BKS Bank Increases Dividend Payout

BKS Bank has announced a significant increase in its dividend payout for the fiscal year 2024, demonstrating resilience amidst challenging market conditions. The bank, headquartered in Klagenfurt, reported a net income of EUR163.2 million, marking an 8.8% decline compared to the previous year. Despite this drop, the results represent the second-best performance in the bank's history since it rebranded from Bank für Kärnten und Steiermark Aktiengesellschaft prior to 2005.

The bank's total assets grew by 3.7% to reach EUR11.1 billion. Although the interest income decreased by 2.8% to EUR241.6 million, the bank saw an 8.4% rise in fee-based income, totaling EUR70.4 million. This growth was primarily driven by robust corporate banking activities, while demand for personal real estate loans remained subdued, even as inflation stabilized.

In Austria, the bank issued new loans amounting to EUR1.2 billion, and executives expressed a commitment to expanding their presence in the retail banking sector. However, the bank faced increased write-downs on receivables and fixed assets, which doubled to EUR58.87 million. This was largely due to valuation adjustments within its real estate portfolio. Management clarified that the recent insolvencies related to the real estate firm Signa did not impact the bank's finances directly.

Nevertheless, BKS Bank is listed as a creditor in the insolvency proceedings of the Austrian motorcycle manufacturer KTM, alongside other banks. The core capital ratio improved to 16%, while the return on equity (ROE) decreased from 10.8% to 8.8%. Despite this decline, the ROE remains close to the bank's target of 10%. The non-performing loan (NPL) ratio increased slightly by 0.3 percentage points to 3.2%, a figure that management considers acceptable given the rising insolvency rates and weaker industrial and construction sectors.

The bank's CEO expressed satisfaction with the results, highlighting their ability to maintain profitability under difficult circumstances. Subject to approval at the upcoming general meeting, the bank plans to distribute a dividend of EUR0.40 per share for the 2024 fiscal year. This represents an increase of over 14% compared to the previous year, resulting in a dividend yield of 2.5% based on the year-end share price.

Looking ahead to 2025, BKS Bank's executive team remains cautious. They anticipate ongoing volatility in market conditions, compounded by increased state levies which may dampen expectations for the coming year. The bank is committed to focusing on strong customer orientation, further capital accumulation, and sustainable engagement while explicitly stating there are no plans for branch closures.

As the bank approaches its 40th anniversary on the stock exchange, it has achieved a stock return of approximately 358% since its listing, illustrating that sustainable banking practices can lead to long-term success.