Erste Group Bank Ag · VIE:EBS
Erste Group Bank — FY2009 Earnings Presentation
24 slides from Erste Group Bank's earnings presentation, Feb 26, 2010
Slide 1: Erste Group Bank AG – Annual Results 2009 Presentation
Erste Group Bank AG – Annual Results 2009 Presentation 26 February 2010 Andreas Treichl Franz Hochstrasser Johannes Leobacher Bernhard Spalt Manfred Wimmer
Slide 2: Erste Group in the region – Overview of key facts
Erste Group in the region – Overview of key facts Czech Republic Slovakia Ukraine Clients: 5.3m Retail loans: 27.7% Clients: 2.5m Clients: 0.1m Retail dep.: 29.5% Retail loans: 25.9% Retail loans: 1.7% Retail dep.: 28.1% Retail dep.: 0.3% Branches: 660 Branches: 279 Branches: 134 Austria Hungary Cli
Slide 3: CEE economies expected to recover in 2010
Erste Group in the region – CEE economies expected to recover in 2010 As CEE economies emerge from GDP growth in CEE recession, growth is set to return in 2010 5.0 1.5 1.8 1.9 2.6 2.8 0.0 0.3 0.7 Slower recovery expected in Croatia, 0.0 Hungary and Serbia recovering more slowly in % -5.0 -2.9 Growth
Slide 4: The size of CEE6 public debt is extremely low in European context
The size of CEE6 public debt is extremely low in European context Public debt (EURbn, 2009E) 1760 CEE6 public debt is less than 400 1/4 of nominal public debt of Italy Public debt of Czech Republic, Slovakia, 350 Hungary, Romania and Croatia is about EUR200bn 300 300 is less than single Greece (EUR
Slide 5: Attractive fiscal environment in CEE
Erste Group in the region – Attractive fiscal environment in CEE Public debt/fiscal deficit in % of GDP 0 20 40 60 80 100 120 140 Greece 8.7 122 Erste Group’s markets benefit from lower Italy 5.3 117 levels of public debt than Western Europe Belgium 5.9 101 The highest public debt is in Hungary, whi
Slide 6: Strong operating performance in all segments
FY 2009 financial highlights – Strong operating performance in all segments in EUR million 2009 2008 Change Q4 09 Q3 09 Q4 08 Retail & SME 3,008.1 2,707.0 11.1% 853.2 808.1 796.5 Austria 816.2 764.6 6.8% 231.2 208.6 239.3 EB Oesterreich 328.3 281.0 16.8% 84.7 90.4 79.1 Savings Banks 488.0 483.6 0.9%
Slide 7: Revenues stable at high levels while costs declined
FY 2009 financial highlights – Revenues stable at high levels while costs declined Operating income per quarter Operating expenses per quarter 2,400 1,200 1,922 1,921 1,922 948 976 984 1,752 1,814 1,000 920 927 1,900 199 160 82 92 88 91 in EUR million 144 in EUR million 93 105 482 425 460 800 445 44
Slide 8: Cost/income ratio reached record low in 2009
FY 2009 financial highlights – Cost/income ratio reached record low in 2009 Net profit improved by 5.1% to EUR 903.4m Decline in EPS due to 60m new shares issued in November Cash earnings per share * capital raising NIM on interest bearing assets at highest ever level of 5.0 3.0% at FY 09 (FY 08: 2.
Slide 9: Quarterly deposit trends by segment
Erste Group’s customer deposits – Quarterly deposit trends by segment Total customer deposits increased by 2.5% in 2009 Customer deposit trends by main segments * Deposit inflows and stabilisation of CEE currencies 125 113 113 112 supported deposit growth 109 109 6 6 6 6 100 6 Retail & SME deposits
Slide 10: Quarterly loan book trends by segment
Erste Group’s loan book – Quarterly loan book trends by segment Customer loans increased by 2.5% in 2009 in line with Customer loans by main segments * continued slow demand since Q4 08 150 126.2 126.3 128.1 130.0 129.1 Loans marginally declined 0.6% qoq 120 20.1 20.3 20.5 20.3 19.5 Growth rates wer
Slide 11: Q3 trends confirmed: deceleration of new NPLs
Risk profile benefits from business mix – Q3 09 trends confirmed: deceleration of new NPLs NPL growth continued to slow down in Q4 09 Erste Group: NPL ratio vs NPL coverage Although the NPL ratio increased from 4.7% (FY 08) to 6.6% (FY 09), growth rates levelled off from +120bps in 30% 62.8% 65% H1
Slide 12: Substantially improved capital ratios
Erste Group’s capital position – Substantially improved capital ratios Key capital ratios 12.0% 10.8% 10.0% 9.2% 8.0% 7.0% 7.2% 6.6% 8.3% 6.0% 6.2% 6.1% 6.2% 4.0% 5.0% 5.0% 5.2% Dec 06 Dec 07 Dec 08 Dec 09 TIER I ratio (credit risk) Tier I ratio (total risk) Core TIER I ratio Press conference 26 Feb
