Erste Bank Polska Is Buying Customers With Cashback While the Tax Bill Jumps 51%
A brand goes from 3% to 35% awareness in five months, net interest income finally bottoms, and the capital ratio pays for it — all in the same quarter
EBP.WA · Earnings Call · 2026-10-30
A rebrand, a cashback land grab, and a tax bill
Erste Bank Polska's third quarter is not a story about a bank harvesting a rate cycle. It is a story about a bank deliberately spending to buy future customers in the same year its tax burden exploded. Three separate cost buckets — rebranding, integration, and a customer acquisition promotion — landed simultaneously on a P&L that still produced PLN 3.7 billion of net profit for the first nine months and PLN 1.49 billion in the third quarter alone. The headline tension is simple. Total income over three quarters was PLN 12.1 billion, with Q3 at PLN 3.06 billion, essentially flat quarter-on-quarter. The reported cost-to-income ratio was 36.1% — but strip out integration, rebranding, and Bank Guarantee Fund charges and it is 29.3%. That gap of nearly seven percentage points is the price of transformation. Meanwhile corporate income tax went from PLN 1.5 billion to PLN 2.2 billion.In the last year, we paid corporate income tax of PLN 1.5 billion. This year, it is PLN 2.2 billion, and the effective tax rate is growing, unfortunately. We try to manage it in the best way we can.
From awareness to ambition: the brand bet
The most company-unique element of this call is the marketing thesis. Spontaneous brand awareness of the Erste name stood at roughly 3% just before the April rebrand; by September management claims it reached 35%. That is the single fastest-moving number in the transcript, and it explains why love brand appears as a fresh top-ten theme this quarter — a phrase that did not exist in this company's vocabulary two quarters ago, when the language was merely a new brand and improving brand awareness. “Our ambition is to build the first banking love brand in Poland. This ambition rests on solid foundations.” — Michał Gajewski, CEO · 2026-10-30 Costs are real and front-loaded: PLN 226 million of rebranding over nine months, of which PLN 51 million in Q3, plus PLN 158 million of cost of integration. Management trimmed its full-year transformation budget by roughly PLN 16 million — but pushed that same PLN 16 million into 2027, so next year remains "a year of continued investment."The margin finally stops falling
The quarter's quiet surprise is net interest income. Year-to-date it was PLN 9.5 billion, flat versus last year, but Q3 alone rose 6.5% quarter-on-quarter and 3% year-on-year despite lower rates, with the net interest margin at 4.42%. Volume did the work: gross loans PLN 183 billion (+11% y/y), customer deposits PLN 252 billion (+14%), total customer funds PLN 287 billion (+15%), and current-account deposits growing at nearly twice the market rate. “I think what we are seeing here is a bottoming out of the trend of the previous quarters, so I rather look positively on this.” — Bernhard Leder, CFO · 2026-10-30 This is a genuine narrative reversal. In late 2025 the company's top keywords were rate cut and declining term deposits; today the discussion is about pricing power on both sides of the balance sheet, plus a deliberate extension of duration in the investment book. The sensitivity is disclosed and modest: a 1% rate cut costs roughly PLN 300 million of NII over four quarters. That is a bank that has stopped being a pure rates trade — a theme echoed across global banking keywords like core deposits, as peers fight the same deposit-beta battle.Buying 115,000 business accounts with cashback
The SME segment is where management is most animated — and most exposed to criticism. The special offer pays up to PLN 1,500 back over three months provided customers meet inflow, card-spend, and tax/social-security conditions. It cost PLN 129 million in Q3, will be similar or higher in Q4, and dented fee income, which came in at PLN 643 million for the quarter.SME customers reached 657,000, up 17% year-on-year, with acquisition up 97%; 115,000 business accounts were opened in nine months. Roughly two-thirds of acquired customers are transacting, and half opened personal accounts — cross-sell the bank did not pay for directly. The bear case writes itself: a promotion is not a moat, and the cash-back mechanic is replicable by any competitor with a balance sheet. The bull case is that a digital end-to-end SME credit process plus a 35%-aware brand converts a one-off subsidy into a lasting relationship. Management insists it will return to "regular levels" in fees once the campaign ends.It turns out that our assumptions in business case are met. We can see now that the average inflows to the accounts and the balances in the accounts are like the average for the whole SME base. We can see that as many as 10% of these accounts are the accounts with loans taken out.