Investing in Erste Group

Bernd Spalt, CEO on presentation of the H1 2020 results of Erste Group Bank AG:

“I want to thank all our employees in Austria and the CEE region for their exceptional work under the most difficult of circumstances over the past few months. As one of the leading financial institutions in CEE, Erste Group’s actions have been critical to keeping the region’s economies going. Among other things, we have been the transmission channel for over 16 billion euros in government measures and have kept almost all branches open, while our digital platform George has experienced record usage. Our efforts have helped individuals and companies in the region to meet their financial needs.”

“The development of risk costs was the key driver impacting our profit in the first half of 2020. Although our NPL ratio remained at a historically low level of 2.4 percent, we vigilantly planned ahead to already take into account the expected deterioration in asset quality as far as possible at this point in time. We set aside risk provisions of 675 million euros in the first six months of the year. This led our net profit for the period to decline to 294 million euros.Deposit growth was again strong at more than five percent, reflecting the trust that customers place in us. Loan volumes rose over two percent, boosted by government measures such as loan moratoria and guaranteed loans. The clearest sign of our strong positioning: a record high capitalization, visible in our CET1 ratio of 14.2 percent, far above the regulatory minimum requirement.Given the robust underlying result, solid capitalization and profitable business model, customers can continue to rely on Erste as a strong partner even in these unprecedented times.”

Founded in 1819 as the first Austrian savings bank, Erste Group went public in 1997 with a strategy to expand its retail business into Central and Eastern Europe. Since then Erste Group has grown through numerous acquisitions and organically to become one of the largest financial services providers in the Eastern part of the EU in terms of clients and total assets.