Erste Group’s long-term focus on European Union states in central and southeastern Europe proved to be particularly well judged this year. Other big banks in this region now face billions of euros of losses in Russia and major headaches in managing their operations in that state. Erste is the only major regional lender with negligible direct exposure to Russia.
Even before the invasion of Ukraine, Erste was doing well, thanks to top-tier positions in these EU member countries. Rising local currency interest rates – especially those outside the eurozone, such as the Czech Republic and Romania – have proved a major boost to Erste’s net interest margins. Its net interest income rose by 18.8% in the first quarter of 2022, following a 4.2% rise in 2021.
But Erste’s position as central and eastern Europe’s best bank is not just about the legacy of buying good central European banks 20 years ago.