- Earnings quality increases year-on-year, driven by higher net fee and commission income (+9.5%) and net interest income (+1.1%)
- Net result lower due to higher banking taxes and collective agreement increases
- Loan volume and deposit volume rise by +0.9% and +1.9% YTD, respectively
- Risk costs (-9.9% YoY) decline on the basis of an improved asset quality
Erste Group Bank AG achieved a good operating performance in its core business in the first quarter of 2025. Net interest income increased slightly year-on-year by 1.1% to 1.87 billion euros (Q1 2024: 1.85 billion euros), while net fee and commission income surged by 9.5% to 780 million euros (Q1 2024: 712 million euros). The growth in fee income was particularly driven by stronger demand for capital market products and by payment transactions. Operating income grew year-on-year by 0.5% to 2.80 billion euros (Q1 2024: 2.79 billion euros), although the previous year's quarter had benefited from one-off effects. The operating result decreased in the first quarter of 2025 by 3.2% to 1.46 billion euros (Q1 2024: 1.51 billion euros). The decline was primarily due to a rise in personnel expenses as a result of collective agreement increases, as well as in IT costs. Risk costs decreased both year-on-year and quarter-on-quarter and amounted to 85 million euros in the first quarter (Q1 2024: 95 million euros). This was mainly due to the better performance of the Austrian business, with fewer defaults in the first quarter of 2025. Banking taxes increased year-on-year by 41% to 121 million euros (Q1 2024: 86 million euros). Therefore, the net result decreased to 743 million euros, which was 5.1% lower year-on-year (Q1 2024: 783 million euros). Loan volumes at the end of the first quarter of 2025 stood at 220.1 billion euros, an increase of 0.9% since the start of the year, mainly due to loan growth in the Czech Republic and Croatia. Year-on-year, the loan volume grew by 5.8%, thus exceeding the five percent mark for the first time since the second quarter of 2023. Deposit volumes also grew by 1.9% quarter-on-quarter to 246.1 billion euros, which corresponded to a rise of 4.6% year-on-year. The common equity tier 1 ratio (CET1, pro forma) stood at 16.2% thanks to the strong operating performance and positive effects from the implementation of Basel IV. It thus significantly exceeded Erste Group’s 14% target.
“In times like these, reliability is important and our results underscore this. We were able to improve the quality of our results and to keep our risk costs low. At the same time, we have posted growth in both our loan and deposit volumes and have remained a reliable partner to our customers. In addition, we have further strengthened our capital position, which enables us to both meet the challenges of a dynamic market environment and to make the most of opportunities that arise,” says Peter Bosek, CEO of Erste Group.
“We were able to achieve a solid operating performance in the first quarter despite all the volatility and uncertainties in the global economic system. This strong foundation allows us to maintain our outlook for the full year 2025 and to even slightly increase our guidance for fee income growth,” says Stefan Dörfler, CFO of Erste Group.