Erste Group Bank AG: Preliminary results 2024

Erste Group posts net profit of EUR 3,125 million in 2024

Vienna (pta006/28.02.2025/07:30 UTC+1)

Financial data

Further tables are available in the attached pdf

HIGHLIGHTS

P&L 2024 compared with 2023; balance sheet 31 December 2024 compared with 31 December 2023

Net interest income increased to EUR 7,528 million (+4.2%; EUR 7,228 million), in all core markets except Austria, on the back of higher loan volumes and lower interest expenses. Net fee and commission income rose to EUR 2,938 million (+11.3%; EUR 2,640 million). Growth was registered across all core markets, most notably in payment services and asset management. Net trading result declined to EUR 519 Mio (EUR 754 million); the line item gains/losses from financial instruments measured at fair value through profit or loss improved to EUR -82 million (EUR -306 million). The development of these two line items was mostly attributable to valuation effects. Operating income increased to EUR 11,178 million (+5.9%; EUR 10,552 million). General administrative expenses were up at EUR 5,279 million (+5.2%; EUR 5,020 million). Personnel expenses rose to EUR 3,202 million (+7.1%; EUR 2,991 million) driven by salary increases. Other administrative expenses were higher at EUR 1,529 million (+4.1%; EUR 1,468 million), which was mainly attributable to higher IT expenses in the amount of EUR 622 million (EUR 549 million). Contributions to deposit insurance schemes included in other administrative expenses declined to EUR 72 million (EUR 114 million), most notably in Austria. Amortisation and depreciation amounted to EUR 547 million (-2.2%; EUR 560 million). The significant increase in the operating result to EUR 5,900 million (+6.6%; EUR 5,532 million) was attributable in equal parts to increases in net interest income and net fee and commission income. The cost/income ratio improved to 47.2% (47.6%).

The impairment result from financial instruments amounted to EUR -397 million or 18 basis points of average gross customer loans (EUR -128 million or 6 basis points). Allocations to provisions for loans and advances were posted primarily in Austria. Positive contributions came from the recovery of loans already written off, likewise most notably in Austria. The NPL ratio based on gross customer loans deteriorated slightly to 2.6% (2.3%). The NPL coverage ratio (excluding collateral) slipped to 72.5% (85.1%).

Other operating result amounted to EUR -414 million (EUR -468 million). This includes an allocation in the amount of EUR 102 million to a provision relating to the interbank exemption pursuant to the Austrian VAT Act. Expenses for annual contributions to resolution funds declined significantly to EUR 28 million (EUR 113 million), as no regular annual contributions were collected in the euro zone in 2024. Banking levies were paid in four core markets. EUR 245 million (EUR 183 million) are reflected in other operating result: thereof, EUR 168 million (EUR 137 million) were charged in Hungary. In Austria, banking tax equaled EUR 40 million (EUR 46 million), in Romania EUR 37 million (newly introduced in 2024). The banking tax in Slovakia of EUR 103 million is booked in the line item taxes on income.

Taxes on income amounted to EUR 1,053 million (EUR 874 million). The decline in the minority charge to EUR 819 million (EUR 923 million) was attributable to lower profitability at the savings banks. The net result attributable to owners of the parent rose to EUR 3,125 million (EUR 2,998 million) on the back of the strong operating result.

Total equity not including AT1 instruments rose to EUR 28.1 billion (EUR 26.1 billion). After regulatory deductions and filtering in accordance with the CRR, common equity tier 1 capital (CET1, final) rose to EUR 24.0 billion (EUR 22.9 billion), total own funds (final) to EUR 30.9 billion (EUR 29.1 billion). Total risk – risk-weighted assets including credit, market and operational risk (CRR, final) – increased to EUR 159.1 billion (EUR 146.6 billion). The common equity tier 1 ratio (CET1, final) stood at 15.1% (15.7%), the total capital ratio at 19.5% (19.9%).

Total assets increased to EUR 353.7 billion (+4.9%; EUR 337.2 billion). On the asset side, cash and cash balances declined to EUR 25.1 billion (EUR 36.7 billion); loans and advances to banks rose – most notably in the Czech Republic – to EUR 27.0 billion (EUR 21.4 billion). Year on year, loans and advances to customers increased to EUR 218.1 billion (+4.9%; EUR 207.8 billion). On the liability side, deposits from banks declined to EUR 21.3 billion (EUR 22.9 billion). Customer deposits rose – most strongly in the Czech Republic and Romania – to EUR 241.7 billion (+3.8%; EUR 232.8 billion). The loan-to-deposit ratio stood at 90.2% (89.3%).

Outlook 2025

Erste Group's goal for 2025 is to achieve a return on tangible equity (ROTE) of about 15%. 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 and on average, improves moderately versus 2024. Consequently, Erste Group expects robust loan growth of about 5% in 2025, supported by growth in the retail as well as the corporate business. Secondly, operating performance as defined by operating result to stay broadly stable versus 2024, as net interest income is projected to remain flat year-on-year, fee and commission income continues to grow by about 5%, net trading and fair result produces a similar revenue contribution as in 2024, and operating expenses grow on the order of 5%. Consequently, the cost/income ratio is expected to be below 50%. Thirdly, risk costs increase only slightly to about 25 basis points of average customer loans from levels seen in 2024, as the asset quality environment remains strong across Central and Eastern Europe while only deteriorating moderately in Austria. 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.

While a forecast for the other operating result, which is primarily impacted by regulatory costs excluding deposit insurance contributions as well as extra profit tax in Slovakia, and various categories of gains and losses from financial instruments not measured at fair value is challenging, this combined item is likely to stay flat versus 2024 in the absence of significant one-off effects. Assuming an effective group tax rate of about 21% and lower minority charges compared to 2024, all of the above should result in return on tangible equity of about 15% in 2025.

In line with the projected strong profit performance, the CET1 ratio is expected to increase in 2025, providing enhanced capital return and/or M&A flexibility. The adjusted net profit of 2024 (net profit after deduction of AT1-dividends) allows Erste Group to target a regular dividend equalling 41.2% of adjusted net profit as well as the execution of a third share buyback in the amount of 23.7% of adjusted net profit, subject to regulatory approval.

Potential risks to the guidance include (geo)political and economic (including monetary and fiscal policy impacts) developments, regulatory measures as well as changes to the competitive environment. International (military) conflicts, such as the war in Ukraine and in the Middle East do not impact Erste Group directly, as it has no operating presence in the regions involved. Indirect effects, such as financial markets volatility, sanctions-related knock-on effects, supply chain disruptions or the emergence of deposit insurance or resolution cases cannot be ruled out, though. Erste Group is moreover exposed to non-financial and legal risks that may materialise regardless of the economic environment. Worse than expected economic development may put goodwill at risk.

PERFORMANCE IN DETAIL
January-December 2024 compared with January-December 2023

Net interest income

Net interest income rose in the CEE core markets, most notably in the Czech Republic, Romania and Hungary. This was mainly due to higher loan volumes and higher interest income from debt securities. These effects were partly compensated by lower interest income from cash balances at central banks and higher interest expenses on debt securities in issue. The net interest margin (calculated as the annualised sum of net interest income, dividend income and net result from equity method investments over average interest-bearing assets) remained nearly stable at 2.46% (2.50%).

Net fee and commission income

Growth was achieved across all core markets and nearly all income categories. Significant rises were recorded in payment services, driven by a larger number of transactions and repricing, as well as in asset management. The development of insurance brokerage was likewise positive.

Net trading result & gains/losses from financial instruments measured at fair value through profit or loss

Net trading result as well as the line item gains/losses from financial instruments measured at fair value through profit or loss are materially affected by the fair value measurement of debt securities issued. The related valuation is shown in the fair value result, the valuation of corresponding hedges in the net trading result.

Net trading result deteriorated to EUR 519 million (EUR 754 million) due to valuation effects resulting from interest rate developments in the securities and derivatives business. Gains/losses from financial instruments measured at fair value through profit or loss trended in the opposite direction and improved to EUR -82 million (EUR -306 million), primarily due to a decline in losses from the valuation of debt securities in issue at fair value.

General administrative expenses

Personnel expenses were up in nearly all core markets – most significantly in Austria – driven mostly by collective salary agreements. The rise in other administrative expenses was primarily attributable to higher IT, marketing and consulting expenses. Contributions to deposit insurance schemes declined to EUR 72 million (EUR 114 million). In Austria, contributions fell to EUR 33 million (EUR 68 million), in the Czech Republic to EUR 16 million (EUR 20 million).

The cost/income ratio improved to 47.2% (47.6%).

Headcount as of end of the period

Gains/losses from derecognition of financial instruments not measured at fair value through profit or loss and of financial assets measured at amortised cost

Losses from this position amounted to EUR 91 million (EUR 141 million). This includes most notably negative results from the sale of securities in the Czech Republic and in Austria.

Impairment result from financial instruments

The impairment result from financial instruments amounted to EUR -397 Mio (EUR -128 million). Net allocations to provisions for loans and advances increased – most notably in Austria – to EUR 394 million (EUR 264 million). Positive contributions came from income from the recovery of loans already written off, primarily in Austria, in the amount of EUR 72 million (EUR 80 million). Allocations to provisions for loan commitments and financial guarantees amounted to EUR 54 million (net releases of EUR 70 million).

Other operating result

Other operating result is significantly affected by contributions to resolution funds and taxes and levies on banking activities. Contributions to resolution funds declined in all markets to EUR 28 million (EUR 113 million). The sharp decline is mainly due to the discontinuation of annual regular contributions from credit institutions in the euro zone in 2024. Taxes and levies on banking activities included in this line item rose to EUR 245 million (EUR 183 million). Thereof, EUR 40 million (EUR 46 million) were payable by Austrian entities. In Hungary, banking levies rose to a total of EUR 168 million (EUR 137 million): in addition to the regular Hungarian banking tax of EUR 22 million (EUR 17 million), a windfall tax based on the previous year's net revenues was posted in the amount of EUR 52 million (EUR 48 million). The financial transaction tax amounted to EUR 91 million (EUR 71 million). In Romania, the newly introduced banking tax amounted to EUR 37 million. The Austrian entities posted allocations of EUR 102 million to a provision relating to the interbank exemption pursuant to Art 6 sec 1 subsec 28 (2nd sentence) Austrian VAT Act. This exemption might be classified by the European Court of Justice or the EU Commission as incompatible with EU law and may have to be refunded. The balance of allocations/releases of other provisions amounted to EUR 23 million (EUR ‑23 million).

Net result attributable to owners of the parent

Taxes on income amounted to EUR 1,053 million (EUR 874 million). The decline in the minority charge to EUR 819 million (EUR 923 million) was attributable to lower profitability at the savings banks. The net result attributable to owners of the parent rose to EUR 3,125 million (EUR 2,998 million) on the back of the strong operating result.

FINANCIAL RESULTS – QUARTER-ON-QUARTER COMPARISON

Fourth quarter of 2024 compared to third quarter of 2024

Net interest income was up 1.8%, most notably in Austria (Holding) and Romania. Net fee and commission income increased by 6.1%, primarily from asset management and payment services.

Net trading result deteriorated mainly due to a decline in the foreign exchange business. Gains/losses from financial instruments measured at fair value through profit or loss improved primarily due to lower valuation losses of debt securities in issue measured at fair value.

General administrative expenses rose by 16.5% on the back of seasonal effects. Personnel expenses increased – mostly due to provisions for bonuses – by 12.7%. The rise in other administrative expenses (+29.8%) is mostly attributable to higher IT, marketing and consulting expenses. The cost/income ratio stood at 51.4% (45.1%).

Gains/losses from derecognition of financial instruments not measured at fair value through profit or loss amounted to EUR -67 million (EUR -22 million). This reflects mainly losses from the sale of fixed-income securities in the Czech Republic, Slovakia and Hungary.

The deterioration in the impairment result from financial instruments was mainly attributable to net allocations to provisions for loans and advances.

Other operating result deteriorated primarily due to impairment losses on tangible assets and software, provisions for legal cases and allocations to a provision in the amount of EUR 12 million relating to the interbank exemption pursuant to Art 6 sec 1 subsec 28 (2nd sentence) Austrian VAT Act. Taxes and levies on banking activities amounted to EUR 51 million (EUR 59 million). Thereof, EUR 31 million (EUR 40 million) were charged in Hungary. In Austria, banking tax amounted to EUR 10 million (EUR 10 million), in Romania to EUR 10 million (EUR 9 million).

DEVELOPMENT OF THE BALANCE SHEET

31 December 2024 compared with 31 December 2023

The decline in cash and cash balances to EUR 25.1 billion (EUR 36.7 billion) was primarily due to a decrease in cash balances at central banks. Trading and investment securities held in various categories of financial assets, primarily debt securities of governments, increased to EUR 75.8 billion (EUR 63.7 billion).

Loans and advances to credit institutions (net), including demand deposits other than overnight deposits, increased – primarily due to repo business volumes in the Czech Republic – to EUR 27.0 billion (EUR 21.4 billion). Loans and advances to customers (net) increased to EUR 218.1 billion (EUR 207.8 billion), most notably in Austria, the Czech Republic and Romania. Growth was recorded in both retail and corporate business.

Loan loss allowances for loans to customers were unchanged at EUR 4.1 billion (EUR 4.1 billion). The NPL ratio – non-performing loans as a percentage of gross customer loans – deteriorated slightly to 2.6% (2.3%), the NPL coverage ratio (based on gross customer loans) slipped to 72.5% (85.1%).

Financial liabilities – held for trading amounted to EUR 1.8 billion (EUR 2.3 billion). Deposits from banks declined to EUR 21.3 billion (EUR 22.9 billion); deposits from customers increased to EUR 241.7 billion (EUR 232.8 billion) due to growth in term and savings deposits of retail and corporate customers. The loan-to-deposit ratio stood at 90.2% (89.3%). Debt securities in issue rose to EUR 51.9 billion (EUR 43.8 billion) on increased issuance activity.

Total assets rose to EUR 353.7 billion (EUR 337.2 billion). Total equity increased to EUR 30.8 billion (EUR 28.5 billion). This includes AT1 instruments in the amount of EUR 2.7 billion. After regulatory deductions and filtering according to the Capital Requirements Regulation (CRR) common equity tier 1 capital (CET1, CRR final) rose to EUR 24.0 billion (EUR 22.9 billion) as were total own funds (CRR final) to EUR 30.9 billion (EUR 29.1 billion). Total risk – risk-weighted assets including credit, market and operational risk (CRR final) – increased to EUR 159.1 billion (EUR 146.5 billion).

The total capital ratio, total eligible qualifying capital in relation to total risk (CRR final), stood at 19.5% (19.9%), well above the legal minimum requirement. The tier 1 ratio was 16.8% (17.3%), the common equity tier 1 ratio 15.1% (15.7%) (both ratios CRR final).

BUSINESS DEVELOPMENT

January-December 2024 compared with January-December 2023

The tables and information below provide a brief overview of the development in the core markets by geographical segments (operating segments) focusing on selected and summarized items. For more details please see Note 28 Segment reporting. At www.erstegroup.com/investorrelations additional information is available in Excel format.

Operating income consists of net interest income, net fee and commission income, net trading result, gains/losses from financial instruments measured at fair value through profit or loss, dividend income, net result from equity method investments and rental income from investment properties & other operating leases. The latter three listed items are not shown in the tables below. Net trading result and gains/losses from financial instruments measured at fair value through profit or loss are summarized under one position. Operating expenses correspond to the position general administrative expenses. Operating result is the net amount of operating income and operating expenses. Risk provisions for loans and receivables are included in the position impairment result from financial instruments. Other result summarizes the positions other operating result and gains/losses from financial instruments not measured at fair value through profit or loss, net. The cost/income ratio is calculated as operating expenses in relation to operating income. The return on allocated capital is defined as the net result after tax/before minorities in relation to the average allocated capital.

AUSTRIA

Erste Bank Oesterreich & Subsidiaries

The Erste Bank Oesterreich & Subsidiaries (EBOe & Subsidiaries) segment comprises Erste Bank der oesterreichischen Sparkassen AG (Erste Bank Oesterreich) and its main subsidiaries (e.g. s Bausparkasse, Salzburger Sparkasse, Tiroler Sparkasse, Sparkasse Hainburg).

Net interest income decreased due to the repricing of customer deposits and higher volumes of term deposits and savings accounts. This was only partially offset by asset side repricing resulting from higher average interest rates and higher customer loan volumes. Net fee and commission income rose mainly on the back of higher payment and securities fees. Net trading result and gains/losses from financial instruments at FVPL increased on valuation effects. Operating expenses went up due to higher personnel and IT expenses which was partially compensated by the lower contribution to the deposit insurance fund of EUR 12 million (EUR 27 million). Overall, operating result decreased, and the cost/income ratio worsened. Impairment result from financial instruments worsened due to rating downgrades and new defaults. Other result improved on the discontinuation of payments into the resolution fund in 2024 (EUR 16 million in 2023) as the target level was reached, a decrease of banking tax to EUR 7 million (EUR 16 million) due to a one-off payment in 2023, and a release of provisions for legal expenses, which was partially offset by the provision for the interbank VAT exemption. Overall, the net result attributable to owners of the parent decreased.

Savings Banks

The Savings Banks segment includes those savings banks which are members of the Haftungsverbund (cross-guarantee system) of the Austrian savings banks sector and in which Erste Group does not hold a majority stake but which are fully controlled according to IFRS 10. The fully or majority owned savings banks Erste Bank Oesterreich, Tiroler Sparkasse, Salzburger Sparkasse, and Sparkasse Hainburg are not part of the Savings Banks segment.

Net interest income decreased due to repricing of customer deposits and higher volumes of term deposits and savings accounts, only partially compensated by higher income from customer loans. Net fee and commission income increased on the back of higher payment and securities fees. The worsening in net trading result and gains/losses from financial instruments at FVPL was driven by valuation effects. Operating expenses increased due to higher personnel and IT expenses, partially compensated by a lower contribution to the deposit insurance fund of EUR 21 million (EUR 41 million). Consequently, operating result decreased, and the cost/income ratio worsened. Impairment result from financial instruments deteriorated mainly due to downgrades and higher defaults. The worsening of other result was driven mainly by the provision for interbank VAT exemption partially offset by the discontinuation of payments into the resolution fund in 2024 (EUR 12 million in 2023) – the target level was reached – as well as release of provisions for commitments and pending legal cases and tax litigations. Banking tax increased slightly to EUR 7 million (EUR 5 million). Overall, the net result attributable to the owners of the parent decreased.

Other Austria

The Other Austria segment comprises the Corporates and Group Markets business of Erste Group Bank AG (Holding), Erste Group Immorent, Erste Asset Management and Intermarket Bank.

Net interest income decreased primarily due to a lower contribution of money market and interest rate derivatives business in Group Markets, and a non-recurring positive one-off income in the corporate portfolio of the Holding. Net fee and commission income improved mainly due to higher asset management fees, as well as higher securities fees in Group Markets and higher lending fees in the corporate business of the Holding. Net trading result and gains/losses from financial instruments at FVPL improved on valuation effects. Operating expenses increased on the back of higher personnel, IT and project related costs. Consequently, operating result as well as the cost/income ratio deteriorated. The impairment result from financial instruments deteriorated mostly due to the non-recurrence of last year's significant release caused by rating upgrades and recoveries as well as muted NPL inflows. Other result deteriorated due to lower selling gains in Erste Group Immorent and the provision associated with the interbank VAT exemption, only partially compensated by the discontinuation of payments into the resolution fund in 2024 (EUR 8 million in 2023) and lower provisions for other commitments in the corporate portfolio of the Holding. Overall, the net result attributable to owners of the parent declined.

CENTRAL AND EASTERN EUROPE

Czech Republic

The segment analysis is done on a constant currency basis. The CZK depreciated by 4.7% against the EUR compared to the same period of the last year. Net interest income in the Czech Republic segment (comprising Česká spořitelna Group) increased on the positive contribution of lending business supported by the newly acquired portfolios of Hellobank. The increase in net fee and commission income was mainly driven by higher securities fees. Net trading result and gains/losses from financial instruments at FVPL improved on positive valuation effects. Operating expenses increased in FX-adjusted terms mainly due to higher personnel and IT costs. Contributions into the deposit insurance fund decreased to EUR 16 million (EUR 20 million). Overall, the operating result increased, and the cost/income ratio improved. Impairment result from financial instruments improved due to a parameter update (mainly affected by a review of the forward-looking information methodology considered in PDs) and the non-recurrence of higher provisions related to the integration of the Sberbank portfolio last year. Other result improved on a lower contribution to the resolution fund of EUR 20 million (EUR 32 million) and lower impairments of non-financial assets. These positive developments were partially offset by higher selling losses from bonds. Altogether, these developments led to a significant increase in the net result attributable to the owners of the parent.

Slovakia

Net interest income in the Slovakia segment (comprising Slovenská sporitel'ňa Group) increased due to higher customer loan volumes and higher average interest rates, which was partially offset by the repricing of liabilities, higher volumes of term deposits and savings accounts as well as higher expenses for issued bonds. Net fee and commission income increased on the back of higher securities, payment and insurance brokerage fees. Net trading result and gains/losses from financial instruments at FVPL remained largely stable. Operating expenses increased mainly due to higher personnel and IT expenses. The contributions into the deposit insurance fund amounted to EUR 3 million (EUR 2 million). Operating result increased and the cost/income ratio improved. Impairment result from financial instruments improved slightly driven by a methodological change in retail risk parameter estimation, which was partially offset by higher defaults and rating downgrades in Corporate business. Other result remained largely stable as the selling losses for government bonds were compensated by the discontinuation of the payments into the resolution fund in 2024 (EUR 4 million in 2023) as the target level was reached and a release of legal provisions. Overall, the net result attributable to the owners of the parent declined, which was primarily driven by the newly introduced banking tax in the amount of EUR 103 million booked in the taxes on income line.

Romania

The segment analysis is done on a constant currency basis. The RON depreciated by 0.6% against the EUR compared to the same period of the last year. Net interest income in the Romania segment (comprising Banca Comercială Română Group) was positively impacted by higher business volumes and central bank placements. Net fee and commission income went up mainly on higher payment and insurance brokerage fees. The decrease of the net trading result and gains/losses from financial instruments at FVPL was attributable to the P&L neutral shift from net trading result to net interest income related to securities. Operating expenses increased mainly due to higher personnel, marketing and IT expenses. The contributions into the deposit insurance fund decreased to EUR 4 million (EUR 5 million). Overall, operating result and the cost/income ratio improved. Impairment result from financial instruments deteriorated due to higher defaults, mitigated by parameter update (review of the forward-looking information considered in PDs). The deterioration of other result was driven by the new banking tax of EUR 37 million and higher impairments of non-financial assets, partially offset by lower payments into the resolution fund of EUR 6 million (EUR 10 million). Overall, the net result attributable to the owners of the parent increased.

Hungary

The segment analysis is done on a constant currency basis. The HUF depreciated by 3.5% against the EUR compared to the same period of the last year. Net interest income in the Hungary segment (comprising Erste Bank Hungary Group) was positively impacted by lower interest expenses on customer deposits due to a change in the deposit structure. Net fee and commission income rose on higher securities and payment fees. Net trading result and gains/losses from financial instruments at FVPL declined due to valuation effects. Operating expenses increased due to higher personnel and IT expenses. The contributions into the deposit insurance fund amounted to EUR 8 million (EUR 5 million). Despite the increase of the operating result the cost/income ratio worsened marginally. Impairment result from financial instruments improved due to recoveries and upgrades from the non-performing portfolio. The deterioration of the other result was primarily driven by breakage costs related to intragroup transactions. Regulatory charges went up: the banking tax increased to EUR 76 million (EUR 66 million); it included the regular banking tax and a windfall profit tax of EUR 52 million (EUR 48 million). The financial transaction tax went up to EUR 92 million (EUR 71 million). The contribution to the resolution fund was stable at EUR 2 million. Lower impairments of non-financial assets contributed positively. Overall, the net result attributable to the owners of the parent increased.

Croatia

Net interest income in the Croatia segment (comprising Erste Bank Croatia Group) increased due to higher average interest rates, higher customer loan volumes as well as higher income from securities. Net fee and commission income went up mainly on higher payment fees. Net trading result and gains/losses from financial instruments at FVPL remained largely stable. Operating expenses increased on the back of higher personnel, IT as well as legal and consultancy costs. The contribution into the deposit insurance fund amounted to EUR 3 million (EUR 9 million). Despite the increase of the operating result the cost/income ratio worsened marginally. Impairment result from financial instruments still benefited from net releases due to upgrades and recoveries from defaults, albeit at a lower level. The improvement of other result was mainly driven by lower selling losses from bonds and lower provisions for legal expenses. Overall, the net result attributable to the owners of the parent remained stable, driven among others by an additional windfall tax in the amount of EUR 6 million booked in the taxes on income line.

Serbia

The segment analysis is done on a constant currency basis. The Serbian Dinar (RSD) was largely stable against the EUR compared to the same period of the last year. Net interest income in the Serbia segment (comprising Erste Bank Serbia Group) increased due to higher loan volumes and higher average interest rates. Net fee and commission income increased mainly due to higher payment, documentary and insurance brokerage fees. The net trading result and gains/losses from financial instruments at FVPL improved on a higher contribution of foreign currency transactions. Operating expenses rose mainly due to higher personnel expenses and depreciation. The contribution into the deposit insurance fund amounted to EUR 6 million (EUR 5 million). Consequently, operating result increased and the cost/income ratio improved significantly. Impairment result from financial instruments remained stable. Other result improved on lower provisions for legal expenses. Overall, the net result attributable to owners of the parent increased.

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Emitter:	Erste Group Bank AG Am Belvedere 1 1100 Wien Austria
Contact Person:	Thomas Sommerauer/ Simone Pilz
Phone:	+43 (0)50100-17326
E-Mail:	investor.relations@erstegroup.com
Website:	www.erstegroup.com
ISIN(s):	AT0000652011 (Share)
Stock Exchange(s):	Vienna Stock Exchange (Official Trade)
Other Stock Exchanges:	Bucharest Stock Exchange, Prague Stock Exchange