In the past two decades, expansions into central and eastern Europe (CEE) have proved lucrative for Austrian banks, allowing them to capitalise on the region's growth and even protecting them from the financial downturn that swept through the much of western Europe. But, as charts one and two show, while the CEE operations of the two largest Austrian lenders – Erste Bank and Raiffeisen Bank – recorded peak profits in 2008, they have been on a downward spiral since, with results hitting an all-time low in 2014.
For Erste, this meant a loss of €117.3m in the region, adding to the total losses of the group, which amounted to €803.2m. In Raiffeisen’s case, CEE contributed just €29m to its parent, which recorded a €23m pre-tax gain for 2014. After tax, the bank actually posted a net consolidated loss of €493m.