Erste Group Bank EBS.VI
What does Erste Group Bank do?
Erste Group Bank is an Austrian financial institution headquartered in Vienna and is one of the major banks in Central and Eastern Europe. It offers retail, corporate and public-sector customers traditional banking services: savings and current accounts, term deposits, consumer loans, mortgage financing, investment and real estate financing, as well as trade and export finance.
The range of services also includes payment transactions, cash management, interest rate and currency hedging, factoring, guarantees and digital banking offerings. The group earns its money mainly from net interest income, supplemented by fees and commissions from payments, securities and asset management. Competitively, the bank relies on a broad retail customer base, its close link to the savings bank sector and strong market positions in several countries of the region. Competitors include other large regional banks, local institutions and, increasingly, digital providers.
Score profile
Rank vs. Banks - Regional (94 companies). 10 = top of the group, 5 = middle. Calculated from the metrics below, without AI.
Metrics compared with the industry
On profitability and quality, Erste Group Bank ranks in the middle in the group Banks - Regional (5.8/10). On growth, the company ranks among the best in the group Banks - Regional (8.1/10). On valuation (higher = cheaper), the stock ranks below average in the group Banks - Regional (4.0/10). On financial strength, Erste Group Bank ranks in the middle in the group Banks - Regional (5.4/10).
| Metric | Stock | Group median | Ranking |
|---|---|---|---|
| Forward P/E | 10.3x | 10.4x | better than 51 % |
| Trailing P/E | 12.2x | 12.3x | better than 52 % |
| PEG ratio | 5.1x | 1.6x | better than 5 % |
| Price/sales | 3.2x | 3.7x | better than 87 % |
| Price/book | 1.8x | 1.3x | better than 16 % |
| Revenue growth | 40.2% | 7.2% | better than 90 % |
| Earnings growth | 24.5% | 9.9% | better than 73 % |
| Gross margin | 0.0% | 0.0% | better than 50 % |
| Operating margin | 50.8% | 44.9% | better than 74 % |
| Net margin | 28.4% | 32.0% | better than 27 % |
| Return on equity | 14.0% | 11.0% | better than 80 % |
| Debt/equity | 0.0% | 0.0% | better than 50 % |
| Free cash flow yield | 0.0% | 0.0% | better than 50 % |
| Dividend yield | 0.6% | 3.0% | – |
| Payout ratio | 7.9% | 35.7% | – |
| Beta | 0.89 | 0.83 | – |
Valuation: what is Erste Group Bank worth?
Two valuation approaches – a discounted cash flow model and a valuation at the industry’s median multiples – give Erste Group Bank a model range of 83.61 EUR to 118.04 EUR per share.
17 analysts, average rating “Buy”, average price target 130.08 EUR (+10.5%).
The full DCF matrix, the reverse DCF (what growth the price implies) and scenarios are part of the Pro analysis.
What the business depends on
- Net interest income depends heavily on the interest rate level and the margin between lending and deposit rates.
- Loan demand and deposit growth in the core markets of Central and Eastern Europe determine business volume.
- Fee and commission income from payments, securities business and asset management supplements and stabilizes earnings.
Risks
- Economic downturns may increase loan defaults and require higher loan loss provisions.
- Falling interest rates may weigh on interest margins and thereby reduce earnings in the core business.
- Regulatory requirements, special levies and interventions by individual countries may affect profitability and capital planning.
What to look for with Erste Group Bank
Return on equity relative to the capital ratio shows how profitably the bank operates and whether this goes hand in hand with sufficient capital strength.