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Erste Group Bank AG (EBKDY)
OTHER OTC:EBKDY
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Erste Group Bank AG
(OTC:EBKDY)
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Rating:72Outperform
Price Target:
$67.00
▲(9.71% Upside)
The score is driven by solid financial performance with improving profitability and strong recent cash generation, supported by a clear technical uptrend. Valuation appears reasonable with a moderate dividend. The latest earnings call was constructive with upgraded guidance and record revenues, but rising leverage, cost pressures, and tax/macro uncertainties cap the upside.
Positive Factors
Strong Loan and Deposit Growth
The significant increase in loan and deposit volumes indicates strong demand for Erste Group's financial products, enhancing its market position and revenue potential in the long term.
Upgraded Financial Guidance
Upgraded financial guidance reflects management's confidence in sustained revenue growth and improved operational efficiency, supporting long-term profitability.
Integration of Santander Polska
The successful integration of Santander Polska will expand Erste Group's market presence and customer base in Poland, contributing to long-term growth and diversification.
Negative Factors
Elevated Operating Costs
Rising operating costs can erode profit margins and reduce financial flexibility, posing a challenge to maintaining long-term profitability and operational efficiency.
Higher Banking Taxes
Higher banking taxes reduce net income and could impact Erste Group's ability to reinvest in growth initiatives, affecting long-term financial performance.
Risk of Economic Slowdown
Economic slowdowns in key markets can limit revenue growth opportunities and increase credit risk, challenging Erste Group's long-term growth prospects.
Erste Group Bank AG (EBKDY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$52.57B
Dividend Yield2.84%
Average Volume (3M)1.61K
Price to Earnings (P/E)15.3
Beta (1Y)0.59
Revenue Growth-7.11%
EPS Growth2.78%
CountryUS
Employees45,856
SectorFinancial
Sector Strength70
IndustryBanks - Regional
Share Statistics
EPS (TTM)1.27
Shares Outstanding821,028,750
10 Day Avg. Volume0
30 Day Avg. Volume1,612
Financial Highlights & Ratios
PEG Ratio-0.38
Price to Book (P/B)2.01
Price to Sales (P/S)2.06
P/FCF Ratio-4.75
Enterprise Value/Market Cap2.38
Enterprise Value/Revenue9.16
Enterprise Value/Gross Profit14.87
Enterprise Value/Ebitda42.84
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Erste Group Bank AG Business Overview & Revenue Model
Company DescriptionErste 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.
How the Company Makes MoneyErste Group Bank AG generates revenue primarily through interest income from loans and advances to customers, which constitutes a significant portion of its earnings. The bank also earns money through fees and commissions associated with various banking services, such as account maintenance, transaction processing, and advisory services. Additionally, Erste Group benefits from its investment banking activities, including underwriting services and asset management. The bank has established strategic partnerships and collaborations that enhance its service offerings and market reach, contributing to its overall profitability. Key factors influencing its earnings include interest rate fluctuations, regulatory changes, and economic conditions in the regions where it operates.
Erste Group Bank AG Earnings Call Summary
Earnings Call Date:Oct 31, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Feb 26, 2026
Earnings Call Sentiment Positive
The earnings call reflected strong financial performance with record-breaking revenues and profitability. The integration of Santander Polska and upgraded financial guidance are positive signs. However, challenges such as elevated operating costs, increased banking taxes, and economic uncertainties in key markets pose risks.Q3-2025 Updates
Positive Updates
Record-Breaking Revenue and Profitability
Erste Group posted quarterly revenues exceeding EUR 2.9 billion for the first time, supported by a record net interest income of close to EUR 2 billion and fees of almost EUR 800 million. The return on tangible equity was 18% for the quarter.
Strong Loan and Deposit Growth
Customer loan volumes increased by almost EUR 10 billion year-to-date, with a growth rate exceeding 5%. Deposits grew by 2.5% year-to-date, with core retail and SME deposits increasing by 2.4%.
Upgraded Financial Guidance for 2025
The guidance for net interest income growth was upgraded to more than 2%, and the cost/income ratio target was improved to around 48%.
Integration of Santander Polska on Track
Erste Group is progressing well towards the consolidation of Santander Polska, expecting approval by year-end 2025, with all competition authority approvals received.
Negative Updates
Elevated Operating Costs
Operating costs increased by 8% year-on-year due to higher staff costs and IT expenses. Although efforts are underway to reduce cost inflation, it remains a challenge.
Higher Banking Taxes
Increased banking taxes in Austria and Romania have impacted the financials negatively.
Potential Impact of Polish Bank Tax
There is uncertainty regarding the impact of a proposed increase in the Polish bank tax, which could affect the profitability of the Santander Polska acquisition.
Risk of Economic Slowdown in Key Markets
The Austrian economy struggled to produce growth, and the German economy is expected to flatline, which could pose challenges for future growth.
Company Guidance
During the Erste Group's third quarter 2025 results conference call, the company provided several key financial metrics and guidance updates. Erste Group achieved a record quarterly revenue exceeding EUR 2.9 billion, driven by a net interest income of nearly EUR 2 billion and fees of almost EUR 800 million, both quarterly records. The company saw a strong loan growth, with customer loans increasing by over EUR 10 billion since the start of the year, supported by robust volume dynamics across Central and Eastern Europe. The cost/income ratio is expected to be around 48% for the full year, improved from the previous expectation of below 50%. The return on tangible equity for the third quarter was flat at 18%, and the company adjusted its net interest income growth guidance for 2025 to more than 2%. Erste Group expects to maintain its risk costs at about 20 basis points for the year. The CET1 ratio is projected to exceed 18.5% by year-end if the Santander Polska acquisition does not close before then, and over 14% if it does. Looking ahead, Erste Group anticipates continued positive operating leverage and growth momentum, projecting a return on tangible equity of about 19% for the combined entity in 2026.Erste Group Bank AG Financial Statement Overview
Summary
Strong profitability and improving TTM results (net margin ~19.7%, EBIT margin ~23.8%, net income up vs. 2024) and robust TTM cash generation, but balance-sheet risk is elevated due to rising leverage (debt-to-equity ~3.80x vs. ~2.27x in 2024) and cash-flow volatility across years.Income Statement
Profitability is solid and improving: TTM (Trailing-Twelve-Months) net margin is ~19.7% with EBIT margin ~23.8%, and net income has risen versus 2024 ($3.33B TTM vs. $3.13B in 2024). Revenue growth is positive in TTM (~4.0%) after being essentially flat in 2024. Offsetting this, results show some volatility across years (e.g., 2023 margins appear inconsistent versus other periods), which reduces confidence in the smoothness of the earnings trend.78
Positive
Balance Sheet
The bank generates a healthy return on equity (~13.6% TTM), indicating good capital productivity. However, leverage is elevated and has increased: debt-to-equity is ~3.80x in TTM versus ~2.27x in 2024, alongside a large absolute debt load (~$97.8B TTM). Equity has grown, but rising leverage is a key risk factor for balance-sheet resilience in stressed conditions.58
Neutral
Cash Flow
Cash generation is strong in TTM (operating cash flow ~$17.6B; free cash flow ~$16.9B), and free cash flow slightly exceeds net income (about 1.02x), which supports earnings quality. That said, cash flow has been notably volatile—operating and free cash flow were negative in 2024 and 2022—so the latest strength looks more like a rebound than a consistently stable trend.64
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 13.66B | 22.48B | 22.58B | 13.69B | 9.21B | 8.96B |
| Gross Profit | 8.41B | 10.89B | 10.32B | 8.40B | 7.60B | 7.17B |
| EBITDA | 2.92B | 5.55B | 5.43B | 3.82B | 3.54B | 1.98B |
| Net Income | 3.17B | 3.13B | 3.00B | 2.17B | 1.92B | 783.10M |
Balance Sheet | ||||||
| Total Assets | 364.01B | 353.74B | 337.15B | 323.87B | 307.43B | 277.39B |
| Cash, Cash Equivalents and Short-Term Investments | 0.00 | 42.75B | 51.43B | 35.68B | 61.92B | 52.60B |
| Total Debt | 83.53B | 52.58B | 44.43B | 36.57B | 32.72B | 31.24B |
| Total Liabilities | 333.84B | 322.97B | 308.65B | 298.56B | 283.91B | 254.98B |
| Stockholders Equity | 21.98B | 23.14B | 21.65B | 19.35B | 18.00B | 17.34B |
Cash Flow | ||||||
| Free Cash Flow | 15.07B | -9.78B | 2.06B | -9.29B | 10.86B | 23.94B |
| Operating Cash Flow | 15.78B | -9.03B | 2.59B | -8.81B | 11.40B | 24.49B |
| Investing Cash Flow | -4.71B | -850.00M | -599.00M | -233.00M | -483.40M | -351.60M |
| Financing Cash Flow | -9.55B | -1.55B | -1.02B | -756.00M | -1.31B | 1.13B |
Erste Group Bank AG Technical Analysis
Positive
61.07
Price Trends
58.27
Positive
53.99
Positive
48.07
Positive
Market Momentum
1.78
Negative
77.99
Negative
100.03
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EBKDY, the sentiment is Positive. The current price of 61.07 is below the 20-day moving average (MA) of 61.78, above the 50-day MA of 58.27, and above the 200-day MA of 48.07, indicating a bullish trend. The MACD of 1.78 indicates Negative momentum. The RSI at 77.99 is Negative, neither overbought nor oversold. The STOCH value of 100.03 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for EBKDY.
Erste Group Bank AG Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $87.87B | 12.24 | 12.18% | 3.77% | 2.91% | 33.77% | |
77 Outperform | $33.43B | 12.79 | 9.78% | 2.76% | -0.81% | 20.34% | |
72 Outperform | $52.57B | 15.34 | 14.12% | 2.84% | -7.11% | 2.78% | |
72 Outperform | $65.10B | 13.32 | 8.24% | 4.12% | 22.02% | ― | |
71 Outperform | $85.33B | 19.49 | 8.36% | 3.19% | -20.94% | -18.71% | |
69 Neutral | $92.77B | 12.85 | 19.89% | 9.77% | 11.82% | 3.41% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% |
* Financial Sector Average
EBKDY
Erste Group Bank AG
65.69
34.90
113.36%
TFC
Truist Financial
50.31
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9.95%
ITUB
Itau Unibanco
8.88
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95.08%
LYG
Lloyds Banking
5.81
2.86
96.95%
MTB
M&T Bank
216.89
20.85
10.64%
USB
US Bancorp
55.74
9.33
20.09%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.