Erste Group Bank Ag · VIE:EBS
Erste Group Bank — H1 2009 Earnings Presentation
23 slides from Erste Group Bank's earnings presentation, Jul 30, 2009
Slide 1: Erste Group – H1 09 results presentation
Erste Group – H1 09 results presentation 30 July 2009, Vienna Andreas Treichl Franz Hochstrasser Manfred Wimmer Bernhard Spalt Johannes Leobacher
Slide 2: Erste Group – Overview of key ratios
Erste Group – Overview of key ratios Czech Republic Slovakia Ukraine Clients: 5.3m Retail loans: 29.0% Clients: 2.6m Clients: 0.1m Retail dep.: 30.9% Retail loans: 24.8% Retail loans: 1.7% Retail dep.: 28.5% Retail dep.: 0.2% Branches: 652 Branches: 271 Branches: 135 Austria Hungary Clients: 0.8m Cl
Slide 3: Q2 09 financial highlights
Q2 09 financial highlights in EUR million 1-6 09 1-6 08 Change Q2 09 Q1 09 Q2 08 Retail & SME 1,295.4 1,227.1 5.6% 678.8 616.6 586.0 Austria 355.5 334.9 6.1% 166.1 189.4 137.8 EB Oesterreich 147.8 132.1 11.9% 76.2 71.6 67.3 Savings Banks 207.7 202.8 2.4% 89.9 117.7 70.5 Central and Eastern Europe 93
Slide 4: H1 09 financial highlights – Solid NII and strong trading result
H1 09 financial highlights – Solid NII and strong trading result - costs under control Operating income per quarter Operating expenses per quarter 2,400 1,200 1,037 1,052 1,922 948 976 984 1,767 1,755 1,752 1,814 1,000 95 95 1,900 199 92 88 91 102 1 144 in EUR million in EUR million 487 482 444 800
Slide 5: Cost/income ratio
Cost/income ratio reaches historical low of 52,2% Cost/income ratio 70% 65% 63.1% 60.4% 60.5% 60% 57.3% 55% 52.5% 50% 1-6 05 1-6 06 1-6 07 1-6 08 1-6 09 Halfyear Results 2009 30 July 2009 5
Slide 6: Group income statement (IFRS) – Higher risk costs impact bottom line
Group income statement (IFRS) – Higher risk costs impact bottom line performance in EUR million 1-6 09 1-6 08 Change Q2 09 Q1 09 Q2 08 Net interest income 2,505.3 2,306.0 8.6% 1,279.3 1,226.0 1,154.9 Risk provisions for loans and advances (892.1) (384.1) >100.0% (521.9) (370.2) (221.0) Net fee and c
Slide 7: Group balance sheet (IFRS) – Loan growth remained
Group balance sheet (IFRS) – Loan growth remained – RWA driven by recalibration in EUR million Jun 09 Dec 08 Change Cash and balances with central banks 6,897 7,556 (8.7%) Loans and advances to credit institutions 13,800 14,344 (3.8%) Loans and advances to customers 128,110 126,185 1.5% Risk provisi
Slide 8: Group balance sheet (IFRS) – Solid deposit growth
Group balance sheet (IFRS) – Solid deposit growth - also supported by stabilising FX in EUR million Jun 09 Dec 08 Change Deposits by banks 29,776 34,672 (14.1%) Customer deposits 113,489 109,305 3.8% Debt securities in issue 30,130 30,483 (1.2%) Trading liabilities 2,690 2,519 6.8% Other provisions
Slide 9: Erste Group's loan book – Quarterly loan book trends by segment
Erste Group’s loan book – Quarterly loan book trends by segment Customer loans by main segments * Total customer loans increased by 5.2% yoy on continued low demand in first half of 2009 150 126 126 126 128 122 Low growth of 1.5% on YE 08 also impacted by strong 120 22 22 22 23 23 decline of all CEE
Slide 10: Erste Group's customer deposits
Erste Group’s customer deposits Total customer deposits increased by 4.4% yoy Customer deposit trends by main segments * Deposit inflows and stabilising CEE currencies 125 113 supported deposit growth of 3.8% ytd 109 111 109 109 6 6 6 6 100 6 Retail & SME deposit growth of 5.5% yoy in EUR billion 45
Slide 11: Loan to deposit ratio – Supported by solid deposit growth
Loan to deposit ratio – Supported by solid deposit growth Loan vs deposit development 112% 114% 115% 113% 160 107% 120% 126 128 120 114 109 113 90% 97 91 100 in EUR billion 80 80 73 60% table to be updated 40 30% 0 0% 2005 2006 2007 2008 Jun 09 Loans and advances to customers Customer deposits Loan/
Slide 12: Erste Group's asset quality (1)
