Erste Group Bank

Erste Group is a financial services provider based in Austria. As of Dec 31 2015, Co.'s total assets amounted to Euro199,743 million and the number of customers was approximately 16.5 million. Co.'s key business is the retail business, covering the entire spectrum from lending, deposit and investment products to current accounts and credit cards. In addition to providing financial services to private individuals, Co.'s core activities also include advisory services and support for corporate clients in financing, investment and access to international capital markets, public sector funding and interbank market operations.
  • TickerEBS
  • ISINAT0000652011
  • ExchangeVienna Stock Exchange
  • SectorBanks
  • CountryAustria

Analysts

Hai Thanh Le Phuong

Erste - NII Miss But Other Figures Compensate

Erste - Instant Earnings Comment Recommendation:  Accumulate (unch.) Target price (12M): EUR 37.3 (unch.) Erste reported net income came to EUR 355 mln, in line with our forecast and above market est. of EUR 335 mln. The Bank booked EUR 151 mln related to Romanian legal provisions. NII disappointed the market as it grew by only 0.7% q-o-q and 3.3% y-o-y to EUR 1,169 mln (vs. expectation of EUR 1,187 mln) mainly due to lower margins in Other Austria, CZ and Hungary. Net F&C also improved somewhat by 2.5% but higher operating income (y-o-y +5.9%) was thanks to strong trading results. Co...

1 director bought

A director at Erste Group Bank Ag bought 3,000 shares at 32.309EUR and the significance rating of the trade was 60/100. Is that information sufficient for you to make an investment decision? This report gives details of those trades and adds context and analysis to them such that you can judge whether these trading decisions are ones worth following. Included in the report is a detailed share price chart which plots discretionary trades by all the company's directors over the last two years clearly showing Close periods where trading activity is restricted under listing rules. The names of...

Thanks to a better fundamental star rating, ERSTE GROUP BANK AG sees an upgrade to Neutral

The independent financial analyst theScreener just awarded an improved star rating to ERSTE GROUP BANK AG (AT), active in the Money Center Banks industry. As regards its fundamental valuation, the title receives an improved star rating and now shows 3 out of 4 possible stars. With regard to its market behaviour, it remains unchanged and can be qualified as risky. theScreener considers that these elements allow slightly upgrading its rating to Neutral. As of the analysis date July 9, 2019, the closing price was EUR 33.39 and its expected value was estimated at EUR 33.09.

Research Team

Focus: keeping our BUY on Erste Bank, with a lower EUR 38.2 PT; Europe macro – reflections on the new EU leadership nominations; Greece macro – elections on Sunday – all you need to know; Turkey macro – inflation down

HEADLINES: • Erste Bank: Keeping promise on ROTE (stays BUY) • Europe macro: reflections on the new EU leadership nominations • Greece macro: elections on Sunday - all you need to know • Turkey macro: inflation down, the case for modest rate cuts is on • Polish banks: Parliament excludes conversion scheme from president's draft bill on mortgagors • Famur: wins PLN 67m contract from PGG for delivery of roof supporters POSITIVE • Warsaw Stock Exchange: launches project aimed at developing proprietary trading system NEUTRAL • Polish telecoms: mobile number portability in 2Q19 NEUTRAL • Sh...

Alex Boulougouris, CFA ...
  • Marta Jezewska-Wasilewska

Erste Bank: Keeping promise on ROTE (stays BUY)

In this report, we revise our financial forecasts for Erste Bank, discuss the risk of introduction of special charges for the banking sector in the Czech Republic, and reflect a EUR 230m negative one-off (in gross profit) in our 2019E expectations due to the unfavourable ruling of the Romanian court regarding building societies. We note that the discussion on sector charges in the Czech Republic restarted in late-April during the EU elections campaign, followed by some political turmoil in Austria in May, and then finally the recent news on a significant one-off loss in Romania. All of the abo...

Erste Group Bank AG: Geographical diversification and lower credit risk insulate Erste against low interest rates

Erste Bank's key credit metrics have improved thanks to the bank's efforts to de-risk its balance sheet, particularly by reducing non-performing loans in Central and Eastern Europe (CEE).

Erste Group Bank AG: Update to credit analysis

Our credit view of Erste Group Bank AG, reflecting the bank's improved asset quality, solid capitalisation and sound funding profile.

Moody's corrects rating and rating history for ISINs AT0000A14PZ1 and AT000B119680 issued by Erste Group Bank AG

Announcement: Moody's corrects rating and rating history for ISINs AT0000A14PZ1 and AT000B119680 issued by Erste Group Bank AG. Global Credit Research- 16 Aug 2017. Frankfurt am Main, August 16, 2017-- Moody's Investors Service has corrected the current rating and rating history for the Series 1257 subordinated fix-to-variable rate note due 2022 and the Series 1172 subordinated fix-to-variable rate note due 2023.

