Sparkasse Oberösterreich Reports Stable Financial Performance

Sparkasse Oberösterreich has reported its financial results for 2024, indicating a return to a normal level of performance after a strong showing in 2023. The bank experienced a resurgence in private residential financing but continues to face investment hesitance from both individual and business clients. The pre-tax profit for the year stood at EUR114.3 million, which, while significantly lower than the EUR155.7 million recorded in the previous year, still represents an improvement compared to earlier years.

General Director Stefanie Christina Huber expressed satisfaction with the results, noting that although the figures have normalized, they still reflect an upward trend compared to prior periods. A marked shift in customer behavior was observed, with individuals showing greater interest in saving and investing rather than seeking loans. The bank's interest income fell by 9.5%, totaling EUR231 million, attributed to the European Central Bank's interest rate cuts and a decline in loan volumes. The overall credit volume for corporate and private clients decreased by 4.2%, reaching EUR9.2 billion.

Conversely, customer deposits saw a significant rise, increasing by 11.3% to EUR6.9 billion, contributing to a total balance sheet growth from EUR15 billion to EUR15.5 billion. This trend indicates a heightened demand for security and prudent financial planning among customers. Additionally, there has been a noticeable increase in interest in alternative savings and investment options, positively impacting the bank's commission income, which rose by 7.6% to EUR140.4 million.

The private residential financing sector experienced a notable increase, with new business rising by 41% compared to the previous year. The bank processed approximately 1,400 residential financing applications, amounting to around EUR200 million in its own portfolio and EUR35 million in building savings loans. Although the figures have not yet returned to pre-2023 levels, Huber indicated that the financing sector is showing signs of revival.

In terms of capital adequacy, the hard core capital increased to EUR1 billion from EUR913 million in 2023. However, the core capital ratio dipped from 17.8% to 17.2%, attributed to a slight rise in the risk weighting of assets. Risk costs have doubled from EUR9 million to EUR19 million, according to Executive Director Maximilian Pointner. The bank's levy for 2024 was set at EUR1.8 million, with an expectation of around EUR6 million for the current year.

The number of employees at Sparkasse Oberösterreich remained stable at nearly 1,700, although the branch network was reduced by 10 locations to a total of 131. Several branches have undergone renovations, and plans are underway to establish a Financial Life Park in Linz, aimed at improving financial literacy among younger clients, with construction set to begin in the fall and an anticipated opening in 2026.

Looking forward, while the first quarter of 2025 has shown satisfactory results, the bank remains cautious about the overall investment climate. Huber noted a continued reluctance among companies to commit to new investments, indicating a lack of optimism in the investment landscape.