Development in the
core markets

Market review

Reflecting the muted economic performance, Austria’s highly competitive and developed banking market performed moderately in 2025. Total domestic assets amounted to 138% of GDP, significantly higher than in Central and Eastern Europe. The sector further strengthened its capitalisation levels. A still relatively weak sentiment led to customer loan growth of 1.8%. Corporate loans were mainly driven by financing needs for inventories and working capital, and grew faster than retail loans. Overall, corporate loans increased by 1.3%. Reflecting the low demand for housing and consumer loans, lending to households increased by 1.0%. The share of variable rate loans continued to decline further. Customer deposits increased slightly by 2.6%. Overall, the banking system’s loan to deposit ratio stood at 93.2% by year-end.

Financial intermediation - Austria (in % of GDP)

Source: Austrian National Bank, Erste Group

Stress test results, published annually by the Austrian National Bank, again confirmed that the domestic banking sector’s risk-bearing capacity was adequate. Funding and liquidity profiles remained strong. The Austrian banking sector’s liquidity ratios were high and comfortably above minimum requirements. In June 2025, the Austrian Financial Markets Authority (FMA) recommended, before expiry of the regulation on real estate financing measures in credit institutions (KIM-V; Kreditinstitute-Immobilienfinanzierungs-Verordnung), to maintain, in general, the macro-prudential measures (upper limits for loan-to-value ratios, debt-service-to-income levels and tenor). In addition, and following a recommendation of Austria‘s Financial Market Stability Board the sectoral systemic risk buffer for commercial real estate financing will be increased in two steps from 1.0% to first to 2% as of 1 July 2026 and then to 3.5% one year later.

The Austrian banking sector’s profitability declined. Net interest income was impacted by the lower interest rate environment. Net fee and commission income improved mainly due to payment and securities-related fees. Operating expenses rose mainly due to salary increases and higher IT-related expenses. Risk provisions increased but stayed at a comfortable level. The Austrian government significantly increased the banking levy from approximately EUR 150 million p.a. to EUR 500 million for 2025 and 2026. From 2027, onwards the banking levy should be reduced to EUR 200 million p.a. Overall, in 2025, the Austrian banking sector achieved an unconsolidated net profit of EUR 10.7 billion, down by 10.2% compared to 2024. 

Market share – Austria (in %)

Source: Austrian National Bank, Erste Group

Despite its large number of banks, the Austrian sector remained highly concentrated, with the top three banking groups accounting for more than half of total assets. Erste Bank Oesterreich and the savings banks succeeded in further increasing their combined market shares to between 22% and 25% in both retail and corporate business. Erste Group’s market share in the domestic asset management business stood at 22.0%. The number of customers using George, Erste Group’s digital banking platform, amounted to 2.6 million. In 2025, George’s product range was again widened, and the digital sales ratio stood at 35% in Austria.

Economic review

In 2025, the economic performance of the Czech Republic was strong. Growth was mainly driven by robust household consumption due to real wage growth and reduced household savings rates. Consumer confidence improved further. Investments also contributed to the economic performance benefitting from the growth of residential construction and an increase in inventories. Services performed well. Exports suffered due to weakening foreign demand for goods, most pronounced in the case of Germany, the country’s key trading partner. The automotive sector remained a key contributor to exports. The car industry employed 120,000 people and accounted for approximately 8% of the country’s economy. Production of passenger vehicles remained, by and large, stable. The unemployment rate increased to 2.9%, still among the lowest in the European Union. Overall, real GDP increased by 2.5%, and GDP per capita amounted to EUR 31,700.

Parliamentary elections were held in the Czech Republic in October, and a new three-party government was formed in December 2025. Although a major consolidation package, including a range of measures on both the revenue and expenditure side was introduced, the country’s budget deficit increased slightly to 2.1%. The higher deficit was mainly driven by increased defence spending. At 43.0%, public debt as a percentage of GDP remained one of the lowest in the European Union.

Rising food prices were a key driver of the slight increase in inflation. At 2.5%, consumer price inflation remained above the central bank target of 2.0%, but within the tolerance band of ±1 percentage points. Core inflation amounted to 2.7%. The Czech koruna appreciated by 3.7% against the euro. The Czech National Bank (CNB) reduced its key policy rate in two steps in 2025, from 4.00% to 3.50%.

The three major rating agencies maintained their sovereign ratings and outlook for the Czech Republic throughout the year. Fitch affirmed its credit rating at AA-, Standard & Poor’s at AA- and Moody’s at Aa3, each with a stable outlook. 

Market review

Backed by the strong macroeconomic performance, the Czech banking sector performed very well in 2025. Customer loans grew by 7.0%, driven more by retail than corporate lending. Retail loans increased by 8.4% due to strong demand for housing loans and the revival of consumer lending. Corporate loans grew by 4.3%, which was mainly attributable to investment loans. The CNB maintained its regulatory limits for mortgage lending and increased the minimum reserve requirement for banks from 2% to 4%. The systemic risk buffer was set at 0.5% as of 1 January 2025, and the counter-cyclical buffer was kept at 1.25% throughout the year. The CNB’s annual stress test confirmed the resilience of the sector, highlighting high capitalisation and robust profitability. Customer deposit inflows remained strong with a growth rate of 6.1%. Growth was more pronounced in the retail business. At year-end, the banking sector’s loan-to-deposit ratio stood at 64.1%, while the total capital ratio exceeded 20%.

Financial intermediation – Czech Republic (in % of GDP)

Source: Czech National Bank, Erste Group

The Czech banking sector remained highly profitable. Net interest income grew moderately: the decreasing key rate was offset by volume growth and lower cost of funding. Net fee and commission income rose on the back of higher income from card transactions, asset management and insurance business. Operating expenses remained under control as higher wages were partly offset by a lower number of branches. Asset quality remained very good, and risk provisions were low. Overall, the Czech banking sector achieved a return on equity of above 18% in 2025. 

Market shares – Czech Republic (in %)

Source: Czech National Bank, Erste Group

The three largest banks continued to have a combined market share of approximately 60% in customer loans and deposits. Česká spořitelna maintained leading market positions across all product categories. Retail lending market shares ranged from 24% to 27%, in corporate lending, they increased slightly to 23.0%. At 24.0%, the bank also retained the top position in consumer lending, including credit card business. Česká spořitelna also maintained its market leadership position in asset management with a market share of 24.7%. George mobile banking was the most used banking app on the market, both in terms of number of users and transaction volume.  Česká spořitelna had more than 3.5 million George users by the end of 2025. The digital sales ratio increased to 67%. Overall, Česká spořitelna’s market share in terms of total assets stood at 17.9%.

Business Review

Interview with Tomáš Salomon, CEO of Česká spořitelna

How did you add value to your customers?

