This is on the back of lower risk costs driven by an improvement in company's asset quality that saw company's NPL ratio decline to below five percent.
Operating income decreased slightly, pressured by the low interest rate environment, while operating costs rose, reflecting company's increased investments in IT and digitalization.
While loan growth was decent, with nearly five billion euros in net new loans granted in 2016, customer deposits – in total retail and corporate - increased by more than ten billion euros.
While this savings inflow is a strong indication of the trust placed in company's group, it also shows once more that the low interest rate environment by itself isn’t encouraging investments.
Net interest income declined to EUR 4,374.5 million (-1.6%; EUR 4,444.7 million), mainly due to a market environment of persistently low interest rates and large-scale NPL reductions.
Net impairment loss on financial assets declined substantially to EUR 195.7 million or 15 basis points of aver-age gross customer loans (-73.2%; EUR 729.1 million or 56 basis points), on the back of a significant decline of non-performing loans and higher income from the recovery of loans already written off in Romania and Hungary.
The NPL ratio improved significantly to 4.9% (7.1%). The NPL coverage ratio increased markedly to 69.1% (64.5%).
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