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Espirito Santo Financial Q1 2014 net income falls

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Staff writer ▼ | May 28, 2014
Espirito Santo Financial Group S.A. (ESFG) announces its unaudited consolidated results for the first quarter of 2014. The report is compiled under IFRS as implemented by the EU.
ESFG
ESFGEspirito Santo Financial Group S.A. (ESFG) announces its unaudited consolidated results for the first quarter of 2014. The report is compiled under IFRS as implemented by the EU.


ESFG’s banking and insurance operations were constrained by economic weakness in the Eurozone. Despite these challenges, and noting signs of improvement in the economic landscape, ESFG’s principal banking subsidiary, BES, was able to greatly increase its banking income and net operating income during the quarter.

Banking results were underpinned by strong results in capital markets operations as well as a positive recovery in net interest income. Provisioning however weighed on consolidated results. ESFG’s insurance operations continue to make a positive contribution to consolidated results but decline during the period.

Consolidated Q1 2014 Net Income fell to -EUR 37.0 million (-EUR 13.1 million in Q1 2013). Consolidated Banking Income rose by 9.6% to EUR 607.7 million (EUR 554.3 million in Q1 2013). Consolidated Net Interest Income rose 19.3% to EUR 281.6 million (EUR 236.0 million in Q1 2013).

Consolidated Net Fees and Commissions fell by 9.6% to EUR 160.0 million (EUR 177.0 million in Q1 2013). Consolidated Market Results1 and Other Operating Income rose by 34.0% to EUR 189.4 million (EUR 141.3 million in Q1 2013). Consolidated Insurance Earned Premiums Net of Reinsurance rose by 41.9% to EUR 137.6 million (EUR 97.0 million in Q1 2013) and includes the full consolidation of the BES life insurance business BES Vida. Consolidated Claims Incurred (Net of Reinsurance) fell by 9.1% to EUR 118.6 million (EUR 130.4 million in Q1 2013).

Consolidated Operating Expenses rose by 25.7% to EUR 906.1 million (EUR 721.1 million in Q1 2013). Consolidated expenses include a 53.7% increase in depreciation, provisions and loan impairments, net of reversals. Staff Costs and General Administrative Expenses rose by 0.8% to EUR 299.4 million (EUR 296.9 million in Q1 2013) with staff costs up by only 2.2% year-on-year.

On 15 May 2014 ESFG announced the dissolution of BESPAR. As of the date of this report ESFG’s direct and indirect economic stake in BES remains at 27.36%.


 

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