Erste Bank Polska: Rebranding Pays Off as Legal Ruling Fades
The bank's first full quarter as Erste delivers record customer growth and resilient NII despite a court ruling that cost it PLN 71 million.
EBP.WA · Earnings Call · 2026-07-30
A Brand New Bank
After a quarter dominated by integration and rebranding costs, Erste Bank Polska has emerged with a clear story: the investment is already paying off. The bank's newly minted brand awareness has doubled, and one in three Poles now recognizes the Erste brand, up from 1% in January. The CEO, Michal Gajewski, was keen to emphasize the early returns: “We achieved double-digit brand awareness among Polish consumers. At the moment, 1 in 3 Poles recognizes the Erste brand. And let me remind you, in January at the outset, spontaneous market overall brand awareness was [ 1% up ].” — Michal Gajewski, CEO · 2026-07-30 The result: 300,000 new customers in the first half, including a 17% rise in retail and an 11% increase in the lucrative SME segment.
This momentum is translating into fee income. Net fee income grew 5% year-on-year, with asset management fees up 33% and credit fees up 22%. The CFO, Bernhard Leder, highlighted the structural shift: “fees are a focus point of our sales, continue to be a focus point. And if I want to point your attention to still some quite impressive growth figures, so fees on asset management are up 30% year-on-year, guarantee fees up 32%, credit fees and brokerage fees also solid double-digit growth year-on-year.” — Bernhard Leder, CFO · 2026-07-30 The bank's net fee strength is a deliberate hedge against the rate-cutting cycle, as Gajewski noted: "This is very important especially in – given the interest rate cut cycle and is an important element of our income diversification."
Hard-Hitting Legal Adjustments
The biggest overhang this quarter was the European Court of Justice ruling on non-interest costs. The bank took a €71 million hit to net interest income, but it was prepared. The CEO explained: “Since 2024, we have not been charging interest on the loan interest cost. So long before the judgment of the European Court of Justice, we stopped to charge the interest.” — Michal Gajewski, CEO · 2026-07-30 That preemptive move, combined with a benign cost of risk of 35 basis points, kept the bottom line solid. Net profit for Q2 came in at PLN 1.173 billion, up 14% year-on-year. The European Court of Justice ruling is now a known quantity, and the bank's management expects no material escalation in litigations, noting that 80% of cases are decided in its favor.
Yet the overhang remains for the sector. The bank has not created provisions for potential penalties from the antitrust office (UOKiK) on unauthorized transactions, a move that contrasts with some peers who have set aside PLN 90–100 million. As Gajewski put it, "We have been analyzing the expectations of UOKiK and we are waiting for that proposal. For the time being, we have not created any provisions." This is a point of uncertainty, but the bank's strong capital position (ROE 19%) provides a cushion.
The cost of integration is running at PLN 175 million for rebranding and PLN 107 million for integration in the first half, on track with the PLN 500 million full-year guidance. Excluding these one-offs, the cost-to-income ratio sits at a stellar 28.7%. The bank is not letting up on cost discipline, as the CFO confirmed: "We have exerted a very strong cost discipline. So business-as-usual costs are very well under control."
Looking Ahead
The bank expects loan growth of 7-8% this year and slightly lower in 2027. Credit margins, which have been squeezed, show signs of stabilizing. The CFO sees a reversal in NIM: “Generally, you saw that the net interest income started to reverse and to develop positively in quarter 2. So we saw an increase in net interest income. And this despite of the charge of the European Court of Justice ruling.” — Bernhard Leder, CFO · 2026-07-30 He attributes this to strong volume growth and improved asset mix. The bank's push into asset management is a key growth driver, with customers starting to invest from as little as PLN 10 – a democratization strategy that has already drawn over 1,000 daily new investors.
Erste Bank Polska's tie-up with Erste Group is yielding more than just a brand. The CEO emphasized the group's expertise: "We have the huge knowledge on the part of Erste Group, and we have the huge knowledge of our neighbors, how to do this business." The bank is now the largest privately-owned bank on the WIG20, and its stock has reflected that confidence.
In a market where many banks are chasing asset management fees to offset margin compression, Erste Bank Polska is already a leader. The quarter proves that strategic transformation, when carefully executed, can create tangible returns. The pending legal and regulatory risks are manageable, and the bank's proactive stance on the ECJ ruling shows a management team in control. As the group's largest CEE franchise, this pivot is one to watch.