Erste Group Bank Ag · VIE:EBS
Erste Group Bank — Erste Bank — Q1 2002 Earnings Presentation
45 slides from Erste Group Bank's earnings presentation, May 21, 2002
Slide 1: Erste Bank – Haftungsverbund - a major step forward
> Erste Bank – Haftungsverbund - a major step forward > Q1 2002 Results Teleconference Vienna, 21 May 2002
Slide 2: Table of Contents
> Table of Contents Presentation Appendix 03 New Group Structure 38 Erste Bank’s Home Market 04 Changes in Reported Figures 39 CS Q1 2002 Financial Highlights 05 Q1 2002 Financial Highlights 40 SLSP Q1 2002 Financial Highlights 06 Q1 2002 Key Ratios 41 Quarterly Results 07 Q1 2002 Highlights 44 Shar
Slide 3: New Group structure
> New Group structure Explanations Savings Banks now consolidated in Erste Bank Group THE ERSTE BANK GROUP HAFTUNGSVERBUND CORE ERSTE BANK • Sparkasse Oberösterreich 45 savings banks DOMESTIC CENTRAL EUROPE (26.9%) in which Erste • Erste Bank • Česká spořitelna (52.1%) Bank has no • Sparkasse Bregen
Slide 4: Main changes in Erste Bank's reported figures
> Main changes in Erste Bank‘s reported figures Explanations Important developments with a first time effect in Q1 2002: “Haftungsverbund“ » Consolidation of savings banks boosts Balance Sheet and P&L - Increases minority interest - Small positive effect on net profit » Insurance business – consolid
Slide 5: Q1 2002 Financial Highlights
> Q1 2002 Financial Highlights Financial Highlights Erste Bank Group Core Erste Bank Operating profit » Up 121.5% to EUR 317.8m » Up 42.2% to EUR 204m » Driven by contribution from CE subsidiaries (43%) and accelerated growth in Austrian operations (+42%) Net profit » Increases by 21.6% to EUR » Cor
Slide 6: Q1 2002 Key ratios
> Q1 2002 Key ratios Update on Core Strategies Erste Bank Group Core Erste Bank Return on equity » Boosted to 15.7% » Up to 12.6% from 12.4% at YE 2001 » based on higher net profit and » 12.5% in Q1 2001 reduction of equity base Cost/Income ratio » Improvement to 64.2% » 65.9% after 66.4% at YE 2001
Slide 7: Highlights Q1 2002
> Highlights Q1 2002 Financial Highlights Key developments January 2002 » CS integration process completed successfully - Transition teams dissolved - Responsibilities transferred to line management March 2002 » AVS launches tender offer for minority shares in CS - Offer price set at CZK 375 per sha
Slide 8: Q1 2002 Financials
> Q1 2002 Financials > Balance sheet > P& L > Divisionals
Slide 9: Q1 2002 Erste Bank Group Balance Sheet (IAS) - Assets
> Q1 2002 Erste Bank Group Balance Sheet (IAS) Q1 2002 Balance Sheet Assets Core Erste Bank EUR m 31.3.2002 31.12.2001 % Change 31.3.2002 % Change Cash and balances with central banks 2,400 2,573 (6.7) 1,886 (26.7) Loans and advances to credit institutions 18,972 18,912 0.3 22,046 16.6 Loans and adv
Slide 10: Q1 2002 Erste Bank Group Balance Sheet (IAS) - Liabilities
> Q1 2002 Erste Bank Group Balance Sheet (IAS) Q1 2002 Balance Sheet Liabilities Core Erste Bank EUR m 31.3.2002 31.12.2001 % Change 31.3.2002 % Change Amounts owed to credit institutions 26,541 28,642 (7.3) 28,111 (1.9) Amounts owed to customers 60,861 37,175 63.7 39,356 5.9 Debts evidenced by cert
Slide 11: Q1 2002 Erste Bank Group Income Statement (IAS)
> Q1 2002 Erste Bank Group Income Statement (IAS) Q1 2002 Profit & Loss Accounts Core Erste Bank EUR m Q1 2002 Q1 2001 % Change Q1 2002 Q1 2001 % Change Net interest income 584.8 312.6 87.1% 384.3 312.6 22.9% Risk provisions for loans and advances (89.1) (48.1) 85.2% (56.7) (48.1) 17.9% Net commissi
Slide 12: P&L Details: Net interest income
> P & L Details Net interest income Q1 2002 Profit & Loss Accounts Erste Bank Group – continued double-digit growth » Growth trend of 2001 312.6 584.8 312.6 384.3 continues in Q1 2002 700 Core Erste Bank » Overall NIM of Erste Bank 600 Group at 2.02% - underscoring the SB‘s +87.1% EUR m 500 potentia
Slide 13: P&L Details: Risk provisions
> P & L Details Risk provisions Q1 2002 Profit & Loss Accounts Economic environment reflected in increase compared to Q1 2001 100 48.1 89.1 48.1 56.7 » Provisions at Erste Bank Group boosted by SBs +85.2% 80 » At Core Erste Bank Core Erste Bank provisions unchanged to 60 Q4 2001 EUR m +17.9% » Tirol
Slide 14: P&L Details: Net commission income
> P & L Details Net commission income Q1 2002 Profit & Loss Accounts Back to double-digit growth rates 136.2 244.0 136.2 169.9 250 » Strong growth driven by +79.1% lending and insurance 200 business Core Erste Bank EUR m 150 +24.7% » Increase of commission income based on positive contributions from
