Erste Group Bank Ag · VIE:EBS
Erste Group Bank — Shareholder Meeting (May 2019)
48 slides from Erste Group Bank's shareholder meeting presentation, May 15, 2019
Slide 1: 26th Annual General Meeting Erste Group Bank AG
26th Annual General Meeting Erste Group Bank AG 15 May 2019 Wiener Stadthalle
Slide 2: Friedrich Rödler, Chairman of the supervisory board
Friedrich Rödler Chairman of the supervisory board
Slide 3: First item on the agenda: Report on the financial year 2018
First item on the agenda Report on the financial year 2018 3
Slide 4: Report on the financial year 2018 of Erste Group Bank AG (consolidated)
Report on the financial year 2018 of Erste Group Bank AG (consolidated) Andreas Treichl CEO Erste Group
Slide 5: 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 6: Operating environment – Strong economic development in key markets
Operating environment – 2018 2019 Strong economic development in Erste Group‘s key markets Real GDP growth (in %) Domestic demand contribution to GDP growth (in %) 6.6 5.9 4.9 4.9 4.1 4.1 4.4 3.8 4.1 3.4 3.8 3.8 3.0 3.1 3.4 2.7 2.6 3.0 2.5 2.6 2.3 1.7 2.0 1.6 AT CZ SK RO HU HR AT CZ SK RO HU HR • CE
Slide 7: Operating environment – Solid public finances in Erste Group's markets
Operating environment – 2018 2019 Solid public finances in Erste Group‘s markets General government balance (in % of GDP) Public debt (in % of GDP) 74 74 71 71 71 69 1.5 Maastricht limit: 60% 1.1 0.1 0.1 0.2 0.0 60 49 48 -0.8 -0.7 33 32 35 35 -1.8 -2.2 -3 -3.0 -3.0 Maastricht limit: -3% AT CZ SK RO
Slide 8: Business environment – Low interest rates still hurt, CZ rates have started to rise
Business environment – 3m Interbank 10-year Gov Low interest rates still hurt, CZ rates have started to rise Austria Czech Republic Romania 1.98% 4.77% 0.58% 0.66% 3.92% 1.02% 2.61% 0.95% -0.33% -0.32% 0.41% 1.27% 2017 2018 2017 2018 2017 2018 • ECB cut discount rate to 0% in March • National bank i
Slide 9: Customer loans and deposits – Continued loan growth, strong deposit base
Business performance: customer loans and deposits – 31/12/17 31/12/18 Continued loan growth, strong deposit base, balanced business Customer loans (net) Customer deposits Loan/deposit ratio 139.5 151.0 92.4% Group 149.3 162.6 91.8% 31.4 33.7 93.2% AT/EBOe 32.9 35.5 92.8% 41.1 42.6 96.6% AT/SB 43.7 4
Slide 10: Operating revenues and expenses – Revenues rise on strong net interest income
Business performance: operating revenues and expenses – Revenues rise on strong net interest income, operating expenses stable Operating revenues Operating expenses in EUR m in EUR m +3.7% +0.5% 6,669 6,916 4,158 4,181 211 254 194 232 460 472 1,852 1,908 1,310 1,235 4,353 4,582 2,389 2,474 2017 2018
Slide 11: Focus on operating expenses – Regulatory costs and inflation absorbed
Focus on operating expenses – Regulatory costs and inflation absorbed in 10-year comparison Additional expenses related to regulation Development of operating expenses1 in EUR m in EUR m 418 4.113 4.181 119 236 168 Other 73 Personnel expenses 43 Deposit insurance contribution 70 Resolution fund cont
Slide 12: Operating result and cost/income ratio – Operating turnaround
Business performance: operating result and cost/income ratio – 2017 2018 Operating turnaround, led by CZ, RO and AT/EBOe Geographic segments Performance summary Group 2,511 62.4% • Group operating result and cost/income ratio 2,735 60.5% improved; positive development in almost all markets 374 64.5%
Slide 13: Risk costs – Net releases reflect improving asset quality
Business performance: risk costs – 2017 2018 Net releases reflect improving asset quality Geographic segments Performance summary • Excellent credit risk environment across the board Group -132 59 -0.09% 0.03% AT/EBOe 26 0.08% 14 0.01% • Historically low risk costs 13 0.03% AT/SB 20 -0.02% -40 -0.31
Slide 14: Asset quality in 2018 – Strong asset quality improvement
Business performance: asset quality in 2018 – 2017 2018 Strong asset quality improvement NPL volume NPL ratio NPL coverage (exc collateral) 5,776 4.0% 68.8% Group 73.4% 4,881 3.2% 631 2.0% 57.1% AT/EBOe 61.4% 601 1.8% 1,758 4.2% 58.3% AT/SB 61.4% 1,586 3.6% 723 5.6% 50.2% AT/OA 57.9% 448 3.3% 525 2.
Slide 15: Other result – Other result stable at 2017 levels
Business performance: other result – Other result stable at 2017 levels Other result * Levies on banking activities in EUR m in EUR m -106 -301 -299 -112 2017 2018 2017 2018 • Other result remains relatively stable despite minor • Slight increase in banking levies in Slovakia and increases in bankin
Slide 16: Pre-tax result and taxes on income – Further increase in pre-tax result
Business performance: pre-tax result and taxes on income – Further increase in pre-tax result Pre-tax result Taxes on income in EUR m in EUR m 2,495 2,078 -332 -410 2017 2018 2017 2018 • Strong increase in operating performance and net • Tax rate is at 13.3% in 2018 due to the recognition of release
Slide 17: Net result and dividend – Dividend raised to EUR 1.4 per share
Business performance: net result and dividend – Dividend raised to EUR 1.4 per share on the back of record net profit Net result Dividend +36.3% in EUR m in EUR +16.7% 1,793 1.4 1,316 1.2 2017 2018 2017 2018 • Highest net profit in corporate history • Payout ratio equates 33.6% 17
Slide 18: Erste Group since 1997 – Dividend payments since IPO EUR 3.9 billion
Erste Group since 1997 – Dividend payments since IPO amount to EUR 3.9 billion 383% in EUR 1.40 1.20 1.00 0.75 0.70 0.65 0.65 0.65 0.55 0.50 0.50 0.38 0.40 0.29 0.29 0.31 0.31 0.31 0.31 0.20 0 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Slide 19: Regulatory capital position – CET1 ratio at 13.5%
Business performance: regulatory capital position – Continued strong capital position in 2018: CET1 ratio at 13.5% Regulatory capital (EUR bn) Risk-weighted assets (EUR bn) Capital ratios (in %) 18.5 114.6 18.2 20.9 110.0 20.3 3.4 2.9 15.2 14.4 4.4 17.9 14.0 13.5 4.9 13.4 89.2 95.9 14.7 15.5 2017 20
Slide 20: Q1 19 performance summary – Operating result rises substantially
Q1 19 performance summary – Operating result rises substantially as NII and fees grow Operating revenues Operating expenses Operating result +7.0% in EUR m in EUR m in EUR m 1,772 +4.8% 1,655 76 47 1,116 +11.2% 42 52 1,065 488 116 135 479 656 590 344 358 1,083 1,161 605 622 1-3 18 1-3 19 1-3 18 1-3
Slide 21: Q1 19 performance summary – Improvement in net result
Q1 19 performance summary – Operating performance drives improvement in net result in Q1 19 Risk costs Other result Net result in EUR m in EUR m +12.2% in EUR m 54 377 336 36 -124 -130 1-3 18 1-3 19 1-3 18 1-3 19 1-3 18 1-3 19 • Net releases • Other result remains stable, slight • Return on tangible
Slide 22: Q1 19 performance summary – Volume growth & excellent asset quality
Q1 19 performance summary – Volume growth & excellent asset quality Customer loans (net) Customer deposits NPL ratio +1.8% in EUR m +2.2% in EUR m 149,321 151,957 162,638 166,216 3.2% 3.0% 31/12/18 31/03/19 31/12/18 31/03/19 31/12/18 31/03/19 • Customer loan growth mainly • Continued inflow of custo
Slide 23: Conclusion – Outlook 2019
Conclusion – Outlook 2019 •Real GDP growth of approx. 3% expected in 2019 in CEE and about 2% in Austria Macro outlook •Real GDP growth to be driven by solid domestic demand, as real wage growth and low 2019 unemployment support economic activity in CEE •Solid public finances across CEE •ROTE for 20
Slide 24: Focus capital markets (1) – CEE strategy paid off for investors
Focus capital markets (1) – CEE strategy paid off for investors in the long run Deutsche Bank Commerzbank Erste Group in EUR bn in EUR bn in EUR bn -58% 34.1 -45% +607% 16.8 14.2 14.4 9.3 2.0 1997 13.05.2019 1997 13.05.2019 1997 13.05.2019 • Market capitalisation including all capital increases betw
Slide 25: Focus capital markets (2) – CEE strategy paid off for investors
Focus capital markets (2) – CEE strategy paid off for investors in the long run • 400% outperformance against EuroStoxx Bank Index since IPO • Anyone who invested in Erste Group at the IPO in 1997 and did not participate in capital increases quadrupled, including dividends (gross), the investment 25
Slide 26: Thank you for your attention!
