Retail lending and investment appetite at peak at Erste

By: Trademagazin Date: 2025. 05. 08. 10:45

The momentum in retail lending, which resumed last year, is continuing at Erste. In the first quarter of this year, the volume of newly issued housing loans increased by one and a half times compared to the same period last year, while the growth in personal loans was 31 percent. In addition to the loan volume, savings are also growing rapidly. The retail client assets managed by the Erste Group in Hungary – investments and deposits – increased by 15 percent by the end of March.

Erste’s operating income in the first quarter of 2025 – based on a statement prepared in accordance with international accounting standards (IFRS) – fell by 2 percent from a year earlier. Within this, net interest income stagnated, fee and commission income grew by 24 percent, trading and conversion income fell by almost half, and operating income was also reduced by the revaluation of subsidized loans, said Jelasity Radován, Erste’s CEO, at the press conference presenting the bank’s first quarter results.

Operating expenses increased by 11 percent compared to a year earlier. Erste’s operating profit was HUF 57 billion, compared to HUF 62 billion in the first quarter of 2024. The cost/income ratio was 36 percent at the end of March, compared to 32 percent in March last year. Profit after tax thus amounted to HUF 20 billion, while the bank closed the first quarter of 2024 with a profit of HUF 28 billion.

The volume of customer loans and bonds at the end of the first quarter of this year exceeded the previous year by 3 percent. The volume of new financing increased by 6 percent compared to the same period of the previous year. The non-performing loan ratio decreased to 1.9 percent by the end of March from 2.5 percent a year earlier. In the case of retail loans, the non-performing loan ratio improved to 2.4 percent from 3.1 percent in the first quarter of 2024, while in the case of corporate loans it decreased to 1.2 percent from 2 percent a year earlier. Thanks to the improving loan portfolio, Erste was able to release HUF 1.6 billion in provisions during the quarter.

The total retail loan portfolio grew by 11 percent in one year, the newly disbursed portfolio was 40 percent higher than a year earlier. The disbursement of new housing loans exceeded the performance of the first quarter of 2024 by 56 percent. The amount of new disbursements for personal loans increased by 31 percent, while in the case of small entrepreneurs, the amount of disbursements decreased by 20 percent compared to a year earlier.