Slide 1: Erste Bank – reliable in rough times
> Erste Bank – reliable in rough times > Q3 2002 Results Road Show, 14 – 22 November 2002
Slide 2: Table of Contents
> Table of Contents Hosts Presentation Appendix Andreas Treichl, CEO 03 Financial Highlights 36 Segment Reporting (Erste Bank Group) Reinhard Ortner, CFO 04 Key Ratios 44 Quarterly Balance Sheet Gabriele Werzer, IR 05 Strategic Update 45 Quarterly Results Thomas Schmee, IR 15 Financials 46 Quarterly
Slide 3: Q3 2002 - Financial Highlights
> Q3 2002 - Financial Highlights Financial Highlights Erste Bank Group Core Group Operating profit » Up 65.3% to EUR 695.2m yoy » Up 15.6% to EUR 486.2m compared to Q3 2001 Net profit » Increased by 7.2% to EUR » Improved by 3.1% yoy to EUR 155.5 161.7m at Q3 2001 reversing Q2 downtrend » 70% contri
Slide 4: Q3 2002 - Key Ratios
> Q3 2002 - Key Ratios Financial Highliights Erste Bank Group Core Group Return on equity » 11.5% based on higher equity » Reaches 9.8% (higher equity base and due to capital increase in July impact of EU fine in Q2 2002) 2002 » compares with 12.4% for FY 2001 and 11.3% in Q3 2001 Cost/Income ratio
Slide 5: Strategic Update
> Strategic Update
Slide 6: Four Core Strategies
> Four Core Strategies The key to Erste Bank’s continuing development 1. Focusing on and » Increased contribution of net interest income underlines earnings quality exploiting core business » Controlling costs for efficiency improvement potentials » Risk provisions in Austria reflect economic situat
Slide 7: Efficiency Enhancement
> Efficiency Enhancement Strategic update Erste Bank implements tight cost controls at Core Group Expenses H2 02 » Expenses at Core Group decreased by 2.6% in Q3 compared to Q2 » based on a 3% reduction of general admin. expenses and 1.6% reduction in personnel expenses after implementation of IT pl
Slide 8: Credit Risk Details
> Credit Risk Details Credit risk Credit risk in Q3 2002: » Stable development of asset quality at Group level in Q3 2002 » No substantial new defaults, no new large provisioning requirements » Q3 2002 provisioning level with that of Q1 and Q2 » Net allocation of risk provisions for EB’s domestic po
Slide 9: Austria: a Different Economic Environment
> Austria: a Different Economic Environment Gross Domestic Product (real growth rate in percent) Unemployment rates 4,0 Germany Austria Germany Austria 3,5 9,0 8,5 3,5 8,3 7,9 7,9 7,9 8,0 3,0 2,9 7,0 2,5 2,2 6,0 2,1 2,0 5,0 1,8 4,0 3,8 4,0 1,6 4,0 3,7 3,6 1,5 3,0 0,9 1,0 2,0 0,7 0,6 0,5 0,5 1,0 0,0
Slide 10: Erste Bank's Home Market in Central Europe
> Erste Bank’s Home Market in Central Europe Strategic update EU-enlargement – start of preparations for the second wave » Planned EU enlargement in 2004 will make 95% of Erste Bank´s 10.6m customers members of a common market. » Erste Bank’s expansion into the growth region of CE pays off: » Since
Slide 11: Capturing the Potential of the CEE Economies
> Capturing the Potential of the CEE Economies Rising Trend in GDP Key Criteria for future success: Real GDP (% y/y) 2000 2001 2002e 2003e » Healthy growth potential Croatia 2.9 3.8 3.9 4.0 » Set to benefit from EU enlargement Czech Republic 2.9 3.3 2.3 3.4 » Favourable macroeconomic developments; H
Slide 12: Ceská sporitelna: Q3 2002 Financial Highlights
> Ceská sporitelna: Q3 2002 Financial Highlights Strategic update CS increases operating profit by 35%; net profit up by factor of 4 » Total revenues up 8% and expenses decreased by 3% at the same time. Flooding had no material impact on earnings. » NII income increased by 9% despite a 2% rate cut i
Slide 13: Slovenská sporitelna: Q3 2002 Financial Highlights
> Slovenská sporitel na: Q3 2002 Financial Highlights Strategic update Operating profit up 47% in line with forecasts for 2002 » Balance sheet total increased by 14% to SKK 215bn (EUR 5.0bn) driven by 36% increase in loans to customers and a 13% increase in customer deposits » Very successful launch
Slide 14: Transferring the Multi-Channel Distribution Model throughout Central Europe
> Transferring the Multi-Channel Distribution Model throughout Central Europe Proceeding with the integration of the MCM structure » netbanking » 362,000 clients at Erste Bank and the savings banks by end of September 2002 » Increase of 63% compared to YE 2001 » All CE subsidiaries have successfully
Slide 15: Q3 2002 Financials
> Q3 2002 Financials > Balance sheet > P& L > Segment reporting
Slide 16: Q3 2002 Erste Bank Group Balance Sheet (IAS) - Assets
> Q3 2002 Erste Bank Group Balance Sheet (IAS) Q3 2002 Balance Sheet Assets Erste Bank Group Core Group EUR m 30.9.2002 31.12.2001 % Change 30.9.2002 % Change Cash and balances with central banks 3,161 2,573 22.9 2,725 5.9 Loans and advances to credit institutions 19,956 18,912 5.5 22,895 21.1 Loans
Slide 17: Q3 2002 Erste Bank Group Balance Sheet (IAS) - Liabilities
> Q3 2002 Erste Bank Group Balance Sheet (IAS) Q3 2002 Balance Sheet Liabilities Erste Bank Group Core Group EUR m 30.9.2002 31.12.2001 % Change 30.9.2002 % Change Amounts owed to credit institutions 28,293 28,642 (1.2) 28,511 (0.5) Amounts owed to customers 61,572 37,175 65.6 40,801 9.8 Debts evide
Slide 18: Q3 2002 Erste Bank Group Income Statement (IAS)
> Q3 2002 Erste Bank Group Income Statement (IAS) Q3 2002 Profit & Loss Accounts Erste Bank Group Core Group EUR m Q3 2002 Q3 2001 % Change Q3 2002 Q3 2001 % Change Net interest income 1,835.0 1,058.7 73.3% 1,166.8 1,058.7 10.2% Risk provisions for loans and advances (272.2) (147.6) 84.4% (138.9) (1
Slide 19: P & L Details: Net interest income
> P & L Details Net interest income Q3 2002 Profit & Loss Accounts In line with previous quarters 1,058.7 1,835.0 1,058.7 1,166.8 » Quarterly split » NII contributes 69% to (Core Group): operating income 1400 Q1=EUR 384.3 m supported by higher Q2=EUR 395.2 m Core Group margins in CE subsidiaries 120
Slide 20: P & L Details: Risk provisions
> P & L Details Risk provisions Q3 2002 Profit & Loss Accounts Provisions at Core Group decrease yoy 147.6 272.2 147.6 138.9 » Quarterly split » SBs contribute to strong (Core Group): increase at Group level but Q1=EUR 56.7 m provisions are down on Q2 300 Q2=EUR 37.3 m Core Group Q3=EUR 44.9 m 250 »
Slide 21: P & L Details: Net commission income
> P & L Details Net commission income Q3 2002 Profit & Loss Accounts Keeping up against market trends 420.6 695.2 420.6 486.2 » Quarterly split 700 (Core Group): » Increase is supported by Core Group Q1=EUR 169.9 m positive contributions 600 Q2=EUR 155.8 m +65.3 particularly from payment Q3=EUR 160.
Slide 22: P & L Details: Net trading result
> P & L Details Net trading result Q3 2002 Profit & Loss Accounts Growth supported by positive trading results 90.9 126.5 90.9 105.6 » Quarterly split » 16.2% increase in Core 140 (Core Group): Group is mainly based on Core Group Q1=EUR 43.7 m 120 +39.2% Q2=EUR 33.7 m strong growth (+45.8%) in +16.2
Slide 23: P & L Details: General administrative expenses
> P & L Details General administrative expenses Q3 2002 Profit & Loss Accounts Slowdown in cost growth at Core Group » Costs decreased by 2.6% at 1950 1,064.1 1,815.8 1,064.1 1,203.2 » Quarterly split (Core Group): Core Group Q3 on Q2 Q1=EUR 393.9 m 1650 - -1.6% in personnel Q2=EUR 410.0 m +70.6% Co
Slide 24: P & L Details: Other operating result
> P & L Details Other operating result Q3 2002 Profit & Loss Accounts One-off effect impacts result 0 » Quarterly split Main effects at Core Group: -10 (Core Group): Q1=EUR –26.3 m -20 Q2=EUR –20.3 m » Increased Goodwill charge Q3=EUR –33.8 m after acquisition of CS -30 minorities EUR m -40 -74.5 -5
Slide 25: Segment reporting
> Segment reporting
Slide 26: Core Group - Savings Banks
> Core Group - Q3 2002 Divisional Figures Q3 2002 Divisionals Core Group – Savings Banks » Weaker result of Salzburger In EUR m 1.-3. Q 02 1.-3. Q 01 Sparkasse due to specific Net interest income 92.8 51.0 regional effects Risk provisions for loans and adv. (25.8) (9.8) Net commission income 47.7 31
Slide 27: Core Group - Retail and Real Estate
> Core Group - Q3 2002 Divisional Figures Q3 2002 Divisionals Core Group – Retail and Real Estate EB "domestic" CS Total » Contribution of CS increased In EUR m 1.-3. Q 02 1.-3. Q 01 1.-3. Q 02 1.-3. Q 01 1.-3. Q 02 1.-3. Q 01 to more than 90% of the Net interest income 349.5 339.9 308.2 240.2 657.7
Slide 28: Core Group - Large Corporate Customers
> Core Group - Q3 2002 Divisional Figures Q3 2002 Divisionals Core Group – Large Corporate Customers EB "domestic" CS Total » Net profit at Core Group up In EUR m 1.-3. Q 02 1.-3. Q 01 1.-3. Q 02 1.-3. Q 01 1.-3. Q 02 1.-3. Q 01 59% to EUR 106.8m Net interest income 214.1 194.7 63.0 45.3 277.1 240.0
Slide 29: Core Group - Trading and Investment Banking
> Core Group - Q3 2002 Divisional Figures Q3 2002 Divisionals Core Group – Trading and Investment Banking EB "domestic" CS Total » Reduced contribution from In EUR m 1.-3. Q 02 1.-3. Q 01 1.-3. Q 02 1.-3. Q 01 1.-3. Q 02 1.-3. Q 01 ALM at EB domestic Net interest income 46.0 77.9 (9.6) 13.0 36.4 90.