In 2025, we deepened our commitment to helping people build stronger financial futures. Our goal is not only to provide banking services, but to empower customers to make confident, informed decisions about their long-term financial health. This vision guided all of our work throughout the year.

We continued to develop the George ecosystem into a truly intelligent financial companion – one that brings simplicity, safety, and personalisation to everyday banking. By strengthening tools that enhance financial awareness, support entrepreneurs, and offer greater repayment flexibility, we are making responsible financial management more accessible to everyone.

At the same time, we believe the future of banking lies in the synergy of digital innovation and human expertise. Our Future Lab branch in Prague showcases this vision: a space where customers can experience the possibilities of AI-driven banking while receiving thoughtful, personal guidance.

We even look for ways to bring joy and individuality into the customer experience – whether through tailored digital features or creative touches like gaming-themed payment cards. The continued improvement in customer satisfaction, client numbers, and financial performance shows that our long-term effort to elevate financial well-being is resonating. Our customers are telling us we are moving in the right direction, and we intend to keep raising the bar.

Which measures have you taken to improve the bank’s operating performance and efficiency?

In a rapidly changing world, operational excellence is not just about efficiency - it is about building a bank that can adapt, innovate, and lead. In 2025, we advanced this agenda significantly, ensuring that Česká spořitelna remains strong, agile, and ready for the future.

Our cost discipline and process optimisation kept the cost/income ratio below 45%, while we continued to modernise the foundations of our business. Digital transformation remains the backbone of our strategy: the George platform became more automated, more intuitive, and more supportive, thanks to AI-driven coaching and our “Hey George” digital assistant.

We also realigned our pricing and service structure to reflect evolving customer preferences, encouraging digital channels where convenience and efficiency naturally go hand in hand. At the same time, we continued shaping our branch network into a smarter, more connected system - one that combines digital sophistication with high-quality personal service.

Together, these steps strengthened the quality of our revenues, streamlined our cost base, and positioned us for sustainable growth. More importantly, they are laying the groundwork for a bank that is not only more efficient today but ready for the challenges and opportunities of the next decade.

Looking back at the year, what major achievements or challenges were especially noteworthy?

Celebrating our 200th anniversary in 2025 was more than commemorating history, it was a reminder of the responsibility we carry as the country’s oldest and largest bank. This legacy fuels our ambition to keep driving progress for our customers and for the Czech economy.

It was also a year of important achievements: Česká spořitelna penzijní společnost, our pension savings company, became the largest administrator of long-term savings in the Czech Republic. On top of that, and for the first time, more than 700,000 customers entrusted us with their investments. These milestones show that people increasingly look to us as a partner that can help them navigate a complex financial world and prepare for the future.

Our achievements were reflected in the recognition we received. Internationally, Euromoney named Česká spořitelna the Best Bank in the Czech Republic, and we earned four first-place awards in the Customer Centricity World Series. Domestically, we led the Golden Crown rankings and secured top positions in both the Visa Best Bank and Mastercard Bank of the Year awards – achieving an unprecedented back-to-back double.

These accomplishments affirm that our strategy is working. But more importantly, they strengthen our resolve to keep trans-forming the bank for the next generation, guided by the same purpose that has driven us for two centuries: helping people and communities thrive.

Financial review

The segment analysis is done on a constant currency basis. The CZK appreciated by 1.7% against the EUR in the reporting period. Net interest income in the Czech Republic segment (comprising Česká spořitelna Group) increased on the positive contribution of lending business and lower expenses for customer deposits. The increase in net fee and commission income was mainly driven by higher fees from securities and insurance brokerage. Net trading result and gains/losses from financial instruments at FVPL deteriorated slightly on negative valuation effects. Operating expenses increased due to higher personnel as well as IT and marketing costs. Contributions into the deposit insurance fund remained, by and large, stable at EUR 16 million. Overall, the operating result increased, while the cost/income ratio deteriorated marginally. Impairment result from financial instruments deteriorated on lower releases driven by the recalibration of the risk parameters. Other result improved on the selling gains from real estate and release of provisions for legal expenses, partially offset by higher selling losses from bonds. Contribution to the resolution fund decreased to EUR 6 million (EUR 20 million). Altogether, these developments resulted in a higher net result attributable to the owners of the parent.

Credit risk

Credit risk exposure in the Czech Republic segment rose to EUR 94.1 billion (+4.7%), and loans to customers significantly increased to EUR 49.4 billion (+12.1%). This growth was mainly attributable to the development in the private individuals business (+12.5%). Large corporate business also expanded significantly. Customer loan volume as a percentage of Erste Group’s total loans to customers increased to 20.9% (19.9%). In terms of business volume, the Czech Republic is the second most important market for Erste Group after Austria as of year-end 2025. Non-performing loans as a percentage of total loans to customers improved to 1.6% (1.8%). Loan loss provisions increased slightly leading to higher coverage of non-performing loans to a level of 104.9% (101.9%).

Economic review

In 2025, the Slovak economy – with strong automotive and services sectors – grew by 0.8%. Economic growth was mainly attributable to household consumption and investment activity. The latter was significantly supported by the inflow of European Union funds. Net exports did not contribute to economic growth. Deterioration in foreign demand was pronounced last year, most visibly in relation to Germany. Slovakia has been the world’s largest producer of cars per capita since 2007, with a total of almost one million vehicles last year. Slovakia’s labour market remained solid. The unemployment rate increased slightly from a historic low of 5.3% a year ago to 5.4% in 2025. GDP per capita amounted to EUR 24,700.

The general government deficit improved somewhat, driven mainly by consolidation measures such as adjustments of VAT and corporate tax rates, along with the introduction of a financial transaction tax. On the expense side, the government continued to subsidise energy prices for households. The combined budgetary cost of the energy measures accounted for 0.3% of GDP.  Overall, the general government deficit decreased to 4.8% of GDP. The country’s public debt as a percentage of GDP increased slightly to 61.8%. To further reduce the deficit in 2026, the Slovak government also introduced a variety of measures, such as fewer public holidays, higher healthcare contributions, higher progressive income tax and a partial wage freeze in the public sector. 

Inflation rose mainly due to an increase in the value-added tax rate for most goods and services. The government introduced a new support scheme for households with direct subsidies for gas and electricity prices and vouchers for heating-related expenses. The government also approved plans to extend gas and heat price caps for the majority of households in 2026. Food prices increased moderately while inflation of services remained relatively high. Overall, average consumer price inflation amounted to 4.0%. Slovakia’s monetary policy is set by the ECB, which cut the key policy rate from 3.00% to 2.00% in four steps during the year.

In April 2025, Standard & Poor’s affirmed its credit rating for Slovakia at A+ but revised its outlook from stable to negative. The rating agency cited global trade tensions affecting Slovakia's automotive-heavy economy and potentially damaging fiscal consolidation efforts. Fitch kept its credit rating for Slovakia at A- and Moody’s at A3, both with a stable outlook.

