Erste Group Bank Ag · VIE:EBS
Erste Group Bank — FY2024 Earnings Presentation
50 slides from Erste Group Bank's earnings presentation, Feb 28, 2025
Slide 1: 2024 preliminary results presentation
2024 preliminary results presentation Vienna, 28 February 2025 Strong revenue momentum drives bottom line performance Peter Bosek, CEO Erste Group Stefan Dörfler, CFO Erste Group Alexandra Habeler-Drabek, CRO Erste Group
Slide 2: Cautionary note regarding forward-looking statements
DISCLAIMER Cautionary note regarding forward-looking statements THE INFORMATION CONTAINED IN THIS DOCUMENT HAS NOT BEEN INDEPENDENTLY VERIFIED AND NO REPRESENTATION OR WARRANTY EXPRESSED OR IMPLIED IS MADE AS TO, AND NO RELIANCE SHOULD BE PLACED ON, THE FAIRNESS, ACCURACY, COMPLETENESS OR CORRECTNES
Slide 3: Presentation topics
PRESENTATION TOPICS EXECUTIVE SUMMARY MACROECONOMIC AND BUSINESS UPDATE OPERATING TRENDS WHOLESALE FUNDING AND CAPITAL FINANCIAL OUTLOOK APPENDIX Page 3
Slide 4: 2024 – another bottom-line record
EXECUTIVE SUMMARY: P&L PERFORMANCE 2024 – another bottom-line record QoQ net profit development YTD net profit development in EUR m in EUR m +4.3% 259 627 269 3,125 104 178 2,998 104 -31.3% 886 61 208 100 609 136 55 50 Q3 24 Operating Operating Risk costs Other Taxes on Minorities Q4 24 2023 Operati
Slide 5: Upgraded 2024 guidance fully delivered: ROTE at 16.3%
EXECUTIVE SUMMARY: P&L DASHBOARD Upgraded 2024 guidance fully delivered: ROTE at 16.3% Net interest margin Cost/income ratio Risk cost ratio in % in % in bps 2.49 G24: ≤48% G24: <20 bps 2.47 2.45 2.46 2.43 34 18 16 51.4 49.8 6 0 46.0 46.3 45.1 Q4 23 Q1 24 Q2 24 Q3 24 Q4 24 Q4 23 Q1 24 Q2 24 Q3 2
Slide 6: Solid volume growth trends in 2024, as growth accelerates in Q4 24
EXECUTIVE SUMMARY: BALANCE SHEET PERFORMANCE Solid volume growth trends in 2024, as growth accelerates in Q4 24 YTD total asset development YTD equity & total liability development in EUR bn in EUR bn +4.9% 353.7 353.7 0.1 0.2 2.3 10.2 0.5 8.1 337.2 5.5 12.1 337.2 8.8 11.6 0.5 1.6 31/12/23 Cash Trad
Slide 7: Exemplary balance sheet metrics
EXECUTIVE SUMMARY: BALANCE SHEET DASHBOARD Exemplary balance sheet metrics Loan/deposit ratio Loan & deposit growth Asset quality in % yoy, in % in % G24: ~5% 85.1 83.7 80.6 78.7 89.3 90.2 88.4 89.0 4.9 87.9 72.5 2.8 3.1 3.5 2.7 2.3 2.4 2.4 2.6 2.3 3.9 3.8 1.7 -0.4 -1.2 Q4 23 Q1 24 Q2 24 Q3 24 Q4
Slide 8: Presentation topics
PRESENTATION TOPICS EXECUTIVE SUMMARY MACROECONOMIC AND BUSINESS UPDATE OPERATING TRENDS WHOLESALE FUNDING AND CAPITAL FINANCIAL OUTLOOK APPENDIX Page 8
Slide 9: Improved economic growth projected for 2025
MACROECONOMIC AND BUSINESS UPDATE: ECONOMIC FORECASTS * Improved economic growth projected for 2025 Real GDP growth Consumer price inflation Unemployment rate 2024 in % avg, in % avg, in % 2025 5.6 8.5 8.1 3.5 3.9 3.8 5.0 2.9 4.4 4.6 2.0 2.0 2.0 2.0 2.0 2.8 3.7 3.7 3.7 5.2 5.3 5.3 5.3 5.3 5.3 5.2 4.
