Good morning. Cordial welcome, ladies and gentlemen, to our press conference on the annual results 2025. The results will be presented by CEO Peter Bosek, Alexandra Habeler-Drabek, Risk Manager, and CFO Stefan Dörfler. We will start with the presentations right now, and afterwards, all the gentlemen and the lady will be available for questions. Mr. Bosek, please.
Good morning, and hi, everyone. Thanks for coming. You're all running on a tight schedule, so we really appreciate it that you're here with us today. Now, when we look back to 2025, there are two important dimensions to remember. Let's start with dimension number one, the acquisition in Poland. That meant a lot of work for us, of course, and we've reached a fantastic result in the end. The second dimension to remember and bear in mind, the strength of the existing group, which has actually enabled us to acquire the Santander Bank Poland. We have really been successful in the past 20 years to develop a business model. We did it step by step, and so we've really grown strong, especially when it's about creating capital, because we have a balanced approach.
We have a conservative business mix that our work is based on, that provides us with stability, and we've been successful and strong, standing in all the markets we operate in. We also have an influence on the market, so it's not just about meeting demands, but also adapting demands. Now, when we look at the details, when we get to the figures, so the loans have really grown and, of course, also the interest income has grown. We'll hear more about that from Stefan later on. When we take a look at the loans, we have grown by 6.4% as compared to the previous year. In all other countries, we saw higher growth as compared to Austria. That's also down to the fact that the business development there was better.
Even in Austria, we have seen an increase by 3.3%. I think that's quite a positive signal for the future. We will see a comeback, a slight comeback, also as regards to the Austrian economy. Of course, things will improve this year again. Another thing we have been successful with is the connection between the growth of our loans and the deposits. When it gets to the deposits, we have seen an overall growth of 6.7%. In Austria, we have seen a slight dip of deposits under 10%, because when you're part of a savings bank, you know, that's quite weird. Generally speaking, when you look at the economy, that's something positive.
That's a positive signal, because when people save less, they will consume more. They invest in the economy, that provides us with a better forecast for the future. When you see a slight dip in the deposit ratio, that's nothing bad in general, just to bear in mind. Another thing to mention, that's not an aside, this really means a huge success. Our colleagues in equity and deposit management, more than 300 transactions with a total volume of more than EUR 200 billion. This is something we are really proud of, that provides us with a lot of opportunities in the future, too. Moving on to the individual countries we operate in.
Because it's of high importance to us that you understand what's going on in our regional markets. Let me provide you with an overview, and let's start with the Czech Republic. The economic development in the Czech Republic has been quite sensational in the past two decades. Really going strong, highly stable, generally speaking. We see an increase of 2%-3% year-on-year. That's really a fantastic field for doing business for us. Has been the largest part within our group and will be an important player in the future, too.
When you look back, a decade ago, we started with George in Austria, innovation in Austria. Now we are in the beautiful situation that innovation has become an important factor in all the countries that we operate in, with new functionalities, with new updates. In 2025, we've seen new rollouts. AI, George, for example, a digital assistant to increase the usability, to strengthen the functionality of the app. We have actually received positive feedback. We're gonna go for the rollout also in the other countries in 2026. When it gets to the asset management, George Invest, we already started in the Czech Republic moving on then to Austria. I think it's really great that all, each and everyone is here involved. That's a strong push as regards AI.
When it gets to our net income, the Czech Republic has had the strongest impact so far. Moving on to Austria. It has already been communicated that we started cooperation with a start-up as regards quantum computing and quantum security. In Austria, we have a Nobel laureate. Let's not forget about that. There's a strong impact from the Austrian field of science to become quantum secure with our transactions, and of course, we're highly interested to closely cooperate with research in that regard because that will strengthen our infrastructure and our way of doing business. As the Bank, Austria, has also seen a hike in housing financing. Two years ago, you know, we saw a lot of discussions, but we've seen a pickup on the market in Austria, and so we've also been successful in this regard.
Let me add to George Invest, I already mentioned it. Our target group, our audience has grown younger, 63% of the users are under the age of 35, and it's really a strong trend that we've been following here. The younger generation starts much earlier with regards to asset management, to take an interest in asset management, and that, of course, has an impact on our way of doing business. Of course, we also provide consultation, we provide services, we provide advice, and in the future, we need guidance to understand what to do depending on the developments of the market. This is how we can make a difference as compared to the new brokers on the market. Moving on to Slovakia.