Slide 13: Substantially improved capital ratios
Erste Group’s capital position – Substantially improved capital ratios Tier 1 ratio Tier 1 ratio Core Tier 1 ratio (credit risk)1 (total risk)2 (total risk)3 +358 bps 10.8% +303 bps 9.2% +313 bps 8.3% 7.2% 6.2% 5.2% 2008 2009 2008 2009 2008 2009 Press conference 26 February 2010 13 Preliminary Resul
Slide 14: IFRS total equity increased by EUR 5bn in 2009
Erste Group’s capital position – IFRS total equity increased by EUR 5bn in 2009 Total capital reconciliation 18 EUR 0.5bn private investors 16.1 EUR 1.2bn Republic of Austria 0.8 0.3 -0.3 -0.2 15 1.7 3.4 11.1 1.8 in EUR billion 12 1.0 3.0 9 6 12.7 8.1 3 0 Total Net Part cap New Result Other Dividend
Slide 15: Group's funding profile
Erste Group’s funding profile Redemption Profile of Erste Group 6,0 5 5,0 4.6 4.1 4,0 3.6 in EUR billion 2.9 3,0 1.9 1.7 1.7 2,0 1.4 1,0 0.7 0.5 0.7 0.3 0,0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022+ Senior unsecured Covered Bonds Subordinated Debt Debt CEE Subsidiaries Press
Slide 16: Group income statement (IFRS)
Group income statement (IFRS) – Operating result close to record Q3 09 levels in EUR million 2009 2008 Change Q4 09 Q3 09 Q4 08 Net interest income 5,220.9 4,913.1 6.3% 1,380.0 1,335.6 1,339.8 Risk provisions for loans and advances (2,056.6) (1,071.4) 92.0% (607.4) (557.1) (469.1) Net fee and commis
Slide 17: Group balance sheet (IFRS) – Total assets unchanged yoy
Group balance sheet (IFRS) – Total assets unchanged yoy in EUR million Dec 09 Dec 08 Change Cash and balances with central banks 5,996 7,556 (20.6%) Loans and advances to credit institutions 13,140 14,344 (8.4%) Loans and advances to customers 129,134 126,185 2.3% Risk provisions for loans and advan
Slide 18: Group balance sheet (IFRS) – Loan to deposit ratio stable
Group balance sheet (IFRS) – Loan to deposit ratio was stable at 115.3% in 2009 in EUR million Dec 09 Dec 08 Change Deposits by banks 26,295 34,672 (24.2%) Customer deposits 112,042 109,305 2.5% Debt securities in issue 29,612 30,483 (2.9%) Trading liabilities 3,157 2,519 25.3% Other provisions 1,67
Slide 19: Core segments – Group Markets division continues to outperform
Core segments – Group Markets division continues to outperform Retail & SME GCIB Group Markets Corporate Center Total group in EUR million 2009 2008 2009 2008 2009 2008 2009 2008 2009 2008 Net interest income 4,532.5 4,399.2 570.5 469.3 193.2 263.8 (75.3) (219.1) 5,220.9 4,913.1 Risk provisions (1,7
Slide 20: Core segment – Austria
Core segment – Austria Improving performance of Erste Bank Oesterreich Savings Banks EB Oesterreich Austria in EUR million 2009 2008 2009 2008 2009 2008 Net interest income 957.1 1,005.5 637.5 625.8 1,594.6 1,631.4 Risk provisions (331.3) (307.2) (151.4) (100.9) (482.7) (408.1) Net fee and commissio
Slide 21: Core segment Central and Eastern Europe (1)
Core segment Central and Eastern Europe (1) – NII continues to improve in Q3 09 … Czech Republic Romania Slovakia Hungary in EUR million 2009 2008 2009 2008 2009 2008 2009 2008 Net interest income 1,083.0 1,108.1 836.8 749.5 385.9 340.4 353.6 298.7 Risk provisions (288.1) (131.9) (532.4) (129.0) (15
Slide 22: Core segment Central and Eastern Europe (2)
Core segment Central and Eastern Europe (2) – … but bottom line impacted by rising risk costs Croatia Serbia Ukraine CEE in EUR million 2009 2008 2009 2008 2009 2008 2009 2008 Net interest income 223.4 204.6 28.1 33.5 27.1 33.0 2,937.9 2,767.8 Risk provisions (74.5) (28.1) (7.0) (6.6) (76.7) (21.0)
Slide 23: FY 2009 financial highlights – Executive summary
FY 2009 financial highlights – Executive summary Erste Group’s operating result was up by 25.8% to EUR 3,771.4m in 2009 Supported by a strong Q4 09 performance sustaining that of the first nine month Net profit improved by 5.1% to EUR 903.4m for the full year All CEE subsidiaries, except for Erste B
Slide 24: Outlook – Cautiously optimistic about 2010
Outlook – Cautiously optimistic about 2010 Market environment continues to improve gradually Erste Group’s CEE markets will show slightly better growth than the rest of Europe Situation is still fragile, particularly in IMF supported countries But momentum for recovery is substantially better than i