Austrian bank Erste Group lifts NII outlook after Q2 beat
Erste Group beats expectations for Q2 NII, operating income
Sees stable NII in 2024, versus previous forecast for 3% drop
Proposes dividend of 3 euros per share for fiscal 2024
Adds CFO quotes from call in paragraphs 5-8
By Tristan Veyet and Mateusz Dobrzyniewski
Aug 2 (Reuters) -Austrian bank Erste Group ERST.VI beat second-quarter expectations and raised its 2024 net interest income (NII) forecast on Friday, helped by higher market interest rates in the euro zone and a larger loan volume.
The Vienna-based lender said its NII, or the difference between what a bank earns on loans and pays out for deposits, should remain stable compared to 2023, after previously forecasting an around 3% decline.
Its NII grew 2.4% to 1.84 billion euros ($1.99 billion) in the April-June quarter, compared to a year earlier, just ahead of analysts' expectations of 1.83 billion euros in a consensus provided by Erste.
Quarterly operating income of 2.73 billion euros also beat estimates of 2.68 billion euros.
Asked about NII expectations for 2025, Chief Financial Officer Stefan Dörfler said during a conference call that Erste would not give an outlook for next year yet, but it "does not fundamentally disagree" with the current market expectations.
According to the company-provided consensus, analysts are expecting net interest income growth of 0.3% in 2025.
"A plateau is a nice picture that we would like to have in front of us. And it is a perfect plateau. And it will very likely remain a perfect plateau," Dörfler said about NII growth into 2025.
Erste expects the European Central Bank, which cut interest rates from record highs in June, to lower them at least twice more this year, in September and in December, Dörfler said.
The bank also said it would propose a dividend of 3 euros per share for the 2024 financial year, in line with its existing policy.
($1 = 0.9243 euros)
Reporting by Tristan Veyet and Mateusz Dobrzyniewski in Gdansk, editing by Milla Nissi
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