31.10.2025
Erste Group continues growth in customer business in third quarter
- Customer loan volume increased by 10 billion euros YTD
- Asset management surpasses 100 billion euro milestone
- CET1 ratio (pro forma) at 18.2%
- Banking levies total 283.9 million euros
Erste Group Bank AG (“Erste Group”) delivered a good operating performance during the first nine months of 2025. Despite declining interest rates in its core markets, net interest income rose by three percent to 5.76 billion euros (9M 2024: 5.59 billion euros). This was driven by robust growth in client business. The volume of customer loans increased by 4.5% since the start of the year, rising by nearly 10 billion euros to 228.0 billion euros (Dec. 2024: 218.1 billion euros), due mainly to heightened demand in Czechia, Austria, and Slovakia. In addition, housing loans also gained momentum across all markets in the third quarter. Deposit volumes grew by 2.5% to 247.8 billion euros in the first nine months (Dec. 2024: 241.7 billion euros). Net fee and commission income rose by 8.4% to 2.34 billion euros (9M 2024: 2.16 billion euros), with the securities business in Austria and Hungary posting particularly strong growth. Strategic initiatives undertaken there, such as simplified access to securities savings plans, proved effective. Driven by continued strong demand for investment products as well as by targeted acquisitions, the total assets under management by Erste Asset Management exceeded the 100 billion euro mark for the first time at the end of the third quarter.
Operating income during the first three quarters increased by 3.2% year-on-year to 8.59 billion euros (9M 2024: 8.32 billion euros), while the operating result remained stable at 4.52 billion euros, up 0.2% (9M 2024: 4.51 billion euros). This was due to inflation-related increases in personnel expenses and continued investments in IT. The cost-income ratio stood at 47.4%, remaining below the 50% target. Risk costs remained low at 19 basis points of average gross customer loans, totaling 318.5 million euros (9M 2024: 211.5 million euros). Banking levies rose by 46.6% year-on-year to 283.9 million euros (9M 2024: 193.6 million euros), mainly due to a strong increase in the banking tax contributions made in Austria. Overall, Erste Group achieved a net profit of 2.57 billion euros in the first three quarters of 2025 (9M 2024: 2.52 billion euros), with a return on tangible equity (ROTE) of 16.8%. The CET1 ratio (pro forma) rose to 18.2%, reflecting a strong operating performance. Supported by robust growth in customer business and a favorable interest rate environment, Erste Group has raised its full-year outlook for net interest income and now expects it to grow by more than 2%. Guidance for capitalisation is also being raised, with CET1 now expected to reach over 18.5% by year-end, provided that no initial consolidation from the acquisition of Santander Bank Polska has taken place by then.
Peter Bosek, CEO of Erste Group, commented: “We continued to successfully expand our customer business in the third quarter. Our strategic initiatives are delivering results and we’re managing to sustainably attract more and more customers to securities savings plans and other investment offerings – especially in Austria and Hungary. We’ve now managed to pass the 100 billion euro mark in assets under management for the first time. Our strong results confirm that Central and Eastern Europe remains Europe’s growth engine.”
Stefan Dörfler, CFO of Erste Group, added: “Our strong operating performance, combined with capital optimization measures, has led to a significant increase in our core capital ratio. This provides us with an excellent foundation for self-financing our planned transaction in Poland.”
On 9 September 2025, Erste Group received antitrust clearance from the European Commission for the planned acquisition of a controlling 49% stake in Santander Bank Polska. Approval from the Polish Financial Supervisory Authority (Komisja Nadzoru Finansowego, KNF) is still pending. Subject to this approval, the transaction is expected to close around the end of 2025.
Financial results from January to September 2025 are compared with those from January to September 2024 and balance sheet positions as of 30 September 2025 with those as of 31 December 2024.
Operating income rises on back of growth in customer business
Net interest income increased to EUR 5,761 million (+3.0%; EUR 5,591 million), primarily in the Czech Republic, Romania and Slovakia, on the back of loan growth and lower interest expenses on customer deposits. Net fee and commission income rose to EUR 2,340 million (+8.4%; EUR 2,158 million). Growth was registered across all core markets and income categories. Net trading result declined to EUR 231 million (EUR 428 million); the line item gains/losses from financial instruments measured at fair value through profit or loss rose to EUR 58 million (EUR -70 million). The development of both line items was mostly attributable to valuation effects. Operating income increased to EUR 8,587 million (+3.2%; EUR 8,319 million).
Cost/Income ratio inline with expectations
General administrative expenses were up at EUR 4,068 million (+6.8%; EUR 3,809 million). Personnel expenses increased to EUR 2,449 million (+5.6%; EUR 2,318 million) driven by collectively agreed salary increases. Other administrative expenses were higher at EUR 1,206 million (+11.1%; EUR 1,086 million). While contributions to deposit insurance schemes included in other administrative expenses – mostly already posted upfront for the full year of 2025 – declined to EUR 59 million (EUR 72 million), IT expenses increased to EUR 530 million (EUR 451 million). Amortisation and depreciation amounted to EUR 413 million (+2.0%; EUR 405 million). Overall, the operating result increased moderately to EUR 4,519 million (+0.2%; EUR 4,510 million), the cost/income ratio stood at 47.4% (45.8%).
