Erste Group
Encyclopedia
Erste Group Bank AG is one of the largest financial services providers in Central and Eastern Europe
and focuses on retail
and SME banking. More than 50,000 employees are serving clients in over 3,000 branches in 8 countries (Austria
, Czech Republic
, Slovakia
, Romania
, Hungary
, Croatia
, Serbia
, and Ukraine
).
Erste Group was founded in 1819 as the first Austrian savings bank
. In 1997, Erste Group went public with a strategy to expand its retail business into Central and Eastern Europe
(CEE). Since then Erste Group's customer base has grown through numerous acquisitions and organic growth from 600,000 to more than 17 million. 95% of all clients are citizens of the European Union
.
proposed the creation of a savings bank
based on the German and English model. Johann Baptist Weber, a pastor in Leopoldstadt, pursued this idea. In 1819, he founded the association “Verein der Ersten österreichischen Spar-Casse” and on 4 October 1819 the first Austrian savings bank “Die Erste oesterreichische Spar-Casse” opened its doors for business.
pursuant to the 1986 Banking Act Amendment. In this procedure, all its banking operations were transferred to “DIE ERSTE österreichische Spar-Casse-Bank AG”, a newly founded subsidiary
, which became the operational bank. The holding company
changed its name to “DIE ERSTE österreichische Spar-Casse Anteilsverwaltungssparkasse (AVS)”.
. Since 1 October 2002, Erste Bank shares have also been traded on the Prague Stock Exchange
and since 14 February 2008 on the Bucharest Stock Exchange
.
Hungary
: With the takeover of the Hungarian Mezöbank in 1998, which had the fifth-biggest branch network in Hungary and was later renamed to Erste Bank Hungary Rt., Erste Bank secured a good starting position in Central and Eastern Europe
. In 2003 Erste Group won the tender
to buy 99.94% of Hungary’s Postabank, and merged it with Erste Bank Hungary in 2004. The new bank is the second largest retail bank in Hungary with 0.9 million clients and a market share
by retail deposits of 8%.
Croatia
: In 1999, together with Steiermärkische Bank und Sparkassen AG, Erste Bank successively acquired a majority stake (87%) in the three smaller Croatian banks Bjelovarska banka, Trgovacka banka and Cakovecka banka, and merged them to Erste & Steiermärkische banka. In 2002, Erste Group acquired an 85% stake in Riječka banka merging it with its existing operations and creating the number three bank in the Croatian market with 800,000 clients and a market share by retail deposits of almost 13%.
Czech Republic
: In 2000 Erste Bank acquired a majority (52%) stake to 98% during 2002 and 2003. Česká spořitelna is a leading retail bank in the Czech Republic
, serving 5.3 million clients with a market share by retail deposits of almost 30%.
Slovakia
: In 2001 Erste Bank acquired an 87% stake in Slovenská sporiteľňa
, increasing it to 100% in 2005. Slovenská sporiteľňa is the largest bank in the country, serving 2.5 million clients with a market share by retail deposits of almost 28%.
Romania
: In December 2005, Erste Group won the tender for 61.8825% stake in Banca Comercială Română
(BCR), increasing it to 69.17% in 2006. BCR is the largest bank in Romania with 4.3 million clients and a market share by retail deposits of 23%.
Serbia
: Erste Group acquired 83.3% of Novosadska banka in Serbia. In a strategic cooperation agreement with Steiermärkische Sparkasse, Erste Group holds today 80.49% of Erste Bank Serbia
's shares. The bank has a market share by retail deposits below 3%.
Ukraine
: Erste Bank acquired 100% of Bank Prestige in Ukraine, which was renamed Erste Bank Ukraine. The bank has a market share by retail deposits below 1%.
In October 2011 it said it expected a full year loss of up to EUR 1.1 billion, after making writedowns and provisions of EUR 1.6 billion. This would be its first loss since at least 1988. It said the writedowns were due to government intervention in Hungary, where it is forced to take losses on Swiss franc mortgages, and a slower than expected recovery in Romania. It will also delay a plan to repay some of the state aid received in 2009.
“Erste Group Bank AG” was separated from the Austrian business of “Erste Bank der oesterreichischen Sparkassen AG”. The result was a clear separation of tasks between “Erste Group Bank AG”, which acts as a holding company
, and its subsidiaries in each of the countries that concentrate fully on local customer business. The new company structure became necessary due to the expansion of Erste Bank-Group within Central and Eastern Europe
.
