Short Sellers Flee Erste Group as Polish Integration Test Looms

Short interest in Erste Group plunges 87% as stock surges 59%, with institutional buying approved and analysts raising price targets to €123.

The bears are abandoning Erste Group in droves. Just days before the Austrian lender publishes its first-quarter results on April 30 — the maiden report card for its Santander Bank Polska acquisition — speculative short positions have collapsed to near zero.

Data from mid-April shows only around 2,400 Erste Group shares held in short positions, an 87 percent plunge from late March levels. The days-to-cover ratio now signals virtually no squeeze potential remains. This exodus of short sellers coincides with a remarkable run for the stock, which has surged 59 percent over the past twelve months to close at €99.65 — just above its 50-day moving average of €98.80.

The retreat from bearish bets is only part of the story. On the other side of the trade, institutional demand is being deliberately cultivated. Erste Group’s annual general meeting on April 17 approved a framework allowing Austria’s regional savings banks — the Sparkassen — to acquire up to 812,974 shares between late April 2026 and November 2028. The timing opens the door for fresh buying from the core shareholder base in the weeks ahead, even as the stock has dipped roughly seven percent week-on-week, largely due to a dividend adjustment.

A Dividend Sacrifice for Scale

That dividend — €0.75 per share, paid out on April 24 — was deliberately modest. The total distribution of around €308 million represented a payout ratio of just 9.1 percent of 2025 net profit, which itself climbed to €3.5 billion on the back of a loan book that expanded to €232 billion. The message from management is clear: every euro of retained capital is being marshalled to fund the Santander Polska acquisition internally, without tapping equity markets.

Analysts at Barclays have responded by lifting their price target on Erste Group to €123, maintaining an "overweight" rating. Their projections show earnings per share rising from €10.50 this year to over €13 by the 2027 financial year, accompanied by an estimated dividend of €4.30. For 2026, FactSet consensus forecasts a net profit of €3.8 billion — roughly 12 percent above trailing twelve-month levels — and a dividend of €4.19 per share, assuming the Polish expansion delivers as planned.

A Board Built for a Bigger Bank

The April 17 AGM also reshaped the supervisory board to reflect the lender’s new scale and complexity. Alongside the re-election of Christine Catasta and Christiane Tusek, three new international profiles joined: Dorota Snarska-Kuman, an expert in international accounting standards; Roeland Louwhoff, who brings digital transformation experience from Standard Chartered and ING; and Jernej Omahen, a former Goldman Sachs partner now serving as senior adviser at Oliver Wyman. The board now comprises nine women and eleven men — a composition designed to oversee a bank that has grown significantly larger and more international through the Polish acquisition.

The April 30 Reckoning

All eyes now turn to the first-quarter interim report on April 30, when Santander Bank Polska’s figures will be fully consolidated into Erste Group’s balance sheet for the first time. Market participants are looking for concrete details on integration costs, early synergy realisation, and whether the bank’s core capital ratio remains solid after absorbing the acquisition.

If the numbers hold up, they would validate the bullish analyst forecasts and the strategic logic behind the dividend sacrifice. The short sellers have already voted with their feet — the question now is whether the Polish bet will reward the long-term holders who stayed.