Slide 1: Erste Bank – an exceptionally challenging year
> Erste Bank – an exceptionally challenging year > Full Year 2002 (Preliminary) Results Teleconference Vienna, 24 March 2003
Slide 2: Table of contents
> Table of contents Hosts Presentation Appendix Andreas Treichl, CEO 03 EB Group – Key Ratios 24 P&L Details 04 Core Group – FInancial 30 Segment Reporting Reinhard Ortner, CFO Highlights 37 Quarterly Balance Sheet Gabriele Werzer, IR 05 Key Developments 38 Quarterly Results Thomas Schmee, IR 06 Key
Slide 3: FY 2002 – Financial highlights
> FY 2002 – Financial highlights Financial Highlights Erste Bank Group - Key ratios (Preliminary figures) » Operating Profit at EUR 1,151.3m » Net profit at EUR 255.2m » Return on equity 12.7% » Net interest margin 2.17 » Cost/income ratio 67.9% EPS development » Tier 1 ratio for Erste Bank Group 6.
Slide 4: FY 2002 – Financial highlights: Core Group
> FY 2002 – Financial highlights Financial Highlights Core Group (Preliminary figures) Operating Profit » EUR 748.4m, up 5.1% from EUR 711.8m in 2001 » Steadily growing contribution from CE subsidiaries (61% after 33% in 2001) more than compensates downward trends in domestic and International marke
Slide 5: FY 2002 – Highlights: Key developments
> FY 2002 – Highlights Highlights Key developments January 2002 » Start of integration and restructuring of Tiroler Sparkasse (TISPA) » Transition teams implemented after model of CE integration projects » Turnaround expected for 2003 May 2002 » Acquisition of Croatian Rijecka banka finalised » Fina
Slide 6: Key figures of EB subsidiaries in Central Europe
> Key figures of EB subsidiaries in Central Europe Highlights Preliminary Full Year Results 2002 (IAS) YE 02 YE 01 YE 02 YE 01 YE 02 YE 01 YE02 YE 01 YE 02 YE01 Net Profit (EUR m) 1 184.3 56.3 29.5 26.8 7.4 4.2 12.0 10.1 16.4 (87.6) ROE (%) 21.4 7.6 10.1 10.1 10.6 8.4 17.0 15.7 20.0 n.a. Cost / Inco
Slide 7: Preliminary 2002 Financials
> Preliminary 2002 Financials > P& L > Balance sheet
Slide 8: Preliminary 2002 EB Group Income Statement (IAS)
> Preliminary 2002 EB Group Income Statement (IAS) Prelim 2002 Profit & Loss Accounts Erste Bank Group Core Group EUR m YE 2002 YE 2001 % Change YE 2002 YE 2001 % Change Net interest income 2,463.0 1,438.9 71.2% 1,570.7 1,438.9 9.2% Risk provisions for loans and advances (406.4) (203.6) 99.6% (211.1
Slide 9: Preliminary 2002 EB Group Balance Sheet (IAS) – Assets
> Preliminary 2002 EB Group Balance Sheet (IAS) Prelim 2002 Balance Sheet Assets Erste Bank Group Core Group EUR m 31.12.2002 31.12.2001 % Change 31.12.2002 % Change Cash and balances with central banks 3,181 2,573 23.6 2,608 1.4 Loans and advances to credit institutions 15,492 18,913 (18.1) 19,238
Slide 10: Preliminary 2002 EB Group Balance Sheet (IAS) – Liabilities
> Preliminary 2002 EB Group Balance Sheet (IAS) Prelim 2002 Balance Sheet Liabilities Erste Bank Group Core Group EUR m 31.12.2002 31.12.2001 % Change 31.12.2002 % Change Amounts owed to credit institutions 26,425 28,642 (7.7) 27,918 (2.5) Amounts owed to customers 61,308 37,175 64.9 39,337 5.8 Debt
Slide 11: Erste Bank – Austrian home market
> Erste Bank – Austrian home market Strategic update Combatting low profitability of Austrian business » Extremely low NIM environment in SME business » Competitive banking market – near term EB does not expect relief in NIM » Therefore EB will further reduce the SME loan book (down 10% to EUR 2.1bn
Slide 12: Ceská sporitelna: FY 2002 Financial highlights