Slide 10: Retail business enjoys improved volume momentum
MACROECONOMIC AND BUSINESS UPDATE: RETAIL BUSINESS Retail business enjoys improved volume momentum Loan book rises on improving loan demand Housing and consumer loans − Housing loan volumes improving across the group driven by increased demand; in EUR bn customer demand supported by lower rates − Co
Slide 11: Corporate loan demand re-emerges in Q4 24
MACROECONOMIC AND BUSINESS UPDATE: CORPORATES & MARKETS BUSINESS Corporate loan demand re-emerges in Q4 24 Loan growth in wholesale business and strong fee performance Net loan stock of Corporate segment − SME loan demand improves towards year-end, while Large Corporates and Commercial Real Estate e
Slide 12: Presentation topics
PRESENTATION TOPICS EXECUTIVE SUMMARY MACROECONOMIC AND BUSINESS UPDATE OPERATING TRENDS WHOLESALE FUNDING AND CAPITAL FINANCIAL OUTLOOK APPENDIX Page 12
Slide 13: Healthy customer loan growth: +4.9% in 2024
OPERATING TRENDS: NET LOAN STOCK AND GROWTH Healthy customer loan growth: +4.9% in 2024 Net loan stock Growth rates Acceleration in loan demand in Q4 24 − Yoy growth more pronounced in Retail than in Corporate business, 207.8 2.2% up 5.7% vs 4.7%, mostly in RO, CZ and HR Group 213.5 4.9% 218.1 − Qoq
Slide 14: Encouraging customer deposit trends: +3.8% in 2024
OPERATING TRENDS: CUSTOMER DEPOSIT STOCK AND GROWTH Encouraging customer deposit trends: +3.8% in 2024 Customer deposits Growth rates Erste Group’s favourable deposit mix is a key competitive advantage – overweight retail, sight, EUR deposits 232.8 0.8% Group 239.7 3.8% 241.7 Key Q4 24 deposit drive
Slide 15: NII hits new quarterly and annual high, up by 4.2% in 2024
OPERATING TRENDS: NET INTEREST INCOME (NII) AND NET INTEREST MARGIN (NIM) NII hits new quarterly and annual high, up by 4.2% in 2024 Net interest income Net interest margin Q4 24 NII again above EUR 1.9bn, setting new record − Positive effects from client business: swift deposit repricing, 1,806 2.4
Slide 16: Fees remain on growth path, up by 11.3% in 2024
OPERATING TRENDS: NET FEE AND COMMISSION INCOME Fees remain on growth path, up by 11.3% in 2024 Net fee income by segment Net fee income by fee type in EUR m in EUR m +11.1% +6.1% 780 780 735 34 7 735 19 702 712 711 712 711 23 35 7 702 16 26 33 6 31 6 33 7 84 24 17 27 23 72 78 Other 27 21 69 69 73 6
Slide 17: Operating expenses in line with guidance, up by 5.2% in 2024
OPERATING TRENDS: OPERATING EXPENSES Operating expenses in line with guidance, up by 5.2% in 2024 Operating expenses by segment Operating expenses by type in EUR m +16.5% in EUR m +9.3% 1,470 1,470 1,345 102 1,345 Residual other admin 1,283 30 176 1,283 1,265 84 26 61 1,265 1,262 53 74 Other 162 1,2
Slide 18: 2024 CIR at historic best of 47.2%
OPERATING TRENDS: OPERATING RESULT AND COST/INCOME RATIO (CIR) 2024 CIR at historic best of 47.2% Operating result Cost/income ratio in EUR m in % +2.6% 1,536 1,505 1,468 1,354 18 18 80 18 1,390 Other 72 75 75 3 143 72 7 RS 152 133 129 122 109 105 115 119 HR 103 168 159 164 HU G24: ≤48 % 152 168 SK
Slide 19: 2024 risk costs fully in line with guidance
OPERATING TRENDS: CREDIT RISK/RISK COSTS 2024 risk costs fully in line with guidance Risk costs by segment * Risk cost ratio * in EUR m in bps 186 78 86 Other G24: <20 bps 0 95 RS 31 HR HU 18 34 SK 15 9 6 RO 18 16 CZ AT/OA 6 0 AT/SB AT/EBOe 2020 2021 2022 2023 2024 Q4 23 Q1 24 Q2 24 Q3 24 Q4 24 Q4 2
Slide 20: Excellent asset quality across CEE