Erste Group’s asset quality (1) Slight increase in total exposure by 3.3% ytd to EUR 222.8bn (YE 08: EUR 215.7 bn) Industry distribution of exposure remained well diversified with households and finance/insurance industries contributing the largest shares Asset quality varies considerably across CEE
Slide 13: Erste Group asset quality (2)
Erste Group asset quality (2) Risk costs rose to 141 bps on average loans (Q2 08: 66 bps) As anticipated risk costs rose by > 100% to EUR 892.1m in 1-6 09, increases were posted across all the geographies but strongest in CEE from still low levels in the previous year; Increase in Austria was mainly
Slide 14: Erste Group's risk costs – Quarterly risk costs (segment view)
Erste Group’s risk costs – Quarterly risk costs (segment view) Risk costs in key segments Quarterly risk cost development (main segments) 4% 3.68% 600 522 500 469 in EUR million 3% 2.43% 400 370 1.85% 2.02% 2% 300 221 218 1.10% 200 427 0.87% 314 1% 268 100 185 179 0% 0 GCIB Austria Czech R Romania S
Slide 15: Erste Group's asset quality – Non-performing loans and NPL coverage
Erste Group’s asset quality – Non-performing loans and NPL coverage Group NPL ratio vs group NPL coverage 4.0% 3.6% 100% 3.5% 3.3% 2.9% 80% 3.0% 2.5% 2.4% 2.5% 60% 68.0% 65.5% 2.0% 61.6% 58.3% 55.5% 1.5% 40% 1.0% 20% 0.5% 0.0% 0% Jun 08 Sep 08 Dec 08 Mar 09 Jun 09 NPL ratio NPL coverage NPL ratios i
Slide 16: Core segment – Austria
Core segment – Austria Solid performance of Erste Bank Oesterreich Savings Banks EB Oesterreich Austria in EUR million 1-6 09 1-6 08 1-6 09 1-6 08 1-6 09 1-6 08 Net interest income 455.6 461.0 319.6 291.2 775.2 752.2 Risk provisions (162.6) (110.7) (68.9) (50.1) (231.5) (160.7) Net fee and commissio
Slide 17: Core segment Central and Eastern Europe (1)
Core segment Central and Eastern Europe (1) – NII continues to improve in Q2 09 … Czech Republic Romania Slovakia Hungary in EUR million 1-6 09 1-6 08 1-6 09 1-6 08 1-6 09 1-6 08 1-6 09 1-6 08 Net interest income 520.7 511.7 383.9 356.7 175.1 160.6 159.8 135.0 Risk provisions (111.6) (48.9) (169.8)
Slide 18: 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 1-6 09 1-6 08 1-6 09 1-6 08 1-6 09 1-6 08 1-6 09 1-6 08 Net interest income 100.9 91.9 15.8 14.6 14.3 12.3 1,370.7 1,282.6 Risk provisions (24.0) (10.5) (4.0) (2.9)
Slide 19: Erste Group's capital position – Regulatory capital versus equity
Erste Group’s capital position – Regulatory capital versus equity Regulatory capital development (ABA) 25 10% 8.4% 21 7.8% 6.9% 7.2% 8% 6.6% Total participation capital at 17 in EUR billion 12.3 13.2 11.5 11.8 6% EUR 1.760m 13 11.1 7.4 8.2 9.0 9 7.1 6.9 4% Republic of Austria has subscribed 5 to EUR
Slide 20: Erste Group's long-term funding profile – 2009 funding completed
Erste Group’s long-term funding profile – 2009 funding completed Total funding needs for 2009 – estimated to be maximum EUR 5-7bn - already raised Possibility of issuing up to EUR 6bn of Government guaranteed bonds EUR 4bn already issued at around EURIBOR + 53-65bps and 90bps guarantee fee Cover poo
Slide 21: Long-term funding in detail – Redemption profile
Long-term funding in detail – Only 1 year has redemptions exceeding EUR 4bn Redemption Profile of Erste Group 5.0 4.4 4.5 4 4.0 3.7 3.5 3.2 3.0 in EUR bn 2.5 2.5 2.0 1.7 1.4 1.3 1.3 1.2 1.5 1.0 0.5 0.7 0.3 0.3 0.5 0.0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022+ Senior unse
Slide 22: Conclusion – Remaining positive, but cautious
Conclusion – Remaining positive, but cautious Our core markets are EU-member states We are market leaders in all our core markets and thus have pricing power We are operating in underpenetrated retail banking markets We are operating in markets with floating currencies, converging towards the Euro N
Slide 23: Halfyear Results 2009 30 July 2009
Halfyear Results 2009 30 July 2009 23