February 28, 2020 / 7:42 AM / a month ago

UPDATE 1-Erste Group raises dividend, forecasts higher 2020 operating result

* Q4 operating result 739.4 mln euros (740.6 mln in Q4 2018)

* Q4 net interest income 1.23 bln euros (1.21 bln)

* 2019 dividend to increase to 1.5 euros/shr

* 2020 operating result to increase (Adds detail, background)

VIENNA, Feb 28 (Reuters) - Austrian lender Erste Group on Friday said it would propose a 7% dividend increase for 2019 after reporting a flat fourth-quarter operating result affected by one-offs.

For 2020, the group expects its operating result to rise, net loans to grow in the mid-single digits and its CET 1 ratio, a measure of capital strength, to increase despite a slight economic slowdown in its core markets.

Erste Group, which operates in six central and eastern European countries besides its Austrian home market, said the operating result for the three months from October through December came in at 739.4 million euros ($803.6 million) after 740.6 million the previous year.

Profitability in the period was affected by goodwill impairment of 165 million euros in Slovakia and risk provisions of 82 million, Erste Group said. Fourth-quarter net interest income was up 1.6% at 1.23 billion euros.

Erste Group, one of the largest financial services providers in the eastern part of the European Union in terms of clients and total assets, said it proposed to increase the dividend for 2019 to 1.50 euros a share from 1.40 euros the previous year.

For 2019, Erste Group reported a 4.9% revenue increase, net loan growth of 7.3%, a cost-income ratio of 59% and a CET 1 ratio of 13.7%.

Negative economic effects from a spreading of the coronavirus were a risk for its 2020 forecast, the bank said.

$1 = 0.9201 euros Reporting by Kirsti Knolle; editing by Thomas Seythal and David Evans

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