Erste Group Bank AG
Online Annual Report 2020

Editorial deadline: 26 February 2021, unless stated otherwise


Solid result in 2020

_  Net result of EUR 783.1 million
despite significant risk provisioning due to
Covid-19 pandemic and related measures

_  Local banks in all core markets remain profitable

Operating result impacted by lockdowns

_  Operating revenues down by 1.4%

_  Net interest income grows by 0.6% despite further rate cuts in CEE

_  Efficiency efforts support improvement in expenses by 1.5%

_  Operating result declined by 1.3%

_  Cost/income ratio stable at 59.0%

Loan growth continues

_  Net loans increase by 3.6%, organic growth supported by
state guarantees and moratoria across the region

_  NPL ratio only moderately up to 2.7%

_  NPL provision coverage at 88.6%

_  risk provisioning on updated risk parameters with
forward looking information results in 78 basis points
(on average gross customer loans)

Favourable capitalisation

_  CET1 ratio (CRR final) increases to 14.2%, exceeding
regulatory requirements and internal target

_  Two successful AT1 issuances

Excellent funding and liquidity position

_  Strong retail deposit base in all core countries is key trust indicator and competitive advantage

_  Loan-to-deposit ratio at 86.9%

_  Successful issuance of various asset classes by Holding and subsidiaries, e.g. first Non-Preferred Senior (NPS) issuance in Slovakia

Extensive presence in Central and Eastern Europe


Management Board

Bernd Spalt, Chairman of the Management Board
Ingo Bleier, Chief Corporates and Capital Markets Officer
Stefan Dörfler, CFO
Alexandra Habeler-Drabek, CRO
David O‘Mahony, COO 
Maurizio Poletto, Chief Platform Officer
Thomas Schaufler, Chief Retail Officer 

Supervisory Board

Friedrich Rödler, Chairman of the Supervisory Board
Jan Homan, 1st Vice Chairman of the Supervisory Board
Maximilian Hardegg, 2nd Vice Chairman of the Supervisory
Members of the Supervisory Board:
Matthias Bulach, Henrietta Egerth-Stadlhuber, Jordi Gual, 
Marion Khüny, Friedrich Santner, Elisabeth Krainer Senger-Weiss, 
András Simor, John James Stack, Michèle F. Sutter-Rüdisser
Delegated by the employees’ council:
Barbara Pichler, Andreas Lachs, Karin Zeisel, Jozef Pinter, 
Markus Haag, Regina Haberhauer


Erste Group, the leading lender in Central and Eastern Europe, ended the Corona year 2020 with a solid operating result of 2.9 billion euros (-1.3% year-on-year). The stock exchange-listed banking group formed almost 1.3 billion euros in risk provisions for impending loan losses in the aftermath of the pandemic. As a result, net income fell by 46.7% to 783 million euros. Customer loans, on the other hand, increased by 3.6% to 166.1 billion euros and customer deposit volumes rose by 9.9% to 191.1 billion euros. The common equity tier 1 ratio (CET1, final) rose again, from 13.7% to 14.2%.

Please refer to the links below for detailed information on business performance and segments.

Capital markets

In the past year, international financial markets were dominated by the Covid-19 induced crisis and measures taken to contain the virus. Geopolitical risks such as uncertainty over the outcome of the US presidential elections and the drawn-out Brexit negotiations between the European Union and the United Kingdom were, by comparison, relegated to the background. As the coronavirus started spreading worldwide, the first quarter saw a global sell-off in stock markets after an initially promising start to the year. Lockdowns imposing restrictions on social and economic activities in almost all countries slowed the outbreak of the coronavirus, but fears of a world-wide economic downturn of an unquantifiable degree sent share prices plummeting. Massive support measures initiated by policy-makers, central banks and regulators in an effort to cushion adverse impacts on the future development of the economy eased tensions in the markets. The flow of alternately positive and negative news, however, mostly in connection with the Covid-19 pandemic, fuelled volatility. The optimistic outlook on economic growth from 2021 onwards along with lower-than-expected declines in 2020 corporate earnings were offset by a continuing rise in Covid-19 infection rates. These resulted in further lockdowns in the fourth quarter, albeit, in a number of countries, less strict ones than at the beginning of the pandemic. Reports about successful clinical studies of vaccines against Covid-19, the start of vaccinations and the ebbing off of political risks after the United Kingdom’s exit from the EU single market boosted share prices significantly, but failed to make up for the losses previously sustained in most of the stock markets covered.

* A comparison after the IPO would not be applicable as Erste Group has been included in this index only since 16 January 1998. ​​​​​​​​​​​​​​​​
IPO … initial public offering, SPO … secondary public offering

Interactive Chart of Erste Group Share 

Information about previous performance does not guarantee future performance.

Shareholder Structure

Free float: 68.83%
1  Syndicated Savings Banks Foundations, own holdings of Savings Banks, Erste Employees Private Foundation
2  Other parties to the shareholder agreement of Erste Foundation, Savings Banks and CaixaBank
*  Institutional and Retail Investors international
** Including Market Makers, Prime Brokerage, Proprietary Trading, Collateral and Stock Lending positions which are visible through custodian banklistsThe shareholder structure may contain rounding differences. The information presented on this website is based on sources that we consider to be reliable. Erste Group does not guarantee the accuracy or completeness of the text and graphs.

Trends and Outlook

Erste Group’s goal for 2021 is to increase net profit. Among the factors that will support achievement of this goal are a recovery of the economies of all core markets – the Czech Republic, Slovakia, Hungary, Romania, Croatia, Serbia and Austria – and, on this basis, a reduction of risk costs and an improvement in the operating result. A continuation or further escalation of Covid-19 measures by governments as well as potential – and as yet unquantifiable – political, regulatory or economic risks may render meeting this goal more challenging.

