Growing Revenues at Erste Bank Hungary

Erste Bank Hungary Plc. closed last year with an improved profit profile, mainly due to the growth in the number of active customers and assets under management. Loan and bond volumes rose again in 2024, with new lending in retail loans up one and a half times, while corporate lending was 9% down on a year earlier. Invested and managed assets grew by 21% year-on-year to nearly HUF 5,400 billion at the end of December.

Erste Bank Hungary CEO Radovan Jelasity said at a press conference presenting the bank's 2024 results that the bank's operating income in 2024 was 15% higher than a year earlier, according to the International Financial Reporting Standards (IFRS) statement. Within this, fee and commission income increased by 24%, mainly due to the growth in the number of active customers and assets under management. Operating expenses increased by 15% compared to a year earlier. Erste's operating profit was HUF 234 billion, compared to HUF 204 billion in 2023. The cost-to-income ratio at the end of December was essentially the same as a year earlier, at under 34%. Profit after tax in 2024 was HUF 132 billion, compared with a profit of HUF 115 billion in 2023.

The stock of loans and bonds to customers at the end of 2024 was 3.3% higher than a year earlier. The volume of new financing increased by 25% last year compared to 2023. The non-performing loan ratio fell to 1.9% from 2.6% a year earlier. For residential loans, the non-performing loan rate eased to 2.4% from 3.1% in 2023, while the rate for business loans improved to 1.3% from 2% a year earlier. The improved loan portfolio allowed Erste to release provisions of HUF 8 billion in 2024.

The total retail loan portfolio grew by 10% in one year, with the newly extended portfolio 54% higher last year than a year earlier. New home loan disbursements were 133% above the 2023 performance. For personal loans, new disbursements rose 44%, while small business lending fell 15% from a year earlier.

The amount of card purchases increased 12% last year, including a 10% increase in physical card transaction volume, while online card purchases increased twice as fast, 20% in 2024. Last year, a quarter of all card transactions were online, with the value of online purchases averaging one and a half times that of physical card transactions. Nearly half of online spending was a foreign purchase, with the volume of foreign online spending growing four and a half times faster than domestic spending in 2024.

Retail assets under management by Erste Group in Hungary – investments and deposits – stood at HUF 6,554 billion at the end of December, up 19% in a year. The share of investments in savings was 71%. The significant increase is partly due to Erste's democratization of investments and the free management of securities accounts. Today, almost half of all customers with a securities account have Erste Future savings, which the bank has created for those who can save regularly, even small amounts.