Erste Group Bank Ag · VIE:EBS
Erste Group Bank — FY2012 Earnings Presentation
22 slides from Erste Group Bank's earnings presentation, Feb 28, 2013
Slide 1: Erste Group Bank AG Annual results 2012
Erste Group Bank AG Annual results 2012 28 February 2013 Andreas Treichl, Chief Executive Officer Manfred Wimmer, Chief Financial Officer Gernot Mittendorfer, Chief Risk Officer
Slide 2: Presentation topics
Presentation topics − Erste Group’s development in YE 2012 − Central and Eastern Europe − Outlook 2013 Press Conference – Annual Results 2012 2 28 February 2013
Slide 3: Net profit adjusted for extraordinary effects
Net profit adjusted for extraordinary effects • 2012 positive extraordinary effects: EUR 380.1m (post-tax) • 2012 negative extraordinary effects: EUR 740.8m (post-tax) -360.7 56.8 323.3 456.2 844.2 187.4 Capital neutral 75.0 483.5 22.2 Underlying Hybrid Selling gains real Goodwill Banking Selling lo
Slide 4: Income statement (IFRS) FY 2012
Income statement (IFRS) FY 2012 in EUR million 2012 2011 Change Comment Net interest income 5,235.3 5,569.0 (6.0%) Declining margins, non-core business reduction Risk provisions for loans (1,980.0) (2,266.9) (12.7%) Extraordinary risk costs (HU in 2011, RO in 2012) Net fee and commission income 1,72
Slide 5: Balance sheet (IFRS)
Balance sheet (IFRS) in EUR million Dec 12 Dec 11 Change Comment Cash and balances with central banks 9,740 9,413 3.5% Loans and advances to credit institutions 9,074 7,578 19.7% Excess liquidity deposited with central banks Loans and advances to customers 131,928 134,750 (2.1%) Reduction in GCIB, H
Slide 6: Balance sheet (IFRS) – Net profit and OCI drove substantial increase in equity
Balance sheet (IFRS) – Net profit and OCI drove substantial increase in equity in EUR million Dec 12 Dec 11 Change Comment Deposits by banks 21,822 23,785 (8.3%) Lower funding requirements Customer deposits 123,053 118,880 3.5% Growth mainly in AT, CZ, SK & HU Debt securities in issue 29,427 30,782
Slide 7: Asset quality review – NPL ratio stable for 2nd consecutive quarter
Asset quality review – NPL ratio stable for 2nd consecutive quarter − Overall slight NPL reduction by EUR 147m qoq Erste Group: NPL ratio vs NPL coverage − NPL sales of EUR 212m in Q4 2012, mainly in BCR 30% 65% − Qoq NPL volume decreased in all countries except 61.9% 63.1% 62.6% 25% 61.0% 61.2% Cro
Slide 8: Asset quality review – AT, CZ & SK improved, HU & RO remained challenging
Asset quality review – AT, CZ & SK improved, HU & RO remained challenging NPL ratios in key segments − Austria, Czech Republic & Slovakia: asset quality stable year-over-year 30% 28.3% 25.4% − Retail & SME/Austria: Risk costs remained at low level 25% − Slovakia: NPL ratio significantly reduced from
Slide 9: Loan book review – Limited demand reflected in loan book
Loan book review – Limited demand reflected in loan book − Customer loans decreased by 2.1% yoy mainly Customer loans by main segments on reduction in Hungary, GCIB and Ukraine 150 − Decline in Hungary (FX conversion), Group Real Estate 134.7 134.8 133.9 133.5 131.9 business and targeted reduction i
Slide 10: Funding update – Excess liquidity position underpins LTRO repayment
Funding update – Excess liquidity position underpins LTRO repayment − Short-term funding needs very well covered Evolution of funding mix − Investment in highly liquid assets led to continuously 100% 3.2% 3.2% 3.0% 3.0% 2.7% rising collateral coverage of short-term funding needs in 90% 5.8% 8.5% 9.0
Slide 11: Capital requirements – more than fulfilled at Erste Group and its subsidiaries
Capital requirements – more than fulfilled at Erste Group and its subsidiaries Basel 2.5 Local solvency ratios 21.3% 19.7% 18.0% 17.4% 16.0% 12.4% 11.2% 11.7% 12.0% required 10.0% required 8.0% 7.0% as of required 1.1.2013 (plus event. additional ÖNB-requirements) Local subsidiaries show solvency ra
Slide 12: Erste Group’s Segment highlights – Improvement in CZ, EBOe, GM and HU, bottom in RO
Erste Group’s Segment highlights – Improvement in CZ, EBOe, GM and HU, bottom in RO Top segment performers in FY 2012: Czech Republic Slovakia EB Oesterreich Group Markets in EUR million 2012 2011 ∆ 2012 2011 ∆ 2012 2011 ∆ 2012 2011 ∆ Operating income 1,581 1,634 (3%) 538 553 (3%) 953 1,007 (5%) 511
Slide 13: Presentation topics
Presentation topics − Erste Group’s development in YE 2012 − Central and Eastern Europe − Outlook 2013 Press Conference – Annual Results 2012 13 28 February 2013
Slide 14: Operating environment: macro trends – CEE continued to outgrow the euro zone in 2012
Operating environment: macro trends – CEE continued to outgrow the euro zone in 2012 Real GDP growth in Erste Group‘s core markets (in %) − Eurozone’s weakness still a drag on economic development in CEE 4.4 2010 2012e 3.2 2011 2013e − Several countries following through with 2.7 2.3 2.2 2.1 1.9 2.0
Slide 15: Operating environment: macro trends – Despite growth slowdown, encouraging market signals
Operating environment: macro trends – Despite growth slowdown, encouraging market signals − HU and RO successfully tapped 5 year CDS international markets with USD bond issues Mar 2009 lately 754 − CEE debt markets finding favour with 590 622 investors as the region has remained largely unscathed fr
Slide 16: Erste Group Remains #1 Bookrunner in CEE
Erste Group Remains #1 Bookrunner in CEE Source: Bloomberg EUR denominated Bond issues from Austria and CEE excl. Russia (1/1-11/13/2012; 1/1-12/31/2011; 1/1-12/31/2010) Press Conference – Annual Results 2012 16 28 February 2013
Slide 17: Austrian banks keep the funding in CEE stable
Austrian banks keep the funding in CEE stable Cross-border funding of Austrian banks to selected countries in CEE2) (unconsolidated, as of quarter end) − In an international comparison, deleveraging in CEE has been moderate (except for HU) − CEE61) has reduced their external vulnerability – net exte
Slide 18: Erste Group’s loans granted in CEE
Erste Group’s loans granted in CEE 70 64.2 65.8 − Retail business in CEE 60 Erste Group has as of YE 2012: − Local customer deposits are key pillar for 50 • EUR 52.4 bn loans in CEE vs. Erste’s refinancing • EUR 54.7 bn local deposits in CEE 40 in EUR − Erste Group had as of YE 2012: 28.0 30 − EUR 5
Slide 19: Presentation topics
Presentation topics − Erste Group’s development in YE 2012 − Central and Eastern Europe − Outlook 2013 Press Conference – Annual Results 2012 19 28 February 2013
Slide 20: Interest rate environment in Europe
Interest rate environment in Europe Development of 10y government bonds Press Conference – Annual Results 2012 20 28 February 2013
Slide 21: Executive summary – Erste Group improved capital substantially in 2012
Executive summary – Erste Group improved capital substantially in 2012 • Net profit of EUR 483.5m impacted by positive and negative one-off items Income statement – • All extraordinary items together resulted in a net negative effect of EUR 360.7m; banking tax FY 2012 view alone amounted to EUR 187.
Slide 22: Erste Group in 2013 – Outlook
Erste Group in 2013 – Outlook − Erste Group expects a slight improvement in economic performance for Central and Eastern Europe in 2013, even though growth will remain moderate − For 2013 Erste Group targets a stable operating result compared to 2012 − Slightly lower operating income as a result of