> Ceská sporitelna: FY 2002 Financial highlights Strategic update CS surpasses 2002 ROE goal and net profit forecasts » Operating result increases by 26.9% on 6.5% increase of operating income and a 2.9% reduction of administrative expenses » NII income increased by 3.7% despite a 2% rate cut in the
Slide 13: Slovenská sporitelna: FY 2002 Financial Highlights
> Slovenská sporitel na: FY 2002 Financial Highlights Strategic update SLSP on track to 2003 goals » Operating profit grew by 101% supported by strong growth of NII (+36%) and fee income (+ 37%). Costs increased moderately (+7%) in restructuring year. » Improvement of NIM to 3.9% - deposits grew by
Slide 14: Credit risk
> Credit risk
Slide 15: Overview of international exposures by regions
> Overview of international exposures by regions Credit risk Credit Risk by region at Core Group Low Risk Management Substandard Doubtful Total outstanding attention in EUR m FY 2002 FY 2001 FY 2002 FY 2001 FY 2002 FY 2001 FY 2002 FY 2001 FY 2002 FY 2001 share in % share in % Austria 33,806 30,614 5
Slide 16: Overview of international exposures by sectors
> Overview of international exposures by sectors Credit risk Credit Risk by industry sectors at Core Group Low Risk Management Substandard Doubtful Total outstanding attention in EUR m FY 2002 FY 2001 FY 2002 FY 2001 FY 2002 FY 2001 FY 2002 FY 2001 FY 2002 FY 2001 share in % share in % Banking and i
Slide 17: Credit risk details
> Credit risk details Credit risk NPLs increase by EUR 606m to EUR 2,414m due to various factors: » 40% - Technical migration to default status due to new risk assessment standards (*) » 30% - Finalisation of full portfolio review at TISPA - Retention of previously ring fenced NPLs at CS after final
Slide 18: Credit risk details
> Credit risk details Credit risk Technical migration to NPL status: » Full implementation of new standards for risk assessment in accordance with BIS II (completed in 2002) » Erste Bank´s provisioning policy is focused on expected loss – which has increased in domestic segments due to adverse econo
Slide 19: Credit risk details
> Credit risk details Credit risk Balance of Risk provisions decreased by EUR 75m to EUR 1,829m » A main factor is the consumption and release of provisions in CS and SLSP of app. EUR 100m due to „total put options” exercised in 2002 » Following the introduction of a new NPL definition and the new c
Slide 20: Outlook and targets
> Outlook and targets
Slide 21: Outlook and targets: The year ahead
> Outlook and targets Outlook The year ahead » EB management is cautiously optimistic and expects net profit to grow double-digit in 2003 » Actions taken during past months expected to lead in 2003 to » Flat expenses in the three main markets: EB Austria, CS and SLSP » Slight increase in NIM due to
Slide 22: Outlook and targets: 2004 and beyond
> Outlook and targets Outlook 2004 and beyond » Bulgaria – DSK an attractive savings bank » Second largest bank in Bulgaria (TA of EUR 800m) undisputed leader in retail business with market shares of 31% in retail deposits and no exposure to corporate lending » Based on present information Erste Ban
Slide 23: Appendix
> Appendix > Additional Financial information
Slide 24: P & L Details: Net interest income
> P & L Details Net interest income Preliminary 2002 Profit & Loss Accounts Interest income provides 66% of EB Core Group earnings 2700 » Quarterly split » Sharp rate cuts did not impact (Core Group): margins in CE 2400 Q1=EUR 384.3 m Core Group Q2=EUR 395.2 m 2100 +71.2% Q3=EUR 387.3 m » Contributi
Slide 25: P & L Details: Risk provisions