In 2021, the positive development of the economy should be reflected in growth rates (real GDP growth) of between 3% and close to 6% in Erste Group’s CEE core markets. The development of other economic indicators should vary depending on Covid-19 policy measures imposed by authorities and/or the phasing out of state support. Unemployment rates are expected to rise but, in the Czech Republic and Hungary, should remain among the lowest in the EU. Inflation rates are forecast to decline in the Czech Republic and Slovakia while the other core markets are likely to see a slight acceleration. In most countries, sustained competitiveness should again result in solid and, in Slovakia and Romania, stronger current account balances. The fiscal situation should likewise improve again after the significant budget deficits posted in the year 2020. Public debt is projected to remain largely stable, albeit at a significantly elevated level.

Against this backdrop, Erste Group expects net loan growth in the low to mid-single digit range. This performance should keep net interest income stable despite negative interest rates in the euro zone. The second most important income component – net fee and commission income – is expected to rise in low single digits. As in 2020, positive momentum should again come from fund management, the securities business and insurance brokerage. Given the average result seen in 2020, the net trading and fair value result is expected to come in higher. This, however, will depend substantially on the financial market environment. The remaining income components are forecast to remain, by and large, stable. Overall, operating income should increase again in 2021. Operating expenses are expected to rise slightly in 2021, partly due to re-emerging wage pressure across all Erste Group markets. In addition, Erste Group will continue to invest in IT in 2021, and thus strengthen its competitive position, with a focus on progressive IT modernisation, back-office digitalisation and expansion of the digital platform George. The rollout of George in Hungary and Croatia should be completed in 2021, as a result of which customers will be able to access George in the six largest core markets. Though faced with more challenges in a largely unpredictable environment, Erste Group is striving to make operating income grow faster than costs. This leads Erste Group to project a rise in the operating result in 2021.

Based on the scenario described above, risks costs should decline again in 2021. While precise forecasting is hard in the current Covid-19 environment, Erste Group believes that in 2021 risk costs will not exceed 65 basis points of average gross customer loans. Due to the expected expiry of state support schemes a rise of the NPL ratio to 3-4% is expected though.

Other operating result is expected to remain unchanged in the absence of significant one-off effects. Assuming a tax rate of below 25% and a similar level of minority charges as in the previous year, Erste Group aims to achieve an improvement in net profit. Erste Group’s CET1 ratio is expected to remain strong. The management board proposes to the annual general meeting in May – in line with ECB recommendation – a dividend for 2020 of EUR 0.5 per share. An additional EUR 1/share has been reserved for a potential later payment.

Potential risks to the guidance are besides other than expected (geo)political, economic (monetary and fiscal policies) und regulatory measures and developments also global health risks or changes to the competitive environment. In addition, given the Covid-19 governmental measures and their impact on the economic development, financial forecasts are still subject to an elevated level of uncertainty. Erste Group is moreover exposed to non-financial and legal risks that may materialise regardless of the economic environment. Worse than expected economic development may put goodwill at risk.

Risk management

A core function of a bank is taking risks in a conscious and selective manner and professionally steering those risks. Adequate risk policy and risk strategy is essential to a bank’s fundamental financial health and operational business success.

Erste Group has developed a risk management framework that is forward-looking and tailored to its business and risk profile. This framework is based on a clear risk strategy that sets out general principles according to which risk taking must be performed across the Group. The risk strategy is consistent with the business strategy and incorporates the expected impact of external environment on the planned business and risk development.

The risk strategy describes the current risk profile, defines risk management principles, strategic goals and initiatives for the main risk types as well as sets strategic limits for the significant financial and non-financial risk types as defined in the Risk Materiality Assessment. The risk strategy is executed within a clearly defined governance structure. This structure also applies to monitoring of risk appetite, additional metrics, as well as to the escalation of limit breaches.

In 2020, when the Covid-19 pandemic has been the central topic worldwide – and hence also in our core markets, management has continued to steer credit portfolio, including active management of non-performing exposures to further strengthen the risk profile. A forward-looking approach was implemented in the Group and significant provisions were set aside to reflect the expected deterioration in asset quality as a result of worsening in the macroeconomic outlook due to Covid-19.


2020 was not only characterised by the Covid-19 induced crisis but also by several initiatives to address environmental topics mostly to curb global warming. On 15 January 2020, the World Economic Forum listed in its Global Risk Report climate change and related environmental risks as the five most likely risks events. While infectious diseases did not make Top 10 in terms of likelihood they ranked tenth in terms of impact. At that time hardly anyone could have imagined how soon such a risk in the form of a new coronavirus would spread worldwide and that in order to protect healthcare systems significant social restrictions and economic lockdowns were to be implemented on a global scale. The Covid-19 induced crisis resulted in significant adverse economic impacts, but it also demonstrated how much can be achieved if policymakers focus on common goals.

For Erste Group, considering the impact of its entrepreneurial activities on society or the environment is nothing new. On the contrary, looking beyond financial performance is very much in line with the principles to which Erste österreichische Spar-Casse committed itself when it was founded more than 200 years ago. The Management Board adopted a Statement of Purpose to reaffirm and state in more detail the purpose of Erste Group to promote and secure prosperity across the region. It defines the following tasks and principles:

_   Disseminating and securing prosperity

_   Accessibility, independence and innovation

_   Profitability

_   Financial literacy

_   It is about people

_   Serving civil society

_   Transparency, stability, simplicity