Market review

Despite the moderate economic backdrop and elevated sector taxes, the Slovak banking market performed well. Customer loans grew by 6.9%. Retail loans increased by 6.8% driven by the revival of mortgage lending and strong demand for consumer loans. The latter was significantly supported by declining interest rates. In addition, the Slovak government continued to subsidise housing loan repayments. The National Bank of Slovakia kept macroprudential measures unchanged, including limits for debt-service-to-income (DSTI), debt-to-income (DTI) and loan-to-value (LTV) ratios. The countercyclical buffer has also been kept unchanged at 1.50% since August 2023. At 5.5%, customer deposits grew less than loans. The inflow of retail deposits was impacted by a retail government bond programme issued in March 2025. The asset management business performed very well and grew by 12.0%. Corporate deposits increased by 3.2%. The banking system’s loan-to-deposit ratio stood at 104.8%. 

Financial intermediation – Slovakia (in % of GDP)

Source: National Bank of Slovakia, Erste Group

The Slovak banking market remained profitable. Operating income grew, supported by both net interest income and net fee and commission income. Net interest income benefitted from loan growth and still from the gradual repricing of the fixed-rate mortgage loan portfolio. Fee and commission income was driven mainly by asset management and insurance-related fees. Despite rising personnel expenses, operating expenses remained under control with the sector cost/income ratio almost unchanged at 45.7%. Banks continued to reduce their branch networks. Asset quality remained very solid, and risk costs were low. While the special bank levy declined, net profit was negatively affected by higher corporate income tax, which increased from 21% to 24%. In addition, the government introduced a financial transaction tax as of April 2025. The banking sector remained well capitalised. The Slovak banking sector recorded its third most profitable year ever and achieved a return on equity of 7.7%.

Market shares – Slovakia (in %)

Source: National Bank of Slovakia, Erste Group
 

The three largest banks in Slovakia control approximately 70% of the country’s banking market. Consolidation of the sector continued. KBC Group announced the acquisition of a 98.45% stake in 365.bank from J&T Finance Group. Slovenská sporiteľňa remained the country’s largest bank. Its market shares in both customer loans and deposits amounted to approximately 23%. Market shares were higher in the retail segment than in the corporate segment. In the retail business, market shares stood between 25% and 28%. In addition, Slovenská sporiteľňa was the country’s second-largest asset manager, with a market share of 21.0%. Slovenská sporiteľňa also maintained its leadership position in digital banking with more than 1.3 million registered George users. 

Business Review

Interview with Peter Krutil, CEO of Slovenská sporiteľňa

How did you add value to your customers?

Last year, we delivered significant value to customers by improving their experience, strengthening financial well‑being services, and providing faster, more intuitive digital solutions. We achieved a +4‑point surplus in our relative Customer Experience Index relative to the other top 3 banks. This shows that customers perceived our service quality as superior to that of major competitors.

In 2025, Slovenská sporiteľňa significantly expanded and deepened its Financial Health Advisory (FHA) proposition, positioning it as a core pillar of client value creation. The bank provided such advisory to more than 250,000 people, thus broadening the access to tailored guidance that helped customers to better understand their savings and investments as well as overall financial resilience. This development was strengthened by the tighter integration of advisory tools across channels: improvements in George, the tablet advisory environment, and the introduction of support tools, which enriched advisor preparation; all of which nudged clients toward better decisions through data‑driven insights. These enhancements enabled higher advisory availability, increased the consistency of services and helped the bank to maintain its leadership ambitions in multi‑channel advisory.

We launched new digital features such as George ID, the pension calculator and migrated George to the cloud. These enhancements increased service availability, improved onboarding and made it easier for customers to manage their finances independently. The introduction of a real‑time AI whisperer in the call center boosted the accuracy and consistency of support during live conversations.

Finally, in response to regulatory changes, we delivered the infrastructure for handling the financial transaction tax and automated account openings, enabling us to successfully onboard 75,000 new micro‑clients without service slowdowns. Together, these steps elevated our customer experience, strengthened our advisory value, and improved convenience across all channels.

Which measures have you taken to improve the bank’s operating performance and efficiency?

Throughout 2025, we carried out multiple initiatives that strengthened the bank’s operational efficiency and thus profitability.

We launched a new mortgage process, which reduced internal complexity and operating costs by replacing older systems. Optimised workflows also benefited customers. Alongside this, we expanded AI‑driven automation across internal processes, including document handling and coding support, which reduced manual workload and improved speed.

The bank advanced its major strategic initiative of automating the corporate lending process, a critical step toward better risk control, more accurate processing and faster decision cycles. Additionally, we upgraded the omnichannel campaign management platform to enable more targeted communication and a higher level of personalisation.

We are also improving internal “ways of working” by standardising best practices across teams and introducing more effective discovery and validation processes, including sparring sessions for key initiatives. This strengthened project execution quality and reduced the risk of delays or inefficiencies.

Together, these measures laid the foundations for sustainable efficiency improvements.

Looking back at the year, what major achievements or challenges were especially noteworthy?

The year 2025 brought several significant achievements. We achieved strong results in becoming the primary bank for customers, in deposit market share, CXI performance, and employee engagement, which exceeded 80%. Slovenská sporiteľňa was recognised as the Best Employer in the financial sector by the PROFESIA portal - our eighth time receiving this award - highlighting the strong commitment and engagement of our employees.

Our digital platform, George, also earned the SmartBank Award, voted on directly by users. We won in two categories: Best App (reflecting the highest client satisfaction) and Investments.

Challenges remained, particularly government interventions (special bank tax, financial transaction tax, and support for people with higher housing loan interest rates), which affected our profits. Nonetheless, we managed these difficulties as effectively as possible, turning them into competitive strengths and ensuring the impact on our clients was as limited as possible.

Financial review

Net interest income in the Slovakia segment (comprising Slovenská sporitel’ňa Group) increased due to higher customer loan volumes and repricing of fixed-rate loans, as well as lower expenses for customer deposits. These effects were partially offset by lower income from central bank placements. Net fee and commission income increased on the back of higher insurance brokerage and securities fees. Net trading result and gains/losses from financial instruments at FVPL decreased due to valuation effects. Operating expenses went up mainly due to higher personnel, IT and marketing expenses. The contributions to the deposit insurance fund amounted to EUR 2 million (EUR 3 million). Operating result increased, and the cost/income ratio improved. Impairment result from financial instruments worsened due to higher allocations in the retail business and lower releases driven by the recalibration of risk parameters. Other result worsened mainly due to provisions related to the governmental mortgage loan subsidy, partially compensated by a better valuation result of a participation. The banking tax, booked in the taxes on income line, amounted to EUR 67 million (EUR 103 million). Overall, the net result attributable to the owners of the parent increased.

Credit risk

Credit risk exposure in the Slovakia segment rose to EUR 32.3 billion (+9.3%), and loans to customers increased at a slower but still significant pace to EUR 21.1 billion (+6.6%). Their share of Erste Group’s total loan portfolio remained unchanged at 8.9%. Loan growth was driven mostly by private households, while business growth of corporate customers was more moderate. The share of loans to private households was again significantly larger in the Slovakia segment than in Erste Group’s other core markets and accounted for 68.4% (67.8%) of total loans to customers. This customer mix, with a substantial proportion of retail mortgage loans, also explains the large share of secured business. At year-end, it slightly increased to 53.6% (52.7%), still exceeding that of other Central and Eastern European core markets. The NPL ratio moderately increased to 2.2% (1.9%), and the NPL coverage ratio stood at 81.5% (92.3%).

Economic review

In 2025, the Romanian economy grew by 0.6%. The main contributor to economic growth was investment activity related to infrastructure projects funded by the European Union. Inflows of EU funds from the regular Multiannual Financial Framework and NextGenerationEU amounted to EUR 15.2 billion. Unlike in other CEE countries, consumer sentiment was rather weak, with fiscal consolidation significantly affecting household consumption. Consumption was negatively impacted by elevated inflation, the freeze of pensions and public wages and various tax increases. Net exports did not contribute to economic growth due to weak external demand. Change in inventories was a negative contributor to real GDP growth. Agriculture, on the other hand, improved from 2024 when a severe drought hit the sector. The unemployment rate increased to 6.0%. GDP per capita rose significantly to EUR 20,000. 

Political uncertainty following the presidential elections and the resignation of the prime minister led to temporary concerns in financial markets. A new government was formed in June 2025. At 8.0%, Romania’s budget deficit remained relatively high. In July 2025, the parliament adopted additional fiscal consolidation measures, comprising significant tax increases (such as higher VAT rates and higher sectoral taxes) and an extension of the nominal freeze in wages and pensions until 2026. Public debt to GDP increased further to 59.2%.

At 7.3%, Romania’s inflation was the highest in the European Union in 2025. The removal of the electricity price cap in July and the indirect tax hikes in August significantly contributed to this. Core inflation, excluding food and energy prices, increased by 8.5%. The Romanian leu depreciated slightly against the euro. The National Bank of Romania kept its key policy rate unchanged throughout the year at 6.50%.

All three major rating agencies reacted to political uncertainty. Standard & Poor’s, Fitch and Moody’s revised their outlook from stable to negative while affirming their ratings, Standard & Poor’s and Fitch at BBB- and Moody’s at Baa3.

Market review

Despite macroeconomic headwinds and significantly higher sectoral taxes, the Romanian banking market recorded another successful year. Customer loans increased by 6.1%, and customer deposits were up by 6.9%. Lending growth was mainly driven by the retail sector. Housing loans, despite still elevated interest rates, increased by 6.5%, and consumer loans rose by 10.3%. Corporate loans were up by 4.5%. The growth in customer deposits was higher in the retail business, where they rose by 8.1%. Corporate deposits increased by 5.0%. Overall, the banking system’s loan-to-deposit ratio stood at 66.2%. The Romanian National Bank maintained the countercyclical capital buffer at 1.0% throughout the year. At a capital adequacy ratio of 24.4%, the Romanian banking sector remained strongly capitalised.

Financial intermediation – Romania (in % of GDP)

Source: National Bank of Romania, Erste Group

Net interest income was supported by the interest rate environment and volume growth. Fee and commission income also rose, mainly attributable to securities business and insurance-related fees. Expenses were particularly driven by higher salaries. Banks continued to adjust their branch networks. 

Market shares – Romania (in %)

Source: National Bank of Romania, Erste Group
 

Asset quality remained strong, and risk provisions were low. The NPL ratio of the sector stood at 2.7% while the NPL coverage ratio amounted to 65.1% at the end of the year. As part of its consolidation package, the government doubled the special tax of the banking sector from 2% to 4% of operating revenues as of July 2025. Overall, the Romanian banking sector achieved a return on equity of 17.6%.

Consolidation of the Romanian banking market continued. Banca Transilvania completed the integration of OTP Bank Romania, boosting its total asset market share further and cementing its leadership position. UniCredit finalised its merger with Alpha Bank Romania in August, creating the country’s third-largest banking group. Banca Comercială Română remained the second largest bank in the country, both in terms of total assets as well as customer loans and deposits. Its customer loan market share stood at 14.4%. The retail loan market share amounted to 17.4%, while in the corporate business it was 11.7%. The number of customers using George, Erste Group’s digital banking platform, increased to 2.3 million. The digital sales ratio increased to 91.6%. 

Business Review

Interview with Sergiu Manea‚ CEO of Banca Comercială Română

How did you add value to your customers?

In 2025, our focus was on integrating digital innovation with personalised financial health, significantly advancing both our retail and corporate franchises.

A major milestone was the complete transition to George Business, onboarding over 10,000 SME and corporate clients to this new standalone platform, which now processes around EUR 9 billion in monthly transactions and received highly positive feedback.

We launched George Benefits, the first banking loyalty programme in Romania rewarding retail clients with progressive benefits linked to their own financial goals. This innovative system allows clients to activate benefit bundles, including preferential interest rates for loans and deposits. For goal setting, customers are assisted by FinCoach, a planning tool using predictive analysis to provide actionable, tailored recommendations and educational resources. Currently, 65% of our customers are enrolled in George Benefits, and over 900,000 financial health dialogues have been conducted.

Further features were added to George, e.g. AI-powered assistance, new financial guidance tools, instant transfers and QR payments through RoPay, in‑app video call support or Move & Save, which integrates physical activity with savings habits.

Which measures have you taken to improve the bank’s operating performance and efficiency?

Last year, we implemented AI-driven solutions to streamline internal workflows and standardise advisory processes. We specifically targeted operational friction in corporate lending, improving processing time for loan drawdowns by 80%. Insurance policy workflows for mortgages were simplified, halving processing time. These measures enhanced accuracy, scalability and freed staff for higher-value tasks. Currently, 25% of our colleagues are using AI assistants daily.

Furthermore, front-office productivity accelerated with the launch of M-Powered Advisors, a mobile platform with over 1,000 relationship managers already onboarded. By embedding learning, coaching, and performance feedback into daily activity, 
M-Powered Advisors shifted time away from operational tasks toward meaningful client interactions, with daily usage exceeding 90%.

Operating income grew faster than costs, supported by customer acquisition and solid lending demand, while interest rates remained rather stable year-on-year. We remained selective about new business relative to the risk-weight impact, to preserve asset quality and risk indicators. As a result, BCR achieved a new record bottom line despite prudent risk provisioning.

Looking back at the year, what major achievements or challenges were especially noteworthy?

Despite a challenging political and macroeconomic environment, we demonstrated the resilience of our strategy by steadfastly supporting the real economy and expanding our societal footprint.

In 2025, BCR financed around 6,400 companies, supporting over 310,000 jobs. BCR Leasing exceeded EUR 1 billion in the financed portfolio, marking a major milestone on the local financial leasing market. We also attracted 157,000 new customers through a retail acquisition and activation campaign, with total sales rising by 60% and cash loan origination market share reaching 25%. In housing, we processed nearly 9,000 loans totalling RON 3.5 billion through our expanded 15-centre Xpert Casa dedicated network, raising our total mortgage production market share to over 30%. Today, nearly 95% of all retail products are sold online.

We scaled up ZBOR, Romania’s largest youth ecosystem, to over 67,000 participants and 9 hubs, and launched a mobile app that attracted 13,000 users in two months, offering financial education, life skills, mentoring, and competitions. Money School reached 1.9 million Romanians, while LifeLab, our interdisciplinary financial literacy programme, provided free online resources to 14,000 teachers and 21,000 students.

On a different note, we issued an EUR 500 million Eurobond, achieving one of the most competitive margins ever for an MREL-eligible Romanian bank issue. BCR also went local with another senior non-preferred issue of RON 1.12 billion, and achieved the narrowest spread for this debt type of a Romanian bank in recent years.

Last but not least, BCR was acknowledged in Davos and Bucharest for its innovative financial education and communication campaigns, received international awards for excellence in private banking services, earned an HR award for its forward-looking people strategy, and ranked 7th among the most valuable companies in Romania.

Financial review

The segment analysis is done on a constant currency basis. The RON depreciated by 1.4% against the EUR in the reporting period. Net interest income in the Romania segment (comprising Banca Comercială Română Group) was positively impacted by higher loan volumes, higher income from securities investments and lower expenses for customer deposits. Net fee and commission income went up mainly on higher payment and securities fees. The net trading result and gains/losses from financial instruments at FVPL increased due to an improved contribution from FX business as well as higher income from money market instruments and interest rate derivatives. Operating expenses increased mainly due to IT and marketing expenses. The deposit insurance contribution remained unchanged at EUR 4 million. Overall, both operating result and the cost/income ratio deteriorated. The impairment result from financial instruments worsened mostly due to new defaults, partly mitigated by parameter updates. Other result was positively impacted by the release of provisions for legal risks in relation to business activities of the local building society and the release of provisions for other legal expenses. This was partially offset by the increase in banking tax to EUR 63 million (EUR 37 million) and a higher contribution into the resolution fund of EUR 7 million (EUR 6 million). Overall, the net result attributable to the owners of the parent increased.

Credit risk

Credit risk exposure in the Romania segment rose to EUR 30.2 billion (+8.9%). Loans to customers increased to EUR 14.8 billion (+5.7%). Their share in Erste Group’s total customer loan portfolio remained unchanged at 6.3%. An expansion of lending volume was seen more in the retail than in the corporate segment. Non-performing loans increased to EUR 366 million (+3.5%), mainly attributable to the retail segment. Non-performing loans as a percentage of total loans to customers increased slightly to 2.7% (2.6%). Loan loss provisions decreased and the coverage of non-performing loans stood at a comfortable 132.0% (168.7%).

Economic review

In 2025, Hungary’s economic growth was mainly driven by household consumption, which was supported by continued positive real wage gains and the initial steps of pre-election fiscal easing. Investments remained a drag on economic growth due to the postponement of investment projects, subdued inflow of European Union funds and a relatively low level of business confidence. Net exports were impacted by weaker external demand and did not contribute to economic growth. Foreign direct investments benefited again from China as Hungary became its top investment destination in Central Europe. One fourth of the country’s manufacturing output was produced by German and Chinese carmakers. The unemployment rate remained almost unchanged at 4.4%, low compared to many other European countries. Overall, real GDP increased by 0.4%, and GDP per capita amounted to EUR 22,800.

Parliamentary elections are scheduled for April 2026, and the government gradually introduced a series of pre-election measures already in 2025, such as higher pension payments, various tax benefits for families and state subsidies for some retail and corporate loan programmes, all of which which impacted expenses. These were partly offset by the postponement of state investments. Revenues, on the other hand, were supported by further adjustments of the banking tax and the prolongation of windfall taxes for financial, energy and retail companies. Overall, Hungary’s general government deficit stood at 5.0% at the end of the year. Public debt to GDP increased slightly to 74.1%. 

As in most of its CEE peer countries, inflation increased in Hungary. The main driver of inflation was higher food prices. Many administrative price-controlling measures, along with a stronger forint, helped moderate price increase though. Overall, average consumer price inflation stood at 4.4% while core inflation, excluding food and energy prices, was 4.6%. The Hungarian forint appreciated by 7.0% against the euro and was among the best-performing currencies in CEE. The Hungarian National Bank kept its key policy rate unchanged at 6.50% throughout the year. 

In April 2025, Standard & Poor’s affirmed Hungary’s sovereign rating at BBB- but revised the country’s outlook from stable to negative. The rating agency cited concerns over fiscal consolidation paths and potentially worsening public finances ahead of the elections in April 2026. In December 2025, citing the same reasons, Fitch also revised its outlook from stable to negative and kept the country’s long-term credit rating unchanged at BBB. Moody’s also kept the country’s long-term credit rating unchanged at Baa2 with a negative outlook.

Market review

Despite the moderate macroeconomic development and high banking taxes, the Hungarian banking sector performed well. Customer loans grew by 8.5%, driven by retail business. Retail lending, up by 14.4%, was mainly driven by housing loans. Corporate loan growth amounted to 3.6%, reflecting muted demand for investment loans. Various state subsidies and support programmes continued to play a significant role. In retail lending, the Home Start programme to support first-time home buyers, had a positive growth impact. The government also introduced a Workers’ Loan programme, which offers subsidised loans for young blue-collar workers. Programmes introduced in the previous year, such as CSOK Plus (subsidised housing programme for families), Baby Loans and the Home Renovation subsidy, remained in place. Customer deposits increased by 5.5%, driven almost entirely by retail deposits. Overall, the banking system’s loan-to-deposit ratio stood at 73.7%. 

Financial intermediation – Hungary (in % of GDP)

Source: Hungarian National Bank, Erste Group

Profitability of the Hungarian banking sector remained strong. Net interest income declined slightly. The government further extended the interest rate cap for variable and certain fixed-rate residential mortgages until 30 June 2026. The Hungarian National Bank decided to cut the mandatory reserve requirement from 10% to 8% with effect from 1 August 2025. Net fee and commission income grew significantly benefitting from strong asset management business. Administrative expenses remained under control, although the increase in personnel expenses was visible. The number of branches decreased further. In April 2025, the Hungarian government passed a law that obliges banks to ensure access to cash withdrawal services by installing and operating ATMs in every municipality. Asset quality developed favourably, and risk costs were low. 