> P & L Details Risk provisions Preliminary 2002 Profit & Loss Accounts Releases in CE compensate higher provisions in Austria 450 » Quarterly split » Austria “domestic” and 400 (Core Group): international business Q1=EUR 56.7 m account for app. 83% of 350 Q2=EUR 37.3 m new risk provisions 300 +71.2
Slide 26: P & L Details: Net commission income
> P & L Details Net commission income Preliminary 2002 Profit & Loss Accounts Double digit growth despite weak securities business 1000 » Quarterly split » Strong growth in fees for Core Group (Core Group): payment transfer mainly 800 Q1=EUR 169.9 m +64.3% driven by CE subsidiaries Q2=EUR 155.8 m 94
Slide 27: P & L Details: Net trading result
> P & L Details Net trading result Preliminary 2002 Profit & Loss Accounts Turbulent markets impact trading result » Quarterly split » Securities business hit by 180 Core Group (Core Group): the market situation for the +9.7% Q1=EUR 43.7 m -9.9% Q2=EUR 33.7 m second consecutive year 150 Q3=EUR 28.2
Slide 28: P & L Details: General administrative expenses
> P & L Details General administrative expenses Preliminary 2002 Profit & Loss Accounts First time inclusion of subsidiaries boost cost growth 2500 » Quarterly split » First time inclusion of (Core Group): TISPA (1/2003) and RB Q1=EUR 393.9 m (4/2003) as well as 2000 +67.2% Core Group 2,432 Q2=EUR 4
Slide 29: P & L Details: Other operating result
> P & L Details Other operating result Preliminary 2002 Profit & Loss Accounts One-off items impact other operating result 0 » Quarterly split » Goodwill charge rises by (Core Group): 45% to 57.3m due to buy -20 Q1=EUR –26.3 m out of CS minorities and Q2=EUR –20.3 m acquisition of TISPA and -40 Q3=E
Slide 30: Segment reporting
> Segment reporting
Slide 31: Preliminary 2002 Divisional figures – Core Group
> Preliminary 2002 Divisional figures – Core Group Preliminary 2002 Divisionals Core Group – “domestic” * Savings banks Retail & Real Est. Large Corp. Savings banks In EUR m YE 2002 YE 2001 YE 2002 YE 2001 YE 2002 YE 2001 » A weaker result at SSK and a negative contribution from TISPA, as Net intere
Slide 32: Preliminary 2002 Divisional figures – Core Group
> Preliminary 2002 Divisional figures – Core Group Preliminary 2002 Divisionals Core Group – “domestic” * Trading & Inv. Banking Trading & Inv.B. Asset Gathering Corp. Center » Weaker operating income through In EUR m YE 2002 YE 2001 YE 2002 YE 2001 YE 2002 YE 2001 reduced contribution form ALM and
Slide 33: Preliminary 2002 Divisional figures – Core Group
> Preliminary 2002 Divisional figures – Core Group Preliminary 2002 Divisionals Core Group – CS and SLSP SLSP CS Total Slovenska sporitel’na In EUR m YE 2002 YE 2001 YE 2002 YE 2001 YE 2002 YE 2001 » Goodwill and funding costs amount to EUR 18.99m Net interest income 161.3 116.0 477.4 421.8 1,570.7
Slide 34: Preliminary 2002 Divisional Figures - EB Group
> Preliminary 2002 Divisional Figures - EB Group Preliminary 2002 Divisionals Erste Bank Group – “domestic” * Savings banks Retail & Real Est. Large Corp. In EUR m YE 2002 YE 2001 YE 2002 YE 2001 YE 2002 YE 2001 Net interest income 1,003.9 71.6 497.8 469.1 270.6 269.7 Risk provisions for loans and a
Slide 35: Preliminary 2002 Divisional Figures - EB Group
> Preliminary 2002 Divisional Figures - EB Group Preliminary 2002 Divisionals Erste Bank Group – “domestic” * Trading & Inv.B. Asset Gathering Corp. Center In EUR m YE 2002 YE 2001 YE 2002 YE 2001 YE 2002 YE 2001 Net interest income 70.7 87.3 (1.0) 3.6 (17.6) (0.2) Risk provisions for loans and adv.