As regards to the opening of accounts, we have seen new regulations on the market, which could be automatized, especially for small-scale businesses. We saw more than 75,000 new openings of accounts. Peter Krutil, the CEO, left us. He had been with us for more than three decades. Fantastic work, but it is with great delight that Michaela Bauer will become the new CEO starting next week, and we're also highly delighted that Slavo Seemann will become the new CFO. You know, he's been closely cooperating with Stefan. We will miss him in our working context, but of course, it is a great delight that he will become the new CFO for Erste Bank Slovakia. Moving down south to Romania. Digitally speaking, a lot has been going on in Romania in recent years.
In 2025, they introduced George Junior, so reaching out to kids and teens. Of course, everything will be under the control of adults, of their parents, this is how we can increase financial literacy as regards children and teens. Romania has also been highly successful. For example, we have seen an emission, and generally speaking, Romania has been highly successful. Moving on to Croatia. Croatia seems to be quite small, when it gets to doing banking business, really successful. We have a stable team at work there, closely connected to the business field there, and the corporate business has developed strong, also as regards housing, financing.
For the first time in 2025, the Governor of the Croatian National Bank will also become a Vice President of European Union, I think that's of importance to understand. That will also have an impact, a positive impact, That's a positive signal, Let me really congratulate Boris Vujčić in that regard, because, of course, the focus will change as regards this particular region. When it gets to digitalization, we've also been highly successful in Croatia, especially when it's about corporate business. Moving back north, Hungary has always been strong, when it's about securities, so the last one and a half decades.
They've gained quite some experience in that regard, and we've been successful to improve our security savings plans and increase them by 55%, and we also see a pickup, a hike, as regards the loans. We've seen an increasing demand as regards the loans, and also the deposits have increased, so quite successful. Now, moving on to Serbia. That's the last country to mention here, the last country for the roll out of George. An interesting thing to mention here as regards Serbia, actually, the corporate business has grown stronger than the retail business. You know, in all other countries, it's different. This is a particular situation that we've been facing in Serbia. Now, moving up north to Poland.
On January 9th, we have had the closings of the new acquisitions, what I'm referring to really fantastic work of a small team, a highly skilled team. When we started with the negotiations and the complete transfer, the closing, you know, down to earth, keeping the ball low, very focused. You know, a lot of work had to be done before the closing, that's a big wow from my side. Congrats, great work. Of course, in the next two years, there will be a lot of integration work to be done. You know, we will have to mainstream the IT systems. We'll have to shut down IT systems that our colleagues in Poland have used in connection to Spain.
That means a lot of work, we have a clear cut understanding of where we're heading and a strong team that will also be able to manage this work. The extraordinary general meeting also secured the name change, the new brand. Erste Bank Polska will be the new name, we've seen a lot of preparatory work, and during the second quarter of this year, we'll see the rebranding. Quite exciting work because that has not been known so far. It's an unknown brand, you only have one chance, so we have to stay focused in that regard. We have 485 branches to rebrand. We have a lot of advertising media, we have a lot of cash dispensers.
That means a lot of work, but also a huge opportunity to find our place in the Polish market. I'm looking forward to the campaigns that we're gonna run and when we introduce you to them as the next steps. During the first quarter, we will have a first consolidation that we're gonna provide you with, and of course, we'll work on the integration of the new IT system. Now let me hand it over to Stefan.
Thank you so much, Peter. Ladies and gentlemen, good morning. A warm welcome also from my side. Thanks for being here, for joining us. Before I'm gonna tell you about the latest figures, the figures on 2025, let me put you in the picture and start with a frame. Peter already touched on it.
So we have seen constant growth, not only of Erste Bank, but also of the economies in the countries we operate in. That's the pacemaker for the European economy. That sets the rhythm, and I know the things that you write, and we always discuss competition, and that provides for a strong competition in this context. Central and Eastern Europe, Central Europe will play an important part, either to keep things stable, to be a stable competitor, or to regain competitiveness on the market. Poland, you know, as a major player, will have an important word to say, of course. Now let's get to the results. Peter Bosek already touched on several dimensions in that regard. We work in close cooperation not only with the people, but also with the economies of the countries we operate in.
Profits and loss statement looks really good and was quite better than we expected. For example, the interest income has increased quite a lot. The main driver in that regard is, of course, the hike in loans, in loan business, also the increase in our customer business, asset management, and so on and so forth. Also the interest rate, of course, had an important part to play in that regard. We have had a stable business model that we developed in all these countries. How do we see the figures as regards to 2025? The figures are slightly different from country to country, not only as regards growth, but also the interest income. In Slovakia and the Czech Republic, the structure is quite different. For example, in Slovakia, the housing loans provide us with a positive structure.