Slide 30: Core Group - Asset gathering
> Core Group - Q3 2002 Divisional Figures Q3 2002 Divisionals Core Group - Asset gathering 1 » Decrease of net profit by In EUR m 1.-3. Q 02 1.-3. Q 01 10.6% Net interest income (1.4) 2.0 Risk provisions for loans and adv. 0.0 0.0 » Pre-tax contribution from Net commission income 67.1 69.7 Erste Spa
Slide 31: Core Group - Corporate Centre
> Core Group - Q3 2002 Divisional Figures Q3 2002 Divisionals Core Group - Corporate Centre EB "domestic" CS Total » Provisions for EU-fine (EUR In EUR m 1.-3. Q 02 1.-3. Q 01 1.-3. Q 02 1.-3. Q 01 1.-3. Q 02 1.-3. Q 01 20m in Q2 ) and negative Net interest income (8.8) (2.7) (0.4) 0.4 (9.2) (2.3) c
Slide 32: Core Group - Slovenská sporitelna
> Core Group - Q3 2002 Divisional Figures Q3 2002 Divisionals Core Group - Slovenská sporitelna » Pre-tax profit up 30% In EUR m 1.-3. Q 02 1.-3. Q 01 Net interest income 113.4 97.0 » Transfer of ring fenced Risk provisions for loans and adv. 5.4 (5.3) assets leads to release of Net commission incom
Slide 33: Core Group - Total
> Core Group - Q3 2002 divisional figures Q3 2002 Divisionals Core Group - Total SLSP Savings Banks EB "domestic" CS Grand Total In EUR m 1.-3. Q 02 1.-3. Q 01 1.-3. Q 02 1.-3. Q 01 1.-3. Q 02 1.-3. Q 01 1.-3. Q 02 1.-3. Q 01 1.-3. Q 02 1.-3. Q 01 Net interest income 113.4 97.0 92.8 51.0 599.4 611.8
Slide 34: Targets and outlook
> Targets and outlook Outlook Erste Bank Group outlook for YE 2002 confirmed » Management confirms outlook for full year 2002 » In spite of negative one-off effect of provisions for EU-fine in Q2 2002 and the negative economic environment Erste Bank still expects earnings for the full year to exceed
Slide 35: Appendix
> Appendix > Additional information
Slide 36: EB Group - Savings Banks
> EB Group - Q3 2002 Divisional Figures Q3 2002 Divisionals Erste Bank Group – Savings Banks » Stable NII and a decrease in In EUR m 1.-3. Q 02 1.-3. Q 01 commission income over the Net interest income 735.9 51.0 quarters do not compensate Risk provisions for loans and adv. (153.1) (9.8) funding cos
Slide 37: EB Group - Retail and Real Estate
> EB Group - Q3 2002 Divisional Figures Q3 2002 Divisionals Erste Bank Group – Retail and Real Estate EB "domestic" CS Total » Strong double digit growth In EUR m 1.-3. Q 02 1.-3. Q 01 1.-3. Q 02 1.-3. Q 01 1.-3. Q 02 1.-3. Q 01 of operating income (+17%) Net interest income 373.3 339.9 308.2 240.2
Slide 38: EB Group - Large Corporate Customers
> EB Group - Q3 2002 Divisional Figures Q3 2002 Divisionals Erste Bank Group – Large Corporate Customers EB "domestic" CS Total » Net profit in EB Group In EUR m 1.-3. Q 02 1.-3. Q 01 1.-3. Q 02 1.-3. Q 01 1.-3. Q 02 1.-3. Q 01 strongly grows y 56% to EUR Net interest income 214.1 194.7 63.0 45.3 27
Slide 39: EB Group - Trading and Investment Banking
> EB Group - Q3 2002 Divisional Figures Q3 2002 Divisionals Erste Bank Group – Trading and Investment Banking EB "domestic" CS Total • For other details see In EUR m 1.-3. Q 02 1.-3. Q 01 1.-3. Q 02 1.-3. Q 01 1.-3. Q 02 1.-3. Q 01 comments for Core Group Net interest income 47.3 77.9 (9.6) 13.0 37.