Slide 36: Preliminary 2002 Divisional Figures – EB Group
> Preliminary 2002 Divisional Figures – EB Group Preliminary 2002 Divisionals Erste Bank Group – CS and SLSP SLSP CS Total In EUR m YE 2002 YE 2001 YE 2002 YE 2001 YE 2002 YE 2001 Net interest income 161.3 116.0 477.4 421.8 2,463.0 1,438.9 Risk provisions for loans and adv. (2.4) 13.3 23.0 (13.5) (4
Slide 37: Quarterly Balance Sheet (IAS)
> Quarterly Balance Sheet (IAS) Additional financial information Balance sheet details Erste Bank Group Core Group EUR m Q1'01 Q2'02 Q3'01 Q4'01 Q1'02 Q2'02 Q3'02 Q4´02 Q1'02 Q2'02 Q3'02 Q4´02 Total assets 80,114 82,327 81,485 86,033 117,684 121,068 124,797 121,222 88,508 90,893 86,033 95,564 Loans
Slide 38: Quarterly Results (IAS)
> Quarterly Results (IAS) Additional financial information P & L details Erste Bank Group Core Group EUR m Q4'00 Q1'01 Q2'01 Q3'01 Q4'01 Q1'02 Q2'02 Q3'02 Q4´02 Q1'02 Q2'02 Q3'02 Q4´02 Net interest income 295 313 357 389 380 585 634 616 628 384 395 387 404 Risk provisions (50) (48) (45) (55) (56) (8
Slide 39: Quarterly Divisional Figures (IAS)
> Quarterly Divisional Figures (IAS) Additional financial information Core Group Savings Banks Retail & Real Estate Large Corporate Customers In EUR m Q4 01 Q1 02 Q2 02 Q3 02 Q4 02 Q4 01 Q1 02 Q2 02 Q3 02 Q4 02 Q4 01 Q1 02 Q2 02 Q3 02 Q4 02 Net interest income 20.6 28.0 26.5 38.3 49.5 222.0 209.2 22
Slide 40: Quarterly Divisional Figures (IAS)
> Quarterly Divisional Figures (IAS) Additional financial information Erste Bank Group Savings Banks Retail & Real Estate Large Corporate Cust. In EUR m Q4 01 Q1 02 Q2 02 Q3 02 Q4 02 Q4 01 Q1 02 Q2 02 Q3 02 Q4 02 Q4 01 Q1 02 Q2 02 Q3 02 Q4 02 Net interest income 20.6 219.4 260.3 256.2 268.0 222.0 21
Slide 41: Preliminary full year 2002 results: Key financial data
> Preliminary full year 2002 results Additional financial information Key financial data in EUR m YE 1998 YE 1999 YE 2000 YE 2001 YE 2002 1 Tier 1 Capital pursuant to § Austrian Banking Act 1,611 1,753 2,125 2,337 3,800 Total own funds pursuant to § Austrian Banking Act 3,176 3,296 3,956 4,308 6,983
Slide 42: Multi-channel distribution in Austria
> Multi-channel distribution in Austria Additional information Growth in use of alternative channels at YE 2002 YE 2002 YE2001 Change Erste Bank 107,000 66,000 + 62% Savings Banks 279,000 156,000 + 79% Erste Bank 5,900 4,900 + 20% Savings Banks 6,300 2,300 + >100% Erste Bank 42,000 4,400 + >100% Sav
Slide 43: Erste Bank share
> Erste Bank share Additional information Erste Bank share vs ATX and DJ Euro Stoxx Index since 1.1.2002 Erste Bank ATX DJ STOXX FY 2002 (Preliminary) Results 43 24 March 2003
Slide 44: Current shareholder structure
> Current shareholder structure Additional information Total number of shares: 59,825,114 By Investor Type By Region Free float AVS Others 64.4% 35.6% 0.1% Continental Europe 12.6% UK & Ireland 11.6% North America 12.1% Employees Institutional investors 1.4% Austria 47.3% 63.7% Private investors Sav
Slide 45: Investor relations contacts
> Investor relations contacts Erste Bank, Graben 21, 1010 Vienna Fax: +43-(0) 50100-13112 E-mail: investor.relations@erstebank.at Internet: www.erstebank.at Reuters: ERST.VI Bloomberg: DESC AV Datastream: O:ERS Securities ID: 065201 Investor relations Gabriele Werzer Tel: +43 (0) 50100-11286 E-Mail: