She said in the bank’s semi-annual report that higher returns can be achieved in customer business, while costs have decreased. Net interest income rose by about ten percent to 69.9 million euros, and commission income rose by nearly eight percent to 9.8 million euros.
On the other hand, administrative costs were reduced (minus 4.5 percent to 57 million euros). The expense ratio (the relationship between a bank’s costs and income) improved from 57.9 percent to 53.1 percent, HYPO NOE Landesbank für Niederösterreich und Wien AG reported on Tuesday.
The demand for housing construction and infrastructure was high
“Our core competencies in particular – social and public infrastructure and residential construction – have been in great demand in the past few months and have contributed to our very good semi-annual results,” says HYPO-NOE Board Member Wolfgang Viehauser.
Although many uncertainties remain due to the coronavirus pandemic and the bank expects an increase in defaults due to the end of government assistance measures, the bank’s risk profile improved slightly in the first half of the year. The non-performing loan rate decreased from 0.78 percent at the end of the year to 0.68 percent.
As a result of reversal of provisions, risk provisions increased by 3.8 million euros at the end of the first half of 2021. In the first half of 2020, 5.1 million euros were allocated. Ongoing risk factors such as “any portfolio impacts due to COVID-19” are still fully taken into account, according to the company’s semi-annual report.
HYPO NOE expects ‘strong business development’
For the whole of 2021, the bank expects “strong business development”. Economic activity should return to normal throughout the year as vaccination progresses. However, the institute intends to continue to focus its strategic focus on the two low-risk lines of business infrastructure and residential construction financing – “while maintaining conservative risk and capital profile,” the forecast states.
The bank’s core capital ratio was 17.62 percent at the end of the half year, which is just below the level at the end of 2020 (17.92 percent). HYPO NOE stated that the stake is “above the Austrian average for all banks of 14.72 percent and well above regulatory requirements of 12.62 percent”, which is 100 percent owned by the State of Lower Austria and according to its own information is the largest and oldest Landesbank in Austria .
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