Erste Group Bank AG: Update following rating upgrade to A3/P-2

FINANCIAL INSTITUTIONS CREDIT OPINION 1 August 2017 Update RATINGS Erste Group Bank AG Domicile Vienna, Austria Long Term Debt A3 Type Senior Unsecured - Fgn Curr Outlook Positive Long Term Deposit A3 Type LT Bank Deposits - Fgn Curr Outlook Positive Please see the 

Erste Group Bank AG: Semiannual update

FINANCIAL INSTITUTIONS CREDIT OPINION 22 May 2017 Update RATINGS Erste Group Bank AG Domicile Vienna, Austria Long Term Debt Baa1 Type Senior Unsecured - Fgn Curr Outlook Stable Long Term Deposit Baa1 Type LT Bank Deposits - Fgn Curr Outlook Stable Please see the 

Hai Thanh Le Phuong

Erste - NII Miss But Other Figures Compensate

Erste - Instant Earnings Comment Recommendation:  Accumulate (unch.) Target price (12M): EUR 37.3 (unch.) Erste reported net income came to EUR 355 mln, in line with our forecast and above market est. of EUR 335 mln. The Bank booked EUR 151 mln related to Romanian legal provisions. NII disappointed the market as it grew by only 0.7% q-o-q and 3.3% y-o-y to EUR 1,169 mln (vs. expectation of EUR 1,187 mln) mainly due to lower margins in Other Austria, CZ and Hungary. Net F&C also improved somewhat by 2.5% but higher operating income (y-o-y +5.9%) was thanks to strong trading results. Co...

Alex Boulougouris, CFA ...
  • Marta Jezewska-Wasilewska

Erste Bank: Keeping promise on ROTE (stays BUY)

In this report, we revise our financial forecasts for Erste Bank, discuss the risk of introduction of special charges for the banking sector in the Czech Republic, and reflect a EUR 230m negative one-off (in gross profit) in our 2019E expectations due to the unfavourable ruling of the Romanian court regarding building societies. We note that the discussion on sector charges in the Czech Republic restarted in late-April during the EU elections campaign, followed by some political turmoil in Austria in May, and then finally the recent news on a significant one-off loss in Romania. All of the abo...

Research Team

The Rear-View Mirror – EME markets: Strong month for telecoms, up 11.5% overall in June

EME Equity Market – June 2019 Market performance – ISE30 index the best performer in June, gaining 6.7% in LCU. Other markets were generally stronger in June than in May, with the MSCI EME gaining 6.3% mom in local currency (vs. 0.9% mom in May). Turkey’s ISE30 index gained 6.7% mom, while the ASE increased by 4.6% mom. Bucharest’s BET and Moscow’s MOEX indices gained 3.8% mom each in June, while the Polish WIG20 increased by 3.9% mom. On the other hand, the Czech Republic PX fell 0.2% mom, while Hungary’s BUX dropped 1.5% mom. (All in local currencies.)

Research Team

The Rear-View Mirror – EME markets: Another strong month for ASE index, up 7.4% mom

EME Equity Market – May 2019 Market performance – ASE index the best performer, up 7.4% mom in May. In May, the MSCI EME improved by 0.9% mom. The ASE index rose by 7.4% in May, following a mom rise of 7.2% in April; while Moscow’s index gained 4.1%; and Bucharest’s BET index was up 0.6% mom. On the other hand, the worst performer was Turkey’s ISE30, down 4.8% mom; while the WIG20 index saw mom losses of 4.1%; the BUX index fell 3.8% in May; and Prague’s PX index dropped 2.3% mom.

Derya Guzel

Morningstar | Erste Group 1Q 2019: Interest Rate Hikes and Lending Growth Drive 1Q Results

Erste Group reported first-quarter results of EUR 377 million compared with EUR 336 million in the same period last year, driven by improved interest rates as well as lending growth in most of its core markets. The beneficial operating environment, supported by real wage growth and low unemployment, is expected to continue in 2019, keeping credit costs at a benign level while improved interest rates and loan growth support income generation going forward. We maintain our fair value estimate of EUR 40 per share and no-moat rating. Reference rate hikes in the Czech Republic and Romania as well ...

1 director bought

A director at Erste Group Bank Ag bought 3,000 shares at 32.309EUR and the significance rating of the trade was 60/100. Is that information sufficient for you to make an investment decision? This report gives details of those trades and adds context and analysis to them such that you can judge whether these trading decisions are ones worth following. Included in the report is a detailed share price chart which plots discretionary trades by all the company's directors over the last two years clearly showing Close periods where trading activity is restricted under listing rules. The names of...