Slide 15: P&L Details: Net trading result
> P & L Details Net trading result Q1 2002 Profit & Loss Accounts Securities markets improve 60 33.1 50.9 33.1 43.7 » Securities business in Austria main contributor to 50 32% increase at Core Erste Core Erste Bank +53.8% Bank +32.0% 40 » Domestic net trading result EUR m 30 up 52% 20 » Reflects ove
Slide 16: P&L Details: General administrative expenses
> P & L Details General administrative expenses Q1 2002 Profit & Loss Accounts Cost growth boosted by central group functions » Costs almost flat at CS post 338.4 570.0 338.4 393.9 600 restructuring +68.4% 500 Core Erste Bank » Integration process is cause for increased 400 expenses at SLSP (+ 30%)
Slide 17: P&L Details: Other operating result
> P & L Details Other operating result Q1 2002 Profit & Loss Accounts IAS 39 contributes to volatility 0 » Consolidation of SBs increases goodwill at Erste -3.1 -20 -3.1 Bank Group level – nearly >100% flat at Core EB -26.3 -40 EUR m » CS payments to deposit Core Erste Bank insurance decreased due t
Slide 18: Q1 2002 divisional highlights: Savings banks
> Q1 2002 divisional highlights 1 Q1 2002 Divisional highlights Savings banks » For the first time shown as separate segment including all members of the Haftungsverbund Erste Bank Group » Net profit EUR 0.5m leads to ROE of 1.2% and CIR of 68.9% - Cannot be compared to Q1 2001 which only includes S
Slide 19: Q1 2002 divisional highlights: Retail and real estate
> Q1 2002 divisional highlights 1 Q1 2002 Divisional highlights Retail and real estate Erste Bank Group » Net profit increased threefold to EUR 14.m driven by strong contribution from CS - ROE 11.1% based on lower equity compared to Core Bank » Majority-owned Erste & Steiermärkische fully consolidat
Slide 20: Q1 2002 divisional highlights: Large corporate clients
> Q1 2002 divisional highlights 1 Q1 2002 Divisional highlights Large corporate clients Erste Bank Group » Net profit up 44% to EUR 29.2m in EB Group - ROE improved accordingly to 16.3% (from 11.9%) - CIR 35.6% down from 44.6% last year » Additional Immorent subsidiaries consolidated through Haftung
Slide 21: Q1 2002 divisional highlights: Trading and investment banking
> Q1 2002 divisional highlights 1 Q1 2002 Divisional highlights Trading and investment banking Erste Bank Group » Drop in net profit to EUR 10.8m compared to 21.9m - ROE 18.6% from 27.2% Q1 2001 - CIR 50.0% down from 56.2% last year » Mainly due to valuation losses on securities assets » Improved se
Slide 22: Q1 2002 divisional highlights: Asset gathering, Corporate Centre
> Q1 2002 divisional highlights 1 Q1 2002 Divisional highlights Asset gathering Erste Bank Group » Net profit at EUR 15.0m up 55% from EUR 9.7m in Q1 2001 - Main factor is inclusion of s Versicherung due to the Haftungsverbund - Result from insurance business shown in new P&L line item » CIR improve
Slide 23: Q1 2002 divisional highlights: Slovenská sporiteľňa
> Q1 2002 divisional highlights 1 Q1 2002 Divisional highlights Slovenská sporiteľňa » Net profit in SLSP dropped to EUR 3.5m due sharp increase in taxes - Changes in tax deduction on interest payments from securities » Pre-tax profit nearly unchanged to Q1 2001 » Improvement in interest income and
Slide 24: Targets and outlook
> Targets and outlook Outlook Erste Bank Group considers new targets for 2003 » Based on the positive results achieved this quarter (even after the acquisitions of Tiroler Sparkasse and Riječka banka) and the effects of the consolidation of the savings banks through the Haftungsverbund, Erste Bank i
Slide 25: Segment reporting
> Segment reporting
Slide 26: Q1 2002 divisional figures: Savings banks
> Q1 2002 divisional figures Q1 2002 Divisionals Savings banks Erste Bank Group Core Erste Bank In EUR m Q1 2002 Q1 2001 Q1 2002 Q1 2001 Net interest income 219.4 14.6 28.0 14.6 Risk provisions for loans and adv. (41.2) (3.6) (10.9) (3.6) Net commission income 90.2 11.1 18.6 11.1 Net trading result
Slide 27: Q1 2002 divisional figures: Retail and real estate
> Q1 2002 divisional figures Q1 2002 Divisionals Retail and real estate Erste Bank Group Core Erste Bank CS Total EB "domestic" CS Total In EUR m Q1 2002 Q1 2001 Q1 2002 Q1 2001 Q1 2002 Q1 2001 Q1 2002 Q1 2001 Q1 2002 Q1 2001 Net interest income 96.9 76.2 216.3 178.9 112.3 102.6 96.9 76.2 209.2 178.