OPERATING TRENDS: CREDIT RISK/ASSET QUALITY Excellent asset quality across CEE NPL ratio NPL coverage ratio Austria sees continuation of asset quality trends − New defaults mainly in Austrian segments, related to corporate/real 2.3 in % 85.1 in % estate business; retail performance remained strong G
Slide 21: Other result in line with seasonal trends
OPERATING TRENDS: OTHER RESULT Other result in line with seasonal trends Other result by segment Other result by accounting categories in EUR m in EUR m Other 0 0 0 RS HR -27 -59 HU -57 SK -36 -86 -57 -51 RO -1 -127 CZ -48 -129 -127 AT/OA -129 AT/SB -193 -193 AT/EBOe -279 -279 Q4 23 Q1 24 Q2 24 Q3 2
Slide 22: 2024 ROTE at 16.3%
OPERATING TRENDS: NET RESULT, EARNINGS PER SHARE (EPS) & RETURN ON TANGIBLE EQUITY (ROTE) 2024 ROTE at 16.3% Net result by segment EPS & ROTE in EUR m in EUR -11.4% 886 19.5% 846 17.2% 17.2% 783 Other 688 14.7% RS 609 HR 11.5% HU 2.14 SK 1.87 1.87 RO 1.54 CZ 1.33 AT/OA AT/SB AT/EBOe Q4 23 Q1 24 Q2 2
Slide 23: Presentation topics
PRESENTATION TOPICS EXECUTIVE SUMMARY MACROECONOMIC AND BUSINESS UPDATE OPERATING TRENDS WHOLESALE FUNDING AND CAPITAL FINANCIAL OUTLOOK APPENDIX Page 23
Slide 24: Vast retail deposit base provides competitive funding advantage
WHOLESALE FUNDING AND CAPITAL: ISSUED DEBT AND INTERBANK FUNDING Vast retail deposit base provides competitive funding advantage Liabilities and equity Debt securities Interbank deposits Comments in EUR bn in EUR bn in EUR bn Highly granular and well- diversified Retail & SME 353.7 deposit base is k
Slide 25: 2024 funding successfully executed, similar funding volumes in 2025
WHOLESALE FUNDING AND CAPITAL: LONG TERM FUNDING 2024 funding successfully executed, similar funding volumes in 2025 Maturity profile of debt 8.9 in EUR bn 7.5 5.6 5.1 5.0 4.1 2.8 1.3 1.0 1.0 0.3 0.1 0.1 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037+ Debt CEE Tier 2 Covered bonds
Slide 26: RWAs up mainly on exposure growth
WHOLESALE FUNDING AND CAPITAL: CAPITAL AND RISK-WEIGHTED ASSETS (RWA) RWAs up mainly on exposure growth Basel 3 capital Risk-weighted assets in EUR bn +8.5% in EUR bn 155.9 159.1 149.9 153.2 146.5 7.4 6.6 6.5 6.8 6.3 16.3 16.7 16.2 +6.4% 14.8 16.4 30.1 29.9 30.9 29.1 28.7 3.6 3.6 4.2 3.7 3.8 2.4 2.7
Slide 27: CET 1 ratio incorporates planned third share buy-back
WHOLESALE FUNDING AND CAPITAL: COMMON EQUITY TIER 1 (CET1), TIER 1 AND TOTAL CAPITAL RATIOS CET 1 ratio incorporates planned third share buy-back CET 1 ratio development (final) Basel 3 capital ratios (final) in % in % 19.9 19.6 19.5 19.2 19.2 15.66 0.77 1.94 0.31 17.3 17.2 0.25 15.09 16.9 0.45 0.48
Slide 28: Presentation topics
PRESENTATION TOPICS EXECUTIVE SUMMARY MACROECONOMIC AND BUSINESS UPDATE OPERATING TRENDS WHOLESALE FUNDING AND CAPITAL FINANCIAL OUTLOOK APPENDIX Page 28
Slide 29: 2025 guidance: again targeting ROTE of ~15%
FINANCIAL OUTLOOK 2025 guidance: again targeting ROTE of ~15% Variable 2025 guidance Key assumptions/additional comments Real GDP ~ +1-4% Diverging economic performance with HR and RS expected to grow fastest Loans ~ +5% On the back of improving loan demand in most markets NII ~ ±0% Lower rates to b
Slide 30: Presentation topics
PRESENTATION TOPICS EXECUTIVE SUMMARY MACROECONOMIC AND BUSINESS UPDATE OPERATING TRENDS WHOLESALE FUNDING AND CAPITAL FINANCIAL OUTLOOK APPENDIX: ERSTE GROUP BASICS, ERSTE GROUP DETAILED FINANCIALS & ERSTE GROUP ESG PROFILE Page 30
Slide 31: Banking leadership in Central and Eastern Europe (1)
APPENDIX: ERSTE GROUP‘S GEOGRAPHIC FOOTPRINT Banking leadership in Central and Eastern Europe (1) Czech Republic Slovakia Customers: 4.6m Customers: 1.9m Hungary Employees: 9,674 Employees: 3,491 Customers: 1.0m Branches: 337 Branches: 160 Employees: 3,386 Retail loan share: 27.0% Retail loan share:
Slide 32: Banking leadership in Central and Eastern Europe (2)
APPENDIX: ERSTE GROUP STRATEGY (1) Banking leadership in Central and Eastern Europe (2) Eastern part of EU Focus on CEE, limited exposure to other Europe Retail Corporate Capital Public Interbank banking banking markets sector business Acting as financial SME and large Focus on customer Financing so
Slide 33: Strategy: continuity & progress
APPENDIX: ERSTE GROUP STRATEGY (2) Strategy: continuity & progress Strategic continuity… … and strategic progress Full commitment to growth Elevating George to the next level − Organic growth: fully capturing existing and emerging growth − Rolling out digital client advice in a structured way, there
Slide 34: Commanding market shares across the CEE region
APPENDIX: MARKET SHARES Commanding market shares across the CEE region Gross retail loans Retail deposits Gross corporate loans Corporate deposits 21.4% 24.2% 24.1% 23.2% AT 21.6% AT 24.4% AT 24.5% AT 22.3% 26.7% 24.9% 22.7% 13.1% CZ 26.9% CZ 24.4% CZ 22.7% CZ 14.2% 27.0% 24.2% 22.6% 13.9% 24.7% 27.
Slide 35: Strong track record of profitability
APPENDIX: ERSTE GROUP FINANCIALS/PROFIT AND LOSS ACCOUNT Strong track record of profitability Year-to-date view Quarterly view in EUR million 2023 2024 YOY-Δ Q4 23 Q3 24 Q4 24 YOY-Δ QOQ-Δ Net interest income 7,227.9 7,528.3 4.2% 1,805.6 1,903.2 1,937.6 7.3% 1.8% Interest income 15,044.7 15,352.9 2.0
Slide 36: Strong balance sheet dominated by customer loans
APPENDIX: ERSTE GROUP FINANCIALS/BALANCE SHEET/ASSETS Strong balance sheet dominated by customer loans Quarterly data Change in EUR million Dec 23 Mar 24 Jun 24 Sep 24 Dec 24 YOY-Δ YTD-Δ QOQ-Δ Cash and cash balances 36,685 29,425 26,231 23,972 25,129 -31.5% -31.5% 4.8% Financial assets held for trad
Slide 37: Liabilities dominated by retail deposits
APPENDIX: ERSTE GROUP FINANCIALS/BALANCE SHEET/ EQUITY AND LIABILITIES Liabilities dominated by retail deposits Quarterly data Change in EUR million Dec 23 Mar 24 Jun 24 Sep 24 Dec 24 YOY-Δ YTD-Δ QOQ-Δ Financial liabilities held for trading 2,304 1,805 2,003 1,770 1,821 -20.9% -20.9% 2.9% Derivative
Slide 38: Capital requirements for 2025 slightly up on higher buffers
APPENDIX: REGULATORY CAPITAL POSITION/REQUIREMENT (SREP – SUPERVISORY REVIEW AND EVALUATION PROCESS) Capital requirements for 2025 slightly up on higher buffers Erste Group Consolidated Erste Group Unconsolidated Fully loaded Fully loaded 2022 2023 YE 2024 YE 2025 2022 2023 YE 2024 YE 2025 Pillar 1
Slide 39: MREL compliance at point of entry level (bail-in)
APPENDIX: MULTIPLE POINT OF ENTRY (MPE) RESOLUTION STRATEGY MREL compliance at point of entry level (bail-in) Resolution Groups * Erste Group Bank AG 100% 69.3%** & Savings Banks + other subs 100% 100% 99.9% Banca Česká Slovenská Erste Bank Erste Bank Comercială spořitelna sporiteľňa Hungary Croatia
Slide 40: Austrian resolution group: MREL requirement based on RWA fulfilled
APPENDIX: DETAILS ON AUSTRIAN RESOLUTION GROUP Austrian resolution group: MREL requirement based on RWA fulfilled MREL capacity based on TREA (RWA)* Key take-aways Erste Group adopted multiple point of entry (MPE) in % 38.26% resolution approach − In Q2 24, Erste Group Bank AG received its MREL requ
Slide 41: MREL issuance progresses to plan
