Austrian banks achieved significant profit growth in 2022

In general, local banks are doing well. In 2022, annual gross profit will increase from 6.1 to 10.2 billion euros, the Oesterreichische Nationalbank (OeNB) announced on Wednesday.

Thus, the result for the period of groups of credit institutions and individual credit institutions exceeds the “really really good” result of the previous year by 66.9 percent. And the banks achieved a “record annual result in a tense atmosphere.”

Better utility results

The SNB stressed that major increases in interest income and commission income must be seen in the context of a sluggish economy, high inflation and correspondingly restrictive monetary policy.

The interest result, according to the information, improved by 23.3 percent to 19.3 billion euros, and the commission result increased by 25.6 percent to 10.1 billion euros.

The extraordinarily large increase in profit for the period of €4.1 billion is also put into perspective, as the Russian invasion means that the ability to generate profits from subsidiary banks in Belarus and Russia is currently restricted.

Girls helped

In addition to the increase in operating income, the main reason for the positive development in annual profits after minority interests and taxes is the increase in the total result from discontinued operations after taxes by €1 billion.

In addition, the increase in profits from subsidiaries that were not fully or partially integrated in the amount of 811 million euros made a significant contribution to the improvement.

However, a doubling of impairment and provisions for credit risk by €1.1 billion to €2.2 billion weighed on the annual result.

variable interest rate environment

Operating income of local banks increased by 22.5 percent (5.8 billion euros) to 31.6 billion euros in the last financial year. The increase in interest and commission income had a positive impact on operating income.

OeNB emphasized that “the good development in interest income is mainly due to the changing interest rate environment and the increase in the volume of receivables.”

The operating result increased year-on-year by 42.6% (3.8 billion euros) to around 12.9 billion euros. According to OeNB, this was primarily due to a significant increase in operating income.

An increase in the impairment of intangible assets, property, plant and equipment and investments by €1.3 billion to €3.4 billion (plus 63.8%) had a negative impact on the operating result.