Erste Group Bank Ag · VIE:EBS
Erste Group Bank — Q3 2013 Earnings Presentation
90 slides from Erste Group Bank's earnings presentation, Oct 30, 2013
Slide 1: Erste Group investor presentation – 1-9 2013 results
Erste Group investor presentation – 1-9 2013 results 30 October 2013 Participation capital repaid, asset quality improves Andreas Treichl, CEO, Erste Group Gernot Mittendorfer, CFO, Erste Group Andreas Gottschling, CRO, Erste Group
Slide 2: Disclaimer – Cautionary note regarding forward-looking statements
Disclaimer – Cautionary note regarding forward-looking statements − THE INFORMATION CONTAINED IN THIS DOCUMENT HAS NOT BEEN INDEPENDENTLY VERIFIED AND NO REPRESENTATION OR WARRANTY EXPRESSED OR IMPLIED IS MADE AS TO, AND NO RELIANCE SHOULD BE PLACED ON, THE FAIRNESS, ACCURACY, COMPLETENESS OR CORREC
Slide 3: Executive summary – Participation capital repaid, asset quality improves
Executive summary – Participation capital repaid, asset quality improves • Net profit of EUR 430.3m supported by significant reduction in risk costs • Decline in net profit due to significant one-off income in 1-9 12 (hybrid buyback) Income statement – • Operating result impacted by subdued loan dem
Slide 4: Presentation topics
Presentation topics − Business performance − BCR update − Credit risk − Funding − Capital − Outlook − Appendix − Segments − Asset quality − CEE local consolidated results − About Erste Group − Shareholder structure 1-9 2013 results 30 October 2013 presentation 4
Slide 5: Operating environment: macro trends – Signs of economic recovery visible in CEE
Operating environment: macro trends – Signs of economic recovery visible in CEE − Growth mainly driven by exports, however, domestic Real GDP growth in Erste Group‘s core markets (in %) demand has also started to gradually improve 4.4 2010 2012 − Consumer confidence has improved across the region in
Slide 6: Operating environment: macro trends – What has recently happened in CEE?
Operating environment: macro trends – What has recently happened in CEE? − AT: economy continuously outgrows the euro zone − Remains one of the strongest economies in Europe − Unemployment rate (4.9% as of August 2013) is the lowest in the entire European Union − Public debt and budget deficit are b
Slide 7: Key financial indicators – EPS and ROE reflecting market environment
Key financial indicators – EPS and ROE reflecting market environment YTD cost income ratio YTD net interest margin 52.4% 51.9% 52.4% 50.9% 49.9% 3.09% 3.03% 2.98% 2.82% 2.70% 1-9 09 1-9 10 1-9 11 1-9 12 1-9 13 1-9 09 1-9 10 1-9 11 1-9 12 1-9 13 Cash earnings per share** Cash return on equity** 2.06
Slide 8: Income statement (IFRS) 1-9 13 vs 1-9 12
Income statement (IFRS) 1-9 13 vs 1-9 12 – Net profit driven by risk costs, NII and banking tax in EUR million 1-9 13 1-9 12 Change Comment Net interest income 3,651.6 3,968.9 (8.0%) Low interest rates, subdued loan demand Risk provisions for loans (1,260.0) (1,465.3) (14.0%) Significant reduction i
Slide 9: Income statement (IFRS) drill-down – Other operating result in detail
Income statement (IFRS) drill-down – Other operating result in detail Other operating result (1-9 13): - EUR 578.5m Deconsolidation • Banking and transactional taxes EB Ukraine are biggest single item -76.6 • 1-9 13 negative one-off effects: Goodwill at EUR 157.4m impairment -52.2 Banking & − Decons
Slide 10: Income statement (IFRS) Q3 13 vs Q2 13
Income statement (IFRS) Q3 13 vs Q2 13 – Improved NII reflected in net profit in EUR million Q3 13 Q2 13 Change Comment Net interest income 1,220.4 1,190.6 2.5% Strong retail & SME, particularly in Austria Risk provisions for loans (428.2) (429.6) (0.3%) Net fee and commission income 450.4 447.7 0.6
Slide 11: Balance sheet (IFRS) – Lower customer loans, lower RWAs
Balance sheet (IFRS) – Lower customer loans, lower RWAs in EUR million Sep 13 Dec 12 Change Comment Cash and balances with central banks 10,556 9,740 8.4% Loans and advances to credit institutions 9,113 9,074 0.4% Loans and advances to customers 129,492 131,928 (1.8%) Reduction in most segments Risk
