Strategy

We strive to be the leading retail and corporate bank in the eastern part of the European Union, including Austria. To achieve this goal, we aim to support our retail, corporate and public sector customers in realising their ambitions and ensuring financial health by offering excellent financial advice and solutions, lending responsibly and providing a safe harbour for deposits.

As a competent and reliable partner for our customers and with our business activities anchored in the real economy for more than 200 years, we will continue to contribute to economic growth and financial stability and, thus, to the prosperity of our region.

In all of our core markets, we pursue a balanced business model focused on providing the best banking services to each of our customers. In this respect, digital innovations are playing an increasingly important and inclusive role. In this respect, our digital platform George is of utmost importance.

Our focus on the countries of the eastern part of the European Union lies in the firm conviction that, over the coming 15 to 20 years, these countries should experience higher growth rates than the countries of Western Europe – even though periods of expansion may alternate with times of economic stagnation or even setbacks on this long-term path of sustainable growth.

In May 2025, we announced the acquisition of a controlling stake in Santander Bank Polska. The transaction was closed in January 2026, and the bank will be renamed Erste Bank Polska in the second quarter of 2026. It is the third-largest bank in the country, underpinning our aim to be the leading bank in the eastern part of the European Union. 

Taking this acquisition into account, we have an extensive presence in the following core markets (in alphabetical order): Austria, Croatia, the Czech Republic, Hungary, Poland, Romania and Slovakia – all of which are members of the European Union. In Serbia, which has been granted European Union candidate status, we maintain a minor market presence.

The sustainability of the business model is reflected in our ability to fund customer loans with customer deposits, with most customer deposits being stable retail deposits. The sustainability of our strategy is reflected in long-term client trust, which underpins strong market shares in almost all of our core markets. However, market leadership is not an end in itself. Market leadership creates value only when it goes hand in hand with positive economies of scale and contributes to the long-term success of the company.

The banking business, however, should not only be run profitably but should also reflect its corporate responsibility towards all material stakeholders, in particular customers, employees, society and the environment. Therefore, we pursue the banking business in a socially responsible manner and aim to earn an adequate premium on the cost of capital.

Strategy in detail

The basis of our banking operations is retail and corporate customer business in the eastern part of the European Union, including Austria. The capital markets and interbank activities, as well as public sector business, are defined more broadly to be able to meet our customers’ needs as effectively as possible.

Long-standing tradition in customer banking

Erste Group has been active in the retail business since 1819. This is where the largest part of our capital is tied up, where we generate most of our income and where we fund the overwhelming part of our core activities by drawing on our customers’ deposits. Offering attractive, easy-to-understand products and services that meet the individual needs and objectives of bank customers is important in building and maintaining strong, long-term customer relationships.

RETAIL BUSINESS

Our key business is retail, and it represents our strength. It is our top priority when developing products such as modern digital banking that enable us to meet customers’ expectations more effectively.

Our retail business covers the entire spectrum from lending, deposit and investment products to current accounts and credit cards. Our core competence in retail banking has historical roots. In 1819, wealthy Viennese citizens donated funds to establish Erste Group’s predecessor, the first savings bank in Central Europe. It was their aim to make basic banking services such as safe savings accounts and mortgage loans available to wide sections of the population. Today, we serve a total of 22.7 million customers in our markets, including Poland, through a mix of digital and physical distribution channels. Our flagship digital retail product is George, a web and mobile app, while our physical presence includes some 2,100 branches. Wealthy private clients, trusts and foundations are served by our private banking staff and benefit from services that are tailored to the needs of this target group.

Retail banking is attractive to us for a number of reasons: It offers a compelling business case that is built on market leadership, an attractive risk-reward profile and the principle of self-funding. In addition, it benefits from a comprehensive range of products that are simple and easy to understand and provide substantial cross-selling potential. We take advantage of these factors in all core markets. In addition to the expansion of digital sales channels, the branch network remains an important component of the business strategy. Our retail banking model supports sustainable and deposit-funded loan growth even in economically more challenging times. Another positive factor is the diversification of the retail business across countries that are at differing stages of economic development, such as Austria, Croatia, the Czech Republic, Hungary, Poland, Romania, Serbia and Slovakia (in alphabetical order).

CORPORATE BUSINESS

The second main business line, which also contributes significantly to our earnings, is business with small and medium-sized enterprises, regional and multinational groups and real estate companies. Our goal is to enhance relationships with our clients beyond pure lending business. Specifically, our goal is for SMEs and large corporate customers to choose Erste Group as their principal bank and also route their payment transfers through our banking entities and, in fact, regard Erste Group as their first point of contact for any kind of banking service.

Catering to their different requirements, we serve small and medium-sized enterprises locally in branches or separate commercial centres, while multinational groups are serviced by the Group Corporates units. This approach permits us to combine industry-specific and product expertise with an understanding of regional needs and the experience of our local customer relationship managers.

CAPITAL MARKETS BUSINESS

Client-driven capital markets activities are also part of the comprehensive portfolio of products and services that we offer to our retail and corporate customers. Our centrally governed and locally rooted capital markets operations support all other business areas in their dealings with the capital markets and provide our customers with professional access to the financial markets. We, therefore, view our capital markets business as a link between financial markets and our customers. As a key capital markets player in the region, we also perform important functions such as market making, capital market research and product structuring.

Capital markets business serves the needs of our retail and corporate customers as well as those of government entities and financial institutions. Due to our strong network in the eastern part of the European Union, we have a thorough understanding of local markets and customer needs. In our capital markets business, too, we concentrate on core markets of retail, SME and large corporate business (in alphabetical order): Austria, Croatia, the Czech Republic, Hungary, Poland, Romania, Serbia and Slovakia. For institutional customers, specialised teams have been established in Germany as well as in Hong Kong and New York that offer these customers a tailor-made range of products.

In many countries where we operate, the local capital markets are not yet as highly developed as in Western Europe or the United States of America. That means our banking subsidiaries are pioneers in some of these markets. Therefore, building more efficient capital markets in the region is another strategic objective of our capital markets activities.

PUBLIC SECTOR BUSINESS

A solid deposit business is one of the key pillars of our business model. Customer deposits surpass lending volume in most of our geographic markets. Our banking entities make a significant part of this liquidity available as financing to the region’s public sector entities. In this way, we facilitate essential public sector investment. Our public sector customers are primarily municipalities, regional entities and sovereigns that we additionally support and advise in capital market issuance, infrastructure financing and project financing. Furthermore, we cooperate with supranational institutions. In terms of sovereign bond investments, we focus on our core markets.

Adequate transport and energy infrastructure and municipal services are absolutely key prerequisites for sustainable economic growth in the long term. Therefore, we view infrastructure finance and all associated financial services as a key priority. 

INTERBANK BUSINESS

Interbank business is an integral part of our business model that performs the strategic function of ensuring that the liquidity needs of our customer business are met. In particular, this involves short-term borrowing and lending of liquid funds in the interbank market.



Core Markets in the eastern part of the
European Union

When Erste Group went public as an Austrian savings bank with no meaningful foreign presence in 1997, it defined its target region as consisting of Austria and the part of Central and Eastern Europe that had realistic prospects of joining the European Union. The aim was to benefit from the attractive growth prospects in these countries. Against the backdrop of emerging European integration and limited potential for growth in Austria, Erste Group acquired savings banks and financial institutions in countries adjacent to Austria from the late 1990s onwards. This part of Europe offered, and still offers, the best structural, and therefore long-term, growth prospects.

For years, we have had an extensive presence in the following core markets (in alphabetical order): Austria, Croatia, the Czech Republic, Hungary, Romania and Slovakia – all of which are members of the European Union. Following significant investments in our subsidiaries, we hold considerable market positions in these countries. In January 2026, Erste Group completed the acquisition of a controlling stake in its Polish subsidiary. As a result, Erste Group now also holds significant market shares in Poland. In Serbia, which has been granted European Union candidate status, we maintain a minor market presence, but one that may be expanded through acquisitions or organic growth as the country makes progress towards European Union integration. In addition to our core markets, we also hold direct and indirect majority and minority banking participations in Slovenia, Montenegro, Bosnia and Herzegovina and North Macedonia.



Long-term growth trends
in Central and Eastern Europe

The economic catch-up process across the countries of Central and Eastern Europe and the underlying convergence trend continue. This is due, on the one hand, to the fact that the region has to make up for almost half a century of economic mis-management under communism and, on the other, to the fact that banking activities were largely non-existent during that time. With the exception of deposit-taking, modern banking services were largely unknown in these countries after the fall of communism. On the lending side, this was due to high nominal and real interest rates and also to low disposable incomes that did not support household credit growth. In addition, a healthy competitive environment was lacking due to extensive state ownership. All this has changed.