Pawel Wieprzowski, PhD

EME Strategy: Polish pension funds' holding data for 2018

The Polish pension funds (OFEs) released their annual holding reports last week, containing all of their stakes. Over the past year, OFEs’ equities allocation has remained broadly unchanged vs. end-2017, at c.85% of net assets. At the same time, the share of foreign equities in OFEs’ equities portfolio fell slightly, from 7.3% to 7.1%. The value of their equity portfolios dropped from c.PLN 153bn to c.PLN 134bn (-c.12% yoy), driven by the negative performance of the equities market (the WIG20 dropped by c.5% yoy on a total return basis, while the WIG lost 9.5% yoy), among other things. The val...

Research Team

Focus: keeping our BUY on Erste Bank, with a lower EUR 38.2 PT; Europe macro – reflections on the new EU leadership nominations; Greece macro – elections on Sunday – all you need to know; Turkey macro – inflation down

HEADLINES: • Erste Bank: Keeping promise on ROTE (stays BUY) • Europe macro: reflections on the new EU leadership nominations • Greece macro: elections on Sunday - all you need to know • Turkey macro: inflation down, the case for modest rate cuts is on • Polish banks: Parliament excludes conversion scheme from president's draft bill on mortgagors • Famur: wins PLN 67m contract from PGG for delivery of roof supporters POSITIVE • Warsaw Stock Exchange: launches project aimed at developing proprietary trading system NEUTRAL • Polish telecoms: mobile number portability in 2Q19 NEUTRAL • Sh...

Research Team

Focus: LiveChat Software’s 4Q18-19 EBITDA beats consensus by 11%; Erste Bank makes EUR 230m provision for old dispute in Romanian High Court; Polish financials – anti-usury bill draft amended, cutting maximum non-interest charges to 20%

HEADLINES: • LiveChat Software: 4Q18-19 EBITDA beats consensus by 11% POSITIVE • Erste Bank: makes EUR 230m provision for old dispute in Romanian High Court NEGATIVE • Polish financials: anti-usury bill draft amended, cutting maximum non-interest charges to 20% NEGATIVE • Play Communications: signs preliminary share purchase agreement for 3S Group NEGATIVE • Richter: AbbVie to acquire Allergen for USD 63bn NEUTRAL • Raiffeisen Int.: sees maximum EUR 15m potential provision related to Romanian building societies NEUTRAL • EME Strategy: MSCI - Kuwait upgraded conditionally to EM (broadly in line...

Research Team

Focus: transferring coverage of Electrica (BUY), Transelectrica (HOLD) and Transgaz (HOLD); Yapi Kredi’s 1Q19 highlights; Erste Bank posts 6% beat vs. net profit estimates in 1Q19, due to LLPs releases; Komercni Banka posts solid 1Q19

HEADLINES: • Romanian utilities: entering murky waters (Electrica stays BUY, Transelectrica & Transgaz stay HOLD – transfer of coverage) • Yapi Kredi: 1Q19 highlights POSITIVE • Erste Bank: posts 6% beat vs. net profit estimates in 1Q19, due purely to LLPs releases • Komercni Banka: posts solid 1Q19 NEUTRAL • Coca-Cola Icecek: 1Q19 review - weak numbers, with 5% beat on EBITDA; Pakistan issues continue NEUTRAL • BRD-GSG: weaker pre-provision profitability, but write-backs support bottom line • OMV: 1Q19 results, in line • OMV Petrom: 1Q19 results, no surprises • MOL: 1Q19 results • Myti...

Research Team

Focus: Turkey macro - borrowing cost update; Kruk’s solid 1Q19 delivery; Hellenic Bank’s full-year results post Coop acquisition and capital issue; Novatek’s 1Q19 results - earnings better, although FCF not as strong as expected

HEADLINES: • Turkey macro: borrowing cost update • Kruk: solid 1Q19 delivery POSITIVE • Hellenic Bank: full-year results post Coop acquisition and capital issue • Novatek: 1Q19 results - earnings better, although FCF not as strong as expected NEUTRAL • Lenta: 1Q19 revenues up 6% on 5% lfl growth NEUTRAL • X5: 1Q19 results above expectations POSITIVE • NIS: 1Q19 results review - weak, as expected NEUTRAL • Bank Pekao: reaches agreement with the trade unions on the group layoffs announced previously NEUTRAL • Erste Bank: supervisory board approves new management board members NEUTRAL • Moscow ...

