Erste Group Bank Ag · VIE:EBS
Erste Group Bank — H1 2019 Earnings Presentation
22 slides from Erste Group Bank's earnings presentation, Jul 31, 2019
Slide 1: H1 2019 results presentation
ERSTESS Group H1 2019 results presentation
Slide 2: Business environment: Growth in CEE to remain above euro area average
Business environment Growth in CEE to remain clearly above euro area average | Summary > Erste Group's core CEE markets expected to grow by ca. 3-4% in 2019, well above euro area average > Domestic demand is expected to remain the main driver of economic growth 2019f @ 2020f Source: Erste Group Rese
Slide 3: Changing of the guard in the periphery
Changing of the guard in the periphery CEE has what the Western periphery lacks: High level of competitiveness and a location close to the key industrial centers Z HU RO SK Burgenland West Wales Andalusia Calabria * Purchasing Power Parity ERSTES Group GDP per capita (PPP*, % of EU avg) 90 o ———————
Slide 4: Central and Eastern Europe is on track for convergence
Central and Eastern Europe is on track for convergence A sustainable growth trend has replaced the bonanza-like atmosphere in the pre- and post-crisis eras Annual rate of convergence (Average in %-points) Cumulated convergence (in %-points) 3.2 25.2 27 26 213 7 18 142 14 aot ia 122 12 13 13 99 09 78
Slide 5: What counts in the long run
What counts in the long run: The growth bonus of the region as a whole is back! Real GDP growth: Divergence from EU-28 average (in %-points) 29 25 21 17 o7 15 13 24 1 10 os os 06 oF On ee: De -03 21 18 14 13 a u 12 12 os o1 o1 00 o1 -01 03 al ul 2 16 2009 2010, «20k 2012 2018, 2014 2015 «| 2016 «= 2
Slide 6: What's especially important for us
What's especially important for us: Developments since 2008 show that the formula “convergence = lower poverty and greater prosperity” applies fully D, | Summary > Across all of our markets, the share of the population at risk of poverty has declined significantly > Inparticular, Hungary, Croatia an
Slide 7: Bond market: yields at record low
Bond market: yields at record low Negative interest rates remain a challenge German bund yields and ECB deposit rate (in %) 2013 2014 2015 2016 2017 2018 2019 German bund yields @ ECB deposit rate Source: Bloomberg, ECB ERSTES Group
Slide 8: Interest rate environment
Interest rate environment Interrest rate environment remains challanging, despite hikes in some markets Austria 0.73 —— Led 0.19 —_, 1-618 1-619 119 219 > ECB cut discount rate to zero in March 2016 > Maintains expansionary monetary policy stance, despite tapering announcement Slovakia O.81 0.65 ow
Slide 9: Solid net profit despite one-off effect in Romania
Business performance Solid net profit despite one-off effect in Romania Qo0 net profit reconcilation (EUR mn) Q119 Operating Operating Riskcosts Other Taxeson Minorities Q219 income expenses result income ERSTES Group YoY net profit reconciliation (EUR mn) 77% 0 Le 1/618) Speretng: Operating Rikcart
Slide 10: Solid growth in customer loans and deposits
Business performance Solid growth in customer loans (+7.3% YoY) and deposits (+8.2% YoY) Customer loans (net; EUR bn) Customer deposits (EUR bn) Loan-Deposit ratio (%) ih man 140 3 vp ml 1028 a8 Group e 1552 P 169.7 0; 318 Pry 313 AT/EBOe —— ————————— ESSE 7 424 8 asa AT/SB —_—<—— __<_<_< ik | — 3 6
Slide 11: Operating revenues up on all major components
Business performance Operating revenues up on all major components Operating revenues (EUR mn) —— 6.5% | 3,593 ——_-—— 170 980 3,374 73 1-6 18 1-6 19 Net interest income @ Net trading result © Netfee and commission income @ Other income ERSTES Group Operating expenses (EUR mn) — +3.3% —aA. 2,076 2,14
Slide 12: Operating result rises 11.5% YoY
Business performance Operating result rises 11.5% YoY Operating result (EUR mn) Group =/- = naar AT/EBOe 190 AT/SB 288 (74 = ws RO r an 149 SK I 160 HU a 108 HR 98 1-6 18 © 1-619
Slide 13: Cost/Income ratio improves to below 60%
Business performance Cost/Income ratio improves to below 60% Cost/Income ratio (in %) Group 597 AT/EBOe ho 53 AT/SB 74 @Z 467 RO : set SK 465 HU 505 HR mn 53.4 RS — 781 1-6 18 @ 1-619 ERSTES Group B
Slide 14: Excellent capital generation over the past decade
Business performance Excellent capital generation over the past decade DEC 2010 DEC 2011 DEC 2012 DEC 2013 DEC 2014 DEC 2015, DEC 2016 DEC 2017 DEC 2018 JUN 2019 ERSTES Group 4
Slide 15: Risk costs: Net releases in most geographies
Business performance Risk costs: Net releases in most geographies Absolute* (EUR mn) Relative (in %) | Summary Group Sil =; eames > Continuation of healthy asset quality resulting in net releases AT/EBOe Sails | baad So in most geographies > Ri i AT/SB at on| —— remain at historic low @Z me 21 074 0
Slide 16: NPL ratio improves further to 2.8%
Business performance NPL ratio improves further to 2.8% NPL volume (EUR mn) NPL ratio (%) NPL coverage (excl. collateral; %) Group 7) — ee aS 704 AT/EBOe 00 1s I ony AT/SB aot a2 ‘co az {os ven RO pt 55. “002 SK ts fea I a HU or 30. I aa HR =e al iiss RS 20 s Biss DECEMBER 18 @ JUNE19 ERSTES Group
Slide 17: Solid growth in corporate lending and income, active cap. markets role
Business performance Solid growth in corporate lending and income, active cap. markets role TOTAL GROSS LOANS H1 2019 Corporates and Markets Highlights SME GROWTH EUR 53.8 bn rise by 6% since end-2018 CAPITAL MARKETS: ADVANCING ROLE IN REGION - 3,500 new SME clients - Growth in income +6% and loan v
Slide 18: Retail lending volume rises by 7.1% YoY on net basis
Business performance Retail lending volume rises by 7.1% YoY on net basis Retail Highlights for H1 2019 MORTGAGES RETAIL DEPOSITS EUR 45.7 bn ¢} EUR 117 bn & Volume rises by 8.9% YoY Volume grows by 9.1% YoY CONSUMER LENDING ASSET MANAGEMENT © py: EUR 12.8bn & EUR 61.1 bn <n Volume decreases by 9.8%
Slide 19: Customers love digital innovation
Customers love digital innovation Nearly 5 million George users; Erste launches Apple Pay in 4 markets
Slide 20: Customers love digital innovation
Customers love digital innovation Nearly 5 million George users; Erste launches Apple Pay in 4 markets > George is the leading pan-European banking platform, onboarding over 5,000 users a day + George is open to partners thanks to APIs and modular architecture > Strong client uptake for Apple Pay co
Slide 21: Outlook 2019
Outlook 2019 The outlook is based on a solid macroeconomic development in our markets. Real GDP growth is forecast to come around 3-4% in CEE core markets and about 2% in Austria, again driven primarily by robust domestic demand. In CEE, economic activity should be supported by real wage growth and
Slide 22: ERSTES
ERSTES Group