Most formerly state-owned banks have been sold to strategic investors that have fostered product innovation and competition. Disposable income has risen strongly on the back of growing gross domestic product. In addition, most countries of Central and Eastern Europe have human resources that are at least equivalent to those of Western European countries, but they do not need to struggle with increasingly unaffordable costs of the Western welfare states, and have labour markets that are considerably more flexible. These advantages are complemented by, on average, highly competitive export industries that benefit from wage costs that are low relative to workforce productivity and from, by and large, investor-friendly tax and welfare systems. These factors will remain the driving force behind the future development of banking markets in Central and Eastern Europe. 

Customer loans in CEE (2025) in EUR thousand


A comparison of per capita private debt levels in Central and Eastern Europe with those of Western economies reveals that even today, an enormous gap exists between these markets. Countries such as the Czech Republic and Slovakia, but also Croatia and Hungary, are many years away from reaching Austrian or Western European levels of loans per capita; also, in relative terms, these countries differ substantially regarding debt levels common in the West. The contrast to Serbia or Romania is even more pronounced – private debt levels, particularly household debt, are substantially lower than in the advanced economies. We firmly believe that credit expansion, accompanied by economic growth in this region, will prove to be a lasting trend rather than a short-term process that has already peaked.

Over the coming 15 to 20 years, on average, the countries of the eastern part of the European Union are therefore expected to experience higher growth rates than the countries of Western Europe, even though periods of expansion may alternate with times of economic stagnation or even setbacks on this long-term path of sustainable growth.



Focus on sustainability and profitability

Acting responsibly and earning a premium on the cost of capital is a key prerequisite for the long-term survival of any company and the creation of value for customers, investors and employees. Only a bank that operates in a sustainable manner – balancing the social, ecological and economic consequences of its business activities – and profitably can achieve the following: provide customers with products and services that support them in achieving their financial ambitions; deliver the foundation for share price appreciation as well as dividend and coupon payments to investors; create a stable and rewarding work environment for employees and be a reliable contributor of tax revenues to society at large.

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. Building on this Statement of Purpose, a Code of Conduct defines binding rules of day-to-day business for employees and members of both the management and supervisory boards. At the same time, the Code of Conduct underlines that in pursuing our business activities, we value responsibility, respect and sustainability. The Code of Conduct is an important tool for preserving the reputation of Erste Group and strengthening stakeholder confidence. Sustainability in this context means operating our core business both in a socially and environmentally responsible manner and economically successfully.

Through a combination of stable revenues, low loan loss provisions and cost efficiency, profits can be achieved on a long-term basis. This is helped by a strong retail-based funding profile. When growth opportunities are elusive, as they will be from time to time, or the market environment is less favourable as a result of factors including high taxation, increased regulation or low interest rates, there will be a stronger focus on efficiency measures. When the operating environment improves, more time will be devoted to capturing growth in a responsible way. Irrespective of the environment, we should benefit materially from operating in the region of Europe that offers the best structural growth opportunities for some time to come.

Our sustainability strategy

Since its foundation, Erste Group has been pursuing the goal defined in the Statement of Purpose, namely, to promote and secure prosperity for all people throughout the region. This is why we have incorporated key ESG themes into the business strategy. We believe that this is essential to be successful over the long term, working towards a fairer and more inclusive society.

Our sustainability strategy centres on two main pillars, supporting the green transition and promoting social inclusion: Since the largest environmental footprint arises from lending activity and financed emissions, our focus is on supporting customers in their transition to a low-carbon economy. For us, green transformation means providing financing that contributes to limiting climate change. Social inclusion encompasses not only traditional financial services but also financial education, social banking, affordable housing, and gender equality. We are convinced that a sound socio-economic environment forms the basis for a robust banking business and has a positive impact on economic development.

Both pillars are underpinned by strong governance: The ESG strategy is anchored in the Management Board and Supervisory Board and thus integrated into all business areas and processes of the Group.



Strategic objectives

Our comprehensive and forward-looking strategy aims to secure our position as a leading financial institution in the eastern part of the European Union while addressing the challenges of rapidly changing market dynamics. It addresses significant global developments, including economic shifts, demographic changes, technological advancements, geopolitical fragmentation, and climate change, to ensure sustainable growth and resilience even in the event of a different future.

As part of our strategy, we focus on five overarching objectives, designed to drive sustainable growth, improve customer experience and strengthen operational excellence. These objectives emphasise the need for transformation, innovation, and efficiency while integrating principles of sustainability to ensure the bank remains competitive and relevant in a rapidly changing financial landscape.

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