Research Team

Focus: Turkish Banks - putting CBT swaps into context for the banks; Banca Transilvania – first read on the 1Q19 parent results - strong beat due to provision reversals; PKP Cargo’s CEO does not exclude raising EBITDA forecasts for 2019E

HEADLINES: • Turkish Banks: Putting CBT swaps into context for the banks • Banca Transilvania: first read on the 1Q19 parent results - strong beat due to provision reversals • Kety: 1Q19 results - better than the preliminary figures, broadly in line with our forecasts POSITIVE • PKP Cargo: CEO does not exclude raising the EBITDA forecasts for 2019 following 1H19E POSITIVE • Benefit Systems: incentive programme for foreign companies' managements NEUTRAL • Tofas: to adjust production into two shifts, CEO comments on the domestic market NEUTRAL • MTS: plans to invest in drones, according to Ko...

Thanks to a better fundamental star rating, ERSTE GROUP BANK AG sees an upgrade to Neutral

The independent financial analyst theScreener just awarded an improved star rating to ERSTE GROUP BANK AG (AT), active in the Money Center Banks industry. As regards its fundamental valuation, the title receives an improved star rating and now shows 3 out of 4 possible stars. With regard to its market behaviour, it remains unchanged and can be qualified as risky. theScreener considers that these elements allow slightly upgrading its rating to Neutral. As of the analysis date July 9, 2019, the closing price was EUR 33.39 and its expected value was estimated at EUR 33.09.

Ford Equity International Rating and Forecast Report

Ford Equity International Research Reports cover 60 countries with over 30,000 stocks traded on international exchanges. A proprietary quantitative system compares each company to its peers on proven measures of business value, growth characteristics, and investor behavior. Ford's three recommendation ratings buy, hold and sell, represent each stock’s return potential relative to its own country market.. The rating reports which are generated each week, include the fundamental details behind each recommendation and reflect the fundamental and price data as of the last trading day of the week...

Expert Corporate Governance Service (ECGS)

Erste Group Bank - AGM 15 May 2019

Item 4: Since there is no vote on Management Board members' remuneration in Austria, we take the opportunity to voice our concerns regarding the remuneration system currently in place at Erste Group Bank which we consider has several shortcomings: The target amounts for the performance-linked remuneration have not been disclosed and the performance criteria and their weighting are insufficiently disclosed. Furthermore, there is no separate long-term incentive (LTI) in place for Management Board members. Although we consider the absolute amounts paid to the Management Board members as acceptabl...

Erste Group – Proxinvest Corporate Governance Rating ® : C

Proxinvest Corporate Governance Rating ® helps investors integrate governance into their investment decision and identify governance risks and opportunities within their portfolio. Proxinvest Corporate Governance Rating ® Service rates European issuers through the analysis of four main themes : Ownership & Shareholder rights, Board & Committees, Audit & Process, Remuneration. Each theme is rated taking into account several comprehensive sub-categories. Our unique two-step process to achieve each rating includes a first step quantitative valuation and a second step qualitative filter...

Dave Nicoski ...
  • Ross LaDuke

Vermilion Int'l Compass: Global Equity Strategy

EU and UK Financials remain actionable Our outlook on global equities (both the MSCI ACWI and ACWI ex-US) remains positive and we continue to expect higher equity prices going forward. Below we highlight several new developments which give us additional confidence in our outlook, including but not limited to continued price and RS improvements for UK/European Financials. • Actionable Sector: Financials. Today's stock recommendations go beyond UK and European Financials, however these regions are the primary focus due to a plethora of attractive setups. In today's report we reiterate our 3/21...

Dave Nicoski ...
  • Ross LaDuke

Vermilion Int'l Compass: Global Equity Strategy

As support levels continue to hold for the MSCI ACWI and S&P 500, our neutral but constructive outlook remains. Additionally, we reiterate our expectation for more consolidation and volatility. In today's report we highlight actionable stocks within countries that are displaying bullish price and relative strength trends. • Asia/Pacific. In Japan, the TOPIX continues to exhibit leadership characteristics. Stay overweight. Broadly speaking, global Consumer Staples stocks are lagging, but Japan is the exception. Hong Kong's Hang Seng Index also remains on bullish footing... see pages 2 and 5-11...

David Nikoski

Int'l Insights: Bullish Stocks

• European banks present a pullback opportunity. The industry's two-month decline is testing support, and individual names are beginning to inflect higher, ranging from UBS Group (UBS) and Commerzbank (CBK-DE) to Intesa Sanpaolo (ISP-IT) and Deutsche Bank (DB). • French banks are particularly attractive. Both BNP Paribas (BNP-FR) and Societe Generale (GLE-FR) retraced to the 9-year base patterns they broke out from earlier this year. Credit Agricole (ACA-FR) is just beginning to break out from a similar pattern. Buy. • This is a reiteration of our original recommendation on Oct. 18, 2016. F...

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