Slide 40: EB Group - Asset gathering
> EB Group - Q3 2002 Divisional Figures Q3 2002 Divisionals Erste Bank Group - Asset gathering 1 • For other details see In EUR m 1.-3. Q 02 1.-3. Q 01 comments for Core Group Net interest income (0.7) 2.0 Risk provisions for loans and adv. 0.0 0.0 Net commission income 67.1 69.7 Net trading result
Slide 41: EB Group - Corporate Centre
> EB Group - Q3 2002 Divisional Figures Q3 2002 Divisionals Erste Bank Group - Corporate Centre EB "domestic" CS Total • For other details see In EUR m 1.-3. Q 02 1.-3. Q 01 1.-3. Q 02 1.-3. Q 01 1.-3. Q 02 1.-3. Q 01 comments for Core Group Net interest income (9.5) (2.7) (0.4) 0.4 (9.9) (2.3) Risk
Slide 42: EB Group - Slovenská sporitelna
> EB Group - Q3 2002 Divisional Figures Q3 2002 Divisionals Erste Bank Group - Slovenská sporitelna • For other details see In EUR m 1.-3. Q 02 1.-3. Q 01 comments for Core Group Net interest income 113.4 97.0 Risk provisions for loans and adv. 5.4 (5.3) Net commission income 30.8 21.9 Net trading r
Slide 43: EB Group - Total
> EB Group - Q3 2002 Divisional Figures Q3 2002 Divisionals Erste Bank Group - Total SLSP Savings Banks EB "domestic" CS Grand Total In EUR m 1.-3. Q 02 1.-3. Q 01 1.-3. Q 02 1.-3. Q 01 1.-3. Q 02 1.-3. Q 01 1.-3. Q 02 1.-3. Q 01 1.-3. Q 02 1.-3. Q 01 Net interest income 113.4 97.0 735.9 51.0 624.5
Slide 44: Quarterly Balance Sheet (IAS)
> Quarterly Balance Sheet (IAS) Additional financial information Balance sheet details Erste Bank Group Core Group EUR m Q1'01 Q2'02 Q3'01 Q4'01 Q1'02 Q2'02 Q3'02 Q1'02 Q2'02 Q3'02 Total assets 80,114 82,327 81,485 86,033 117,684 121,068 124,797 88,508 90,893 86,033 Loans & advances credit inst. 22,
Slide 45: Quarterly Results (IAS)
> Quarterly Results (IAS) Additional financial information P & L details Erste Bank Group Core Group EUR m Q2'00 Q3'00 Q4'00 Q1'01 Q2'01 Q3'01 Q4'01 Q1'02 Q2'02 Q3'02 Q1'02 Q2'02 Q3'02 Net interest income 196 253 295 313 357 389 380 585 634 616 384 395 387 Risk provisions for loans and advances (33)
Slide 46: Quarterly Divisional Figures (IAS) - Core Group
> Quarterly Divisional Figures (IAS) Additional financial information Core Group Savings Banks Retail & Real Estate Large Corporate Clients In EUR m Q3 01 Q4 01 Q1 02 Q2 02 Q3 02 Q3 01 1 Q4 01 1 Q1 02 Q2 02 Q3 02 Q3 01 Q4 01 Q1 02 Q2 02 Q3 02 Net interest income - - 28.0 26.5 38.3 213.8 244.4 209.2
Slide 47: Quarterly Divisional Figures (IAS) - Erste Bank Group
> Quarterly Divisional Figures (IAS) Additional financial information Erste Bank Group Savings Banks Retail & Real Estate Large Corporate Cust. In EUR m Q1 02 Q2 02 Q3 02 Q1 02 Q2 02 Q3 02 Q1 02 Q2 02 Q3 02 Net interest income 219.4 260.3 256.2 216.3 233.3 231.9 85.8 87.4 103.9 Risk provisions (41.2
Slide 48: 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 Q2 2002 Q3 2002 Tier 1 Capital pursuant to § Austrian Banking Act 1,611 1,753 2,125 2,337 2,465 2,350 3,631 Total own funds pursuant to § Austrian Banking Act 3,176 3,296 3,
Slide 49: Current Shareholder Structure
> Current Shareholder Structure Total number of shares: 59,825,114 Five largest institutional shareholders: Austria Versicherungsverein: 3.6% Generali: 2.6% Uniqa: 2.5% AVS Swedbank: 3.4% 35.6% Dexia Bank: 2.0% Commerzbank: 1.7% Shareholders < 5% Four largest savings banks 64.4% shareholders: Kärntn
Slide 50: 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: