Erste Group Bank Ag · VIE:EBS
Erste Group Bank — Erste Bank — Q1 2004 Earnings Presentation
40 slides from Erste Group Bank's earnings presentation, May 10, 2004
Slide 1: Erste Bank – a record start with the promise of more to come
> Erste Bank – a record start with the promise of more to come > Q1 2004 Results > Teleconference Prague, 10 May 2004
Slide 2: Table of Contents
> Table of Contents Hosts Presentation Appendix Andreas Treichl, CEO 03 Important information on 27 Overview of International Q1 reporting Exposures Reinhard Ortner, CFO 29 Q1 04 Financials of CE 05 Q1 04 Financial Highlights – Group Key Ratios Subsidiaries Gabriele Werzer, IRO 06 Key Figures of EB
Slide 3: Important information on Q1 reporting
> Important information on Q1 reporting Q1 04 net profit not impacted by one-off items » Early application of IFRS 3 (mandatory from Jan 2005) » Replacement of linear depreciation by annual impairment of goodwill » Various one-off items influence Q1 04 P&L of EB Group » Pre-tax profit includes extra
Slide 4: Important information on Q1 reporting (2)
> Important information on Q1 reporting (2) Impact of one-offs on net profit after tax and minorities EUR m Valuation gain from sale of insurance Goodwill +52 +25 Net profit contribution +3 0 -28 -20 -53 Tax provision Impairment Q1 2004 Results 10 May 2004 4
Slide 5: Q1 2004 – Financial highlights
> Q1 2004 – Financial highlights Erste Bank Group - Key ratios » Net profit increases by 37.5% to EUR 104.2m » No material effect by one-off items on bottom line » Cash ROE 14.6% » Following 13.7% at YE 2003 1 » Further improvement of CIR to 63.8% from 64.2% at YE 2003 » Revenues increase by 10.5% a
Slide 6: Key figures of EB subsidiaries in Central Europe
> Key figures of EB subsidiaries in Central Europe Q1 2004 Results (IFRS) as reported by local entities 1 2 EB stake 97.9% 80.1% 99.6% 68.5% Q1 04 Q1 03 Q1 04 Q1 03 Q1 04 3 Q1 03 Q1 04 Q1 03 Net Profit (EUR m) 85.8 56.8 18.9 24.2 8.3 0.8 14.9 8.6 ROE (%) 31.4 23.6 19.4 30.1 19.9 13.9 24.4 17.4 Cost
Slide 7: Q1 2004 Group Results
> Q1 2004 Group Results > Group Income Statement Group Balance Sheet P&L Details Divisional Figures
Slide 8: Q1 04 EB Group Income Statement (IFRS)
> Q1 04 EB Group Income Statement (IFRS) 1 EUR m Q1 2004 Q1 2003 % Change Net interest income 656.9 617.6 6.4 Risk provisions for loans and advances (108.2) (97.2) 11.3 Net commission income 281.4 228.9 22.9 Net trading result 62.4 60.1 3.8 General administrative expenses (642.3) (605.1) 6.1 Result
Slide 9: Q1 04 EB Group Balance Sheet (IFRS) – Assets
> Q1 04 EB Group Balance Sheet (IFRS) Assets EUR m 31.3.2004 31.12.2003 % Change Cash and balances with central banks 2,204 2,549 (13.5) Loans and advances to credit institutions 18,514 13,140 40.9 Loans and advances to customers 69,045 67,766 1.9 Risk provisions for loans and advances (2,847) (2,77
Slide 10: Q1 04 EB Group Balance Sheet (IFRS) – Liabilities
> Q1 04 EB Group Balance Sheet (IFRS) Liabilities EUR m 31.3.2004 31.12.2003 % Change Amounts owed to credit institutions 28,842 25,704 12.2 Amounts owed to customers 67,361 64,839 3.9 Debts evidenced by certificates 17,733 16,944 4.7 Provisions 6,622 6,366 4.0 Other liabilities 6,093 5,515 10.5 Sub
Slide 11: P&L Details – Net interest income
> P & L Details – Net interest income NII improvement driven by Czech and Hungarian subsidiaries » Group NIM 1 almost unchanged at 2.25% » Austria: NII up 0.7% Other » Improvement in Savings Banks segment (up 3.6%) compensates 2.4% CE reduction in Retail & Real Estate. Large Corporates up slightly (