The holding company, named “Erste Group Bank AG” concentrates on the strategic steering function and provides the infrastructure for the local customer business in the individual markets. In addition, it is responsible for the operation of the business areas Global Markets and Group Corporate and Investment Banking.
:
Central and Eastern Europe
Central and Eastern Europe is a term describing former communist states in Europe, after the collapse of the Iron Curtain in 1989/90. In scholarly literature the abbreviations CEE or CEEC are often used for this concept...
and focuses on retail
Retail banking
Retail banking is banking in which banking institutions execute transactions directly with consumers, rather than corporations or other banks. Services offered include: savings and transactional accounts, mortgages, personal loans, debit cards, credit cards, and so forth.-Types of...
and SME banking. More than 50,000 employees are serving clients in over 3,000 branches in 8 countries (Austria
Austria
Austria , officially the Republic of Austria , is a landlocked country of roughly 8.4 million people in Central Europe. It is bordered by the Czech Republic and Germany to the north, Slovakia and Hungary to the east, Slovenia and Italy to the south, and Switzerland and Liechtenstein to the...
, Czech Republic
Czech Republic
The Czech Republic is a landlocked country in Central Europe. The country is bordered by Poland to the northeast, Slovakia to the east, Austria to the south, and Germany to the west and northwest....
, Slovakia
Slovakia
The Slovak Republic is a landlocked state in Central Europe. It has a population of over five million and an area of about . Slovakia is bordered by the Czech Republic and Austria to the west, Poland to the north, Ukraine to the east and Hungary to the south...
, Romania
Romania
Romania is a country located at the crossroads of Central and Southeastern Europe, on the Lower Danube, within and outside the Carpathian arch, bordering on the Black Sea...
, Hungary
Hungary
Hungary , officially the Republic of Hungary , is a landlocked country in Central Europe. It is situated in the Carpathian Basin and is bordered by Slovakia to the north, Ukraine and Romania to the east, Serbia and Croatia to the south, Slovenia to the southwest and Austria to the west. The...
, Croatia
Croatia
Croatia , officially the Republic of Croatia , is a unitary democratic parliamentary republic in Europe at the crossroads of the Mitteleuropa, the Balkans, and the Mediterranean. Its capital and largest city is Zagreb. The country is divided into 20 counties and the city of Zagreb. Croatia covers ...
, Serbia
Serbia
Serbia , officially the Republic of Serbia , is a landlocked country located at the crossroads of Central and Southeast Europe, covering the southern part of the Carpathian basin and the central part of the Balkans...
, and Ukraine
Ukraine
Ukraine is a country in Eastern Europe. It has an area of 603,628 km², making it the second largest contiguous country on the European continent, after Russia...
).
Erste Group was founded in 1819 as the first Austrian savings bank
Savings bank
A savings bank is a financial institution whose primary purpose is accepting savings deposits. It may also perform some other functions.In Europe, savings banks originated in the 19th or sometimes even the 18th century. Their original objective was to provide easily accessible savings products to...
. In 1997, Erste Group went public with a strategy to expand its retail business into Central and Eastern Europe
Central and Eastern Europe
Central and Eastern Europe is a term describing former communist states in Europe, after the collapse of the Iron Curtain in 1989/90. In scholarly literature the abbreviations CEE or CEEC are often used for this concept...
(CEE). Since then Erste Group's customer base has grown through numerous acquisitions and organic growth from 600,000 to more than 17 million. 95% of all clients are citizens of the European Union
European Union
The European Union is an economic and political union of 27 independent member states which are located primarily in Europe. The EU traces its origins from the European Coal and Steel Community and the European Economic Community , formed by six countries in 1958...
.
1819: Foundation of Austria’s first savings bank
During the years of economic crisis in the wake of the Napoleonic War, Francis I, Emperor of AustriaFrancis II, Holy Roman Emperor
Francis II was the last Holy Roman Emperor, ruling from 1792 until 6 August 1806, when he dissolved the Empire after the disastrous defeat of the Third Coalition by Napoleon at the Battle of Austerlitz...
proposed the creation of a savings bank
Savings bank
A savings bank is a financial institution whose primary purpose is accepting savings deposits. It may also perform some other functions.In Europe, savings banks originated in the 19th or sometimes even the 18th century. Their original objective was to provide easily accessible savings products to...
based on the German and English model. Johann Baptist Weber, a pastor in Leopoldstadt, pursued this idea. In 1819, he founded the association “Verein der Ersten österreichischen Spar-Casse” and on 4 October 1819 the first Austrian savings bank “Die Erste oesterreichische Spar-Casse” opened its doors for business.
Transfer to a joint-stock company
In 1993, the business operations of “DIE ERSTE oesterreichische Spar-Casse” were transferred to a public limited companyPublic limited company
A public limited company is a limited liability company that sells shares to the public in United Kingdom company law, in the Republic of Ireland and Commonwealth jurisdictions....
pursuant to the 1986 Banking Act Amendment. In this procedure, all its banking operations were transferred to “DIE ERSTE österreichische Spar-Casse-Bank AG”, a newly founded subsidiary
Subsidiary
A subsidiary company, subsidiary, or daughter company is a company that is completely or partly owned and wholly controlled by another company that owns more than half of the subsidiary's stock. The subsidiary can be a company, corporation, or limited liability company. In some cases it is a...
, which became the operational bank. The holding company
Holding company
A holding company is a company or firm that owns other companies' outstanding stock. It usually refers to a company which does not produce goods or services itself; rather, its purpose is to own shares of other companies. Holding companies allow the reduction of risk for the owners and can allow...
changed its name to “DIE ERSTE österreichische Spar-Casse Anteilsverwaltungssparkasse (AVS)”.
Merger with GiroCredit
As of 27 June 1997, Die Erste was merged with GiroCredit through the absorption of GiroCredit into Die Erste. Through universal succession, Die Erste was subrogated into all the rights and obligations of GiroCredit. The merger was approved by the general shareholders’ meetings of Die Erste and GiroCredit on 21 Aug. 1997 and became legally effective upon registration in the Company Register on 4 October 1997. At the same time, “DIE ERSTE österreichische Spar-Casse - Bank AG” was renamed “Erste Bank der Oesterreichischen Sparkassen AG”.Expansion in Central and Eastern Europe since 1997
In December 1997 Erste Bank went public on the Vienna Stock Exchange with the strategy to expand its retail business model across potential EU-member states in Central and Eastern EuropeCentral and Eastern Europe
Central and Eastern Europe is a term describing former communist states in Europe, after the collapse of the Iron Curtain in 1989/90. In scholarly literature the abbreviations CEE or CEEC are often used for this concept...
. Since 1 October 2002, Erste Bank shares have also been traded on the Prague Stock Exchange
Prague Stock Exchange
The Prague Stock Exchange or PSE is the Czech Republic's main securities market and currently the second biggest stock exchange in Central and Eastern Europe...
and since 14 February 2008 on the Bucharest Stock Exchange
Bucharest Stock Exchange
The Bucharest Stock Exchange is a stock exchange in Bucharest, capital of Romania. On December 1, 2005, Bucharest's electronic over-the-counter stock market, Rasdaq, was merged with the Bucharest Stock Exchange....
.
Hungary
Hungary
Hungary , officially the Republic of Hungary , is a landlocked country in Central Europe. It is situated in the Carpathian Basin and is bordered by Slovakia to the north, Ukraine and Romania to the east, Serbia and Croatia to the south, Slovenia to the southwest and Austria to the west. The...
: With the takeover of the Hungarian Mezöbank in 1998, which had the fifth-biggest branch network in Hungary and was later renamed to Erste Bank Hungary Rt., Erste Bank secured a good starting position in Central and Eastern Europe
Central and Eastern Europe
Central and Eastern Europe is a term describing former communist states in Europe, after the collapse of the Iron Curtain in 1989/90. In scholarly literature the abbreviations CEE or CEEC are often used for this concept...
. In 2003 Erste Group won the tender
Tender
-Transportation:* Tender , a type of railroad car hauled immediately after the locomotive and used to carry fuel and water* Water tender, fire truck tanker-Boats/ships:* Buoy tender, used to maintain Aids to Navigation including buoys...
to buy 99.94% of Hungary’s Postabank, and merged it with Erste Bank Hungary in 2004. The new bank is the second largest retail bank in Hungary with 0.9 million clients and a market share
Market share
Market share is the percentage of a market accounted for by a specific entity. In a survey of nearly 200 senior marketing managers, 67 percent responded that they found the "dollar market share" metric very useful, while 61% found "unit market share" very useful.Marketers need to be able to...
by retail deposits of 8%.
Croatia
Croatia
Croatia , officially the Republic of Croatia , is a unitary democratic parliamentary republic in Europe at the crossroads of the Mitteleuropa, the Balkans, and the Mediterranean. Its capital and largest city is Zagreb. The country is divided into 20 counties and the city of Zagreb. Croatia covers ...
: In 1999, together with Steiermärkische Bank und Sparkassen AG, Erste Bank successively acquired a majority stake (87%) in the three smaller Croatian banks Bjelovarska banka, Trgovacka banka and Cakovecka banka, and merged them to Erste & Steiermärkische banka. In 2002, Erste Group acquired an 85% stake in Riječka banka merging it with its existing operations and creating the number three bank in the Croatian market with 800,000 clients and a market share by retail deposits of almost 13%.
Czech Republic
Czech Republic
The Czech Republic is a landlocked country in Central Europe. The country is bordered by Poland to the northeast, Slovakia to the east, Austria to the south, and Germany to the west and northwest....
: In 2000 Erste Bank acquired a majority (52%) stake to 98% during 2002 and 2003. Česká spořitelna is a leading retail bank in the Czech Republic
Czech Republic
The Czech Republic is a landlocked country in Central Europe. The country is bordered by Poland to the northeast, Slovakia to the east, Austria to the south, and Germany to the west and northwest....
, serving 5.3 million clients with a market share by retail deposits of almost 30%.
Slovakia
Slovakia
The Slovak Republic is a landlocked state in Central Europe. It has a population of over five million and an area of about . Slovakia is bordered by the Czech Republic and Austria to the west, Poland to the north, Ukraine to the east and Hungary to the south...
: In 2001 Erste Bank acquired an 87% stake in Slovenská sporiteľňa
Slovenská sporitelna
Slovenská sporiteľňa is the largest commercial bank in Slovakia. It provides comprehensive banking services to more than 2 million clients via the largest distribution network with 400 retail outlets...
, increasing it to 100% in 2005. Slovenská sporiteľňa is the largest bank in the country, serving 2.5 million clients with a market share by retail deposits of almost 28%.
Romania
Romania
Romania is a country located at the crossroads of Central and Southeastern Europe, on the Lower Danube, within and outside the Carpathian arch, bordering on the Black Sea...
: In December 2005, Erste Group won the tender for 61.8825% stake in Banca Comercială Română
Banca Comerciala Româna
Banca Comercială Română , a member of Erste Group, is a universal bank serving both retail and corporate clients. BCR is the most important financial services provider in Romania, managing assets worth over EUR 16 billion. BCR is the most valuable Romanian financial brand...
(BCR), increasing it to 69.17% in 2006. BCR is the largest bank in Romania with 4.3 million clients and a market share by retail deposits of 23%.
Serbia
Serbia
Serbia , officially the Republic of Serbia , is a landlocked country located at the crossroads of Central and Southeast Europe, covering the southern part of the Carpathian basin and the central part of the Balkans...
: Erste Group acquired 83.3% of Novosadska banka in Serbia. In a strategic cooperation agreement with Steiermärkische Sparkasse, Erste Group holds today 80.49% of Erste Bank Serbia
Erste Bank Novi Sad
Erste Bank a.d. Novi Sad is a bank operating in Serbia. Bank's headquarters are located in the second largest city in Serbia - Novi Sad.The bank was founded in 1864 as Novosadska banka. In August 2005 Austrian Erste Bank took over the bank's majority share from the Serbian government for €73.2...
's shares. The bank has a market share by retail deposits below 3%.
Ukraine
Ukraine
Ukraine is a country in Eastern Europe. It has an area of 603,628 km², making it the second largest contiguous country on the European continent, after Russia...
: Erste Bank acquired 100% of Bank Prestige in Ukraine, which was renamed Erste Bank Ukraine. The bank has a market share by retail deposits below 1%.
Effects of the finanicial crisis
In 2009 Erste received around EUR 2 billion in capital from the Austrian government.In October 2011 it said it expected a full year loss of up to EUR 1.1 billion, after making writedowns and provisions of EUR 1.6 billion. This would be its first loss since at least 1988. It said the writedowns were due to government intervention in Hungary, where it is forced to take losses on Swiss franc mortgages, and a slower than expected recovery in Romania. It will also delay a plan to repay some of the state aid received in 2009.
Business organisation
As of 9 August 2008, the newly founded holding companyHolding company
A holding company is a company or firm that owns other companies' outstanding stock. It usually refers to a company which does not produce goods or services itself; rather, its purpose is to own shares of other companies. Holding companies allow the reduction of risk for the owners and can allow...
“Erste Group Bank AG” was separated from the Austrian business of “Erste Bank der oesterreichischen Sparkassen AG”. The result was a clear separation of tasks between “Erste Group Bank AG”, which acts as a holding company
Holding company
A holding company is a company or firm that owns other companies' outstanding stock. It usually refers to a company which does not produce goods or services itself; rather, its purpose is to own shares of other companies. Holding companies allow the reduction of risk for the owners and can allow...
, and its subsidiaries in each of the countries that concentrate fully on local customer business. The new company structure became necessary due to the expansion of Erste Bank-Group within Central and Eastern Europe
Central and Eastern Europe
Central and Eastern Europe is a term describing former communist states in Europe, after the collapse of the Iron Curtain in 1989/90. In scholarly literature the abbreviations CEE or CEEC are often used for this concept...
.
The holding company, named “Erste Group Bank AG” concentrates on the strategic steering function and provides the infrastructure for the local customer business in the individual markets. In addition, it is responsible for the operation of the business areas Global Markets and Group Corporate and Investment Banking.
Subsidiaries in Central and Eastern Europe
The holding company Erste Group Bank AG operates local banks in eight countries in Central and Eastern EuropeCentral and Eastern Europe
Central and Eastern Europe is a term describing former communist states in Europe, after the collapse of the Iron Curtain in 1989/90. In scholarly literature the abbreviations CEE or CEEC are often used for this concept...
:
- AustriaAustriaAustria , officially the Republic of Austria , is a landlocked country of roughly 8.4 million people in Central Europe. It is bordered by the Czech Republic and Germany to the north, Slovakia and Hungary to the east, Slovenia and Italy to the south, and Switzerland and Liechtenstein to the...
: Erste Bank der oesterreichischen Sparkassen AG - Czech RepublicCzech RepublicThe Czech Republic is a landlocked country in Central Europe. The country is bordered by Poland to the northeast, Slovakia to the east, Austria to the south, and Germany to the west and northwest....
: Česká spořitelna a.s. - SlovakiaSlovakiaThe Slovak Republic is a landlocked state in Central Europe. It has a population of over five million and an area of about . Slovakia is bordered by the Czech Republic and Austria to the west, Poland to the north, Ukraine to the east and Hungary to the south...
: Slovenská sporiteľňaSlovenská sporitelnaSlovenská sporiteľňa is the largest commercial bank in Slovakia. It provides comprehensive banking services to more than 2 million clients via the largest distribution network with 400 retail outlets... - HungaryHungaryHungary , officially the Republic of Hungary , is a landlocked country in Central Europe. It is situated in the Carpathian Basin and is bordered by Slovakia to the north, Ukraine and Romania to the east, Serbia and Croatia to the south, Slovenia to the southwest and Austria to the west. The...
: Erste Bank Hungary Nyrt. - CroatiaCroatiaCroatia , officially the Republic of Croatia , is a unitary democratic parliamentary republic in Europe at the crossroads of the Mitteleuropa, the Balkans, and the Mediterranean. Its capital and largest city is Zagreb. The country is divided into 20 counties and the city of Zagreb. Croatia covers ...
: Erste & Steiermärkische Bank d.d. - SerbiaSerbiaSerbia , officially the Republic of Serbia , is a landlocked country located at the crossroads of Central and Southeast Europe, covering the southern part of the Carpathian basin and the central part of the Balkans...
: Erste Bank Novi SadErste Bank Novi SadErste Bank a.d. Novi Sad is a bank operating in Serbia. Bank's headquarters are located in the second largest city in Serbia - Novi Sad.The bank was founded in 1864 as Novosadska banka. In August 2005 Austrian Erste Bank took over the bank's majority share from the Serbian government for €73.2... - RomaniaRomaniaRomania is a country located at the crossroads of Central and Southeastern Europe, on the Lower Danube, within and outside the Carpathian arch, bordering on the Black Sea...
: Banca Comerciala RomanaBanca Comerciala RomânaBanca Comercială Română , a member of Erste Group, is a universal bank serving both retail and corporate clients. BCR is the most important financial services provider in Romania, managing assets worth over EUR 16 billion. BCR is the most valuable Romanian financial brand... - UkraineUkraineUkraine is a country in Eastern Europe. It has an area of 603,628 km², making it the second largest contiguous country on the European continent, after Russia...
: Erste Bank Ukraine AO