Slide 12: Balance sheet (IFRS) – Strong deposit base
Balance sheet (IFRS) – Strong deposit base in EUR million Sep 13 Dec 12 Change Comment Deposits by banks 22,946 21,822 5.2% Customer deposits 122,060 123,053 (0.8%) Exclusion of Czech pension fund: EUR 1.7bn Debt securities in issue 27,232 29,427 (7.5%) Value adjustments from Portfolio fair value he
Slide 13: Segment highlights – Improvement in RO, solid results in EBOe, CZ and SK
Segment highlights – Improvement in RO, solid results in EBOe, CZ and SK Top segment performers in 1-9 13: Romania EB Oesterreich Czech Republic Slovakia in EUR million 1-9 13 1-9 12 ∆ 1-9 13 1-9 12 ∆ 1-9 13 1-9 12 ∆ 1-9 13 1-9 12 ∆ Operating income 585 569 3% 716 706 1% 1,090 1,191 (8%) 405 404 0%
Slide 14: Presentation topics
Presentation topics − Business performance − BCR update − Credit risk − Funding − Capital − Outlook − Appendix − Segments − Asset quality − CEE local consolidated results − About Erste Group − Shareholder structure 1-9 2013 results 30 October 2013 presentation 14
Slide 15: BCR turnaround – Restructuring well on track, NPL stock declines
BCR turnaround – Restructuring well on track, NPL stock declines Key priorities The road to profitability in 2013 • NPL stock declined for the first time since 2008 due to lower new NPL formation, Key priority #1: efficient recovery efforts and sell-offs in line with strategy Improve asset • 7th con
Slide 16: Presentation topics
Presentation topics − Business performance − BCR update − Credit risk − Funding − Capital − Outlook − Appendix − Segments − Asset quality − CEE local consolidated results − About Erste Group − Shareholder structure 1-9 2013 results 30 October 2013 presentation 16
Slide 17: Loan book review – Slowing loan book decline
Loan book review – Slowing loan book decline − Customer loans declined by 0.2% qoq, 1.8% ytd Customer loans by main segments reductions mainly in GCIB and Romania − Austria: stable ytd, up qoq in retail and SMEs/local 150 133.5 131.9 130.3 129.8 129.5 corporates but decline in municipalities 120 18.
Slide 18: Asset quality review – First visible qoq NPL ratio reduction since 2008
Asset quality review – First visible qoq NPL ratio reduction since 2008 − NPL ratio down qoq, but still up 0.4pp ytd Erste Group: NPL ratio vs NPL coverage − Ytd increase driven by GCIB and declining loan book − NPL reduction of EUR 61m qoq in Romania 30% 63.1% 62.6% 63.0% 65% 62.4% − NPL sales in Q
Slide 19: Asset quality review – AT, CZ & SK improve, while RO stabilises
Asset quality review – AT, CZ & SK improve, while RO stabilises − Retail & SME/Austria: asset quality stable NPL ratios in key segments − NPL ratio stable at 5.5% − NPL coverage ratio slightly down to 60.7% 35% 31.3% 30% 27.4% − Hungary: uptick in NPLs in the retail segment 25% (CHF portfolio) ahead
Slide 20: Asset quality review – Risk costs further decreased in retail & SME business
Asset quality review – Risk costs further decreased in retail & SME business − Slovakia: further good quality loan growth − NPL ratio further declined to 5.5% Risk costs in key segments − NPL coverage ratio stood at 92.1% − Loan growth mainly with retail clients 8% − Czech Republic: NPL ratio reduct
Slide 21: Presentation topics
Presentation topics − Business performance − BCR update − Credit risk − Funding − Capital − Outlook − Appendix − Segments − Asset quality − CEE local consolidated results − About Erste Group − Shareholder structure 1-9 2013 results 30 October 2013 presentation 21
Slide 22: Funding update – Continued strong deposit performance
Funding update – Continued strong deposit performance − Strong customer deposit base Customer deposit trends by main segments − GCIB deposits increased by 18.6% ytd 122.2 123.1 123.1 122.5 122.1 − Retail & SME deposits in Austria down by 0.5% 125 4.9 5.5 6.2 6.1 6.5 − Nominal decline in the Czech Re
