Erste Group Bank Ag · VIE:EBS
Erste Group Bank — H1 2014 Earnings Presentation
23 slides from Erste Group Bank's earnings presentation, Jul 31, 2014
Slide 1: Erste Group Bank AG HY 2014 preliminary results
Erste Group Bank AG HY 2014 preliminary results 31 July 2014 Andreas Treichl, Chief Executive Officer Franz Hochstrasser, Deputy Chief Executive Officer Gernot Mittendorfer, Chief Financial Officer Andreas Gottschling, Chief Risk Officer Herbert Juranek, Chief Operations Officer
Slide 2: Presentation topics
Presentation topics − Overview − Erste Group’s development in H1 2014 − Equity item and Outlook 2014 − Appendix HY Press Conference 31st July 2014 Page 2
Slide 3: Group income statement performance: Q2 14 one-off summary
Overview- Group income statement performance: Q2 14 one-off summary One-offs with effect on regulatory capital One-offs with no effect on regulatory capital • Romania: Additional risk provisions of about EUR 80m • Full writedown of remaining goodwill, value of customer • Remaining booking in H2 2014
Slide 4: Overview
Overview Net interest income & margin Operating result & cost/income ratio 2.66% 2.62% in EUR m in EUR m +0.2% 2,340 2,244 2.62% 2.61% 57.0% 53.9% 1,523 1,525 1,124 1,120 798 727 1-6 13 1-6 14 Q1 14 Q2 14 1-6 13 1-6 14 Q1 14 Q2 14 Banking levies Loan/deposit ratio in EUR m 185 98.0% 99.8% 154 100 54
Slide 5: Presentation topics
Presentation topics − Overview − Erste Group’s development in H1 2014 − Equity item and Outlook 2014 − Appendix HY Press Conference 31st July 2014 Page 5
Slide 6: Group income statement performance
Group income statement performance YoY net profit reconciliation (EUR m) 302 61 64 12 • Deterioration in other result driven primarily by one- off intangible writedowns in RO; partial booking of FX 911 loan law impact in HU • Increase in taxes due to partial writedown of deferred tax assets related
Slide 7: Operating income stable yoy
Q2 13 Operating income – Q1 14 Operating income stable yoy Q2 14 Business line view Geographic view Highlights 1,735 1,735 • Increase in qoq group operating income Group 1,691 Group 1,691 despite lower NII on improved net trading & 1,731 1,731 842 230 FV result Retail 824 AT/EBOe 245 • SME: yoy decl
Slide 8: Operating expenses – Lower costs yoy and qoq
Q2 13 Operating expenses – Q1 14 Lower costs yoy and qoq Q2 14 Business line view Geographic view Highlights 970 970 • Group operating expenses declined due Group 963 Group 963 933 933 to lower average headcount (yoy) and Retail 469 154 lower other administrative expenses 434 AT/EBOe 145 (qoq) Small
Slide 9: Operating result and CIR – Improved yoy and qoq operating result
Q2 13 Operating result and CIR – Q1 14 Improved yoy and qoq operating result Q2 14 Business line view Geographic view 765 55.9% 765 55.9% Group 727 57.0% Group 727 57.0% 798 53.9% 798 53.9% 374 55.6% 76 67.1% Retail 391 52.6% AT/EBOe 100 59.3% 380 54.1% 103 58.9% Small and medium –sized 165 30.4% 80
Slide 10: Group balance sheet performance
Group balance sheet performance YTD total asset reconciliation (EUR m) YTD total liability reconciliation (EUR m) 1,503 2,166 200,118 200,118 678 61 2,091 2,034 172 705 198,398 1,061 1,003 1,019 198,398 66 31/12/13 Cash Trading, Loans to Net Intangibles Other 30/06/14 31/12/13 Trading Bank Customer
Slide 11: Customer loans by country of risk
Customer loans by country of risk – First qoq increase in performing loans since Q3 11 Net customer loans (EUR bn) Performing loans (EUR bn) Non-performing loans (EUR bn) 0.0% +0.2% -2.4% 122.0 119.9 120.0 117.2 115.4 115.7 2.7 2.7 12.6 12.3 6.4 2.7 2.8 6.0 2.8 2.9 5.1 0.8 0.3 12.0 0.9 5.8 5.6 0.9 5
Slide 12: Risk costs – Higher risk costs on additional provisioning in Romania
Q2 13 Risk costs – Q1 14 Higher risk costs on additional provisioning in Romania Q2 14 Business line view Geographic view 413 1.27% 43 0.60% Group 364 1.14% AT/EBOe 21 0.30% 432 1.35% 35 0.49% 68 2.05% 111 0.95% 51 1.64% Retail 119 1.02% Other Austria 70 2.24% 61 0.52% 41 0.86% Small and 139 2.13% C
Slide 13: Non-performing loans and NPL ratio
30/06/13 Non-performing loans and NPL ratio – 31/03/14 Declining NPL volume, declining NPL ratio 30/06/14 Business line view Geographic view 12,573 9.7% 1,050 3.8% Group 12,238 9.6% AT/EBOe 986 3.5% 11,996 9.4% 1,018 3.6% 1,334 10.2% 3,648 7.7% 1,688 14.2% Retail 3,410 7.3% Other Austria 3,420 7.3%
Slide 14: Allowances for loans and NPL coverage
30/06/13 Allowances for loans and NPL coverage – 31/03/14 NPL coverage rises to multi-year high of 64.0% 30/06/14 Business line view Geographic view 7,757 61.7% 699 66.5% Group 7,660 62.6% AT/EBOe 673 68.2% 7,674 64.0% 697 68.4% 718 53.8% 2,477 67.9% 847 50.2% Retail 2,363 69.3% Other Austria 841 53
Slide 15: Presentation topics
Presentation topics − Overview − Erste Group’s development in H1 2014 − Equity item and Outlook 2014 − Appendix HY Press Conference 31st July 2014 Page 15
Slide 16: Capital position – CET 1-ratio (fully loaded) at 10.8%
Capital position – CET 1-ratio (fully loaded) at 10.8% Risk-weighted assets (EUR bn) Basel 2.5/Basel 3 capital ratios Basel 2.5 Basel 3 Basel 2.5 Basel 3 Phased-in Phased-in 16.6% 16.5% 16.3% 15.8% 15.5% 100.9 99.0 102.2 98.0 97.9 12.2% 3.5 3.0 2.9 11.0 3.3 2.7 11.8% 11.8% 11.7% 11.7% 11.4% 11.2% 10
Slide 17: Outlook
Outlook • Erste Group confirms outlook provided on 3 July 2014 for 2014 and 2015 • For Erste Group (consolidated): • Operating result is staying despite stable underlying group operating trends – will be pushed slightly below guidance in 2014 • Risk costs of EUR 2.1 – 2.4bn, depending on booking of
Slide 18: Presentation topics
Presentation topics − Overview − Erste Group’s development in H1 2014 − Equity item and Outlook 2014 − Appendix HY Press Conference 31st July 2014 Page 18
Slide 19: Business environment - Visible macroeconomic improvement across the CEE region
2013 Business environment - 2014 Visible macroeconomic improvement across the CEE region Real GDP growth (in %) Dom. demand contribution* (in %) • CEE economies performed better than expected in Q1 2014 with industrial output being the bright spot 3.5 3.0 3.0 2.8 2.5 2.2 2.3 • Positive outlook for 2
Slide 20: Business environment – Market shares gross retail loans and retail deposits
Market share 20-30% Business environment – Market share 10-20% Market shares gross retail loans and retail deposits Market share <5% Czech Republic Slovakia Market share: Gross retail loans 23.5% Market share: Retail deposits 26.5% Gross retail loans 26.1% Retail deposits 26.4% Austria Romania Marke
Slide 21: Business environment – Market shares: gross corporate loans and corporate deposits
Business environment – Market share 10-20% Market shares: gross corporate loans and corporate deposits Market share <10% Czech Republic Market share: Slovakia Gross corporate loans 19.1% Corporate deposits 10.0% Market share: Gross corporate loans 11.2% Corporate deposits 11.5% Austria Market share:
Slide 22: Assets under Management grew by 7% YTD
Assets under Management grew by 7% YTD Erste Group manages EUR 50.5 bn assets across CEE; strong ytd growth in RO and SK Assets under Management (in EUR mn; as of HY 2014) Czech Republic Slovakia AuM: 6.7bn Market share: 27% AuM: 1.1bn +8% ytd Market share: 16% +16% ytd Austria Romania +6% ytd AuM:
Slide 23: Private banking assets in CEE grew by almost 40% since 2010
Private banking assets in CEE grew by almost 40% since 2010 Erste Group manages EUR ~15 bn assets in its Private banking division Assets under Management (in EUR bn) 18 16 15.3 14.9 14 13.3 12.8 12 10 8 6 3.9 4.3 4 3.1 3.5 2 - 2010 2011 2012 2013 Total CEE HY Press Conference 31st July 2014 Page 23