Erste offers minimum yield of up to 20%

Erste Group Bank has issued two capital protected products with a minimum redemption in Austria.

Erste Fair Invest Garant 109.50% 23-28 is linked to the Solactive Erste Fair Invest Index VC and offers a guaranteed return of 9.50% after five years, while Erste Green Invest Garant 120% 23-31, which is tied to the Solactive Erste Green Invest Index VC, has a slightly longer tenor, but its minimum return, at 20%, is higher too.

Additionally, both structures offer 100% uncapped participation in the rise of the underlying index.

“The yield curve has increased dramatically since May last year and that is good news for capital guarantee products,” said Uwe Kolar, head of retail and savings banks sales at Erste Group Bank in Vienna.

“You can offer higher coupons and higher participation and you can also offer 100% capital protection at maturity instead of 90 or 95%,” Kolar said.

The bank started with its Invest Garant series around two years ago, but back then, because the yield curve was so low, it could not offer more than 95% capital protection.