It's a Europe country. You might think, you know, there are a lot of challenges as we saw them in Austria in this interest environment. As regards to housing loans in Slovakia, they have fixed rates in Slovakia, and now we've seen a hike as regards interest. In the Czech Republic, we saw a fantastic growth on the market. In the analyst call, we already shared that in combination with the Polish subsidiary, we will get to a higher level as regards the interest income, the earnings interest. We are referring to dimensions of more than EUR 11 billion in the consolidated view. Not all of you will actually get to our net income. We have a nearly 50% of the published bank now.
Of course, that takes us to quite a higher level as regards Europe, and that will provide us with backwinds for doing future business and to become more successful as regards to financing of our customers' businesses. Moving on to the fees and commissions. We've also seen an increase here. That's our second driver to mention. For us, very important as regards our earnings, as regards our income, and we've been highly successful. It is with great delight that we've been successful exactly in the areas that we had put in strategic focus, starting with the payment services. Inflation has helped a lot in that regard. I think you understand, because that's all based on indices. We've also seen an increase in volume. Moving on to security transactions.
Especially when you think of the security savings plans, Peter already mentioned it, we've seen the roll-out in all markets we operate in. That's something classic, that's the most important part for our customers, you know? We've been highly successful, and they really were able to participate, our customers. There's another thing still to mention. A segment that we haven't been that successful with has seen a hike, a pickup, in partnership with our insurance partner, VIG, because insurance brokerage has also picked up year on year quite a lot by EUR 22 million. You know, highly diversified market in Central and Eastern Europe, also, of course, in Austria. We started on a small scale, now really, insurance brokerage has become also an important driver for us, and we will see an increase in the future.
I'm sure of that. In synopsis, we have seen an increase in operational income of 4.3%, up to EUR 11 billion, nearly EUR 12 billion, and that without the Polish bank, which will only become part of the figures during the first quarter of 2026. Moving on to the expenditure, to the costs. One first thought that I wanted to share with you, and we've seen that in the last two or three years.
Waste money to earn money.
I think you understand you have to spend money to earn money. That's a given. That's an adage. That's something to understand moving into the future, technologically speaking, to increase our portfolio, but also as regards the development of our staff. In order to be successful in the future, we need to invest in different dimensions. Technologically speaking, we have to invest into process optimization and other fields of work. That will mean profit in the future. We will become more efficient, of course, but also when it's about the service to our customers. Of course, that costs something, and now let me provide you with concrete figures, something tangible. Our operational expenditure, our operational costs, has increased by EUR 304 million.
That means an increase of 5.8%, EUR 304 million, 5.8%. Of course, that also includes the integration costs for. We didn't have the closing in 2025, but a lot of preparatory work had to be done, and that's already part of the costs here. We're really satisfied with our guidance. We have stayed in line with our guidance, and the market understood that. We invest into the future, and when the costs rise, that will provide us with opportunities in the future for doing business. Now, moving on to the outlook. We already communicated that to the capital market, and Peter Bosek already touched on it. The integration of Erste Bank Polska will mean more expenditure, EUR 200 million up to EUR 250 million.
This is what we thought of, and I think we stay in line with the guidance in that regards. That means EUR 180 million as regards our Polish subsidiary and also including the work in Vienna. Generally speaking, I think, we will see a dip in inflation, even in Austria. You know, when you look into your faces, well, even in Austria, I think because we've been the outlier in that regard, we were the worst, reaching nearly 4 percentage points. Well, that really was crazy. Now, in January, they announced 2%, so we've seen a change here, which takes us to the European average, and that will be of help as regards our costs. Eastern Europe, of course, will be better in that regard.
Think of it, better efficiency, lower costs based on a downturn in inflation, and 3%, I think, is quite realistic as our guidance as a cost increase. There's one thing we need. We have to manage risk. Take it away, Alexandra.
Thank you, Stefan. Risk.
There is nothing new as far as risk is concerned, and this is really good news. Maybe you listened to the analyst call today. It was the 27th analyst call since I'm a Chief Risk Officer, and this was the first one where there was no question relating to the risk profile of our group. This is good. What is risk all about? It's about stability and predictability. For our customers, we are a strong and predictable partner and want to remain so in future. We also have a responsibility to our investors, who wants to have a reliable partner as well. Here you see that the risk costs in 2025 were approximately like 2024. What do we show? We show basis point.