Slide 23: Funding update – Strong liquidity position, limited funding requirements
Funding update – Strong liquidity position, limited funding requirements − Short-term funding needs very well covered Evolution of funding mix − Investment in highly liquid assets resulted in comfortable 100% 3.2% 3.0% 3.0% 2.7% 2.8% 90% 8.5% 9.0% 8.2% 8.3% 7.9% collateral coverage of short-term fun
Slide 24: Presentation topics
Presentation topics − Business performance − BCR update − Credit risk − Funding − Capital − Outlook − Appendix − Segments − Asset quality − CEE local consolidated results − About Erste Group − Shareholder structure 1-9 2013 results 30 October 2013 presentation 24
Slide 25: Capital position – Capital increase & participation capital repayment in Q3
Capital position – Capital increase & participation capital repayment in Q3 Capital position (Sep 2013) Recent developments Capital development Core tier 1 ratio − First and to date only Austrian (total risk) bank that fully repaid the partici- 10.9% CT1 (Basel 2.5) ratio 10.9% pation capital (EUR 1
Slide 26: Presentation topics
Presentation topics − Business performance − BCR update − Credit risk − Funding − Capital − Outlook − Appendix − Segments − Asset quality − CEE local consolidated results − About Erste Group − Shareholder structure 1-9 2013 results 30 October 2013 presentation 26
Slide 27: Conclusion – Outlook
Conclusion – Outlook − Erste Group expects a slight improvement in economic performance for Central and Eastern Europe until year-end 2013, loan demand not expected to pick up significantly − For 2013 Erste Group expects operating result to decline up to 5% compared to 2012 − Lower operating income
Slide 28: Presentation topics
Presentation topics − Business performance − BCR update − Credit risk − Funding − Capital − Outlook − Appendix − Segments − Asset quality − CEE local consolidated results − About Erste Group − Shareholder structure 1-9 2013 results 30 October 2013 presentation 28
Slide 29: Segment review – Improved profitability in the Retail & SME segment
Segment review – Improved profitability in the Retail & SME segment Retail & SME GCIB Group Markets Corporate Center Total Group in EUR million 1-9 13 1-9 12 1-9 13 1-9 12 1-9 13 1-9 12 1-9 13 1-9 12 1-9 13 1-9 12 Net interest income 3,048.4 3,249.8 300.6 381.0 154.2 154.8 148.4 183.3 3,651.6 3,968.
Slide 30: Region – Austria: Net profit improves on lower risk costs
Region – Austria Net profit improves on lower risk costs Savings banks EB Oesterreich Austria in EUR million 1-9 13 1-9 12 1-9 13 1-9 12 1-9 13 1-9 12 Net interest income 674.8 701.7 453.3 467.5 1,128.1 1,169.2 Risk provisions for loans and advances (129.8) (159.2) (45.1) (81.5) (174.9) (240.7) Net
Slide 31: Region – Central and Eastern Europe (1)
Region – Central and Eastern Europe (1) Romania shows most significant yoy improvement Czech Republic Romania Slovakia Hungary in EUR million 1-9 13 1-9 12 1-9 13 1-9 12 1-9 13 1-9 12 1-9 13 1-9 12 Net interest income 747.2 842.6 437.6 423.7 322.5 318.0 201.9 257.6 Risk provisions for loans and adva
Slide 32: Region – Central and Eastern Europe (2)
Region – Central and Eastern Europe (2) Declining risk costs drive CEE performance Croatia Serbia Ukraine CEE in EUR million 1-9 13 1-9 12 1-9 13 1-9 12 1-9 13 1-9 12 1-9 13 1-9 12 Net interest income 175.2 191.8 29.7 26.6 6.2 20.3 1,920.3 2,080.6 Risk provisions for loans and advances (119.5) (107.
Slide 33: Segment Retail & SME – Net profit up on lower risk costs
Segment Retail & SME – Net profit up on lower risk costs − Decline in operating expenses almost offsets in EUR million 1-9 13 1-9 12 Change decrease in operating income Net interest income 3,048.4 3,249.8 (6.2%) − Operating income decreased by 3.1% yoy − Growing share of secured lending in portfolio
Slide 34: Segment Retail & SME – Loan book analysis