Market shares – Hungary (in %)

Source: Hungarian National Bank, Erste Group


Banks continued to pay banking and transaction taxes. The windfall tax, which was originally temporarily implemented for 2022 and 2023, was again extended to 2026 at an increased tax rate. In addition, tax reductions through purchases of government bonds were modified. The Hungarian National Bank increased the countercyclical capital buffer from 0.5% to 1.0% as of 1 July 2025. Overall, the banking sector’s return on equity remained very strong, and the banking sector continued to be well capitalised, with a capital adequacy ratio of around 20%.

The Hungarian banking market continued to be dominated by OTP Bank, followed by Magyar Bank Holding (MBH). In 2025, Revolut received approval to establish a Hungarian branch and launched its operations, offering a broad range of financial services to local customers. Erste Bank Hungary remained one of the major market players in the country. Its market share in terms of customer loans stood at 8.8%, with retail business remaining more dominant than corporate business. The customer deposit market share increased to 8.9%. The bank’s market share in asset management stood at 16.4%. The number of George users increased further to more than 800,000 by the end of the year. At 6.4%, Erste Bank Hungary was the fourth-largest bank in the country in terms of total assets. 

Business Review

Interview with Radován Jelasity, CEO of Erste Bank Hungary 

How did you add value to your customers?

At Erste Bank Hungary, our philosophy focuses on three priorities: satisfied employees, satisfied customers, and satisfied shareholders. The commitment to our clients is reflected in our top-tier Customer Experience Index on the Hungarian market.

Erste has always aimed to lead in digitalisation and innovation. We further developed our digital proposition to provide even better service and convenience. As a result, our digital sales ratio and the number of digitally active customers  continued to grow – three out of four clients are digitally active. The George platform offers one of the broadest product ranges – confirmed by independent surveys and customer feedback. George has evolved into the primary interface for advice, onboarding, and engagement across the digital channel. Today, nearly 80% of digitally active clients use George exclusively for transactions, and more than half of all sales happen through digital channels. 

We also launched AI solutions, like our in-house chatbot, helping branch and contact centre teams respond faster and more accurately to client inquiries. Beyond technology, we promote financial health, investments, financial education, personalised portfolio tips, and initiatives such as gifting gold funds to new savers in our recent campaign. We were the first bank in the country to publish a children’s book on financial literacy. Finally, we actively took part in state programmes, introducing various new government-subsidised loans.

Which measures have you taken to improve the bank’s operating performance and efficiency?

Efficiency has always been part of our DNA, delivering clear results: revenues have grown significantly faster than costs, bringing our cost/income ratio (CIR) to the mid 30ies. Despite substantial increases in salaries and investments, this proves our operations are scalable. We remain committed to a long-term CIR target of up to 40%.

In addition, we are confident regarding Hungary’s growth potential – both in retail and corporate lending. To strengthen efficiency further, we started an agile transformation, aimed at responding faster to customer needs and improving operational flexibility. 

In parallel, we launched a comprehensive IT modernisation programme and continued our Champions Programme, where each business area appoints a dedicated champion to lead efficiency initiatives with support from our specialised efficiency team. These steps ensure modernisation and cultural engagement across the organisation.

Looking back at the year, what major achievements or challenges were especially noteworthy?

2025 was an exceptional year for Erste Bank Hungary. We maintained an excellent cost/income ratio. Our assets under management continued to exceed the bank’s balance sheet total, and we sustained the highest investment account penetration – both within Erste Group and across the Hungarian market.

Beyond financial results, I am proud of our colleagues and their strong engagement. In 2025, Erste Bank Hungary became the top employer in the country according to Wherewework’s Award and was runner-up  in the PwC most attractive workplace in financial services category. Our ESG efforts were recognised when we were named Green Bank of the Year in Hungary, reflecting our commitment to sustainability.

However, challenges remain. Increasing efficiency through end-to-end digitalisation and service streamlining is a key priority. Scaling AI implementation and ensuring smooth cooperation with the government on tax matters also require focus. Additionally, macroeconomic pressures – such as inflation and slower growth – continue to shape the environment. Despite these, our achievements demonstrate resilience and the strength of our strategy.

Financial review

The segment analysis is done on a constant currency basis. The HUF depreciated by 0.6% against the EUR in the reporting period. Net interest income in the Hungary segment (comprising Erste Bank Hungary Group) decreased on a lower contribution from loans and central bank placements driven by lower market interest rates. Net fee and commission income rose mainly on higher payment fees. Net trading result and gains/losses from financial instruments at FVPL declined due to valuation effects. Operating expenses increased due to higher personnel and IT expenses. The contribution to the deposit insurance fund remained stable at EUR 8 million. Overall, operating result remain stable, while the cost/income ratio deteriorated. Impairment result from financial instruments still benefited from net releases, albeit at a lower level. The improvement of the other result was primarily driven by the non-recurrence of breakage costs related to intragroup transactions in the previous period. Financial transaction tax went up to EUR 127 million (EUR 91 million). The banking tax amounted to EUR 48 million (EUR 76 million), it comprised the regular banking tax and a windfall profit tax of EUR 28 million (EUR 52 million). The contribution to the resolution fund decreased to EUR 1 million (EUR 2 million). Overall, the net result attributable to the owners of the parent increased.

Credit risk

Credit risk exposure in the Hungary segment significantly increased to EUR 14.7 billion (+19.9%). Loans to customers increased at a similarly impressive pace to EUR 6.9 billion (+18.7%). The share of the Hungary segment in Erste Group’s total loans to customers slightly increased to 2.9%. Loans in the retail segment rose to EUR 4.1 billion (+26.1%), loans to corporates increased to EUR 2.8 billion (+9.4%). Non-performing loans as a percentage of total loans to customers decreased to 1.6% (1.9%). The loan loss provision coverage of non-performing loans stood at 119.4% (123.2%).

Economic review

The Croatian economy achieved one of the strongest growth rates among the CEE countries in 2025. Economic growth was mainly driven by domestic demand and investment activity. The latter remained robust throughout the year benefitting significantly from inflows of European Union funds. Investments in the construction sector were particularly strong. Exports, on the other hand, were impacted by weaker external demand. Tourism delivered a solid performance, with a marginal increase in overnight stays. Croatia’s labour market remained strong, and the unemployment rate declined to a new record low of 4.9%. Overall, real GDP increased by 3.0%. GDP per capita amounted to EUR 23,900. 

Despite the increasing general government deficit Croatia’s public finances remained sound. Windfall taxes, phasing out of exemptions on health contributions for young workers and the elimination of the temporary VAT rate reduction for several product categories all had positive effects. Expenses increased due to a significant rise in social benefits such as aids to vulnerable people as well as higher pensions and public sector wages. Overall, Croatia maintained fiscal discipline with a general government deficit of 2.9% of GDP. Public debt as a percentage of GDP decreased to 56.5%.

