First Group posted 18.6 percent more profit in the first half of the year

The Erste Group reported a 18.6 percent increase in net profit for the first half of the year, according to its latest financial results. The bank’s performance was driven largely by the inclusion of its new Polish operations, which were added to the balance sheet for the first time this year. The company recorded a net profit of nearly 2 billion euros, up from the previous year’s figure. This growth came despite the exclusion of the Polish business, where the bank still managed a 4 percent rise in earnings. The expansion of the Erste Group's credit portfolio played a key role in its improved performance. Including Poland, customer loans increased by 21.9 percent to 282.7 billion euros. Even without the Polish operations, the bank saw a 4.0 percent growth. In addition, the bank noted a strong demand for loans in established markets such as the Czech Republic, Hungary, Croatia, and Austria. In the private customer segment, over 60,000 new housing loans were issued through its subsidiaries, excluding Poland. For corporate clients, the volume of new business reached more than 4 billion euros. Deposits also grew, with an increase of 4.5 percent excluding Poland. When including the Erste Bank Polska, the total deposit base rose to 323.7 billion euros, marking a 27.9 percent increase. As a result, the interest income, including Poland, climbed by 42.3 percent to 5.4 billion euros. The commission income also rose by 25.1 percent to 1.9 billion euros. Excluding Poland, the growth rates were 6.1 percent for interest income and 8.8 percent for commission income. However, risk costs rose significantly during the period, increasing from 182 million euros to 583 million euros. The bank attributed this to expected one-time effects from integrating the Erste Bank Polska. These one-time impacts amounted to 302 million euros, while an additional 60 million euros came from existing loan portfolios in Poland. Despite these increases, the bank stated that credit quality remained robust, with the non-performing loan ratio staying slightly below 2.4 percent, at 2.3 percent. Operating expenses also rose, increasing by 30.7 percent to 3.5 billion euros when including Poland. This was primarily due to personnel costs and foreign currency effects. Nevertheless, the cost-income ratio improved from 47.7 percent to 44.4 percent. The core capital ratio declined from 19.3 percent in December 2025 to 15.2 percent. Looking ahead, the bank has raised its outlook both with and without the Polish operations. “The strong growth in our credit portfolio over the past six months has already brought us close to our initial target of 285 billion euros,” said CEO Peter Bosek. “We are therefore raising this target to 290 billion euros.” The return on equity (ROE) is expected to exceed 20 percent, and earnings per share are projected to grow by more than 20 percent. For the established core markets, covering Austria, the Czech Republic, Slovakia, Romania, Hungary, Croatia, and Serbia, the bank aims for a credit growth rate of 6 to 8 percent. Previously, a 5 percent increase was anticipated. The interest margin is expected to rise by around 5 percent, and the commission margin by 7 to 9 percent. Earlier this week, the Erste Group announced plans to double its earnings per share (EPS) to more than 15 euros by 2030. It aims for an average annual growth rate of 15 percent in earnings per share.