Slide 28: Q1 2002 divisional figures: Large corporate customers
> Q1 2002 divisional figures Q1 2002 Divisionals Large corporate customers Erste Bank Group Core Erste Bank CS Total EB "domestic" CS Total In EUR m Q1 2002 Q1 2001 Q1 2002 Q1 2001 Q1 2002 Q1 2001 Q1 2002 Q1 2001 Q1 2002 Q1 2001 Net interest income 18.7 8.1 85.8 64.9 64.7 56.8 18.7 8.1 83.4 64.9 Ris
Slide 29: Q1 2002 divisional figures: Trading and investment banking
> Q1 2002 divisional figures Q1 2002 Divisionals Trading and investment banking Erste Bank Group Core Erste Bank CS Total EB "domestic" CS Total In EUR m Q1 2002 Q1 2001 Q1 2002 Q1 2001 Q1 2002 Q1 2001 Q1 2002 Q1 2001 Q1 2002 Q1 2001 Net interest income 7.0 2.7 28.0 18.8 21.0 16.0 7.0 2.7 28.0 18.8
Slide 30: Q1 2002 divisional figures: Asset gathering
> Q1 2002 divisional figures Q1 2002 Divisionals Asset gathering 1 Erste Bank Group Core Erste Bank In EUR m Q1 2002 Q1 2001 Q1 2002 Q1 2001 Net interest income 0.1 0.4 2.0 0.4 Risk provisions for loans and adv. 0.0 0.0 0.0 0.0 Net commission income 25.1 23.7 25.1 23.7 Net trading result 0.0 0.0 0.0
Slide 31: Q1 2002 divisional figures: Corporate centre
> Q1 2002 divisional figures Q1 2002 Divisionals Corporate centre Erste Bank Group Core Erste Bank CS Total EB "domestic" CS Total In EUR m Q1 2002 Q1 2001 Q1 2002 Q1 2001 Q1 2002 Q1 2001 Q1 2002 Q1 2001 Q1 2002 Q1 2001 Net interest income (1.2) 6.5 (2.1) 4.8 (2.4) (1.8) (1.2) 6.5 (3.6) 4.8 Risk pro
Slide 32: Q1 2002 divisional figures: Slovenská sporiteľňa
> Q1 2002 divisional figures Q1 2002 Divisionals Slovenská sporiteľňa Erste Bank Group Core Erste Bank In EUR m Q1 2002 Q1 2001 Q1 2002 Q1 2001 Net interest income 37.3 30.3 37.3 30.3 Risk provisions for loans and adv. 1.6 (3.8) 1.6 (3.8) Net commission income 9.2 6.5 9.2 6.5 Net trading result 2.7
Slide 33: Q1 2002 divisional figures: Total
> Q1 2002 divisional figures Q1 2002 Divisionals Total Erste Bank Group Core Erste Bank 1 Total Total CS Total EB "domestic" CS Total In EUR m Q1 2002 Q1 2001 Q1 2002 Q1 2001 Q1 2002 Q1 2001 Q1 2002 Q1 2001 Q1 2002 Q1 2001 Net interest income 121.3 93.6 584.8 312.6 197.7 174.2 121.3 93.6 384.3 312.6
Slide 34: First-Time Consolidation - Key Points (1)
> First-Time Consolidation - Key Points Explanations Reconciliation between Erste Bank Group and Core Erste Bank (1) Overall P&L Erste Bank Group Core Erste Bank Pre-tax Profit EUR 172.9m EUR 120.9m » Includes all 54 Haftungsverbund Savings » Only includes Savings Banks where Banks Erste Bank has eq
Slide 35: First-Time Consolidation - Key Points (2)
> First-Time Consolidation - Key Points Explanations Reconciliation between Erste Bank Group and Core Erste Bank (2) Retail and Real Est. Erste Bank Group Core Erste Bank Pre-tax Profit EUR 45.1m EUR 42.6m » Erste&Steiermarkische fully consolidated » Erste&Steiermarkische results included at equity
Slide 36: First-Time Consolidation - Key Points (3)