Slide 12: P&L Details – Risk provisions
> P & L Details – Risk provisions Increase in CE provisions after 2 years of net releases » NPL coverage improves to 71.1% » Austria: increase by EUR 4m (4.6%) to EUR 90.4m Other » Due to EUR 3.6m increase at Savings Banks segment (+8%) CE Austria » CE subsidiaries: Net new provisions up EUR 8.6m CS
Slide 13: P&L Details – Net commission income
> P & L Details Net commission income Q1 2004 increase helped by recovery of securities business » Group commission improves strongly by 22.9% to EUR 281.4m » Austria: up 23.8% yoy Other » Supported by very strong SB segment (+27.3%) but also improvement in CE Retail (+6%) and Large Corporate segmen
Slide 14: P&L Details – Net trading result
> P & L Details Net trading result CE performance more than compensates decrease in Austria » Net trading result up slightly (3.9%) on excellent Q1 2003 Other » Austria: down EUR 4m (10.3%) against strongest 2003 quarter CE to EUR 37.4m Austria » FX trading has a slight positive contribution to trad
Slide 15: P&L Details – General administrative expenses
> P & L Details General administrative expenses Cost increase centers on Postabank consolidation » Group expenses increase moderately by 6.1% to EUR 642.2m » Adjusted for Postabank: up only 2.7% Other » Austria (inc. Int’l Business and Corporate Center): Expenses CE increase by 1.4% Austria » Person
Slide 16: P&L Details – Other operating results
> P & L Details Other operating results Q1 2004 one-offs allocated to other operating result » No more linear amortisation of goodwill (EUR 25m per quarter) Other » One-off EUR 80m impairment charge for Austrian goodwill CE » Increased contribution to deposit insurance at CS and SLSP Austria » Impro
Slide 17: Q1 2004 EB Group Divisional Figures – Overview
> Q1 2004 EB Group Divisional Figures Overview Austria CE Subsidiaries Int. Business Corp. Center TOTAL EB GROUP In EUR m Q1 2004 Q1 2003 Q1 2004 Q1 2003 Q1 2004 Q1 2003 Q1 2004 Q1 2003 Q1 2004 Q1 2003 Net interest income 398.3 395.5 225.5 193.9 35.3 31.2 (2.2) (3.0) 656.9 617.6 Risk provisions for
Slide 18: Divisional Figures – Details Austria
> Q1 2004 EB Group Divisional Figures Details - Austria Savings banks Retail & Real Est. Large Corp. Trading & Inv.B. TOTAL AUSTRIA In EUR m Q1 2004 Q1 2003 Q1 2004 Q1 2003 Q1 2004 Q1 2003 Q1 2004 Q1 2003 Q1 2004 Q1 2003 Net interest income 210.2 202.8 125.9 128.9 37.2 36.6 25.0 27.2 398.3 395.5 Ris
Slide 19: Divisional Figures – Details Central Europe
> Q1 2004 EB Group Divisional Figures Details - Central Europe CS SLSP EB Hungary 3 Croatia TOTAL CE In EUR m Q1 2004 Q1 2003 Q1 2004 Q1 2003 Q1 2004 Q1 2003 Q1 2004 Q1 2003 Q1 2004 Q1 2003 Net interest income 121.5 113.3 45.5 51.4 38.7 12.4 19.8 16.8 225.5 193.9 Risk provisions for loans and adv. (
Slide 20: Business update and outlook
> Business update and outlook > Asset quality Business update Outlook and Targets
Slide 21: Q1 2004 - Asset quality at EB Group
> Q1 2004 - Asset quality at EB Group Development at EB Group (including SBs) » Slight (1.2%) increase in NPLs at EB Group from EUR 4,038m at YE 2003 to EUR 4,085m » EB Croatia: driven by technical migration (change of rating system by National Bank) NPLs increase by EUR 72m » NPLs down in Austria b
Slide 22: Asset quality – Credit risk by segments, NPL coverage