Similar to most of the other CEE countries, inflation in Croatia increased. Reflecting strong domestic demand, inflation in services – especially in tourism – remained high. Food prices increased significantly while energy prices rose only moderately. Overall, average consumer prices increased by 3.7%. Croatia’s monetary policy is set by the ECB which cut the key policy rate from 3.00% to 2.00% in four steps during the year.

Rating agencies did not change their ratings on Croatia throughout the year. Fitch kept the long-term credit rating at A- with a  stable outlook. Moody’s affirmed the rating of A3 with a stable outlook. Standard & Poor’s left the rating at A- with a positive outlook. 

Market review

Reflecting the favourable macroeconomic developments, the Croatian banking market continued to perform well in 2025. Customer loans grew by 11.1%, driven by continued strong demand for retail loans and a revival in corporate lending. Retail loans grew by 12.8%, mainly attributable to strong demand for housing loans and resilient consumer lending. At 9.2%, corporate lending growth was significantly higher than in the previous year. The Croatian National Bank tightened macroprudential measures as of July 2025: debt service to income was limited to 45% for housing loans and to 40% for  non-housing loans. The loan to value ratio was capped at 90%. In addition, the countercyclical capital buffer will be raised from 1.5% to 2.0% as of 1 January 2027. Customer deposit growth amounted to 7.2%. While retail deposits increased by 7.0%, corporate deposits rose by 7.7%. At year-end, the banking system’s loan-to-deposit ratio stood at 73.8%.

Financial intermediation – Croatia (in % of GDP)

Source: National Bank of Croatia, Erste Group


The profitability of the Croatian banking sector remained very strong. Net interest income benefited from strong loan growth. Fee and commission income was significantly supported by the asset management business. Despite wage inflation operating expenses remained under control, and the cost/income ratio equalled 42.9%. Asset quality remained very strong. The share of non-performing loans as a percentage of gross loans stood at 2.3% at the end of the year. The coverage ratio stood at 65.4%. Similar to the previous year, banks did not have to pay banking tax. The banking system’s capital adequacy ratio amounted to 22.7%. Overall, the country’s banking sector achieved a return on equity of 14.6%. 

Market shares – Croatia (in %)

Source: National Bank of Croatia, Erste Group

There was no noteworthy M&A transaction in 2025. Erste Bank Croatia remained among the three largest banks in the country. The bank increased its George clients to almost 800,000. The digital sales ratio reached 70.4%. In addition, the digital platform KEKS Pay reached 576,000 users, of which 78% were not customers of Erste Bank Croatia. In terms of total assets, the bank had a market share of 17.6%. The bank’s customer loan and customer deposit market shares stood at 18.5% and 17.3%, respectively. Market shares in corporate business exceeded those in retail business. The bank’s market share in asset management reached 18.2%. The bank’s loan-to-deposit ratio amounted to 77.0%. 

Business Review

Interview with Christoph Schöfböck, CEO of Erste Bank Croatia

How did you add value to your customers?

The project of designing our future operating model, based on agile structure and principles, continued at maximum pace during 2025. In order to enable the next level of customer experience, increase product delivery efficiency, decreased bureaucracy and recognise further growth potential, cross-functional teams, consisting of business and IT experts, have been working together. Each team is responsible for the end-to-end product life cycle and demand management, which contributes to a closer, faster and more client-oriented approach in the market. 

Our goal is to enable a more efficient and value-driven organisation, placing a successful and efficient customer journey at the top of our strategic pillars. 

Which measures have you taken to improve the bank’s operating performance and efficiency?

Several initiatives in various areas have been implemented to further improve our operating performance and efficiency. Apart from continuous efforts on the digitalisation of our products and services, as well as the automatisation of internal processes, we have achieved two major strategic milestones related to our future business model. Following the integration of the card issuing business from Erste Card Club (ECC) into the bank already in October 2024, we sold the acquiring business segment of ECC to Global Payments last year. This was a logical step in our strategic orientation toward improving the overall model of the cards’ payments business. We will intensify our cooperation with Global Payments, which will raise the quality of the card acceptance business, increase the level of customer satisfaction of both merchants and credit card users, and support the development of payment opportunities and innovative functionalities.

In addition, our internal start-up KEKS Pay became a separate company, currently owned 100% by the bank. The goal was to provide the new company more room for independent development, innovation and strategic initiatives, including expansion into new markets.

Looking back at the year, what major achievements or challenges were especially noteworthy?

Generally speaking, we continued our stable and growing operating trends which again resulted in positive financial results. We have seen an uptrend in lending in both segments, retail and corporate. Client deposits also recorded stable growth rates, while the use of our digital channels continued on a solid upward trajectory. A very strong capital position and high level of liquidity enable us to not only adequately support our clients, continue with our digital innovations and further strengthen our position on the  local market, but also to provide an additional boost to the growth and development of the entire Croatian economy. 

I am also proud that our bank again received several prestigious awards last year. For the second year in a row, the Croatian Chamber of Commerce awarded us for outstanding achievements in ESG practices in the category of financial institutions. The award is given to companies based on an extensive national ESG rating. Furthermore, and again for the second consecutive year, we have been awarded by The Croatian Business Council for Sustainable Development in the category of Sustainable Corporate Governance. In addition, the Erste Private Banking team in Croatia received an award from the prestigious Global Finance Magazine for the best private banking.

Financial review

Net interest income in the Croatia segment (comprising Erste Bank Croatia Group) decreased moderately on higher expenses for customer deposits influenced by higher volumes, partially mitigated by higher income from customer loans driven by higher volumes and higher income from central bank placements. Net fee and commission income went up mainly on higher payment fees. Net trading result and gains/losses from financial instruments at FVPL was, by and large, stable. Operating expenses went up on the back of higher personnel, IT, as well as legal and consultancy costs. The contribution to the deposit insurance fund amounted to EUR 4 million (EUR 3 million). Overall, both operating result and the cost/income ratio deteriorated. Impairment result from financial instruments worsened due to the recalibration of risk parameters, particularly in the retail segment, due to the merger of a subsidiary. The improvement of the other result was primarily driven by the non-recurrence of last year’s negative one-offs. Overall, the net result attributable to the owners of the parent decreased, despite the non-recurrence of an additional windfall tax in the amount of EUR 6 million booked in the taxes on income line.

Credit risk

In the Croatia segment, credit risk exposure increased to EUR 18.0 billion (+8.3%), and loans to customers grew at the same pace to EUR 10.8 billion (+8.3%). Its share in Erste Group’s total loans to customers increased slightly to 4.6% (4.5%). The share of the retail segment of the loan portfolio increased to 48.3%, while the share of the corporate segment decreased to 51.7%. The NPL ratio decreased to 2.8% (3.1%). The NPL coverage ratio based on loan loss provisions increased to 96.0% (94.2%).

Economic review

In 2025, Serbia’s economic performance was mainly driven by household consumption. External demand was relatively weak, reflecting the slower growth of the country’s main trading partners, especially Germany. FDI inflows and investment activity in general were not as strong as in the previous year. Agriculture recorded a moderate output. At 8.6%, the unemployment rate remained unchanged. Real GDP grew by 2.0%, and GDP per capita advanced to EUR 13,500.

Serbia maintained a relatively sound fiscal position. While revenues benefitted from increasing domestic demand, expenses increased due to higher subsidies, higher pension payments and defence-related spending. Belgrade, Serbia’s capital city, will host EXPO 2027, which resulted in investments already in the past year. In October 2025, the United States enforced sanctions on Serbia’s oil company NIS, majority-owned by Russia’s Gazprom, which supplies around 80% of the country’s fuel. As a response, the government adapted its 2026 budget plans and allocated RSD 164 billion with the aim of taking over NIS if necessary. Serbia’s general government deficit increased slightly to 2.4%. Public debt as a percentage of GDP did not change materially and amounted to 44.6%.

Inflation significantly decelerated on energy, transportation and communication prices. The Serbian government capped wholesale and retail profit margins for food, household chemicals, hygiene products, and basic groceries. In contrast, service prices remained relatively high. Overall, average consumer prices increased by 3.8%, within the central bank’s target range of 3% ± 1.5 percentage points. The Serbian dinar was again among the most stable currencies in CEE, trading at around RSD 117 against the euro. The National Bank of Serbia kept its policy rate unchanged at 5.75% throughout the year. 

In 2025, all three major rating agencies affirmed their credit ratings and outlook for Serbia. Standard & Poor’s at BBB- with a stable outlook, Fitch at BB+ and Moody’s at Ba2, both with a positive outlook. 

Market review

The Serbian banking market continued to grow dynamically. Customer loan growth amounted to 15.8%, driven by both retail and corporate lending. Mortgage lending continued to be dominated by euro-indexed loans. In corporate business investment loans enjoyed positive momentum. At 6.2%, customer deposit growth was less pronounced. Retail deposits significantly outgrew corporate deposits. Overall, the banking system’s loan to deposit ratio stood at 80.7%. 

Financial intermediation – Serbia (in % of GDP)

Source: National Bank of Serbia, Erste Group

Serbia’s banking system continued to be profitable. Due to interest rate caps on mortgage and consumer loans, as well as overdrafts and credit card fees operating income of the banking sector declined. Operating expenses were kept under control despite rising personnel expenses. The number of branches decreased further. Digitalisation was boosted significantly due to the continuous efforts to migrate customers to digital channels. Asset quality remained favourable with a non-performing loan ratio of 2.1%. Risk costs remained low. The National Bank of Serbia announced an increase in the countercyclical buffer from 0% to 0.5% starting from 15 December 2026. At 21.0%, the banking system’s capital adequacy remained strong and, at 19.8%, its return on equity remained almost unchanged compared to the previous year. 

Market shares – Serbia (in %)

Source: National Bank of Serbia, Erste Group

There was no significant M&A activity in 2025. Erste Bank Serbia remained among the ten largest banks in the country. The bank’s market share in terms of total assets increased to 6.2%. Its market share in customer loans rose to 7.1%. The bank’s market share in corporate loans was marginally higher than in retail loans. Erste Bank Serbia’s customer deposit market share declined slightly to 6.1%. Euro-denominated deposits significantly outgrew deposits denominated in Serbian dinar. Overall, the bank’s loan-to-deposit ratio was almost balanced at 98.9%.

Business Review

Interview with Jasna Terzić, CEO of Erste Bank Serbia

How did you add value to your customers?

In 2025, Erste Bank Serbia continued to focus on creating sustainable value for its customers by further developing digital banking capabilities, simplifying processes, and offering solutions tailored to the needs of both retail and corporate clients. Improved digital journeys and advisory services supported easier access to products, greater transparency, and a more consistent customer experience across all touchpoints, while maintaining a high standard of service quality.

Which measures have you taken to improve the bank’s operating performance and efficiency?

The bank further improved operating performance and efficiency through continued process automation, optimisation of internal workflows, and disciplined cost management. These measures strengthened operational resilience, supported scalability, and ensured that our bank remained well-positioned to respond to changing customer needs and market conditions. In this context, Erste Bank Serbia successfully advanced the George digital banking platform towards completion, with the rollout to clients planned for early 2026, marking an important step in enhancing the everyday banking experience.

Looking back at the year, what major achievements or challenges were especially noteworthy?

Last year, Erste Bank Serbia marked 20 years of successful operations in the local market, reaffirming its position as a stable and trusted financial partner. The year was characterised by solid financial performance, a high capital adequacy ratio, and continued growth in both retail and corporate business, and all that was achieved despite a challenging macroeconomic environment. Specifically, this was reflected in total assets exceeding EUR 4 billion for the first time, and an increase by over 18% in total loans extended to retail and corporate clients. A key accomplishment was the further expansion of sustainable and inclusive financing, supported by partnerships with the EBRD, the European Union, and EIB Global. These partnerships enabled targeted funding for green investments, energy efficiency projects, and socially inclusive entrepreneurship. The bank’s strong and ongoing commitment to ESG principles was also externally recognised through several awards for sustainability and inclusion, reinforcing our reputation as a responsible employer and a leader in sustainable banking practices in Serbia.

Financial review

The segment analysis is done on a constant currency basis. The Serbian Dinar (RSD) remained stable against the EUR in the reporting period. Net interest income in the Serbia segment (comprising Erste Bank Serbia Group) improved slightly. Net fee and commission income increased on higher securities, payments and insurance brokerage fees. Net trading result and gains/losses from financial instruments at FVPL improved due to a higher contribution of FX business. Operating expenses rose mainly due to higher IT expenses and depreciation. The deposit insurance contribution remained stable at EUR 6 million. Consequently, operating result improved, and the cost/income ratio worsened. Impairment result from financial instruments worsened due to portfolio growth and the recalibration of risk parameters. Other result worsened due to the non-recurrence of last year’s positive one-offs. Overall, the net result attributable to owners of the parent remained almost unchanged.

Credit risk

Credit risk exposure in the Serbia segment increased significantly to EUR 4.9 billion (+12.5%). Loans to customers recorded an even more dynamic growth and amounted to EUR 2.7 billion (+18.0%). Corporate loans grew at a significantly higher pace (+25.6%) than retail loans (+10.4%). Non-performing loans decreased to 2.0% (2.6%) of total loans to customers. Loan loss provisions increased to 107.3% (103.5%) of non-performing loans.