Segment Retail & SME – Loan book analysis Segment Retail & SME - Segment Retail & SME - Customer loans by Basel II customer segment Customer loans by currency 120 114.4 113.6 112.2 112.0 112.3 100% 2.1% 1.7% 1.3% 1.2% 1.2% 6.3 6.6 6.4 6.2 6.4 11.5% 11.0% 10.6% 10.0% 9.8% 80% 21.4% 21.2% 21.2% 21.5%
Slide 35: Segment GCIB excl IB – Net loss due to higher risk costs and lower NII
Segment GCIB excl IB – Net loss due to higher risk costs and lower NII − Operating result declined on lower NII − NII declined mainly due to reduction of commercial real estate in EUR million 1-9 13 1-9 12 Change loans and volume declines in the large corporate business Net interest income 260.7 321
Slide 36: International Business (GCIB) – Net profit on improved other result
International Business (GCIB) – Net profit on improved other result − Reduction of business impacts International Business unit result in EUR million 1-9 13 1-9 12 Change − NII declined as a result of significant portfolio downsizing Net interest income 39.9 59.7 (33.1%) − Trading result impacted by
Slide 37: Segment GCIB (incl IB) – Loan book analysis
Segment GCIB (incl IB) – Loan book analysis Segment GCIB - Segment GCIB - Customer loans by currency Customer loans by Basel II customer segment 25 5.3% 5.1% 100% 5.4% 5.3% 5.1% 1.5% 1.5% 1.3% 1.5% 1.4% 18.8 7.3% 6.9% 6.6% 6.7% 6.4% 20 17.9 17.7 80% 7.4% 7.0% 7.5% 7.6% 1.2 17.2 16.7 7.0% in EUR bill
Slide 38: Segment Group Markets – Net profit down on lower trading result
Segment Group Markets – Net profit down on lower trading result − Operating result and net profit declined substantially on lower net trading result in EUR million 1-9 13 1-9 12 Change − NII stable yoy, improvements qoq due to group equity trading Net interest income 154.2 154.8 (0.4%) and credit tr
Slide 39: Segment Corporate Center – 1-9 12 results impacted by one-offs
Segment Corporate Center – 1-9 12 results impacted by one-offs − What is in the Corporate Center? − Included are group services such as marketing, organisation, in EUR million 1-9 13 1-9 12 Change information technology as well as other departments supporting Net interest income 148.4 183.3 (19.1%)
Slide 40: Retail & SME: Austria/EB Oesterreich – Improved net profit supported by lower risk costs
Retail & SME: Austria/EB Oesterreich – Improved net profit supported by lower risk costs − Operating result improved year-on-year by 9.9% − NII decreased yoy as a result of the low interest rate in EUR million 1-9 13 1-9 12 Change environment and lower margins, improved qoq on higher Net interest in
Slide 41: Retail & SME: Austria/EB Oesterreich – Loan book analysis
Retail & SME: Austria/EB Oesterreich – Loan book analysis Subsegment EB Oesterreich - Subsegment EB Oesterreich - Customer loans by Basel II customer segment Customer loans by currency 30 28.2 28.1 27.8 27.9 28.1 100% 1.9% 1.6% 1.5% 1.3% 1.2% 1.8 1.8 1.8 1.5 1.5 11.8% 11.3% 10.4% 10.1% 12.5% in EUR
Slide 42: Retail & SME: Austria/Savings banks – Increased net profit on lower risk costs
Retail & SME: Austria/Savings banks – Increased net profit on lower risk costs − Operating result stable yoy despite weaker net interest income in EUR million 1-9 13 1-9 12 Change − NII decreased as a result of lower income from financial assets, Net interest income 674.8 701.7 (3.8%) up qoq on impr
Slide 43: Retail & SME: Austria/Savings banks – Loan book analysis
Retail & SME: Austria/Savings banks – Loan book analysis Subsegment Savings Banks - Subsegment Savings banks - Customer loans by Basel II customer segment Customer loans by currency 40 37.7 37.7 37.3 37.4 37.5 100% 3.5% 3.3% 2.3% 2.2% 2.3% 1.6 1.7 1.6 1.6 1.6 13.1% 12.8% 15.5% 14.5% 13.8% 30 80% in
Slide 44: Retail & SME: Czech Republic – Net profit down on lower operating income
Retail & SME: Czech Republic – Net profit down on lower operating income − Operating result declined by 9.4% yoy, up qoq − NII down on low interest rate environment and subdued loan in EUR million 1-9 13 1-9 12 Change demand as well as on changed presentation for the pension Net interest income 747.
