Funding Strategy

Erste Group´s prime liquidity source is the large surplus of customer deposits the bank has due to its strong market position in Austria and the CEE countries where it is active.

in EUR million 31.12.2019 31.12.2018 31.12.2017 31.12.2016 31.12.2015
Financial liabilities - held for trading 2,421 2,508 3,423 4,762 5,867
Deposits from banks 13,141 17,658 16,349 14,631 14,212
Deposits from customers 173,846 162,638 150,969 138,013 127,946
Debt securities issued 30,371 29,738 25,095 27,192 29,654
Miscellaneous liabilities 5,437 5,381 6,535 7,027 7,257
Total equity 20,477 18,869 18,288 16,602 14,807
Total 245,693 236,792 220,659 208,227 199,743

Debt Structure as of 31.03.2020

The growing international activity of Erste Group led it to develop alternative sources to the classic primary funding through customer deposits. The bank employs a wide range of funding sources and programmes to meet the funding requirements of the Group, its subsidiaries and the Austrian savings banks. The bank is active in Austria and internationally as a private placement issuer as well as making public issues in varying currencies, maturities and structures. The largest portion within securitised debt is made up of mortgage covered bonds which represent ca. 40%, followed by senior and tier 2 notes. The mentioned seniorities constitute approximately 90% of outstanding bonds.

Overall, relative stable development while volumes of mortgage covered bonds have risen in Q1 2020

Maturity Profile as of 31.03.2020

On the issue side, the current financial year began with the successful placement of a 10-year mortgage Pfandbrief in the amount of EUR750m at MS+3bp, a minimal new issue premium compared to outstanding Pfandbriefe. The above-average positive market environment at the beginning of the year – before the COVID-19 developments crisis led to increased volatility – prompted Erste Group to move a planned AT1 issue into the first quarter of 2020. A EUR 500m perpNC7 AT1 bond was placed with a coupon of 3.375%, which is currently the second lowest for a euro denominated AT1 issue.