Bulletin: Erste Group Bank's Mid-Year Results Highlight COVID-19 Uncertainty

FRANKFURT (S&P Global Ratings) July 31, 2020--S&P Global Ratings said today that Erste Group Bank AG's (Erste) mid-year financial results and broader operational developments are consistent with its view that the group is well-positioned to weather the COVID-19-induced cyclical downturn. Despite an elevated cost of risk, as expected amid the pandemic, and related shutdowns of the economies in which Erste operates, we think the group will maintain a solid balance sheet and fare well through the temporary sharp shock in Austria and Central and Eastern European (CEE) countries. This strengthens our view of the group's relatively high creditworthiness (A/Stable/A-1). Due to heightened stress in Erste's core regions, loan-loss provisions surged almost tenfold to €614 million, or 148 basis points (bps)

...July 31, 2020 FRANKFURT (S&P Global Ratings) July 31, 2020--S&P Global Ratings said today that Erste Group Bank AG's (Erste) mid-year financial results and broader operational developments are consistent with its view that the group is well-positioned to weather the COVID-19-induced cyclical downturn. Despite an elevated cost of risk, as expected amid the pandemic, and related shutdowns of the economies in which Erste operates, we think the group will maintain a solid balance sheet and fare well through the temporary sharp shock in Austria and Central and Eastern European (CEE) countries. This strengthens our view of the group's relatively high creditworthiness (A/Stable/A-1). Due to heightened stress in Erste's core regions, loan-loss provisions surged almost tenfold to 614 million, or 148 basis points (bps) of the lending portfolio, in the second quarter (676 million or 82 bps for first-half 2020), from 62 million in the first quarter. That said, the significant increase is not unexpected...

Bulletin