1 basis point, 21 basis points are 0.21% of our loan portfolio, and this is the risk costs that we had to book. This is not a mere coincidence, especially in an environment that is constantly changing. It is the result of joint work, consistent work, and targeted work, also as far as lending standards are concerned, and also an expression of our stable business, which was already mentioned by Peter and Stefan at the beginning of their presentations. We have a solid risk result, and we expect it to remain solid. This takes me to the outlook for 2026. In 2026, the Polish bank will have been integrated. The level of risk at the Polish market is slightly higher, but has been showing a stable reduction year on year.
Erste Bank Polska has lower than 40 basis points in 2025, and this is an excellent result. Including Poland, we expect risk costs of approximately 25-30 basis points. Without Poland, for the old Erste Group, we would expect 20-25 basis points, so again, a very stable situation. This stability is also reflected in non-performing loans. NPLs amounted to the NPL ratio amounted to 2.4% in 2025. It's likely decreased. As far as the outlook for 2026 is concerned, we expect stable figures and NPL ratio of approximately 2.5%, including the Polish portfolio. With and without the Polish portfolio, we expect approximately 2.4%. Let's have a look at the individual countries.
You know, the Austrian general situation, which is also reflected in the risk costs and the NPLs. The majority of NPL and risk cost is caused by Austria. This started in 2023, had its climax in 2024, and in the previous year, 2025, the situation slightly improved. We had hoped for a more radical turnaround, but going forward, we expect an improvement of the situation in Austria. We have a stable risk profile, we have a stable deposit portfolio, and this shows one thing very clearly: we are open for business, and we are looking forward to new business and to contribute to the growth of our region. Thank you.
Thank you so much. Now we have touched on all dimensions that provide for an explanation why we have reached the result that we have reached. It has never been as true as in recent years, and that's our strategic approach. That's our focus. Our core business is what makes us successful. It's our core business, and with a strong dialogue also with our Polish colleagues. They have the same vibes. That's an important aspect, and Peter, you already mentioned it. Our Polish colleagues, that means a perfect fit. Their philosophy, their vibes, their reporting, the way how they have been operating, that's a customer bank, closely connected to their customers, closely connected to corporate business. That wouldn't have been the case as regards all the options that we looked into.
Our profile has really been strengthened, and it's not just about earnings, but also the image on the market. That will have a strong impact, and we will be able to be successful in the future as well. Allow me to add something. To the other business, apart from the core business, so that has been highly successful, because actually we have seen losses in recent years, up to EUR 500 million based on banking levies. In 2025, we only had EUR 160 million in that regard because we've seen special effects. For example, the sale of the current headquarters, you know, our Czech colleagues will move to a new headquarters. They are currently constructing a similar campus as we have here in Vienna.
That will still take 2 more years, but the current headquarters have already been sold off, so that's a special effect on our profit and loss statement. We've also seen resolutions of provisions of reserves that depended on legal issues, and that has a positive effect also on our capital. The 50 that you see here, that's the difference from the year before to 2025. You'll be provided with detailed figures in that regard. In 2025, in total, there are different names for that, but there are banking levies, new banking levies, so EUR 372 million. That means a huge increase by 52%, a year-on-year increase by 52%. You know, there's nothing to add here. What did I mention here? When you look at the net profit, of course, that has an impact.
That comes on top of everyday life. It's not just the corporate income tax, but when you think of these special banking levies. Before the Polish acquisition, we had to pay EUR 1.1 billion. We're talking about huge figures, aren't we? Of course, that also had an impact on our net results. We have seen an increase and reached a level of EUR 3.5 billion. I think it's of important to mention without the special effects, without the one-off effects, our core performance would take us to EUR 3.3 billion. That's something to understand. Not EUR 3.5 billion, but EUR 3.3 billion would be a realistic figure without the one-off effects. Another important issue to mention here, and we already heard about it in your introduction, Peter.
In 2025, and that's not a word that I often use, I'm really proud of that. We have had the full support of our customer business, this is what you can see as regards to the loans, the increase of loans. We've seen an efficient and substantial buildup of capital, and this allowed us for the entry into the Polish market. You won't find that many examples. It was not to the detriment of our loan business. Acquisition on the one hand and increasing our loan business on the other hand, a big shout-out to all our colleagues in all countries, in all fields of business. I really wanna give it up for you. This wouldn't be possible if we wouldn't be able to act in concert. What's the result now?
The result is a CET1 ratio, which we've never seen before and perhaps won't see in the future again, because that's the ratio before consolidating the Polish acquisition. That takes us to roughly 4 percentage points of consolidation, which will happen during the 1st quarter. And we'll meet again after the 2nd quarter, and then we'll see the realistic figure. Still, what a high figure, what a wonderful figure in this regard, our CET1 ratio. In 2025, of course, we had to reduce the dividend. We will produce a dividend per share of EUR 0.75 per share. This is what we're gonna propose to the board and the supervisory and executive board. Of course, the acquisition will make us profitable in the future, and in 2026, the dividends will rise again.
That's a given. That will be communicated after the second quarter. Of course, you know, for 2025, we cannot distribute or we have to distribute lower dividends. That's understood. Now, moving on to the forecast for 2026. There's no need to go into detail, but let me touch upon the most important thing, line number one: We will increase our loan business. In the right column, you have been provided with our figures, inclusive the Polish acquisition, which will take us to roughly. We started with EUR 230 billion, EUR 30 billion in Poland, and then our increase will take us to EUR 285 billion. From EUR 230 billion + EUR 30 billion in Poland, and then the increase will take us to EUR 285.
Here, we see a momentum. There's no need to go into detail here. I've already mentioned it. The most important thing to bear in mind here is that including the Polish bank, in Poland, we have a slightly increased risk level that has to do with the margins, that has to do with the loan mix that we see there. You have to put it into perspective. The risks, on the one hand. When you talk about 25 or 30 basis points, of course, that will take us to profit. These risk costs, that will help us to increase our capital. Let me close it out by telling you that 2025 meant a huge success, so we're really glad about that.
Let's be glad for 10-15 minutes and then move on to 2026 and start business again from scratch.
Thank you so much. Just to close it out, I think you understand, in Central and Eastern Europe, we are operating in an environment which is quite different as compared to the rest of Europe as regards growth rates. Of course, that provides us with really a fantastic environment for doing business. This positive development is not a given, and we want to transfer it also to Austria. That should also have a positive impact on Austria, and we want to reach beyond, and we already communicated that in our analyst call. When do we see the first impact of the new German infrastructure package?
Just to remember, the decisions were taken in autumn 2024, the new budgeting, the impact will come soon. We said, "Well, you have to wait. Let's be patient." Now we actually took it out of our plans, of our guidance, because there's nothing that you can see. Growth starts in your head, you will have to act, as long as there are no actions, you have to be patient. Getting back to Austria. Austria will be able to grow, you know? We have seen small plants sprouting. We have to become more ambitious. Chancellor Stocker, you know, already mentioned it. Our economic growth should be actually bigger as has been forecast. 1% of growth won't be enough in that regard, of course, Austria runs on a tight budget.
That has to be done quickly because we have to look ahead. It can't happen year after year to run on tight budgets. That has to come quickly. Including our Polish acquisition, we have EUR 285 billion of loans. We have a strong capital base on equity. The things that we experience in Central and Eastern Europe, the vibes that we see, we wanna also transport them to the rest of Europe. Geopolitically speaking, and also the way how people, politicians communicate, that could have a negative impact. Things have changed. We see a new world, but that also meant that Europe actually has woken up, and we have to be more self-assured in that regard, you know. Growth starts in your head, and then you have to act.
I'm really proud that I have the best team, and that's the sentence I want to close it out with.
Now, let's continue with your questions. If you have a question, please raise your hand and wait until I call you. Please use the microphone before asking your question so that the colleagues that are listening to our event online can hear your question. If you have a question and a listener online, I will read the question.
First. Question as regards Hungary and the elections. You know. [crosstalk]. Hungary is going to the country, they will have, elections. Will it become more difficult for foreign banks?
I think that's a classic situation. They're going to the country. It's the elections. Let's wait for what happens after the elections. Of course, there's a lot going on, you know. Things seem critical. We have to keep the ball low.
Next question, [Madeleine Strohmaier].
Hello. CET1. I have a question relating to CET1. Is there any outlook of including Poland?
We have a forecast for Poland. At the end of the year, you have seen that we've reached a level of 19.34%, and today's call acknowledged that the framework for the first consolidation, and we already set the frame in May 2025 as regards to the basis points. During the first quarter, we won't have the final balance, but we will be able to give precise figures where we are. I think all of you know, we communicated that for 2026, we want to reach a level of 14.26%. A bit higher than the 14%, which were based on the regulations that we have to adhere to, but we will reach much higher. That's understood. I'm not sure whether we'll reach 15 percentage points as a ratio.
