statement.
The cost-income ratio, i.e. general administrative expenses as a percentage of operating income),
showed a striking improvement year-on-year from 70.1% to 67.9% despite first-time consolidation
of the new acquisition in the Czech Republic.
Due to the first-time consolidation of Česká spořitelna, a.s., risk provisions for loans and advances
were higher than in 1999, but the adjusted figure shows a decline of just under 10% due
mainly to lower write-offs for loans and advances.
Erste Bank 2000 11