Slide 45: Retail & SME: Czech Republic – Loan book analysis
Retail & SME: Czech Republic – Loan book analysis Subsegment Czech Republic - Subsegment Czech Republic - Customer loans by Basel II customer segment Customer loans by currency 20 17.8 17.9 17.9 0.2% 0.2% 0.2% 0.1% 0.1% 17.5 17.6 100% 3.4% 3.5% 3.9% 4.1% 4.7% 0.6 0.7 0.7 0.7 0.7 16 5.7 5.7 5.5 5.5 5
Slide 46: Retail & SME: Romania – Restructuring well under way, net profit in Q3 13
Retail & SME: Romania – Restructuring well under way, net profit in Q3 13 − Operating result improved yoy − NII increased yoy on deposit repricing despite declining in EUR million 1-9 13 1-9 12 Change volumes Net interest income 437.6 423.7 3.3% − Strong underlying fee performance on payment transfe
Slide 47: Retail & SME: Romania – Loan book analysis
Retail & SME: Romania – Loan book analysis Subsegment Romania - Subsegment Romania - Customer loans by Basel II customer segment Customer loans by currency 12 10.8 100% 1.4% 1.3% 1.4% 1.3% 1.3% 10.7 10.5 10.3 1.0 9.9 1.2 1.2 1.2 80% 9 1.2 in EUR billion 61.7% 61.2% 60.8% 60.8% 59.7% 4.4 4.2 4.1 3.9
Slide 48: Retail & SME: Slovakia – Solid operating performance continues
Retail & SME: Slovakia – Solid operating performance continues − Operating result slightly improved − NII improvement driven by retail loan growth in EUR million 1-9 13 1-9 12 Change − Fee income decreased yoy due to legislation limiting Net interest income 322.5 318.0 1.4% commissions for payment t
Slide 49: Retail & SME: Slovakia – Loan book analysis
Retail & SME: Slovakia – Loan book analysis Subsegment Slovakia - Subsegment Slovakia - Customer loans by Basel II customer segment Customer loans by currency 8 6.6 6.7 6.8 6.8 100% 6.4 0.2 0.1% 0.2% 0.1% 0.1% 0.1% 0.2 0.2 0.2 6 0.2 1.3 1.3 1.3 1.3 80% in EUR billion 1.3 0.3 0.3 0.3 0.3 0.3 4 60% 99
Slide 50: Retail & SME: Hungary – Operating performance reflects deleveraging
Retail & SME: Hungary – Operating performance reflects deleveraging − Operating result down due to lower business volumes − NII declined on portfolio reduction, lower margins and higher FX in EUR million 1-9 13 1-9 12 Change refinancing costs Net interest income 201.9 257.6 (21.6%) − Fee income incr
Slide 51: Retail & SME: Hungary – Loan book analysis
Retail & SME: Hungary – Loan book analysis Subsegment Hungary - Subsegment Hungary - Customer loans by Basel II customer segment Customer loans by currency 10 100% 0.1% 0.1% 0.0% 0.1% 0.1% 8 22.0% 21.2% 23.1% 22.5% 21.2% 6.5 80% 6.2 in EUR billion 0.3 5.9 5.5 5.6 6 0.3 0.3 1.9 0.1 0.3 60% 1.7 1.6 47
Slide 52: Retail & SME: Croatia – Increase in risk costs impacts net profit
Retail & SME: Croatia – Increase in risk costs impacts net profit − Operating result decreased yoy but up qoq − NII declined partly due to lower margins in EUR million 1-9 13 1-9 12 Change − Fee income slightly down yoy, improvement in Q3 13 due to Net interest income 175.2 191.8 (8.7%) seasonal eff
Slide 53: Retail & SME: Croatia – Loan book analysis
Retail & SME: Croatia – Loan book analysis Subsegment Croatia - Subsegment Croatia - Customer loans by Basel II customer segment Customer loans by currency 5.9 5.9 5.9 6.0 5.9 100% 0.2% 0.2% 0.3% 0.2% 0.3% 6 12.2% 11.9% 11.5% 10.8% 10.9% 0.6 0.7 0.7 0.8 0.8 80% in EUR billion 4 2.5 2.4 2.4 2.4 2.3 6
Slide 54: Retail & SME: Serbia – Sound operating performance and net result
Retail & SME: Serbia – Sound operating performance and net result − Operating result improved on higher NII − NII up on corporate loan growth and improved retail margins in EUR million 1-9 13 1-9 12 Change − Net trading result driven by FX development Net interest income 29.7 26.6 11.5% Net fee inco
Slide 55: Retail & SME: Serbia – Loan book analysis
Retail & SME: Serbia – Loan book analysis Subsegment Serbia - Subsegment Serbia - Customer loans by Basel II customer segment Customer loans by currency 600 569.2 575.3 562.9 575.2 0.8% 0.7% 0.7% 0.7% 0.7% 539.2 3.4 2.8 2.7 2.9 100% 3.3% 3.2% 3.0% 3.0% 2.9% 4.3 80% in EUR million 400 334.7 360.1 346
Slide 56: Retail & SME: Ukraine – Deconsolidation as of April 2013