Yeah. I'd also have a question relating to the NPL ratio. How many banks or savings banks have an NPL above 5%?
Leaving aside, the savings banks, no bank in our group has an NPL ratio of more than 5%. In the third quarter, Romania was slightly higher, and we went down to lower than 3% in Romania as well, and there is only a small number of savings banks that have an NPL ratio of 5%, but all of them are trying to get down the NPL ratio and to reduce non-performing loans.
W e are very successful in doing that. Recoveries of previously written off loans rely amounted to EUR 1.5 billion last year. This is 5% more than the previous year, and a lot of it is coming from Austria, and this means that the non-performing loan portfolio is actively directed.
Next question, ECB, European Central Bank, what about the test? Is it a test that is carried out by the bank and not demanded by the ECB? I'd like to know about the risk that you see.
You mean a geopolitical stress test. There is a, sort of, a high number of stress tests. We are talking about the geopolitical stress test. When it comes to liquidity, we have a high frequency. We have a comprehensive stress test, a holistic stress test, a reverse stress test. We have the ECB stress test every other year and specific stress tests. ESG, we had a specific stress test. Now we have geopolitical risk stress tests. We are asked to develop a scenario that creates hard impact on capital. People expect us to include all risk factors and to pass the test, so to speak.
The result is not so interesting because there is a target value that you're trying to achieve, and this is less interesting as the EBA stress test, but we focus on how we will be able to react to risks. We have several teams that are involved in stress tests, and we have a very high quality of stress tests.
Is the ECB too lazy to demand such tests?
We use stress tests internally and for risk management. I would not be happy of having ECB doing that, because stress tests help us in our risks.
That's positive and, you know, I'm not forced to answer like that.
[Mr. Lutze and Mr. Kainz.]
Thank you. Two quick questions from my side as regards to the granting of loans. Mr. Bosek , you mentioned the deposits decreased in Austria. Do you also have a figure as regards to the loans and the increase?
I'm not sure.
3.3%. On the third slide, you have given it per country. In Austria, the loans have increased by 3.3%. Can you tell us what fields of doing business we see the increase of loans?
A thing that we can see in all countries, something that we've seen in all countries, starting in 2024, the demand has been increasing as regards financing, as regards loans. That has also to do with a decrease in interest and moving to Austria.
Sometimes it takes quite long, you know, to establish something, to do business when it's about permits, when it's about grants, and in Austria, we see that the market has been slightly improving. It takes some time. As regards to consumers and housing financing, we have seen a real increase, and as regards corporate business, it's the large corporations, where we see a rise in demands for loans. Small and medium scale business, for example, in the Czech Republic, we've seen an increase, not in Austria. In Austria, we've seen high inflation rates. We still have expectations as regards red tape, doing away with red tape. I already mentioned, you know, sometimes it takes quite long to get a permit, construction permit, for example. Here we really need a push.
The Austrian government will have to take action in that regard to reduce bureaucracy when they discuss the next budgets. It should also be possible to quicker depreciate assets that will improve things. Of course, that means hiring more people, the labor market and so on and so forth will improve as well.
There would be room for maneuver within the next two years. Is this what you're saying?
I hope it will happen earlier. Yeah. Of course, I can't tell the government what to, what to do, so it's just something I'm thinking of, you know, a piece of advice.
[Mr. Pasch?]
Thank you so much. The Austrian regulatory body for financing sees the retail market quite critical and the exposure in that regard, Alexandra already mentioned.
The market is really in a difficult situation. Let's take a look at the big picture. Let me put you in the, in the big picture. Actually, we've been quite successful because the interest rates were very, very low, which meant a lot of people invested into the retail market. Well, that has a long-standing tradition in Austria, and, you know, that even happened before we saw the low interest rates. We saw a real boost, and three, four years ago, you know, actually based on their plans, corporate business was able to sell. That was not in line with the demands of the consumers.
We have a long tradition as regards social housing. 60% actually were covered by social housing before we saw the change of interest rates. Now, that has changed, and not each and everyone can buy a flat with 40 sq m, an apartment with 40 sq m costing EUR 700,000, especially when you think of the younger generation. We see a change in the market, but the things that have been built with high costs, that's something that has to be sold off. You know, these are the non-performing loans. Some of them could be recovered. The banks have been quite patient in that regard, waiting for that sale, sell-off.
Sometimes you have to accept it's not possible, you know, and you have to write it off or manage it away, this kind of issue. The market will take two more years because it needs a lot of planning in that regards, so each and everyone is aware of it. All Austrian banks try to handle that quite well. Of course, you know, the regulatory body in Austria has to see things critical. That's their job.
