April 27, 2020 / 5:56 AM / 2 months ago

BAWAG first-quarter pre-tax profit down 37% due to higher risk provisions

FILE PHOTO: The logo of BAWAG PSK Bank is pictured on one of its branches in Vienna, Austria, March 2, 2016. REUTERS/Leonhard Foeger

VIENNA (Reuters) - Austrian bank BAWAG Group (BAWG.VI) on Monday reported a 37% fall in its first-quarter pre-tax profit as it increased its risk provisions in response to COVID-19 and reduced the value of an exposure in the oil and gas business.

Profit before tax reached 80.5 million euros ($87 million) in the January-March period after 127 million in the previous year, BAWAG said.

The bank, which withdrew its 2020 targets last week, said any new target for this year would be unreliable given the current market uncertainty and deterioration of the macroeconomic environment.

The bank said it had committed itself to medium-term targets of a return on tangible common equity of above 15% and cost-income ratio of less than 40% in a normalized environment.

BAWAG’s management board will waive potential bonuses for 2020 after already having done so for last year, the lender said.

Reporting by Kirsti Knolle; Editing by Riham Alkousaa

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