Retail & SME: Ukraine – Deconsolidation as of 29 April 2013 − Due to the deconsolidation following the sale of in EUR million 1-9 13 1-9 12 Change EB Ukraine, only the results of the first 3 months Net interest income 6.2 20.3 (69.3%) are included in 2013 Net fee income 1.2 4.5 (73.5%) Net trading r
Slide 57: Presentation topics
Presentation topics − Business performance − BCR update − Credit risk − Funding − Capital − Outlook − Appendix − Segments − Asset quality − CEE local consolidated results − About Erste Group − Shareholder structure 1-9 2013 results 30 October 2013 presentation 57
Slide 58: Asset quality analysis – Key definitions
Asset quality analysis – Key definitions − Key asset quality indicators are based Risk category Agency ratings on on-balance sheet customer loans Low risk AAA to BB / Aaa to Ba − Reported NPL and NPL coverage ratios Management attention B exclude collateral Substandard CCC to C / − Broad NPL definit
Slide 59: Asset quality analysis – Loan book overview
Asset quality analysis – Loan book overview Customer loans by Basel II customer segments Customer loans by industries 150 133.5 131.9 130.3 129.8 129.5 7.5 7.8 7.5 7.3 6.3% 120 7.4 3.7% 2.9%3.0% 4.6% 40.1% in EUR billion 90 61.8 60.4 59.7 59.4 58.7 5.5% 60 12.8 12.6 12.4 12.3 12.4 4.4% 30 6.6% 51.4
Slide 60: Asset quality analysis – Loan book by segments
Asset quality analysis – Loan book by segments Management Low risk attention Substandard Non-performing Total loan book Risk provisions NPL coverage NPL ratio in EUR million Sep 13 Dec 12 Sep 13 Dec 12 Sep 13 Dec 12 Sep 13 Dec 12 Sep 13 Dec 12 Sep 13 Dec 12 Sep 13 Dec 12 Sep 13 Dec 12 Retail & SME 8
Slide 61: Asset quality analysis – Loan book by region (country of origination)
Asset quality analysis – Loan book by region (country of origination) Low risk Management Substandard Non-performing Total loan book attention in EUR million Sep 13 Dec 12 Sep 13 Dec 12 Sep 13 Dec 12 Sep 13 Dec 12 Sep 13 Dec 12 Share of total Share of total Core market 89,790 90,219 16,355 18,191 3,
Slide 62: Asset quality analysis – Total exposure by region (country of origination)
Asset quality analysis – Total exposure by region (country of origination) Low risk Management Substandard Non-performing Total Exposure attention in EUR million Sep 13 Dec 12 Sep 13 Dec 12 Sep 13 Dec 12 Sep 13 Dec 12 Sep 13 Dec 12 Share of total Share of total Core market 144,805 145,789 18,715 20,
Slide 63: Asset quality analysis – Financial assets
Asset quality analysis – Financial assets Financial assets by country of origination Financial assets by currency (30 Sep 2013: EUR 39.3 bn) (30 Sep 2013: EUR 39.3 bn) 3.2% 5.6% 2.0% 15.6% 2.9% 1.3% 30.8% 1.0% 9.1% 3.1% 4.7% 18.5% 2.6% 17.6% 14.1% 67.8% AT CZ SK US DE HU RO IT GB Other EUR CZK USD H
Slide 64: Balance sheet (IFRS) drill-down – Trading assets as of 30 Sep 2013
Balance sheet (IFRS) drill-down – Trading assets as of 30 Sep 2013 − Increase of EUR 2.1 bn ytd mainly due to investments into sovereign bonds in EUR m Sovereign Banks Other Total Trading CZ 1,501 23.3% 0 0.0% 8 1.4% 1,509 20.7% SK 341 5.3% 0 0.0% 0 0.0% 341 4.7% RO 1,109 17.2% 4 1.4% 1 0.2% 1,114 1
Slide 65: Balance sheet (IFRS) drill-down – Financial assets at fair value as of 30 Sep 2013
Balance sheet (IFRS) drill-down – Financial assets at fair value as of 30 Sep 2013 − Decline of EUR 141m ytd on reduction of sovereign bonds in EUR m Sovereign Banks Other Total FV CZ 78 67.1% 24 19.7% 62 18.4% 164 28.5% SK 27 23.3% 0 0.0% 12 3.5% 39 6.8% RO 5 4.2% 0 0.0% 2 0.7% 7 1.3% HU 0 0.0% 0 0
Slide 66: Balance sheet (IFRS) drill-down – Financial assets available for sale
Balance sheet (IFRS) drill-down – Financial assets available for sale as of 30 Sep 2013 − Ytd decline of EUR 1.4 bn driven by changed presentation of Czech pension fund in EUR m Sovereign Banks Other Total AFS CZ 1,696 13.3% 106 2.7% 28 0.7% 1,829 8.9% SK 1,940 15.3% 31 0.8% 26 0.7% 1,996 9.7% RO 1,
Slide 67: Balance sheet (IFRS) drill-down – Financial assets held-to-maturity
Balance sheet (IFRS) drill-down – Financial assets held-to-maturity as of 30 Sep 2013 − Financial assets HTM declined by EUR 782 m ytd in EUR m Sovereign Banks Other Total HTM CZ 4,838 30.2% 195 13.5% 25 3.3% 5,059 27.8% SK 3,625 22.7% 0 0.0% 24 3.2% 3,649 20.1% RO 2,498 15.6% 2 0.2% 101 13.5% 2,601