This is what I told you before. It started at the end of 2023. Commercial developers of housing concentrated in the Viennese region contributed to the increase of the NPL ratio. We had a recovery in 2024, 2025, and we expect it for 2026.
[Mr. Vince] , please.
Mr. Bosek, you mentioned that there's a positive forecast for Austria, but you also mentioned that the new German budget plans won't have an immediate impact, and also the Austrian government announced a lot, but we haven't seen action. Why do you see things positive for the near future in Austria? The 9.1% for the dividend ratio, will we see a hike in 2026? What can you tell us about that?
I'm quite optimistic, and that's based on the fact that Austria has everything to grow. We have strong education and training in Austria, so all the prerequisites. We have intelligent people in Austria, skilled labor, and banking is a good example. We are in the vanguard. Research, the university in Innsbruck or in Vienna. Anton Zeilinger, Nobel laureate. Research, we are very strong in that regard. Let's not forget about the good things that we have.
We can't look back and just look into errors. Let me also say something positive about our government. Well, they could have moved quicker, and the budget deficit should go away quickly. You know, it's the economy. It's the people, the shakers and movers in the business world to change things. It's not just the government, and let's not be pessimistic. 1% can't be enough of growth, no. We have to be more ambitious. You know, we don't tell you that a CET1 ratio of 12% would be great.
No, you have to reach higher, and of course, we will provide strong support in that regard to move into the right direction.
Well, on the other hand, of course, the regulations are also something to adhere to, but apart from that, still, we are very ambitious.
Yeah, that's a good point and question, and let me respond by saying, i t should really make sense. There are three things that I wanna share with you. Item number one, of course, I could hide and say, "Well, at the moment, there's nothing we can tell you about the next dividend, and there are no concrete figures that I could provide you with," but that's true. We at the bank, that's something we stand for. A lot of the topics that have been touched upon by the regulatory bodies, they make sense as regards liquidity, the equity ratio, risk, and so on and so forth. It all makes sense.
To put that into practice, that's something else, you know, to put it to action, and it also fits your question as regards to dividend. That was a one-off for 2025, based on originating with the acquisition of the new Polish player in order to strengthen our CET1 ratio. I already used these words in the analyst call. Let me repeat, let me quote myself in that regard, because that tells you, that tells a lot, I guess. We will have the capacity to return to the level that we had before 2025. We will be able to return, okay? That's a clear-cut and straightforward policy. We will be attractive in that regard. We will return to the same level, and there will be a share buyback that will depend on the rate of the shares on the market.
That's no fixture. This answer also provides you with something. There is no need for a must. That's this third thought that I wanted to share with you. If there are other extremely attractive opportunities for making use of our capital, because we don't know what will happen in the near future, but if there's something attractive coming up, of course, we will have to be able to respond, and this is what makes us strong. Peter Bosek, Alexandra, and myself, we are deeply convinced, and this is something we share with a lot of our colleagues. We've become more self-assured. We have grown strong, you know?
When it gets to control and when it gets to risk, when it gets to finance, we have a lot of intelligent people with us, in order to think about new acquisitions, in order to think about our developments in the future. We will keep the bar low. We will be focused. Still, we are a strong player on the market, and we think ahead. What could we do to strengthen our path of growth within Central and Eastern Europe? On the one hand, of course, we have our main driver, customer business, our core business on the one hand, and of course, we have to manage risks. We have to be clever with our investments. Let me move on to the third opportunity, and organic growth, okay. That's something we have to bear in mind. What's the message now?
Will we be able to pay the same dividends as we had it before 2025? Yes. Is it our plan? Yes. If something attractive will happen on the market, extremely attractive, something that can be explained to the market, let's keep that option on the table, too.
Let me continue with an online question. Mr. Brückner from Telex in Hungary. A former manager from Erste Bank, Hungary, became one of the leaders of the opposition of the Tisza Party. Since then, the Hungarian ruling party has launched a media campaign against Erste Bank. What do you think about this case? Have you ever met anything like this in other countries?
I mean, I think it's very obvious that we don't like it. That's good for us, naturally, nicht? Sie werden überrascht, wenn ich anderes sagen würde.
Of Hungarian parliament, so we should also not overrate it.
[Madeleine], du hattest die nächste Frage oder überrasche ich dich gerade?
Na, na.
Madeleine, you had the next question.
System buffers for commercial property are increased. What effect does that have?
