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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.

Market Data

Last Price 66.7
Change Percentage 0.60%
Open 66.7
Previous Close 66.3
Market Cap ( Millions) 26683
Volume 377914
Year High 70.32
Year Low 36.66
M A 50 60.99
M A 200 51.26

Financial Ratios

FCF Yield 59.29%
Dividend Yield 4.05%
ROE 16.41%
Debt / Equity 373.82%
Net Debt / EBIDTA 1764.99%
Price To Book 1.31
Price Earnings Ratio 8.14
Price To FCF 1.69
Price To sales 1.33
EV / EBITDA 23.96

Business Breakdown

Expected Mid-Term Growth

Segment n°1 -> Retail

Expected Growth : 1.2 %

What the company do ?

Retail from Erste Group Bank AG refers to the banking services and products offered to individual customers, including personal loans, credit cards, and savings accounts.

Why we expect these perspectives ?

Erste Group Bank AG's Retail segment growth of 1.2% is driven by increasing demand for consumer loans, mortgages, and credit cards. Strong economic growth in Central and Eastern Europe, coupled with a low interest rate environment, has boosted consumer spending and borrowing. Additionally, the bank's digitalization efforts and expansion into new markets have contributed to the segment's growth.

Segment n°2 -> Savings Banks

Expected Growth : 0.8 %

What the company do ?

Savings Banks from Erste Group Bank AG offer personal and business banking services, providing a range of deposit and loan products to individuals and SMEs in Central and Eastern Europe.

Why we expect these perspectives ?

Erste Group Bank AG's Savings Banks segment growth of 0.8% is driven by a stable deposit base, moderate loan growth, and a focus on cost efficiency. Additionally, the bank's strong presence in Central and Eastern Europe, as well as its diversified revenue streams, contribute to its steady growth.

Segment n°3 -> Corporates

Expected Growth : 1.5 %

What the company do ?

Corporates from Erste Group Bank AG refers to the corporate banking division, providing financial services and solutions to large and medium-sized corporations in Central and Eastern Europe.

Why we expect these perspectives ?

Erste Group Bank AG's 1.5% growth is driven by strong loan growth in CEE markets, increasing demand for digital banking services, and a solid capital position. Additionally, the bank's diversified business model, cost discipline, and improving asset quality contribute to its stable growth. Furthermore, strategic acquisitions and partnerships enhance its market presence and revenue streams.

Segment n°4 -> Group Markets

Expected Growth : 1.3 %

What the company do ?

Group Markets from Erste Group Bank AG refers to the wholesale banking division, providing financial markets and investment products to corporate and institutional clients.

Why we expect these perspectives ?

Erste Group Bank AG's Group Markets segment growth of 1.3% is driven by increasing demand for investment products, favorable interest rate environment, and expansion into Central and Eastern European markets. Additionally, strategic partnerships and digitalization efforts have improved customer engagement and retention, contributing to the segment's growth.

Segment n°5 -> Asset/Liability Management & Local Corporate Center

Expected Growth : 0.9 %

What the company do ?

Asset/Liability Management optimizes Erste Group Bank AG's balance sheet, while the Local Corporate Center provides centralized services to support local business units.

Why we expect these perspectives ?

Erste Group Bank AG's Asset/Liability Management & Local Corporate Center segment growth of 0.9 is driven by effective risk management, optimized asset allocation, and strategic balance sheet management. Additionally, the bank's strong presence in Central and Eastern Europe, coupled with its diversified revenue streams, contributes to its stable growth.

Segment n°6 -> Group Corporate Center

Expected Growth : 1.1 %

What the company do ?

The Group Corporate Center of Erste Group Bank AG is the central unit responsible for strategic management, risk management, and financial planning.

Why we expect these perspectives ?

Erste Group Bank AG's Group Corporate Center segment growth of 1.1% is driven by increasing demand for corporate banking services, expansion into Central and Eastern Europe, and a focus on digitalization and cost efficiency measures, resulting in improved operational performance and enhanced customer experience.

Segment n°7 -> Intragroup Elimination

Expected Growth : 0.7 %

What the company do ?

Intragroup Elimination from Erste Group Bank AG refers to the process of eliminating transactions and balances between subsidiaries within the group to present a consolidated financial statement.

Why we expect these perspectives ?

Erste Group Bank AG's 0.7% intragroup elimination growth is driven by efficient cost management, reduced cross-holding transactions, and optimized internal funding. Additionally, the bank's focus on digitalization and process automation has led to reduced operational expenses, contributing to the growth. Furthermore, the bank's diversified business model and strong risk management practices have also supported this growth.

Erste Group Bank Ag Products

Product Range What is it ?
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.

Erste Group Bank AG's Porter Forces

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.

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.

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.

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.

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.

Capital Structure

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

Historical Valuation

Price/Earnings Ratio

Margin Valuation

Peers Valuation

Competitors

Company Rational
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CABK.MC CaixaBank, S.A., together with its subsidiaries, provides various banking products and financial services in Spain and internationally. The company operates through Banking and Insurance, Equity Investments, and BPI segments. It …
DNB.OL DNB Bank ASA provides financial services for retail and corporate customers in Norway and internationally. The company offers personal banking products and services, including savings and investment products; loans, such …

Peers Metrics

DCF BETA

Parameters

Short Term Growth
Short term Time
Long-Term Growth
WACC
Target Price
66.7$
Current Price
66.7$
Potential
-0.00%

Expected Cash-Flows

Scoring Insights

ValueQualityYieldMomentumVolatilityGrowth
Company A-Score: 4.50Peer Group Average: 4.70Leader: 5.70

Peers Group Analysis

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