Erste Group Bank Ag · VIE:EBS
Erste Group Bank — H1 2008 Earnings Presentation
24 slides from Erste Group Bank's earnings presentation, Jul 30, 2008
Slide 1: Erste Group – H1 08 results presentation
ERSTE GROUP Erste Group – H1 08 results presentation 30 July 2008, Vienna Strong operating performance continues in Q2 2008 Andreas Treichl, Elisabeth Bleyleben-Koren Bernhard Spalt
Slide 2: H1 08 financial highlights – Executive summary
H1 08 financial highlights – Executive summary ERSTE GROUP Operating profit growth remains at high levels - up 25.3% in H1 08 CEE contribution 51,1% Sustained growth of Romanian economy supports performance of BCR 2008 and 2009 profit guidance for BCR and Erste Bank confirmed Cross Guarantee System
Slide 3: Key topics: Macro outlook for CEE – Still very healthy overall
Key topics: Macro outlook for CEE – Still very healthy overall ERSTE GROUP Real GDP growth outlook for CEE Inflation outlook for CEE 8% 30% 25% 6% 20% 4% 15% 10% 2% 5% 0% 0% Czech Romania Slovakia Hungary Croatia Serbia Ukraine Czech Romania Slovakia Hungary Croatia Serbia Ukraine Rep Rep 2008 2009
Slide 4: Key topics: Romanian economy – Positive data points in H1
Key topics: Romanian economy – Positive data points in H1 08 ERSTE GROUP GDP development FDI vs trade and current account balance 8 7.9% 9% 7.0% 7.6 15% in EUR thousand 6.0% 6.0% 9.4% 6 6.4 10% 6.5% 5.8% 5.7% 6% 4.6% 4.2% 5.6 5% as of GDP 4 4.5 0% 3.7 3% 2 -5% -8.7% -10.4% -10% -14.0% -13.7% -12.5%
Slide 5: Key topics: Romania – BCR performance in line with plan
Key topics: Romania – BCR performance in line with plan ERSTE GROUP Net interest margin 6.7% Net profit stood at EUR 206.6m at H1 08 7% 6.4% 63.5% increase based on local consolidated results 6% 5.3% 5.3% 5.5% Supported by strong growth of NII and fee income 5% Cost growth of 8.9% due to network exp
Slide 6: Key topics: Romania – BCR: loan book trends
Key topics: Romania – BCR: loan book trends ERSTE GROUP Market loan growth * Retail loan vs deposit structure by currency 210 80% 169.0 176.6 30 180 24.8 151.8 21.6 60% in RON billion in RON billion 150 132.2 66% 63% 8.2 120 111.8 55% 55% 20 46% 40% 11.0 90 60 10 20% 16.6 30 10.6 0 0% 0 Jun 07 Sep 0
Slide 7: The Cross Guarantee System
The Cross Guarantee System ERSTE GROUP Kundenbasis: “bankable People“ = Personen über 15 Jahre Niederösterreich Quelle: FMDS 2007 Clientbase: 1.30 Mio Oberösterreich Market share (client) Clientbase: 1.14 Mio Sparkassen: 28% Wien Marktanteil Kunden Erste Bank: 8 % Sparkassen: 34 % Clientbase: 1.40 M
Slide 8: Holding – steering the Group
Holding – steering the Group ERSTE GROUP Holding Group Global Corporate & Markets & CEO CFO/CPO Risk ORG / IT Investment Treasury management Banking Divisionalized Steering Center Functions Businesses Functions Infrastructure Local responsibility for Retail & SME Business 8
Slide 9: H1 08 financial highlights – Operating performance remains strong
H1 08 financial highlights – Operating performance remains strong ERSTE GROUP Cash earnings per share * 2.5 2.10 2.0 1.89 2.03 1.54 1.82 1.41 1.5 in EUR 1.00 1.0 0.5 0.0 1-6 04 1-6 05 1-6 06 1-6 07 1-6 08 Cost/income ratio Cash return on equity * 70% 24% 19.1% 65.1% 20% 65% 16.2% 15.2% 62.3% 16% 14.
Slide 10: Group income statement (IFRS) – Sustainable CIR improvement to 57.1%
Group income statement (IFRS) – Sustainable CIR improvement to 57.1% ERSTE GROUP in EUR million 1-6 08 1-6 07 Change Net interest income 2,306.0 1,857.5 24.1% Risk provisions for loans and advances (384.1) (239.3) 60.5% Net fee and commission income 1,002.2 884.9 13.3% Net trading result 184.4 219.6
Slide 11: H1 08 divisional highlights – Sustained strong contribution from CEE
H1 08 divisional highlights – Sustained strong contribution from CEE ERSTE GROUP Operating result per segment * Austria in EUR million 1-6 08 1-6 07 Change Savings banks up marginally on weak Q2 08 NII Austria 533.4 536.9 (0.7%) R&M mainly down on weaker SBs results; own Savings Banks 202.8 200.6 1.
Slide 12: H1 P&L highlights – Revenues continue to grow quarter on quarter
H1 08 P&L highlights – Revenues continue to grow quarter on quarter ERSTE GROUP Operating income improved qoq (+ 2.5%) Net profit per quarter Stable NII (+0.3% qoq) mainly due to decline at savings banks Margins remained stable and loans as well as deposits showed 400 solid growth Fee income improve
Slide 13: Group balance sheet (IFRS) – Loan growth in line with expectations
Group balance sheet (IFRS)* – Loan growth in line with expectations ERSTE GROUP in EUR million Jun 08 Dec 07 Change Cash and balances with central banks 6,854 7,615 (10.0%) Loans and advances to credit institutions 19,253 14,937 28.9% Loans and advances to customers 121,684 113,956 6.8% Risk provisi
Slide 14: Group balance sheet (IFRS) – Loan/deposit ratio at 112% on solid deposit growth
Group balance sheet (IFRS)* – Loan/deposit ratio at 112% on solid deposit growth ERSTE GROUP in EUR million Jun 08 Dec 07 Change Deposits by banks 35,915 35,165 2.1% Customer accounts 108,842 100,116 8.7% Debt securities in issue 30,770 31,078 (1.0%) Trading liabilities 2,575 1,756 46.6% Underwritin
Slide 15: Key topics: Funding – Improved outlook for 2008 funding costs
Key topics: Funding – Improved outlook for 2008 funding costs ERSTE GROUP Forecast for 2008 long-term funding needs of EUR 5-6bn has been revised to max EUR 5bn Successful strategy to put more emphasis on deposit collection supported by strong client base and large branch network Stronger than expec
Slide 16: H1 – Balance sheet highlights: Stable loan to deposit ratio
H1 08 – Balance sheet highlights Stable loan to deposit ratio – not exceeding 115% ERSTE GROUP Loan vs deposit development 110% 114% 112% 140 107% 107% 120% 122 114 109 120 100 100% 97 91 in EUR billion 100 80 80% 80 73 68 71 60% 60 40 40% 20 20% 0 0% 2004 2005 2006 2007 Jun 08 Loans and advances to
Slide 17: Outlook – Erste confirms guidance
Outlook – Erste confirms guidance ERSTE GROUP Outlook for FY 2008 confirmed after first 6 months Excluding proceeds from sale of insurance business; closing expected in Q3 08 Capital ratio expected to strengthen Tier 1 ratio expected to be well above 8% in 2009 after 6.9% at H1 2008 2008: > 20% Net
Slide 18: Core segments – CEE contribution increased to 81% of net profit
Core segments* – CEE contribution increased to 81% of net profit ERSTE GROUP Austria CEE Int'l Business Corp. Center Total in EUR million 1-6 08 1-6 07 1-6 08 1-6 07 1-6 08 1-6 07 1-6 08 1-6 07 1-6 08 1-6 07 Net interest income 906.5 807.2 1,335.5 989.5 83.3 73.6 (19.3) (12.8) 2,306.0 1,857.5 Risk p
Slide 19: Core segment – Austria: Customer business shows resilient performance
Core segment – Austria Customer business shows resilient performance ERSTE GROUP Savings Banks Retail & Mortgage Large Corporates Treasury & IB Austria in EUR million 1-6 08 1-6 07 1-6 08 1-6 07 1-6 08 1-6 07 1-6 08 1-6 07 1-6 08 1-6 07 Net interest income 461.0 420.0 290.6 272.6 111.7 83.0 43.2 31.
Slide 20: Core segment Central and Eastern Europe (1) – Continuing strong performance
Core segment Central and Eastern Europe (1) – Continuing strong performance of CEE subsidiaries … ERSTE GROUP Czech Republic Romania Slovakia Hungary in EUR million 1-6 08 1-6 07 1-6 08 1-6 07 1-6 08 1-6 07 1-6 08 1-6 07 Net interest income 533.1 387.0 380.8 256.1 164.4 145.5 137.8 116.1 Risk provis
Slide 21: Core segment Central and Eastern Europe (2) – 41% higher net profit contribution
Core segment Central and Eastern Europe (2) – … reflected in 41% higher net profit contribution ERSTE GROUP Croatia Serbia Ukraine CEE in EUR million 1-6 08 1-6 07 1-6 08 1-6 07 1-6 08 1-6 07 1-6 08 1-6 07 Net interest income 92.5 74.2 14.6 7.0 12.3 3.6 1,335.5 989.5 Risk provisions (10.7) (5.9) (2.
Slide 22: Long term history – Erste Bank vs. ATX and DJ Euro Stoxx Banks Index
Long term history – Erste Bank vs. ATX and DJ Euro Stoxx Banks Index ERSTE GROUP in € 600 ERSTE BANK 500 400 ATX 300 200 100 DJ EURO STOXX BANKS INDEX 0 12.97 06.98 12.98 06.99 12.99 06.00 12.00 06.01 12.01 06.02 12.02 06.03 12.03 06.04 12.04 06.05 12.05 06.06 12.06 06.07 12.07 06.08 22
Slide 23: Shareholder structure – Total number of shares: 317,011,863
Shareholder structure – Total number of shares: 317,011,863 ERSTE GROUP By investor By region Austria Verein Continental Others Capital 5.0% Europe 2.4% Research 5.0% DIE ERSTE 13.7% österreichische Spar-Casse Privatstiftung 31.1% UK & Ireland 13.5% Austria 54.1% Institutional investors Employees 41
Slide 24: 8 Länder – mehr als 16 Mio Kunden – eine Bankengruppe
ERSTE GROUP 8 Länder – mehr als 16 Mio Kunden – eine Bankengruppe 24