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.

Debt Structure as of 30.09.2020

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; volumes of mortgage covered bonds and senior unsecured bonds have risen ytd

Maturity Profile as of 30.09.2020

The third quarter was marked by brisk issuing activity. Erste Group met its funding target for 2020 by issuing a EUR 500 million 11NC6T2 transaction in early September. The issuance (placed at MS+210 basis points) attracted a strong order book of EUR 2.9 billion andachieved a negative new issue concession. This was followed, within a fortnight, by another EUR 500 million transaction – a Senior Preferred 5y Note issued at MS+52 basis points, which already counts towards the 2021 funding target. This transaction likewise stood out forits highly granular EUR 2.7 million order book and a negative new issue concession. In 2021, issuance volume is expected at a similar levelas in the current year, with a clear focus on senior preferred bonds.