Thank you for your attention!
Slide 27: Agenda Items
Agenda Items Friedrich Rödler Chairman of the supervisory board
Slide 28: Second item on the agenda: Appropriation of the profit
Second item on the agenda Appropriation of the profit 28
Slide 29: Third item: Discharge of management board
Third item on the agenda Grant of discharge to the members of the management board 29
Slide 30: Fourth item: Discharge of supervisory board
Fourth item on the agenda Grant of discharge to the members of the supervisory board 30
Slide 31: Fifth item: Appointment of an additional auditor
Fifth item on the agenda Appointment of an additional auditor 31
Slide 32: Sixth item: Amendment of articles of association
Sixth item on the agenda Amendment of the articles of association with respect to the number of supervisory board members 32
Slide 33: Seventh item: Elections to the supervisory board
Seventh item on the agenda Elections to the supervisory board 33
Slide 34: Eighth item: Acquisition of own shares for securities trading
Eighth item on the agenda Approval of the acquisition of own shares for the purpose of securities trading 34
Slide 35: Ninth item: Acquisition of own shares for free or concessionary shares
Ninth item on the agenda Authorisation for the acquisition of own shares for the purpose of offering free or concessionary shares 35
Slide 36: Tenth item: Acquisition of own shares for no designated purpose
Tenth item on the agenda Authorisation for the acquisition of own shares for no designated purpose 36
Slide 37: 26th Annual General Meeting – Q&A
26th Annual General Meeting Erste Group Bank AG Q&A
Slide 38: 26th Annual General Meeting – Resolutions
26th Annual General Meeting Erste Group Bank AG Resolutions
Slide 39: Second item on the agenda: Appropriation of the profit
Second item on the agenda Appropriation of the profit 39
Slide 40: Third item: Discharge of management board
Third item on the agenda Grant of discharge to the members of the management board 40
Slide 41: Fourth item: Discharge of supervisory board
Fourth item on the agenda Grant of discharge to the members of the supervisory board 41
Slide 42: Fifth item: Appointment of an additional auditor
Fifth item on the agenda Appointment of an additional auditor 42
Slide 43: Sixth item: Amendment of articles of association
Sixth item on the agenda Amendment of the articles of association with respect to the number of supervisory board members 43
Slide 44: Seventh item: Elections to the supervisory board
Seventh item on the agenda Elections to the supervisory board 44
Slide 45: Eighth item: Acquisition of own shares for securities trading
Eighth item on the agenda Approval of the acquisition of own shares for the purpose of securities trading 45
Slide 46: Ninth item: Acquisition of own shares for free or concessionary shares
Ninth item on the agenda Authorisation for the acquisition of own shares for the purpose of offering free or concessionary shares 46
Slide 47: Tenth item: Acquisition of own shares for no designated purpose
Tenth item on the agenda Authorisation for the acquisition of own shares for no designated purpose 47
Slide 48: Thank you for your active participation!
26th Annual General Meeting Erste Group Bank AG Thank you for your active participation!