Slide 68: Drill-down on selected asset classes – Peripheral Europe exposure at manageable level
Drill-down on selected asset classes – Peripheral Europe exposure at manageable level Total net exposure of Erste Group (incl. savings banks) to selected European countries: in EUR million Sovereign Bank Other Total net exposure Dec 11 Dec 12 Sep 13 Dec 11 Dec 12 Sep 13 Dec 11 Dec12 Sep 13 Dec 11 De
Slide 69: Off-balance sheet items – Exclusively related to customer business
Off-balance sheet items – Exclusively related to customer business in EUR million 2011 2012 Sep 13 Guarantees and warranties 6,920 6,363 6,551 of which: in relation to corporate business 6,170 5,584 5,808 Undrawn lines, loan commitments, promissory notes 18,579 14,415 14,583 of which: in relation to
Slide 70: Presentation topics
Presentation topics − Business performance − BCR update − Credit risk − Funding − Capital − Outlook − Appendix − Segments − Asset quality − CEE local consolidated results − About Erste Group − Shareholder structure 1-9 2013 results 30 October 2013 presentation 70
Slide 71: Key local entity data (IFRS, consolidated) – Ceska sporitelna
Key local entity data (IFRS, consolidated) – Ceska sporitelna Key figures and ratios 1-9 13 1-9 12 Change Rate and margin environment Cost/income ratio 42.3% 41.7% Return on equity 16.0% 18.6% 80% 70.1% 69.4% 70.6% 71.7% 72.5% 8% Sep 13 Dec 12 Erste Group stake 99.0% 60% 6% Solvency ratio 17.5% 16.0
Slide 72: Key local entity data (IFRS, consolidated) – Banca Comerciala Romana (BCR)
Key local entity data (IFRS, consolidated) – Banca Comerciala Romana (BCR) Key figures and ratios 1-9 13 1-9 12 Change Rate and margin environment Cost/income ratio 37.5% 39.4% Return on equity 10.7% na 150% 140.8% 140.6% 138.2% 139.0% 15% 131.1% Sep 13 Dec 12 Erste Group stake 93.3% 12% Solvency ra
Slide 73: Key local entity data (IFRS, consolidated) – Slovenska sporitelna
Key local entity data (IFRS, consolidated) – Slovenska sporitelna Key figures and ratios 1-9 13 1-9 12 Change Rate and margin environment Cost/income ratio 42.0% 41.4% Return on equity 15.9% 18.6% 100% 8% 82.0% 84.3% 81.1% 84.6% 84.6% Sep 13 Dec 12 Erste Group stake 100% 80% 6% Solvency ratio 23.5%
Slide 74: Key local entity data (IFRS, consolidated) – Erste Bank Hungary
Key local entity data (IFRS, consolidated) – Erste Bank Hungary Key figures and ratios 1-9 13 1-9 12 Change Rate and margin environment Cost/income ratio 40.1% 37.2% Return on equity na na 180% 12% Sep 13 Dec 12 146.1% 138.2% Erste Group stake 100% 127.7% 127.6% 127.3% 10% Solvency ratio 10.4% 11.7%
Slide 75: Key local entity data (IFRS, consolidated) – Erste Bank Croatia
Key local entity data (IFRS, consolidated) – Erste Bank Croatia Key figures and ratios 1-9 13 1-9 13 Change Rate and margin environment Cost/income ratio 36.7% 38.8% Return on equity 4.5% 8.9% 180% 147.0% 6% Sep 13 Dec 12 150.2% 150.0% 147.5% 146.6% Erste Group stake 69.3% 150% Solvency ratio 17.8%
Slide 76: Key local entity data (IFRS, consolidated) – Erste Bank Serbia
Key local entity data (IFRS, consolidated) – Erste Bank Serbia Key figures and ratios 1-9 13 1-9 12 Change Rate and margin environment Cost/income ratio 62.9% 62.5% 109.6% 114.5% Return on equity 8.0% 5.3% 120% 104.0% 20% Sep 13 Dec 12 96.2% 91.5% Erste Group stake 80.5% 100% 15% Solvency ratio 20.7
Slide 77: Presentation topics
Presentation topics − Business performance − BCR update − Credit risk − Funding − Capital − Outlook − Appendix − Segments − Asset quality − CEE local consolidated results − About Erste Group − Shareholder structure 1-9 2013 results 30 October 2013 presentation 77
Slide 78: Strategy – A real customer need is the reason for all business
Strategy – A real customer need is the reason for all business Customer banking in Central and Eastern Europe Eastern part of EU Focus on CEE, limited exposure to other Europe Retail Corporate Capital Public Interbank banking banking markets sector business Focus on local Large, local corporate Focu
Slide 79: Strategy – Customer banking in the eastern part of the EU
Strategy – Customer banking in the eastern part of the EU Austria Czech Republic Slovakia − Leading retail and corporate bank Clients: 3.3m Clients: 5.3m Clients: 2.4m with 16.4m customers in 7 Retail loans: 19.0% Retail loans: 23.7% Retail loans: 25.9% geographically connected Retail dep.: 18.3% Re
Slide 80: Erste Group's intangible asset split – BCR goodwill and software are biggest items
Erste Group’s intangible asset split – BCR goodwill and software are biggest items Intangibles composition 5 4 in EUR billion 3.2 2.9 2.9 2.8 2.8 3 0.6 0.6 0.6 0.6 0.6 0.3 0.2 0.3 0.3 0.2 0.2 2 0.2 0.2 0.2 0.2 0.5 0.5 0.5 0.5 0.5 0.4 1 0.3 0.4 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.8 0.6 0.6 0.6 0.6 0 Q3 12
Slide 81: Erste Group historic financials – Quarterly income statement (IFRS)
Erste Group historic financials – Quarterly income statement (IFRS) in EUR million Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Net interest income 1,430.2 1,434.9 1,336.9 1,314.8 1,317.2 1,266.4 1,240.6 1,190.6 1,220.4 Net fee and commission income 445.9 435.2 430.3 435.2 418.8 436.5 448.2
Slide 82: Erste Group historic financials – Quarterly balance sheet (IFRS)
Erste Group historic financials – Quarterly balance sheet (IFRS) in EUR million Sep 11 Dec 11 Mar 12 Jun 12 Sep 12 Dec 12 Mar 13 Jun 13 Sep 13 Cash and balances with central banks 5,743 9,413 5,480 5,737 8,675 9,740 7,446 9,626 10,556 Loans and advances to credit institutions 13,559 7,578 13,403 13,
Slide 83: Quarterly segment reporting – Overview of main segments
Quarterly segment reporting – Overview of main segments in EUR million Retail & SME GCIB Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Net interest income 1,057.7 1,068.7 1,021.6 1,004.5 1,022.3 123.8 114.9 104.1 98.0 98.4 Risk provisions for loans and advances (400.0) (394.7) (277.2)
Slide 84: Quarterly segment reporting – Austria sub-segments
Quarterly segment reporting – Austria sub-segments in EUR million EB Oesterreich Savings banks Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Net interest income 155.3 150.3 151.4 146.6 155.3 225.0 238.3 220.0 219.5 235.2 Risk provisions for loans and advances (27.2) (14.7) 2.5 (40.1) (
Slide 85: Quarterly segment reporting – Central and Eastern Europe sub-segments (1)
Quarterly segment reporting – Central and Eastern Europe sub-segments (1) CEE - Details in EUR million Czech Republic Romania Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Net interest income 272.0 271.2 252.8 246.5 247.9 139.4 148.7 149.9 146.6 141.1 Risk provisions for loans and adva
Slide 86: Quarterly segment reporting – Central and Eastern Europe sub-segments (2)
Quarterly segment reporting – Central and Eastern Europe sub-segments (2) CEE - Details in EUR million Croatia Serbia Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Net interest income 62.9 61.9 57.8 61.2 56.2 8.5 10.5 9.8 9.6 10.3 Risk provisions for loans and advances (36.6) (29.8) (3
Slide 87: Group statistical data – Development of key financial ratios
Group statistical data – Development of key financial ratios in EUR million 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Sep 13 Tier 1 Capital pursuant to Austrian Banking Act 1,753 2,125 2,337 3,800 3,912 4,377 5,112 6,185 6,674 7,448 11,450 12,219 11,909 12,223 11,125 Tota
Slide 88: Presentation topics
Presentation topics − Business performance − BCR update − Credit risk − Funding − Capital − Outlook − Appendix − Segments − Asset quality − CEE local consolidated results − About Erste Group − Shareholder structure 1-9 2013 results 30 October 2013 presentation 88
Slide 89: Shareholder structure – Total number of shares: 429,800,000
Shareholder structure – Total number of shares: 429,800,000 By investor By region CaixaBank Other Austria ERSTE Stiftung Versicherungsv. 9.1% 2.7% direct Privatstiftung 15.1% Continental 4.1% Europe ERSTE Stiftung indirect* 27.1% 8.5% Austria 42.4% Employees 1.5% Retail investors 6.7% Institutional
Slide 90: Investor Relations contacts
Investor Relations contacts − Erste Group Bank AG, Graben 21, 1010 Vienna Fax : +43 (0)5 0100-13112 E-mail: investor.relations@erstegroup.com Internet: http://www.erstegroup.com/investorrelations http://twitter.com/ErsteGroupIR http://www.slideshare.net/Erste_Group Erste Group IR App for iPad, iPhon