I don't know it by heart. It is limited to Austria. Nonprofit housing is excluded. It's not dramatically high.
I don't have the figure here with me, but roughly, in Austria, it was something significant, something of importance. With respect to Austria and this business segment, when we analyze it, that will mean a reduction, will make it more difficult for the market in this segment to increase your business because it won't be in line with the expected returns. With reference to our group, won't have a major impact, but of course, we can provide you with the figures in detail, okay? It won't be difficult for us. We calculated that. It's there in our Excel sheets.
We understand that the regulatory bodies and the capital buffers, well, that's actually a look to the past. You know, when the crisis has already ended, telling us that we will have to increase our equity, well, this is what happens and when you think of European banking. In the European Central Bank does its business. Their framework should be enough. You know, the buffers that we need, the resource that we need as regards to our equity, our capital, we shouldn't increase that after each crisis that much.
There's two questions. I have two questions relating to Poland. You said we have integration costs in the amount of EUR 280 million. Potential. We also like to hear something about the synergy potentials.
The integration costs were a bit lower. What about synergies?
EUR 200 million, EUR 180 million. We already booked part of it in the first quarter. That takes us roughly to EUR 250 million and EUR 180 million for 2026. Integration cost, of course, there are other costs. There will be other expenditure in Poland, including the rebranding. Peter already touched upon it. Cost synergies, the classic potential, there's nothing in Poland because we don't have anything in Poland. When you think of mergers, that would be something different. You know, when you have a revenue synergy, that happens, if you wanna call it something like that. The existing entities with the new Polish entity and the new cooperation with our colleagues at Santander, of course, that will have an impact.
That will have synergetic impacts, an impact on the revenue side. A classic synergetic effect, no, that won't happen because we don't merge anything in Poland.
Another question, you said growth is created in the head. Do we also have maybe some growth opportunities due to the vicinity of Ukraine?
Well, in Ukraine, there's something under development. 34 countries actually meet in Vienna today, as far as I'm informed, the coordinators of the restructuring fund for Ukraine. Austria will also have a say there and provide an input. Perhaps that's a bit early to think about what we can do here. That's under development. We can't see the end of the war. We can't see peace coming at this particular moment. We have a situation where the United States still dominate negotiations, and it wouldn't come as a surprise if the United States would cover a huge part of the reconstruction in Ukraine. Now, when you think about raw materials, and we've seen negotiations in that regard, there would be business, and also as regards infrastructure, Austrian construction companies or Polish or Czech construction companies could reach out with a helping hand.
The Austrian coordinator, Mr. [Andreas] Gruber, tries to find out about financial instruments that could be used in the future, and Austria should send a signal in that regard. That would happen at the level of politics, doing politics and the Austrian National Bank. It's a bit early, you know, to have great hope in that regard, unfortunately, I have to say.
Next question is an online question, also relating to Ungarn. Rainer Klima, question to Mr. Bosek. Do you expect further attacks of Mr. Orbán in the course of the election campaigns, and do they have an effect on your business?
No, we haven't seen any kind of impact. I've already mentioned that Hungary is going to the country. You know, they will have elections. We are not a political party. We care about our customers. We have a strong standing on the market. There hasn't been an impact.
Next question is to you, Stefan. What do you think which country could be interested for a further acquisition?
Now, we are skating away on the thin ice. When you open the door in that regard, there will be concrete questions, I thought so. We have growth opportunities in existing countries, the countries we already operate in, organically speaking, but also inorganically speaking. Perhaps in Poland, perhaps in the Czech Republic, perhaps in other countries that we operate in. There are opportunities. I'm looking two pieces, actually, we hold a lot of meetings. I think there's no other country beyond that. That's something I can say, strategically speaking, and that would also be a response to offer here, an answer to offer. We also have a strong focus on Central and Eastern Europe. Strategically speaking, we've discussed that a lot. One and a half, two years ago, our focus will be on Central and Eastern Europe.
I'd also like to add the effect of the Austrian regulatory [body] decision. In June 2026, from 1%, we will see an increase, but nobody knows what will happen in 2027. There will have to be taken decisions in the future, but it will be a one-digit basic point increase. We discussed that with the Austrian regulatory body of the financial market, how that could be applied to Austria. If everything remains the same and everything will happen as had been communicated on the market, that will take us to 7, 8 basis points.
I don't see any further questions here in the room or any further online questions. If there are no further questions, I would like to excuse to the online listeners for having coughed. Otherwise, my I and my team will be available to you if there is anything that hasn't been said so far.
Thank you so much. Thanks to you all.