Slide 1: Erste Bank – Integrating new markets, Q1 2007 Results
> Erste Bank – Integrating new markets > Q1 2007 Results > Teleconference Vienna, 30 April 2007 > Andreas Treichl, CEO Reinhard Ortner, CFO
Slide 2: Disclaimer
> 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 CORRECTN
Slide 3: Presentation topics
> Presentation topics 1. Q1 07 highlights 2. Financial statements 3. Divisional information 4. Asset quality 5. Outlook and targets 6. Appendix NB • According to revised IAS 19 (Employee Benefits), actuarial profits and losses can now be charged against equity without affecting net income when calcu
Slide 4: Q1 07 financial highlights
> Q1 07 financial highlights » Net profit up 25.1% to EUR 302.1m Cash earnings per share * » Up 9.7% to EUR 265.0m excluding BCR contribution 1.2 » Total assets up 4.9% to EUR 190.6bn 1.00 1.0 0.84 » Tier 1 ratio improves to 6.8% (YE 06: 6.6%) 0.97 0.8 0.67 »Adoption of Basel II regulations leads to
Slide 5: Q1 07 operating highlights
> Q1 07 operating highlights BCR integration progressing well » Local management board strengthened by expert from EB Group » Manfred Wimmer, head of group strategic development to coordinate integration at board level » Integration and development programme has strong focus on reorganisation of ret
Slide 6: Q1 07 divisional highlights
> Q1 07 divisional highlights Sustained growth of operating result Operating result per segment * in EUR million 1-3 07 1-3 06 Change Austria Austria 292.4 255.8 14.3% » Strongly growing R&M results drive increase Savings Banks 102.3 98.6 3.7% in Austria Retail & Mortgage 82.3 71.4 15.4% CEE segment
Slide 7: Update on BCR
> Update on BCR Q1 07 financial highlights * » Net profit of BCR Group up 9.6% on pro-rata Q1 06 » EUR 62.0m profit includes restructuring costs of EUR 13.0m – EUR 4m in operating expenses, EUR 9m in risk provisions » NII increases by 6.7% » Margin pressure continues in Q1 2007 – Margin compression
Slide 8: Update on BCR (cont)
> Update on BCR (cont) BCR Q1 2007 (IFRS) results (post restructuring costs) * in EUR million 1-3 07 1-3 06 Change Net interest income 123.9 116.1 6.7% Risk provisions for loans and advances (14.5) (8.7) 65.8% Net fee and commission income 45.3 38.0 19.3% Net trading result 20.0 17.7 13.0% General a
Slide 9: Update on BCR – integration milestones
> Update on BCR – integration milestones Main emphasis on retail operations Retail loan development at BCR » Framework for sales-oriented incentive 12 scheme in place since Feb 07 8.0 7.8 in RON billion » Quarterly performance monitoring 8 7.3 6.5 » First indications of increasing productivity 5.5 »
Slide 10: Update on BCR – Outlook 2007
> Update on BCR – Outlook 2007 Erste Bank remains confident on full Romania - among EU growth leaders year outlook 6 10% 8.4% 7.7% » Benign outlook for Romanian economy 5 in EUR thousand 8% 4.9 » Continued strong GDP growth expected 4 5.2% 4.5 6% » 2007 year-end inflation expected at 3-5% 3 3.7 5.8%
Slide 11: Presentation topics
> Presentation topics 1. Q1 07 highlights 2. Financial statements 3. Divisional information 4. Asset quality 5. Outlook and targets 6. Appendix Q1 2007 Results 30 April 2007 11
Slide 12: Group income statement (IFRS)
> Group income statement (IFRS)* Solid, double-digit growth in operating income Excluding BCR in EUR million 1-3 07 1-3 06 Change 1-3 07 Change Net interest income 903.7 724.0 24.8% 779.7 7.7% Risk provisions for loans and advances (128.4) (109.1) 17.7% (122.9) 12.7% Net fee and commission income 43
Slide 13: Group balance sheet (IFRS) – Assets
