BAWAG Group (BG) Q2 2024 earnings summary

Executive summary

• Q2 2024 net profit reached €175 million, EPS €2.22, ROTCE 24.3%, and H1 2024 net profit was €342 million, up 7% year-over-year, with strong asset quality and stable cost-income ratio.

• Pre-provision profit for Q2 was €263 million, flat year-over-year; cost-income ratio at 32.6%.

• Two strategic acquisitions—Knab Bank (Netherlands) and Barclays Consumer Bank Europe (Germany)—were signed, expected to close by Q1 2025 and add over €250 million pre-tax profit by 2027.

• Maintained strong asset quality with NPL ratio at 1.1% and CET1 ratio at 16.5% post-dividend accrual.

• Fortress balance sheet with €770 million excess capital after dividend accrual.

Financial highlights

• Net profit of €175 million in Q2, up 5% sequentially, down 3% year-over-year; H1 net profit €342 million, up 6.8% year-over-year.

• Net interest income for Q2 was €309.7 million, flat year-over-year; net commission income €81.7 million, up 7%.

• Operating expenses increased 5% to €127.1 million in Q2, mainly due to inflation.

• CET1 ratio at 16.5% post-dividend accrual, up 90 bps from prior quarter; liquidity coverage ratio at 220%.

• NPL ratio stable at 1.1%; risk cost ratio at 27 bps for Q2.

Outlook and guidance

• 2024 guidance reaffirmed: net interest income and core revenue growth of 1%, operating expenses to grow around 3%, risk cost ratio expected at 25–30 bps.

• Profit before tax target above €920 million, ROTCE above 20%, cost-income ratio under 34%.

• Dividend payout ratio maintained at 55% of net profit, with excess capital allocated to growth and M&A.

• Muted customer loan growth expected for 2024, with normalization in mortgage volumes anticipated in 2025.