Austria
Banking sector profile — Europe
Data as of September 2026 • TGB Intelligence Unit
Policy rate as of 7 October 2026: 2.50% (ECB deposit facility rate; source: European Central Bank)
Banking sector at a glance
Structure and performance
Austria has a dense, multi-tier banking system of 445 credit institutions, reflecting the decentralised Raiffeisen and savings-bank sectors: 276 Raiffeisen co-operatives and 48 savings banks operate alongside joint-stock banks, Volksbanks, building societies and specialist lenders. Concentration is low by euro-area standards, with the five largest credit institutions holding 37.1% of sector assets in 2025 on ECB data. Erste Group and Raiffeisen Bank International (RBI) are the two largest groups, followed by UniCredit Bank Austria, BAWAG Group and the regional Raiffeisen Landesbanken.
The large groups are heavily oriented towards Central, Eastern and Southeastern Europe, which accounts for around one third of Austrian banks' credit exposure. Erste completed the acquisition of a 49% controlling stake in Santander Bank Polska in January 2026, renaming it Erste Bank Polska, and reported 2025 net profit attributable to owners of €3.51bn. RBI has continued to shrink AO Raiffeisenbank in Russia, where local-currency loans are down 60% since the start of the war and lending has almost ceased, while damages awarded in the Rasperia litigation have been enforced against the Russian subsidiary.
Sector results are strong. The OeNB reports that Austrian banks earned €11.8bn in 2025 and lifted their CET1 ratio to a record 19.0%. Domestic lending picked up on stronger household mortgage growth, while business lending remained subdued. The aggregate NPL ratio stabilised at 3%, but ratios for SME loans (6.3%) and commercial real estate loans (8.3%) were still rising in 2025, and more than 14% of loans for commercially funded housing are non-performing. Lower provisioning pushed the consolidated coverage ratio below 40%.
The principal risks are commercial real estate, weak domestic growth and geopolitical exposure. The OeNB expects GDP growth of only 0.5% in 2026 after 0.7% in 2025, following the rise in energy prices caused by the war in the Middle East. To address real estate risks, the Financial Market Stability Board recommended raising the sectoral systemic risk buffer on commercial real estate exposures to 2% by mid-2026 and 3.5% by mid-2027. RBI's remaining Russian business adds group-specific legal and sanctions risk.
Structural trends
The shifts shaping banking in Austria.
CESEE expansion continues: Erste closed its purchase of 49% of Santander Bank Polska on 9 January 2026, adding Poland to a region holding about a third of Austrian banks' credit exposure.
Record capitalisation: the sector's CET1 ratio reached 19.0% at end-2025, supported by 2025 profits of €11.8bn that were largely retained, according to the OeNB.
Commercial real estate stress: the NPL ratio on CRE loans rose to 8.3% in 2025 from 6.3% a year earlier, prompting a phased increase in the sectoral systemic risk buffer.
Russia run-down at RBI: AO Raiffeisenbank's local-currency loans have fallen 60% since the start of the war and lending has almost stopped, in line with ECB requirements.
Leading institutions
Largest banks in Austria by total assets.
| # | Bank | Total assets (US$) | Type |
|---|---|---|---|
| 1 | Erste Group | US$433.0bn | Universal |
| 2 | Raiffeisen Bank International | US$247.0bn | Universal |
| 3 | UniCredit Bank Austria | US$128.8bn | Universal |
| 4 | BAWAG Group | US$84.9bn | Commercial |
| 5 | Raiffeisenlandesbank Oberösterreich | US$57.2bn | Cooperative |
Total assets, consolidated group, FY2025 (31 December 2025); EUR converted at the ECB year-end rate (€1 = US$1.1750)
Supervision and capital rules
Significant institutions, including Erste Group, RBI and BAWAG, are supervised directly by the ECB within the Single Supervisory Mechanism, while the FMA supervises less significant institutions with the OeNB conducting analysis and on-site inspections. The Financial Market Stability Board recommends macroprudential measures. The Basel III final reforms apply through the EU's CRR3 from January 2025. Borrower-based standards for residential mortgages are set out in an FMA circular and an FMSB guideline, and a sectoral systemic risk buffer on commercial real estate exposures is being raised to 2% by mid-2026 and 3.5% by mid-2027. Deposits are protected up to €100,000 per depositor under the EU-harmonised guarantee framework.
What changed in 2026
- January 2026: Erste Group completed its acquisition of a 49% controlling stake in Santander Bank Polska on 9 January, and shareholders approved renaming it Erste Bank Polska on 22 January.
- April 2026: BAWAG Group agreed a recommended all-cash offer for Ireland's PTSB on 14 April, subject to High Court and remaining regulatory approvals.
- April 2026: the OeNB's Financial Stability Report put 2025 sector profit at €11.8bn and the CET1 ratio at a record 19.0%, while flagging rising SME and CRE non-performing loans.
- September 2026: the ECB raised its deposit facility rate by 25bp to 2.50% effective 16 September, its second increase of the year.
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