Erste Group Bank Ag · VIE:EBS
Erste Group Bank — Q2 2015 Earnings Presentation
24 slides from Erste Group Bank's earnings presentation, Aug 7, 2015
Slide 1: Erste Group Press Conference Q2 2015 results
Erste Group Press Conference Q2 2015 results 7 August 2015 Andreas Treichl, CEO Erste Group Gernot Mittendorfer, CFO Erste Group Andreas Gottschling, CRO Erste Group Peter Bosek, Board Member – Retail Banking Josef Sikela, Board Member – Corporate Banking Petr Brávek, COO Erste Group Page
Slide 2: Presentation topics
Presentation topics • Business environment • Business performance • Assets and liabilities • Outlook Page 2
Slide 3: Most CEE countries should continue to significantly outpace EU growth
2015 Most CEE countries should continue to significantly outpace EU 2016 growth Real GDP growth (in %) Domestic demand contribution to GDP growth (in %) 3.7 3.5 3.5 3.2 3.7 3.0 3.4 3.3 2.8 3.1 2.4 2.2 2.3 1.4 Ø 1.5 Eurozone 1.7 1.7 1.3 1.2 0.8 0.8 0.7 0.2 0.2 0.0 AT CZ SK RO HU HR AT CZ SK RO HU HR
Slide 4: CEE continues to be the least indebted region in Europe
2015 CEE continues to be the least indebted region (on average) in 2016 Europe General government balance (in % of GDP) Public debt (in % of GDP) 87 86 90 93 Maastricht limit: 60% 77 75 -1.6 -1.4 -1.6 -2.0 -2.0 53 53 -2.2 -2.5 -2.8 -2.5 -2.5 41 41 40 40 Maastricht limit: -3% -4.5 -5.2 AT CZ SK RO HU
Slide 5: End of easing cycle in CEE – no hikes in sight
3m Interbank End of easing cycle in CEE – no hikes in sight 10-year Gov Austria Czech Republic Romania 1.83% 2.00% 5.10% 4.15% 1.17% 1.25% 0.30% 0.15% 0.37% 0.34% 2.60% 1.92% 1-6 14 1-6 15 1-6 14 1-6 15 1-6 14 1-6 15 • ECB cut discount rate to 0.05% in • National bank maintains ultra-low • Central b
Slide 6: CEE ratings are continuously improving
CEE ratings are continuously improving Rating changes from 2000 to 2015 (S&P’s) Highlights S&P HR CZ HU PL RO SK SI AU F BE ES IT rating AAA 2000 2000 • Rating agencies AA+ 2015 2000 2000 acknowledge AA 2015 2015 2000 improving macro AA- 2015 A+ 2015 fundamentals in A 2000 CEE A- 2000 2000 2015 2015
Slide 7: Presentation topics
Presentation topics • Business environment • Business performance • Assets and liabilities • Outlook Page 7
Slide 8: Performing loan stock and growth
YoY 30/06/14 Performing loan stock and growth – QoQ 31/03/15 Performing loan volume grows by 4.0% yoy, edges up qoq 30/06/15 Geographic view Growth Highlights 115.7 Group 120.1 4.0% 0.2% • Across the board growth of the 120.3 27.3 mortgage loan portfolio 28.5 4.8% AT/EBOe 28.6 0.4% • Fifth consecuti
Slide 9: Customer deposit stock & growth
YoY 30/06/14 Customer deposit stock & growth – QoQ 31/03/15 Deposits grow by 3.6% yoy, stable qoq 30/06/15 Geographic view Growth Highlights 120.2 Group 124.8 3.6% • Continued customer trust 124.5 -0.2% 29.7 despite low interest rate 0.7% AT/EBOe 29.9 29.9 0.0% environment 34.8 • Customer deposits u
Slide 10: NII and NIM – Q2 15 NII & NIM stable yoy and qoq
Q2 14 NII and NIM – Q1 15 Q2 15 NII & NIM stable yoy and qoq Q2 15 Net interest income Net interest margin Highlights Group 1,120 1,099 2.61% 2.55% • Group NII stable, supported by 1,113 2.59% shifts of the deposit structure 159 1.74% 158 AT/EBOe 159 1.74% 1.86% from long-term to shorter term AT/SB
Slide 11: Operating income – stable yoy and qoq
Q2 14 Operating income – Q1 15 Q2 15 operating income stable yoy and qoq Q2 15 Geographic view Highlights Group 1,731 1,689 • AT/EBOe: increased NII due to 250 1,710 higher loan volumes and structural AT/EBOe 255 258 changes in the deposits structure 355 351 (short-term savings) AT/SB 365 170 • AT/S
Slide 12: Operating expenses – Costs flat qoq, slightly up yoy
Q2 14 Operating expenses – Q1 15 Costs flat qoq, slightly up yoy Q2 15 Geographic view Highlights 933 Group 948 • Regulatory requirements push 949 147 for higher headcount related to AT/EBOe 153 152 finance & risk management; IT. 239 235 Offsets cost discipline in all AT/SB 240 entities 74 AT/OA 78
Slide 13: Operating result and CIR
Q2 14 Operating result and CIR – Q1 15 Operating result up by 2.8% qoq, down by 4.6% yoy Q2 15 Geographic view Highlights 798 53.9% Group 741 56.1% • Operating result within 762 55.5% 103 58.9% guidance due to stable NII and AT/EBOe 102 59.8% 107 58.8% slightly higher fee income, 116 AT/SB 117 67.3%
Slide 14: Risk costs remain low in Q2 15
Q2 14 Risk costs – Q1 15 Risk costs remain low in Q2 15 due to Austria and Romania Q2 15 Risk costs Risk costs in bps Highlights 183 432 1.35% • Continued strong risk performance Group 0.57% 191 0.58% in Q2 15 supported by risk 35 0.49% management actions taken in 2014 AT/EBOe -8 22 -0.11% 0.30% (Ro
Slide 15: Non-performing loans and NPL ratio
30/06/14 Non-performing loans and NPL ratio – 31/03/15 NPL ratio falls for the 6th consecutive quarter to 7.7% 30/06/15 Non-performing loans (NPL) NPL ratio Highlights 11,996 Group 10,560 9.4% 8.1% • Continued decline of group 10,102 7.7% NPL volume in Q2 15 1,018 3.6% AT/EBOe 993 942 3.4% 3.2% supp
Slide 16: Other result – benefits from financial asset gains
Q2 14 Other result – Q1 15 Q2 15 other result benefits from financial asset gains and lack of one-offs Q2 15 Geographic view Highlights Group -1.147 -143 • QOQ and YOY improvements -22 as all EU banking taxes 20 -10 AT/EBOe -15 already paid in Q1 15 and -31 intangible write-downs (mostly AT/SB -12 1
Slide 17: Net result – Continued positive trend in Q2 15
Q2 14 Net result – Q1 15 Continued positive trend in Q2 15 Q2 15 Net result by geography Highlights -1.033 Group 226 • Q2 15 net profit confirms positive 261 66 trend, driven by Austria, AT/EBOe 51 75 Romania, Hungary and segment AT/SB 5 13 Other 15 -5 • Romania: big swing in 17 AT/OA 43 profitabili
Slide 18: Presentation topics
Presentation topics • Business environment • Business performance • Assets and liabilities • Outlook Page 18
Slide 19: YTD overview – Loan/deposit ratio stable at 99.2%
YTD overview – Loan/deposit ratio stable at 99.2% (Dec 14: 98.6%) Assets (EUR bn) Assets (in %) Liabilities & equity (EUR bn) Liabilities & equity (in %) 196.3 197.5 196.3 197.5 100% 6.6 3.4% 100% 7.8 7.0 4.0% 3.5% 7.7 3.9% 14.8 15.7 7.5% 8.0% 50.1 49.0 25.5% 24.8% 7.4 8.8 3.8% 4.4% 122.6 124.5 62.5
Slide 20: Assets and liabilities – Performing loans up 4.0% yoy, NPLs down 15.8%
Assets and liabilities – Performing loans up 4.0% yoy, NPLs down 15.8% Net customer loans (EUR bn) Performing loans (EUR bn) Non-performing loans (EUR bn) +2.8% +4.0% -15.8% 120.1 120.8 123.4 117.4 120.3 12.0 3.2 115.7 3.3 0.4 2.9 3.2 6.0 0.6 2.9 3.2 10.9 5.6 0.9 5.7 0.8 5.1 0.8 5.4 0.8 0.6 5.7 0.1
Slide 21: LT funding – Limited LT funding needs
LT funding – Limited LT funding needs Maturity profile of debt (EUR bn) 3.7 2.6 2.6 2.7 2.7 1.9 2.0 1.8 0.9 1.0 0.8 0.6 0.4 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027+ Debt CEE Capital exc Tier 1 Covered bonds Senior unsec. bonds • Increased appetite for issues in covered bond
Slide 22: Capital position – B3 phased-in CET1 ratio increases to 11.6%
Capital position – B3 phased-in CET1 ratio increases to 11.6% at 30 June 15 (v/s 10% required) Basel 3 capital (phased-in) Basel 3 capital ratios (phased-in) Highlights • B3 phased-in CET1 ratio 16.8% at 11.6% at 30 June 2015 16.5% 15.7% 15.8% 15.7% 16.8 16.1 15.7 15.8 16.1 0.0 (YE 2014: 10.6%) main
Slide 23: Presentation topics
Presentation topics • Business environment • Business performance • Assets and liabilities • Outlook Page 23
Slide 24: Conclusion – Outlook
Conclusion – Outlook • Operating environment anticipated to be conducive to credit expansion • Real GDP growth of between 2-4% expected in 2015 in all major CEE markets, except Croatia • Real GDP growth to be driven by solid domestic demand • Real GDP growth in Austria expected at below 1% in 2015 •