Erste Group Bank Ag · VIE:EBS
Erste Group Bank — Q3 2009 Earnings Presentation
20 slides from Erste Group Bank's earnings presentation, Oct 30, 2009
Slide 1: Erste Group Bank AG – Q3 2009 Results Presentation
Erste Group Bank AG – Q3 2009 Results Presentation 30 October 2009 Andreas Treichl Franz Hochstrasser Herbert Juranek Johannes Leobacher Bernhard Spalt
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: 28.5% Clients: 2.6m Clients: 0.1m Retail dep.: 30.4% Retail loans: 25.0% Retail loans: 1.7% Retail dep.: 28.6% Retail dep.: 0.2% Branches: 655 Branches: 276 Branches: 135 Austria Hungary Cli
Slide 3: Continued growth potential – CEE economies expected to recover in 2010
Continued growth potential – CEE economies expected to recover in 2010 − CEE economies expected to contract in Real GDP outlook for CEE 2009 but intensity of macro pressure is 7.1% 6.4% easing 10% 2.7% 2.4% − First signs of stabilisation, supported by global 1.7% 0.6% 5% 0.5% 0.9% 1.0% 1.5% 0.5% sta
Slide 4: 1-9 09 financial highlights – Record operating performance in almost all key segments
1-9 09 financial highlights – Record operating performance in almost all key segments in EUR million 1-9 09 1-9 08 Change Q3 09 Q2 09 Q3 08 Retail & SME 2,068.4 1,861.0 11.1% 773.0 678.8 633.9 Austria 552.1 500.3 10.3% 196.6 166.1 165.4 EB Oesterreich 235.5 195.8 20.3% 87.7 76.2 63.7 Savings Banks 3
Slide 5: Continued support from solid NII & net trading result
1-9 09 financial highlights – Continued support from solid NII & net trading result Operating income per quarter Operating expenses per quarter 2,400 1,200 1,052 1,922 1,921 948 976 984 1,755 1,752 1,814 1,000 95 920 1,900 199 160 88 91 in EUR million 92 in EUR million 1 144 93 487 482 444 425 800 3
Slide 6: Operating performance mitigating higher risk provisions
1-9 09 financial highlights – Operating performance mitigating higher risk provisions − Net profit on an adjusted bases (for the sale of the insurance business) declined by 16.4% to EUR 720.1m Cash earnings per share * − Compared to reported EUR 1,463.0m decline was 50.8% − Decline due to significan
Slide 7: Erste Group's loan book – Quarterly loan book trends by segment
Erste Group’s loan book – Quarterly loan book trends by segment − Customer loans increased by 3.4% yoy due to slow Customer loans by main segments * down of loan growth starting Q4 08 − Loan growth increased moderately in Q3 09 up 1.4% qoq 150 126 126 126 128 130 − Growth rates were also impacted by
Slide 8: Erste Group's customer deposits – Quarterly deposit trends by segment
Erste Group’s customer deposits – Quarterly deposit trends by segment − Total customer deposits increased by 2.1% yoy Customer deposit trends by main segments * − Continued inflows and stabilising of CEE currencies supported deposit growth 125 113 113 111 109 109 − Retail & SME deposit growth of 4.9
Slide 9: Deceleration of NPL formation and improved coverage
Risk profile benefits from business mix – Deceleration of NPL formation and improved coverage − NPL growth slowed down in Q3 09 Erste Group: NPL ratio vs NPL coverage − NPL ratio rose by 40 bps to 6.3% after a rise of 70 bps in Q2 09 on the back of slowing new NPL formation in CEE and a decline in N
Slide 10: Erste Group's loan book – Prudent lending criteria and risk mitigating factors
Erste Group’s loan book – Prudent lending criteria and risk mitigating factors − Retail portfolio dominated by secured loans − Low average LTV´s in CEE retail leave cushion for potential further decline in property prices − Around 60% in Hungary and Romania - including currency depreciation − High c
Slide 11: Strongly improving capital position – Increasing share of core Tier 1 capital
Strongly improving capital position – Increasing share of high quality, core Tier 1 capital − Enhanced capital ratio Key capital ratios − Improve Erste Group’s overall financial flexibility − Prepare Erste Group for potential changes in the 12.0% 10.2% regulatory environment and investors’ expectati
Slide 12: Group income statement (IFRS) – Cost/income ratio improves to historic low
Group income statement (IFRS) – Cost/income ratio improves to historic low in EUR million 1-9 09 1-9 08 Change Q3 09 Q2 09 Q3 08 Net interest income 3,840.9 3,573.3 7.5% 1,335.6 1,279.3 1,267.3 Risk provisions for loans and advances (1,449.2) (602.3) >100.0% (557.1) (521.9) (218.2) Net fee and commi
Slide 13: Group balance sheet (IFRS) – Moderate loan growth continues
Group balance sheet (IFRS) – Moderate loan growth continues in EUR million Sep 09 Dec 08 Change Cash and balances with central banks 5,458 7,556 (27.8%) Loans and advances to credit institutions 13,938 14,344 (2.8%) Loans and advances to customers 129,954 126,185 3.0% Risk provisions for loans and a
Slide 14: Group balance sheet (IFRS) – Customer deposits continue to outgrow loans
Group balance sheet (IFRS) – Customer deposits continue to outgrow loans in EUR million Sep 09 Dec 08 Change Deposits by banks 26,920 34,672 (22.4%) Customer deposits 113,317 109,305 3.7% Debt securities in issue 30,431 30,483 (0.2%) Trading liabilities 3,175 2,519 26.0% Other provisions 1,670 1,620
Slide 15: 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 1-9 09 1-9 08 1-9 09 1-9 08 1-9 09 1-9 08 1-9 09 1-9 08 1-9 09 1-9 08 Net interest income 3,284.1 3,143.2 407.2 329.8 158.8 163.3 (9.1) (62.9) 3,840.9 3,573.3 Ri
Slide 16: Core segment – Austria Improving performance of Erste Bank Oesterreich
Core segment – Austria Improving performance of Erste Bank Oesterreich Savings Banks EB Oesterreich Austria in EUR million 1-9 09 1-9 08 1-9 09 1-9 08 1-9 09 1-9 08 Net interest income 692.4 702.7 476.9 445.5 1,169.3 1,148.3 Risk provisions (215.8) (158.3) (105.4) (73.7) (321.2) (232.0) Net fee and
Slide 17: Core segment Central and Eastern Europe (1) – NII continues to improve in Q3 09
Core segment Central and Eastern Europe (1) – NII continues to improve in Q3 09 … Czech Republic Romania Slovakia Hungary in EUR million 1-9 09 1-9 08 1-9 09 1-9 08 1-9 09 1-9 08 1-9 09 1-9 08 Net interest income 806.6 794.2 577.6 542.5 281.8 256.2 253.8 211.4 Risk provisions (187.8) (78.3) (319.7)
Slide 18: Core segment Central and Eastern Europe (2) – bottom line impacted by rising risk costs
Core segment Central and Eastern Europe (2) – … but bottom line impacted by rising risk costs Croatia Serbia Ukraine CEE in EUR million 1-9 09 1-9 08 1-9 09 1-9 08 1-9 09 1-9 08 1-9 09 1-9 08 Net interest income 152.5 144.3 22.0 24.1 20.5 22.2 2,114.7 1,994.9 Risk provisions (41.5) (15.9) (6.1) (4.3
Slide 19: 1-9 09 financial highlights – Executive summary
1-9 09 financial highlights – Executive summary − Erste Group’s strong performance continued with a record operating result of EUR 2,776.9m in the first nine month 2009 − Operating result increased by 26.6% compared to 1-9 08 – supported by a 7.8% increase in revenues and a substantial decline in ad
Slide 20: Conclusion – Improved capital ratio allows to leverage the franchise
Conclusion – Improved capital ratio allows to leverage the franchise − Our key strengths… − Leading market positions in retail and SME banking − Proven and resilient business model − Well-known brand − Continued growth potential − … and our strategic focus… − Business focus on retail and SME banking