> Group balance sheet (IFRS)* Assets – satisfactory growth from customer lending in EUR million Mar 07 Dec 06 Change Cash and balances with central banks 6,861 7,378 (7.0%) Loans and advances to credit institutions 20,877 16,616 25.6% Loans and advances to customers 100,468 97,107 3.5% Risk provisio
Slide 14: Group balance sheet (IFRS) – Liabilities
> Group balance sheet (IFRS)* Liabilities – deposits continue to rise at a fast rate in EUR million Mar 07 Dec 06 Change Amounts owed to credit institutions 38,038 37,688 0.9% Amounts owed to customers 94,956 90,849 4.5% Debt securities in issue 24,989 21,814 14.6% Trading liabilities 1,625 1,200 35
Slide 15: Presentation topics
> Presentation topics 1. Q1 07 highlights 2. Financial statements 3. Divisional information 4. Asset quality 5. Outlook and targets 6. Appendix Q1 2007 Results 30 April 2007 15
Slide 16: Divisional figures – core segments
> Divisional figures – core segments* Balanced growth throughout the home market Austria CEE Int'l Business Corp. Center Total in EUR million 1-3 07 1-3 06 1-3 07 1-3 06 1-3 07 1-3 06 1-3 07 1-3 06 1-3 07 1-3 06 Net interest income 398.9 382.8 473.5 304.2 36.6 34.4 (5.3) 2.7 903.7 724.0 Risk provisi
Slide 17: Core segment – Austria
> Core segment – Austria* Austria – strong performance of Retail & Mortgage segment Savings Banks Retail & Mortgage Large Corporates Treasury & IB Austria in EUR million 1-3 07 1-3 06 1-3 07 1-3 06 1-3 07 1-3 06 1-3 07 1-3 06 1-3 07 1-3 06 Net interest income 206.5 201.1 136.6 133.8 39.4 35.6 16.4 1
Slide 18: Savings Banks
> Savings Banks Q1 07 highlights » Operating result increases by 3.7% yoy Savings Banks 1-3 07 1-3 06 Change » Down 10% on strong Q4 2006 Operating income 313.5 305.4 2.6% » NII improves + 2.7% yoy on better volumes in core retail business Operating expenses (211.2) (206.8) 2.1% » But down qoq (-4.8
Slide 19: Retail and Mortgage
> Retail and Mortgage Q1 07 highlights » Retail Austria – net profit strongly up by 31.4% yoy Retail & Mortgage 1-3 07 1-3 06 Change » On excellent commission income growth and flat costs Operating income 240.8 230.5 4.5% » ROE positively impacted by move to Basel II: lower RWAs result in lower allo
Slide 20: Retail and Mortgage – details
> Retail and Mortgage – details R & M Austria – All subsegments contribute to excellent overall performance Operating profit (EUR m) Net profit (EUR m) 31.1 27.6 1-3 06 1-3 07 1-3 06 1-3 07 17.4 17.8 14.6 16.4 11.5 13.1 10.1 8.8 9.0 8.3 7.4 6.7 6.8 6.0 6.4 5.4 3.3 0.5 Branches SME Own SBs Mortgage S
Slide 21: Large Corporates
> Large Corporates Q1 07 highlights » Net profit declines 22.6% yoy Large Corporates 1-3 07 1-3 06 Change » On a very strong Q1 06 positively impacted by other result Operating income 63.5 57.6 10.3% » NII increases by 10.8% yoy to EUR 39.4m » Continued strong growth of CEE leasing business Operatin
Slide 22: Treasury & Investment Banking
> Treasury & Investment Banking Q1 07 highlights » Net profit contribution improves by 25.2% yoy Treasury & IB 1-3 07 1-3 06 Change » On a very strong trading performance in Q1 06 Operating income 96.3 75.7 27.1% » NII improves by 33.8% yoy to EUR 16.4m Operating expenses (27.7) (25.6) 8.2% » Excell
Slide 23: Core segment – Central and Eastern Europe (1)
> Core segment – Central and Eastern Europe (1)* Operating performance supported by strong growth in Slovakia Czech Republic Romania Slovakia Hungary in EUR million 1-3 07 1-3 06 1-3 07 1-3 06 1-3 07 1-3 06 1-3 07 1-3 06 Net interest income 191.8 168.1 119.4 0.0 71.9 50.6 51.3 56.2 Risk provisions (
Slide 24: Core segment – Central and Eastern Europe (2)
> Core segment – Central and Eastern Europe (2) Improved underlying performance in Croatia Croatia Serbia Ukraine CEE in EUR million 1-3 07 1-3 06 1-3 07 1-3 06 1-3 07 1-3 06 1-3 07 1-3 06 Net interest income 33.9 28.0 3.6 1.3 1.7 0.0 473.5 304.2 Risk provisions (2.4) (2.6) (0.6) (1.4) (0.7) 0.0 (43
Slide 25: Czech Republic
> Czech Republic Q1 07 highlights » Net profit contribution up 11.4% yoy (9.0%)* Czech Republic 1-3 07 1-3 06 Change » Driven by strong operating result +13.7% (11.4%) Operating income 295.6 266.6 10.9% » NII increases by 14.1% yoy (11.7%) » Interest income still benefiting from 2006 rate increases
Slide 26: Romania
> Romania Q1 07 highlights » BCR consolidated since 12 October 2006 Romania 1-3 07 1-3 06 Change » NII reaches EUR 119.4m Operating income 191.8 0.0 na » Difference to BCR local IFRS figures of EUR 123.9m due to effect from group equity allocation Operating expenses (108.4) 0.0 na » NIM on interest-
Slide 27: Slovakia
> Slovakia Q1 07 highlights » Net profit contribution up 35.4% (24%)* Slovakia 1-3 07 1-3 06 Change » Supported by strong NII Operating income 98.7 75.6 30.5% » NII strongly improves by 41.9% (30%) » Brisk volume growth of both assets and liabilities of 2006 Operating expenses (55.7) (45.3) 22.9% co
Slide 28: Erste Bank Hungary
> Erste Bank Hungary Q1 07 highlights » Net profit contribution down 24.5% (25.5%)* » Impacted by a number of one-off items in Q1 07 – not indicative Hungary 1-3 07 1-3 06 Change for future trend » Guidance of +15% net profit on local results confirmed (adjusted Operating income 91.0 79.9 14.0% for
Slide 29: Erste Bank Croatia
> Erste Bank Croatia Q1 07 highlights » Net profit contribution up by 74.0% * Croatia 1-3 07 1-3 06 Change » Helped by solid underlying business growth and other Operating income 46.9 37.0 26.6% result Operating expenses (22.7) (20.5) 10.9% » NII increases by 21.2% » Based on sound overall loan grow
Slide 30: Erste Bank Serbia
> Erste Bank Serbia Q1 07 highlights » Net profit contribution improves by EUR 4.1m, an Serbia 1-3 07 1-3 06 Change improvement of 80.6% (82.2%) Operating income 4.7 2.8 70.3% » Remains slightly negative » Comparison to 2006 affected by restructuring Operating expenses (6.6) (6.2) 7.5% process Opera
Slide 31: Core segments – Int'l Business and Corp. Center
> Core segments – Int’l Business and Corp. Center Int’l Business – Q1 07 highlights Corporate Center – Q1 07 highlights » Operating result improves year-on-year » NII declines yoy mainly due to positive impact from » Net profit down by 14.6% capital increase in Q1 06 » Exclusively due to deteriorati
Slide 32: Presentation topics
> Presentation topics 1. Q1 07 highlights 2. Financial statements 3. Divisional information 4. Asset quality 5. Outlook and targets 6. Appendix Q1 2007 Results 30 April 2007 32
Slide 33: Group asset quality
> Group asset quality1 NPL coverage continues to improve substantially Low risk Mgmt attention Substandard Non-performing Total exposure Risk provisions NPL coverage Mar 07 Dec 06 Mar 07 Dec 06 Mar 07 Dec 06 Mar 07 Dec 06 Mar 07 Dec 06 Mar 07 Dec 06 Mar 07 Dec 06 Austria 80,175 81,200 9,841 10,119 2
Slide 34: Presentation topics
> Presentation topics 1. Q1 07 highlights 2. Financial statements 3. Divisional information 4. Asset quality 5. Outlook and targets 6. Appendix Q1 2007 Results 30 April 2007 34
Slide 35: Erste Bank outlook and targets
> Erste Bank outlook and targets Outlook 2007 remains unchanged Group net profit expected to increase by at least 25% » Over full-year 2006 results of EUR 932m Mid-term group targets confirmed Net profit(1) growth More than 20% p.a. average until 2009 Cost/income ratio Below 55% in 2009 Return on eq
Slide 36: Presentation topics