> Q1 2004 - Asset quality at EB Group Credit risk by segments – NPL coverage ratios Total Outstanding 1 EUR m Low Risk Management Sub- Non- Total NPL’s Risk NPL Attention standard perfoming Provisions Coverage Austria Total 69,161 11,956 3,586 3,452 87,155 3,452 2,157 62.5% CE Total 25,205 1,086 288
Slide 23: Q1 2004 – Business update
> Q1 2004 – Business update Austrian retail initiatives progressing Split of Retail & Real Estate segment Retail branches: » 14 branches closed in Q1 2004 EUR m » Further 4 branches to be sold before end Q3 04 » Reduction of headcount and administrative Op. Profit expenses on track 42 Pre-tax Profit
Slide 24: Business update – Postabank integration
> Q1 2004 – Business update (cont) Postabank – update on integration process » Integration projects – key achievements to date » Headcount reduction – approx. 60% of 2004 target achieved – 414 employees out of targeted 670 lay-offs for 2004 » Branch network integration on track – 13 branches (out of
Slide 25: Outlook and targets
> Outlook and targets Guidance for 2004 » Application of IFRS 3 will increase net profit by EUR 75m in remaining three quarters of 2004 » Q1 04 positive effect offset by tax provisions » EB Group net profit after tax and minorities of at least EUR 500m within reach for 2004 » Outlook 2004 for CE sub
Slide 26: Appendix
> Appendix > Overview of international exposure Key financial data of CE subsidiaries Quarterly income statement Quarterly balance sheet Quarterly divisionals Key financial data Shareholder structure IR Contacts
Slide 27: Overview of international exposures
> Overview of international exposures Credit Risk1 by regions at EB Group Low Risk Management Substandard Non performing Total outstanding attention in EUR m Q1 2004 FY 2003 Q1 2004 FY 2003 Q1 2004 FY 2003 Q1 2004 FY 2003 Q1 2004 FY 2003 share in % share in % Austria 47,089 46,558 9,475 9,111 3,386
Slide 28: Overview of international exposures (cont)
> Overview of international exposures (cont) Credit Risk1 by industry sectors at EB Group Low Risk Management Substandard Non performing Total outstanding attention in EUR m Q1 2004 FY 2003 Q1 2004 FY 2003 Q1 2004 FY 2003 Q1 2004 FY 2003 Q1 2004 FY 2003 share in % share in % Banking & insurance 43,9
Slide 29: Financials of CE subsidiaries – Ceská sporitelna Group
> Q1 2004 Financials (IFRS) of CE subsidiaries Ceská sporitelna Group EUR m Q1 2004 Q1 2003 % Change Net interest income 127.9 120.0 6.6 Risk provisions for loans and advances (9.4) 9.1 > 100.0 Net commission income 61.8 59.2 4.4 Net trading result 11.5 9.4 22.3 General administrative expenses (118.
Slide 30: Slovenská sporitelna Group
> Q1 2004 Financials (IFRS) of CE subsidiaries (cont) Slovenská sporitelna Group EUR m Q1 2004 Q1 2003 % Change Net interest income 47.7 53.1 (10.2) Risk provisions for loans and advances 0.1 0.0 - Net commission income 15.0 10.4 44.2 Net trading result 3.0 2.4 25.0 General administrative expenses (
Slide 31: Erste Bank Hungary Group & Postabank Group
> Q1 2004 Financials (IFRS) of CE subsidiaries (cont) Erste Bank Hungary Group & Postabank Group 1 2 EUR m Q1 2004 Q1 2003 % Change Net interest income 44.1 37.0 19.2 Risk provisions for loans and advances (9.5) (1.2) > 100.0 Net commission income 11.5 8.4 36.9 Net trading result 7.7 5.3 45.3 Genera
Slide 32: Erste Bank Croatia
> Q1 2004 Financials (IFRS) of CE subsidiaries (cont) Erste Bank Croatia EUR m Q1 2004 Q1 2003 % Change Net interest income 21.5 18.7 15.0 Risk provisions for loans and advances 5.0 (2.9) > (100.0) Net commission income 3.3 2.4 37.5 Net trading result 4.5 4.1 9.8 General administrative expenses (14.