> First-Time Consolidation - Key Points Explanations Reconciliation between Erste Bank Group and Core Erste Bank (3) Asset Gathering Erste Bank Group Core Erste Bank Pre-tax Profit EUR 22.2m EUR 16.7m » s Versicherung fully consolidated » s Versicherung taken into account at equity Net Profit after
Slide 37: Appendix
> Appendix > Additional information
Slide 38: Erste Bank's home market in Central Europe with a population of 40 million
> Erste Bank’s home market in Central Europe with a population of 40 million Extended home market Strong presence - servicing 10.6 million customers in Central Europe Branches: 684 Clients: 4.9m Erste Bank Branches: 441 Branches: 315 Clients: 2.3m Czech Republic Clients: 0.6m 10.3m Savings Banks Slo
Slide 39: Česká spořitelna: Q1 2002 financial highlights
> Česká spořitelna: Q1 2002 financial highlights Extended home market ČS Q1 2002 net profit increases by 173% in post-transformation year » Operating profit increases by 16% – administrative expenses down by 3% » Conservative pricing and higher ATM interchange fees as well as acceleration in lending
Slide 40: Slovenská sporiteľňa: Q1 2002 financial highlights
> Slovenská sporiteľňa: Q1 2002 financial highlights Extended home market Strong focus on milestones to push transformation process » Customer deposits account for 85% of total assets of SKK 199bn (EUR 4.7bn) making SLSP the largest bank in the Slovak Republic » Double-digit growth of operating prof
Slide 41: Quarterly results (IAS)
> Quarterly results (IAS) Additional financial information P & L details EB Group Core EB EUR m Q2'00 Q3'00 Q4'00 Q1'01 Q2'02 Q3'01 Q4'01 Q1'02 Q1'02 Net interest income 196 253 295 313 357 389 380 585 384 Risk provisions for loans and advances (33) (52) (50) (48) (45) (55) (56) (89) (57) Net commis
Slide 42: Quarterly divisional figures (IAS)
> Quarterly divisional figures (IAS) Additional financial information Retail & Real Estate Large Corporate Clients Trading & Investment Banking In EUR m Q1 01 Q2 01 Q3 01 Q4 01 Q1 01 Q2 01 Q3 01 Q4 01 Q1 01 Q2 01 Q3 01 Q4 01 Net interest income 195.3 227.5 213.8 244.4 66.9 85.9 93.2 98.9 20.0 20.7 5
Slide 43: Quarterly results (IAS): Key financial data
> Quarterly results (IAS) Additional financial information Key financial data in EUR m YE 1998 YE 1999 YE 2000 YE 2001 Q1 2002 Tier 1 Capital pursuant to § Austrian Banking Act 1,611 1,753 2,125 2,337 2,465 Total own funds pursuant to § Austrian Banking Act 3,176 3,296 3,956 4,308 4,500 Risk weighte
Slide 44: Current shareholder structure
> Current shareholder structure Shareholder structure Total number of shares: 50,615,114 5 largest institutional shareholders: Uniqa: 6.5% Generali: 4.3% Swedbank: 4.4% AVS Dexia Bank 2.3% 40.4% Commerzbank: 2.0% Shareholders < 5% 5 largest savings banks 53.1% shareholders: Kärntner Sparkasse: 1.2%
Slide 45: Investor Relations Contacts
> Investor Relations Contacts Erste Bank, Graben 21, 1010 Vienna Fax: +43-(0)-50100-13112 E-mail: investor.relations@erstebank.at Internet: www.erstebank.at Reuters: ERST.VI Bloomberg: DESC AV Datastream: O:ERS Securities ID: 065201 Investor Relations Gabriele Werzer Tel: +43 (0) 50100-11286 E-Mail: