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Erste Group Q4'17 profit more than triples YOY

Erste Group Bank AG reported fourth-quarter 2017 net result attributable to the owners of the parent of €328.6 million, up from €85.6 million earned in the same period in 2016.

Return on equity for the period amounted to 9.1%, compared to 2.8% in the fourth quarter of 2016. The net interest margin stood at 2.41% in the fourth quarter of 2017, compared to 2.52% a year earlier.

Net interest income ticked up year over year to €1.12 billion from €1.11 billion. Net fee and commission income for the quarter reached €489.7 million, up from €463.2 million in the fourth quarter of 2016.

Net impairment loss on financial assets totaled €60.5 million in the period, narrowing from €132.5 million in the fourth quarter of 2016. The Austrian lender booked a €23.6 million charge from levies on banking activities in the fourth quarter of 2017, narrowing from a €237.1 million charge a year ago.

For full year 2017, the group reported a consolidated net result attributable to owners of the parent of €1.32 billion, up 4.1% from €1.26 billion a year earlier. Return on equity dropped on a yearly basis to 10.1% from 10.8%.

At 2017-end, the bank's phased-in Basel III common equity Tier 1 ratio stood at 13.4%, compared to 12.8% at the end of September 2017 and unchanged from 13.4% at the end of 2016.

The group said it will propose to pay a dividend of €1.20 per share for 2017, up 20% from the year-ago dividend.

Erste Group Bank said it aims to reach a return on tangible equity of more than 10% in 2018, assuming a tax rate of around 22% and a similar level of minority charges, which amounted to €351.5 million in 2017. The group also expects a slight increase in net interest income in 2018, as well as a moderate rise in net fee and commission income.