Slide 33: EB Group Quarterly Results (IFRS)
> EB Group Quarterly Results (IFRS) P&L Details EUR m Q1'01 Q2'01 Q3'01 Q4'01 Q1'02 Q2'02 Q3'02 Q4´02 Q1'03 Q2'03 Q3'03 Q4'03 Q1'04 Net interest income 313 357 389 380 585 634 616 628 618 673 645 652 657 Risk provisions (48) (45) (55) (56) (89) (94) (89) (134) (97) (109) (93) (108) (108) Net commiss
Slide 34: EB Group Quarterly Balance Sheet (IFRS)
> EB Group Quarterly Balance Sheet (IFRS) Balance Sheet Details EUR m Q4'01 Q1'02 Q2'02 Q3'02 Q4´02 Q1'03 Q2'03 Q3'03 Q4'03 Q1'04 Total assets 86,033 117,684 121,068 124,797 121,222 125,081 129,153 130,481 128,575 136,091 Loans & advances credit inst. 21,485 21,372 21,175 23,117 18,673 19,185 20,867
Slide 35: EB Group Quarterly Divisionals – Austria Details
> EB Group Quarterly Divisionals Austria - Details In EUR m Savings Banks Retail & Real Estate Q3 02 Q4 02 Q1 03 Q2 03 Q3 03 Q4 03 Q1 04 Q3 02 Q4 02 Q1 03 Q2 03 Q3 03 Q4 03 Q1 04 Net interest income 222.3 224.9 202.8 220.5 202.6 215.4 210.2 130.1 135.0 128.9 130.3 135.5 126.9 125.9 Risk provisions (
Slide 36: EB Group Quarterly Divisionals – Central Europe Details
> EB Group Quarterly Divisionals Central Europe - Details In EUR m Ceska sporitelna Slovenska sporitelna Q3 02 Q4 02 Q1 03 Q2 03 Q3 03 Q4 03 Q1 04 Q3 02 Q4 02 Q1 03 Q2 03 Q3 03 Q4 03 Q1 04 Net interest income 113.6 116.2 113.3 116.9 111.6 119.1 121.5 36.8 47.8 51.4 70.7 57.2 55.4 45.5 Risk provision
Slide 37: EB Group Quarterly Divisionals – Overview
> EB Group Quarterly Divisionals Overview In EUR m International Business Corporate Center Q3 02 Q4 02 Q1 03 Q2 03 Q3 03 Q4 03 Q1 04 Q3 02 Q4 02 Q1 03 Q2 03 Q3 03 Q4 03 Q1 04 Net interest income 34.3 31.5 31.2 41.9 35.4 38.3 35.3 (5.1) (8.1) (3.0) 2.8 (12.2) 0.4 (2.2) Risk provisions (15.2) (17.3) (
Slide 38: Key financial data
> Preliminary 2003 Results Key financial data in EUR m YE 1998 YE 1999 YE 2000 YE 2001 YE 2002 YE 2003 Q1 2004 Tier 1 Capital pursuant to § Austrian Banking Act 1,611 1,753 2,125 2,337 3,800 3,912 4,224 Total own funds pursuant to § Austrian Banking Act 3,176 3,296 3,956 4,308 6,983 7,146 7,391 Risk
Slide 39: Current shareholder structure
> Current shareholder structure Total numbers of shares: 59,943,808 By Investor Type Free Float (59.9%) split by Region Austria Verein Others 6.1% 1.2% Private investors Continental Europe Austria 34.0% 34.7% 8.3% 11.0% Employees UK & Ireland 1.7% 28.2% Institutional investors 42.9% Savings banks No
Slide 40: Investor relations contacts
> Investor relations contacts Erste Bank, Graben 21, 1010 Vienna Fax +43 (0)5 0100-13112 E-mail: investor.relations@erstebank.at Internet: www.erstebank.com Reuters: ERST.VI Bloomberg: EBS AV Datastream: O:ERS Securities ID: 065201 Investor relations Gabriele Werzer Tel: +43 (0)5 0100-11286 E-Mail: