Erste Group: Solid FY 2022 Results Despite Macroeconomic Deterioration in Core Markets

The commentary analyses Erste Group’s FY 2022 results.

Summary highlights from the commentary include:

• Erste Group Bank AG (Erste or the Group) reported a full-year 2022 net attributable income of EUR 2.2 billion, up by over 12.5% YoY, mainly driven by net interest income, which was up by 19.6% YoY.

• The Group expressed a positive outlook for their core revenues in 2023, including a rise in NII of 10% supported by loan growth of around 5%.

• Cost of risk (CoR) was up but remained low at 15 bps in 2022 from 9 bps in 2021, driven by updated credit risk parameters and portfolio overlays for cyclical and energy intense industries. Erste’s 2023 expects CoR to remain below 35 bps in 2023.

• Erste also improved its asset quality with an historically low gross NPL ratio of 2.0% at end-2022, down from 2.4% at end-2021, following a track record of continued asset quality improvement.

“Erste’s increased profitability in 2022 across most of its core markets reflects resilience despite macroeconomic deterioration in those geographies, which already experienced deceleration in economic growth in 2022” said Borja Barragán, Senior Analyst from the DBRS Morningstar Global Financial Institutions team. “We expect Erste to manage this challenging environment effectively thanks to satisfactory business dynamics, appropriate risk provisioning and sound capitalisation, which can absorb the potential risks present in its core markets.”.