Risk costs remain at a low level
The impairment result from financial instruments (“risk costs”) amounted to EUR -318 million or 19 basis points of average gross customer loans (EUR -211 million or 13 basis points). Allocations to provisions for loans and advances were posted primarily in Austria. The NPL ratio based on gross customer loans improved moderately to 2.5% (2.6%). The NPL coverage ratio (excluding collateral) increased to 73.7% (72.5%).
Significant rise in banking levies
Other operating result amounted to EUR -212 million (EUR -289 million). Expenses for annual contributions to resolution funds included in this line item already for the full year of 2025 declined to EUR 15 million (EUR 28 million). Banking levies – currently payable in four core markets – went up, though. EUR 284 million (EUR 194 million) are reflected in other operating result: thereof, EUR 141 million (EUR 137 million) were charged in Hungary. In Austria, banking tax rose to EUR 102 million (EUR 30 million) on the back of a temporary tax increase, in Romania it amounted to EUR 41 million (EUR 27 million). The banking tax in Slovakia of EUR 50 million (EUR 74 million) is posted in the line item taxes on income.
Taxes on income amounted to EUR 815 million (EUR 817 million). The decline in the minority charge to EUR 596 million (EUR 653 million) was attributable to lower profitability at the savings banks. The net result attributable to owners of the parent rose to EUR 2,566 million (+ 2.0%; EUR 2,516 million).
Good operating performance contributes to higher CET1 ratio
Total equity not including AT1 instruments rose to EUR 30.1 billion (EUR 28.1 billion). After regulatory deductions and filtering in accordance with the Capital Requirements Regulation (CRR), common equity tier 1 capital (CET1, phased-in) increased to EUR 26.4 billion (EUR 24.0 billion), total own funds to EUR 34.8 billion (EUR 30.9 billion). While interim profit for the first half of the year is included in the above figures, interim profit for the third quarter is not. Total risk (risk-weighted assets including credit, market and operational risk, phased-in) declined to EUR 151.1 billion (EUR 157.2 billion). The common equity tier 1 ratio (CET1, phased-in) increased to 17.5% (15.3%), the total capital ratio at 23.0% (19.7%).
Total assets increased to EUR 362.9 billion (+2.6%; EUR 353.7 billion). On the asset side, cash and cash balances rose to EUR 25.3 billion (EUR 25.1 billion); loans and advances to banks were lower at EUR 24.0 billion (EUR 27.0 billion). Year to date, loans and advances to customers rose to EUR 228.0 billion (+4.5%; EUR 218.1 billion), most dynamically in Central and Eastern Europe, in particular in the Czech Republic, Slovakia and Hungary. On the liability side, deposits from banks declined to EUR 15.8 billion (EUR 21.3 billion). Customer deposits rose – most strongly in the Czech Republic – to EUR 247.8 billion (+2.5%; EUR 241.7 billion). Deposit growth was driven by core deposits (Retail, SMEs and Savings Banks segment). The loan-to-deposit ratio stood at 92.0% (90.2%)
Outlook 2025: raised guidance
Following the good business development in the first three quarters of the year, Erste Group has raised the financial outlook for 2025 again. Net interest income is now projected to increase by more than 2% in 2025 (versus slightly higher) and the cost/income ratio is forecast to be around 48% (instead of less than 50%). Furthermore, Erste Group expects a CET1 ratio above 18.5% at year end 2025 (before first time consolidation of Santander Bank Polska). All other assumptions – most of which were already upgraded a quarter ago –remain unchanged.
Overall, Erste Group expects to achieve a return on tangible equity (ROTE) of more than 15% reflecting strong loan growth and better P&L dynamics. This ambition is built on the following key assumptions: Firstly, the macroeconomic environment, primarily as measured by real GDP growth, in Erste Group’s seven core markets (Austria, Czech Republic, Slovakia, Romania, Hungary, Croatia and Serbia) remains robust. Based on good growth dynamics almost across the entire group in the first three quarters of 2025, Erste Group expects loan volumes to rise by more than 5% in 2025. Secondly, operating result is expected broadly unchanged or even moderately up versus 2024, as net interest income is now projected to increase by more than 2% in 2025 (versus slightly higher), net fee and commission income is set to grow by more than 5%, net trading and fair value result to stay flat versus 2024, and operating expenses likely rise in the order of 5%. Consequently, the cost/income ratio is thus expected at around 48% (versus less than 50%). Given the good credit risk performance in the first three quarters of 2025, the full-year risk costs guidance of about 20 basis points is confirmed. In addition, regulatory costs, comprising deposit insurance and resolution fund contributions, banking levies such as banking and financial transaction taxes as well as sector-specific extra profit taxes, and, the cost of supervision, in aggregate, are expected to increase due to an announced increased banking tax in Austria and the rise in Romania from the second half of 2025.
Due to the strong profit performance and faster than expected capital build, Erste Group’s CET1 ratio (pro forma, i.e. including the net profit of the third quarter) stood at 18.2% end of September. Thus, the expected CET1 ratio at the end of the year prior to the first-time consolidation of Santander Bank Polska is now expected at more than 18.5% (versus previously 18.25%).