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1. Company Snapshot

1.a. Company Description

Erste Group Bank AG provides a range of banking and other financial services to retail, corporate, real estate, and public sector customers in Austria, Central and Eastern Europe, and internationally.The company operates through Retail, Corporates, Group Markets, Asset/Liability Management & Local Corporate Center, Savings Banks, and Group Corporate Center segments.It provides mortgage and consumer loans, investment products, current accounts, savings products, and credit cards, as well as cross selling products, such as leasing, insurance, and building society products.


The company also offers factoring and accounts receivable purchasing; investment, acquisition and leveraged, project, and commercial real estate finance; interest rate and currency hedging, letters of credit, documentary collections, and guarantees; account management, payments, digital-banking, and cash logistics services; equity interests and investments, revolving export credits lines, customer financing, and export guarantee; and loan syndication, and debt and equity capital market services.In addition, it provides cash management, trade finance, customer referral, markets execution, and custody and brokerage services.Further, the company offers corporate finance; portfolio management; trading and market; trade execution, market making, and short-term liquidity management; and asset/liability management services, as well as working capital and bridge loans.


As of December 31, 2021, it operated 2,091 branches.The company was founded in 1819 and is headquartered in Vienna, Austria.

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1.b. Last Insights on EBS

Erste Group Bank AG's recent performance was driven by its robust Q3 2025 financial results, which included record revenues and strategic growth initiatives. Despite facing cost challenges, the company's earnings call highlights its resilience. Analysts have been optimistic about the bank's growth prospects, and its dividend yield of up to 5.5% is appealing to income-seeking investors. The company's valuation story is evolving, with a fair value price target increase. Its strategic growth initiatives and strong financial performance position it well for future growth.

1.c. Company Highlights

2. Erste Group's Q3 2025 Earnings: A Strong Performance

Erste Group reported a record quarterly revenue of EUR 2.9 billion, with net interest income reaching almost EUR 2 billion and fees of nearly EUR 800 million. The company's EPS came in at EUR 2.2, slightly above the previous quarter, driven by strong operating performance. The net interest margin recovered, driven by loan growth and strong deposit pricing. The cost/income ratio improved to 46.7% for the quarter, and the company upgraded its full-year guidance to around 48%. The NPL ratio remained stable at 2.5%, with coverage of around 74%.

Publication Date: Nov -04

📋 Highlights
  • Record Revenues and Profitability:: Achieved EUR 2.9 billion quarterly revenue, EUR 2 billion net interest income, and EUR 800 million fees, with a 48% cost/income ratio and EUR 901 million net profit (EUR 2.2 EPS).
  • Strong Loan and Deposit Growth:: 5%+ customer loan growth YoY, 6.4% deposit growth in Retail, and 6.9% Corporate loan growth, supported by balanced housing/consumer finance expansion and digital platform adoption (11.2M users).
  • Capital Strength and Guidance:: CET1 ratio projection raised to >18.5% (18.2% pro forma), with 18% RoTE for Q3 and >15% full-year RoTE guidance, alongside 19% post-acquisition RoTE target for 2026.
  • Fee and Cost Dynamics:: Net fee income up 8.6% YoY (EUR 800M), cost inflation peaking at 8% but expected to decline in Q4 2025, with optimization measures contributing to 46.7% Q3 cost/income ratio.

Segmental Performance

The Retail segment saw balanced growth in loans, with housing and consumer finance contributing equally. The digital platform, George, continued to grow, with 11.2 million onboarded users and a digital sales ratio of 65.8%. In the Corporate segment, loans were up 6.9% year-on-year, with growth well-distributed among all business lines. The Czech business was a standout, with strong loan growth driven by demand, particularly in mortgage lending.

Outlook and Guidance

The company is confident in its ability to deliver its full-year guidance, with customer loans growing by more than 5%. For 2026, Erste Group expects healthy customer volume growth, a favorable interest rate environment, and pricing power, supporting an upgrade in its NII outlook. The company guides to a return on tangible equity north of 15% and expects cost inflation to decline. The acquisition of Santander Bank Polska is expected to improve profit and capital generation capacity, with targets of a return on tangible equity of about 19% and EPS uplift of higher than 20%.

Valuation

Using the Price-to-Tangible Book Value (P/TBV) ratio, we can assess the valuation of Erste Group. With a P/B Ratio of 1.4, the company is trading at a reasonable valuation relative to its book value. Additionally, the Dividend Yield is 3.37%, providing a relatively attractive return for investors. The Net Interest Margin (NIM) is also a key metric for banks, and Erste Group's NIM has recovered, driven by loan growth and strong deposit pricing.

Analysts' Estimates

Analysts estimate next year's revenue growth at 30.4%, indicating a significant increase in revenue. However, the actual EPS came in at EUR 2.2, slightly above estimates, while the previous year's EPS was not provided for comparison.

3. NewsRoom

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Santander sells 3.5% stake in Polish unit for $473m

Dec -03

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Top European Dividend Stocks For December 2025

Dec -03

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Santander to Sell Stake in Polish Subsidiary for Around $473 Million After Erste Group Deal

Dec -02

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Nov -27

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Nov -22

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HSBC Continental Europe: Pre Stabilisation Notice

Nov -20

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How Analysts See the Story Changing for Erste Group Bank Amid Fresh Upgrades and Cautions

Nov -16

Source:

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Erste Group Downgrades Arista Networks (ANET) Stock to Hold from Buy

Nov -16

Source:

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.66%)

6. Segments

Retail

Expected Growth: 4.5%

Erste Group Bank AG's retail segment growth is driven by its strong presence in Central and Eastern Europe, offering a comprehensive range of financial services, including lending, deposits, and payment services, to individual and small business customers.

Corporates

Expected Growth: 5.2%

Erste Group Bank AG’s corporate financial solutions drive growth through innovative products, strong customer relationships, and expansion into Central and Eastern Europe

Savings Banks

Expected Growth: 4.3%

Erste Group Bank AG's savings banks financial services are driven by increasing demand for deposit products, growth in Central and Eastern Europe, and the bank's strong brand presence, leading to a forecast CAGR of 4.3%.

Group Markets

Expected Growth: 5.1%

Erste Group Bank AG's financial services are expected to grow driven by increasing demand for digital banking solutions, a strong presence in the CEE region, and a focus on innovation, particularly in the areas of mobile payments and online lending.

Group Corporate Center

Expected Growth: 5.6%

Erste Group Bank AG's central management unit benefits from strong fundamentals, including a solid capital position, improving asset quality, and a diversified revenue stream. These drivers support a forecast CAGR of 5.6%.

Intragroup Elimination

Expected Growth: 6.5%

Erste Group Bank AG's intragroup elimination transactions are expected to grow driven by increasing efficiency, cost reduction measures, and a growing customer base, resulting in a forecast CAGR of 6.5%.

Asset/Liability Management and Local Corporate Center

Expected Growth: 7.3%

Erste Group Bank AG’s Asset/Liability Management and Local Corporate Center drives growth through effective risk management, and tailored corporate banking solutions, leveraging its strong market position and extensive network in Central and Eastern Europe.

7. Detailed Products

Retail Banking

Erste Group Bank AG offers a wide range of retail banking services, including current and savings accounts, credit cards, personal loans, and mortgages.

Corporate Banking

Erste Group Bank AG provides corporate banking services, including cash management, trade finance, and lending solutions, to large and medium-sized corporations.

Investment Banking

Erste Group Bank AG offers investment banking services, including mergers and acquisitions advisory, equity and debt capital markets, and leveraged finance.

Private Banking

Erste Group Bank AG provides private banking services, including wealth management, investment advice, and portfolio management, to high net worth individuals.

Leasing

Erste Group Bank AG offers leasing services, including vehicle leasing, equipment leasing, and real estate leasing, to individuals and businesses.

Insurance

Erste Group Bank AG provides insurance services, including life insurance, non-life insurance, and pension insurance, to individuals and businesses.

8. Erste Group Bank AG's Porter Forces

Forces Ranking

Threat Of Substitutes

Erste Group Bank AG operates in a highly competitive market, and customers have various alternatives to choose from. However, the bank's strong brand recognition and extensive network of branches and ATMs help to mitigate the threat of substitutes.

Bargaining Power Of Customers

Erste Group Bank AG has a large customer base, but individual customers do not have significant bargaining power. The bank's diversified customer base and lack of concentration in a single industry or segment reduce the bargaining power of customers.

Bargaining Power Of Suppliers

Erste Group Bank AG has a diverse supplier base, and no single supplier has significant bargaining power. The bank's large scale of operations and diversified supplier base reduce the bargaining power of suppliers.

Threat Of New Entrants

The banking industry has high barriers to entry, including regulatory requirements and significant capital requirements. While new fintech companies are emerging, they do not pose a significant threat to Erste Group Bank AG's established position.

Intensity Of Rivalry

The banking industry is highly competitive, with many established players competing for market share. Erste Group Bank AG operates in a highly competitive market, and the intensity of rivalry is high.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 81.33%
Debt Cost 11.76%
Equity Weight 18.67%
Equity Cost 11.76%
WACC 11.76%
Leverage 435.63%

11. Quality Control: Erste Group Bank AG passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

96.8$

Current Price

96.8$

Potential

-0.00%

Expected Cash-Flows