A Major Transformation

Photo: Jakob Polascek

Most of us have always known it; others had freedom of movement, freedom of assembly, the to learn it the hard way last year: physi- right to education and the right to meet other cal health is the most valuable asset in our people, especially those closest to us, were temlives. In 2020, people in Europe and around the porarily suspended. Entire industries suffered world faced the biggest health crisis since World enormous economic slumps due to imposed cloWar II and the first pandemic since the Spanish sures. The dynamics of globalisation suddenly had flu about a hundred years ago. Millions of peo- a downside: chains of infection stretched across ple have died and many more have fallen ill. By continents, while supply chains were abruptly the time this report is published, in the first half disrupted. With borders closed, important goods of 2021, we’re still not quite out of the woods. were unavailable in the short and medium term. Due to the restrictions needed to contain it, the Theatres, museums, and concert halls remained health crisis soon became an economic crisis with empty, and access to culture was blocked. far-reaching economic and social consequences. At the same time, many of us were amazed to see As a result, we learned that what is possible when things financial health is the second Financial health is the second get serious. The crisis gave an most valuable asset for us individually but also for entire most valuable asset of our life. enormous boost to digitalisation, which enabled bridging societies. Physical and finan- solutions for home schooling cial health are also closely intertwined. Illness and working from home, but also innovative foroften leads to economic hardship, and financial mats of collaboration and tools for maintaining worries often trigger physical or mental prob- access to arts and culture. Systemically important lems. In both cases, prevention is the best med- services continued to run smoothly, cashless payicine. ment was increasingly accepted, and medical reAt this time when the coronavirus pandemic un- search delivered results in record time. The most expectedly left masses of people unemployed or frequently cited positive effect of the Covid-19 in a precarious economic situation, ERSTE Foun- crisis is the seven per cent (2.4 billion ton) drop dation took a major step forward in its focus on in global CO2 emissions in 2020 compared to the “financial health”. Together with key stakeholders, previous year. we set up the Foundation for Economic Literacy We are witnessing a major transformation in solast year to help enhance general economic liter- ciety. After overcoming the pandemic, we will not acy throughout Austria and integrate economic return to a pre-crisis state. ERSTE Foundation and and financial education into school curricula. Eco- the entire civil society, but also banks, must and nomic literacy is the primary factor in providing will seize the opportunities that this crisis prefor a financially healthy life. sents. The digital world must also be accessible to In addition to threatening our health and the NGOs, for example (something we are working on economy, the coronavirus pandemic also had a with the start-up Two Next). In view of the solumajor impact on other spheres of life. As a result tions we urgently need to tackle the climate crisis of emergency decrees, we had to accept severe and the social and societal upheavals in its wake, restrictions to fundamental democratic rights: the foundation will have to break new ground

both as a partner of committed NGOs and social enterprises and as a responsible shareholder of Erste Group. For Erste Group, the pandemic has shown the importance of providing face-to-face customer support and individual solutions in crisis situations. Apps are not the answer to everything. Financial service providers will have to provide even more individually tailored services in the future if they want to survive. In its role as owner, ERSTE Foundation will ensure that the business purpose of its bank combines effectiveness and public spirit. In return, it enables one of the largest financial service providers in Central and Eastern Europe to rely on a solid ownership structure in uncertain times. During the pandemic, banks played a key role in disbursing government subsidies to the business sector, and they will be needed as competent partners in the coming period to handle the huge investment volumes provided by the European Green Deal and other stimulus programmes designed to help businesses emerge from the crisis stronger and sustainably. At the same time, banks are under close scrutiny from regulators. Early on, the European Central Bank recommended that banks suspend or limit dividend pay-outs for 2019 and 2020. ERSTE Foundation had sufficient reserves to cushion the loss of its dividend payment in 2020 and was even able to provide special grants to NGOS that were hit particularly hard by the pandemic. Erste Group already made sufficient provisions for possible loan losses at the beginning of the pandemic. The good news is that the prospect of the development of life-saving vaccines in record time was enough to stimulate economic growth in many industries and many countries in Central and Eastern Europe. We are confident about the economic future of Erste Group and ERSTE Foundation after the pandemic is over. The ERSTE Foundation supervisory board’s decision to appoint a health expert to the foundation’s managing board in March 2020 – even before the World Health Organisation had declared the Covid-19 crisis a pandemic and Austria had announced the first lockdown – was indeed a timely move. Eva Höltl, an occupational health practitioner who heads Erste Group’s health centre, has been contributing her expertise on physical and financial health to the ERSTE Foundation board, as well as her knowledge of the impact of social problems on individual people’s health and the resilience of social groups. She is head of the scientific advisory board of the Austrian Academy of Occupational Medicine and Prevention and was also appointed a spokesperson for the “Österreich impft (Austria vaccinates)” initiative, which provides information to the population about the benefits and risks of coronavirus vaccination, in early 2021. I was deeply saddened by the completely unexpected passing of Peter Pichler. He was a particularly committed member of the supervisory board whose valuable contributions based on many years’ expertise as an entrepreneur have greatly benefited our work. We miss his voice and his wise observations. As planned for some time, Philipp Thurn und Taxis was appointed a member of the supervisory board at the association’s meeting on 30 November 2020. I am very much looking forward to working with him. I would like to sincerely thank Mario Catasta (CEO) and Boris Marte (Deputy CEO) as well as Eva Höltl and Franz Portisch and all employees for their work in this extraordinary year and hope you, and all of us, will stay healthy – both physically and financially.

Andreas Treichl

Chairman of the Supervisory Board

Supervisory Board Members

Andreas Treichl Manfred Wimmer Bettina Breiteneder Ilse Fetik Maximilian Hardegg Barbara Pichler Johanna Rachinger Philipp Thurn und Taxis Markus Trauttmansdorff