APPENDIX: MULTIPLE POINT OF ENTRY (MPE) RESOLUTION STRATEGY MREL issuance progresses to plan MPE resolution groups MREL issuance plan (by year-end 2025) 207 ~1,000 – 2,000 in EUR bn, in EUR m 95 as of Dec 2024 81 30 26 24 16 ~350-500 11 11 12 ~250-350 ~250-350 7 6 ~50-150 ~0-150 AT CZ SK RO HR HU Ho
Slide 42: Erste Group benefits from a highly diversified loan book
APPENDIX: GROSS CUSTOMER LOANS BY RISK CATEGORY, CURRENCY AND INDUSTRY Erste Group benefits from a highly diversified loan book Gross customer loans by industry By currency By business segment 222.2 in EUR bn 3.9 0.1 1% 2% 0% 211.9 0.1 1% 1% Other Other 3.7 3.6 22% 1% 22% 1% 28% 27% 5.8 4.4 CHF Savi
Slide 43: Real estate snapshot
APPENDIX: CREDIT RISK/EXPOSURE HIGHLIGHT: REAL ESTATE (RE) Real estate snapshot Sound lending standards − Income producing projects (>80%) − Ring-fenced, A-class buildings in prime locations with risk-mitigating structures − Highly collateralised business with conservative valuation approach (applic
Slide 44: Financial asset portfolio creates strong net interest income tailwinds
APPENDIX: FINANCIAL ASSET DRILL-DOWN Financial asset portfolio creates strong net interest income tailwinds Financial assets – geographic view Financial assets – accounting view AC by issuer and currency in EUR bn +17.1% 64.2 57.7 3% 3% 7% 54.8 15.9 15% 15% 5% 11.9 13.1 3.0 1% 2.1 2.7 7% 2.5 1.2 1.0
Slide 45: Erste Group's sustainability strategy is centered on two main pillars
APPENDIX: ESG PROFILE (1)/ESG STRATEGY OF ERSTE GROUP Erste Group’s sustainability strategy is centered on two main pillars GREEN TRANSITION SOCIAL INCLUSION • Our goal is to achieve net zero status for our portfolio • We enhance financial inclusion through our social by 2050, adhering to sector-spe
Slide 46: Portfolio towards our environmental targets
APPENDIX: ESG PROFILE (2)/ENVIRONMENT – NET-ZERO TARGET SETTING Portfolio towards our environmental targets Financed emissions Sustainable finance corporate Scope 3, financed emissions, covering EUR 190.4 bn exposure New specific purpose Sustainable Financing1 Committed amount (total), Dec 2024 in E
Slide 47: Erste Group benefits from strong and well-diversified shareholder base
APPENDIX. SHAREHOLDER STRUCTURE Erste Group benefits from strong and well-diversified shareholder base By investor By region Erste Foundation direct 4.60% 5.94% 2.30% 0.23% Sparkassen Beteiligungs 0.23% 0.93% GmbH & Co KG 0.93% 12.54% Foundations 16.96% Wiener Städtische Austria 33.51% Versicherungs
Slide 48: Erste Group Bank AG boasts strong issuer ratings
APPENDIX: CREDIT RATINGS Erste Group Bank AG boasts strong issuer ratings Financial Profile SACP - Stand-Alone Credit Profile VR - Viability Rating Asset Risk baa1 a (Individual Rating ) Capital baa1 ▲ a Profitability baa3 Anchor bbb+ Funding Structure a2 Business position Strong +1 SRF - Support Ra
Slide 49: Geographical/operating and business segment view
APPENDIX: SEGMENT REPORTING STRUCTURE Geographical/operating and business segment view Erste Group – Geographical/operating segments Austria Central and Eastern Europe Other EBOe & Savings Other Czech − Holding ALM Slovakia Romania Hungary Croatia Serbia Subsidiaries Banks Austria Republic − Holding
Slide 50: Erste Group IR contact details
APPENDIX: INVESTOR RELATIONS CONTACTS AND SHARE INFO Erste Group IR contact details IR Team Role Phone Email Catherina Frass IR Assistant +4350100 17731 catherina.frass@erstegroup.com Gerald Krames IR Manager +4350100 12751 gerald.krames@erstegroup.com Peter Makray IR Manager +4350100 16878 peter.ma