Funding Strategy
Erste Group´s prime liquidity source is the large surplus of customer deposits the bank has due to its strong market position in Austria and the CEE countries where it is active.
Erste Group opened up the covered bonds segment for European issuers in early January by issuing a EUR 1 billion mortgage covered bond (7-year tenor, MS+50 bps). After some slight clouding of the market environment in the middle of the first quarter, Erste Group issued another EUR 1 billion mortgage covered bond (9.75-year tenor, MS+55 bps). In addition, the first quarter was marked by successful private placements. With these issuing activities Erste Group already fulfilled a major portion of its funding plan, affirming its comfortable liquidity position. In the months ahead, the focus will be primarily on other seniority classes.