> Presentation topics 1. Q1 07 highlights 2. Financial statements 3. Divisional information 4. Asset quality 5. Outlook and targets 6. Appendix Q1 2007 Results 30 April 2007 36
Slide 37: Overview of international exposures
> Overview of international exposures Credit risk by regions* Low risk Mgmt attention Substandard Non-performing Total exposure in EUR million Mar 07 Dec 06 Mar 07 Dec 06 Mar 07 Dec 06 Mar 07 Dec 06 Mar 07 Dec 06 Share of total Share of total Core market 103,029 104,573 16,690 15,901 3,466 2,791 4,0
Slide 38: Overview of international exposures (cont)
> Overview of international exposures (cont) Credit risk by industry sectors* Low risk Mgmt attention Substandard Non-performing Total exposure in EUR million Mar 07 Dec 06 Mar 07 Dec 06 Mar 07 Dec 06 Mar 07 Dec 06 Mar 07 Dec 06 Share of total Share of total Banking and insurance 54,938 51,423 1,839
Slide 39: Summary financials of CEE subsidiaries
> Summary financials of CEE subsidiaries Results (IFRS) as reported by local entities* 97.99% 69.15% 100.00% 99.94% in EUR million 1-3 07 1-3 06 Change 1-3 07 1-3 06 Change 1-3 07 1-3 06 Change 1-3 07 1-3 06 Change Net profit after minorities 97.2 89.5 8.7% 62.0 56.5 9.6% 31.7 26.4 20.5% 16.4 20.9 (
Slide 40: Financials (IFRS) of CEE subsidiaries – Česká spořitelna
> Financials (IFRS) of CEE subsidiaries Česká spořitelna * in EUR million 1-3 07 1-3 06 Change Net interest income 203.5 181.8 11.9% Risk provisions for loans and advances (14.3) (11.1) 29.7% Net fee and commission income 83.8 79.8 4.9% Net trading result 16.5 18.2 (9.3%) General administrative expe
Slide 41: Financials of CEE subsidiaries – Banca Comercială Română
> Financials (IFRS) of CEE subsidiaries (cont) Banca Comercială Română (post restructuring costs) * in EUR million 1-3 07 1-3 06 Change Net interest income 123.9 116.1 6.7% Risk provisions for loans and advances (14.5) (8.7) 65.8% Net fee and commission income 45.3 38.0 19.3% Net trading result 20.0
Slide 42: Financials of CEE subsidiaries – Slovenská sporiteľňa
> Financials (IFRS) of CEE subsidiaries (cont) Slovenská sporiteľňa * in EUR million 1-3 07 1-3 06 Change Net interest income 73.5 57.7 27.5% Risk provisions for loans and advances (7.8) (3.1) >100.0% Net fee and commission income 22.5 21.0 7.4% Net trading result 4.3 6.3 (31.7%) General administrat
Slide 43: Financials of CEE subsidiaries – Erste Bank Hungary
> Financials (IFRS) of CEE subsidiaries (cont) Erste Bank Hungary * in EUR million 1-3 07 1-3 06 Change Net interest income 53.1 58.0 (8.3%) Risk provisions for loans and advances (11.8) (6.5) 81.6% Net fee and commission income 29.5 12.8 >100.0% Net trading result 10.2 11.1 (8.2%) General administr
Slide 44: Financials of CEE subsidiaries – Erste Bank Croatia
> Financials (IFRS) of CEE subsidiaries (cont) Erste Bank Croatia * in EUR million 1-3 07 1-3 06 Change Net interest income 36.2 29.3 23.8% Risk provisions for loans and advances (2.4) (2.6) (5.5%) Net fee and commission income 10.2 6.1 67.4% Net trading result 2.8 2.9 (4.6%) General administrative
Slide 45: Financials of CEE subsidiaries – Erste Bank Serbia
> Financials (IFRS) of CEE subsidiaries (cont) Erste Bank Serbia * in EUR million 1-3 07 1-3 06 Change Net interest income 4.0 1.4 >100.0% Risk provisions for loans and advances (0.6) (1.6) (60.4%) Net fee and commission income 0.9 1.2 (28.4%) Net trading result 0.2 0.4 (45.3%) General administrativ
Slide 46: Financials of CEE subsidiaries – Erste Bank Ukraine
> Financials (IFRS) of CEE subsidiaries (cont) Erste Bank Ukraine * in EUR million 1-3 07 1-3 06 Change Net interest income 2.6 1.2 >100.0% Risk provisions for loans and advances (0.6) (0.2) >100.0% Net fee and commission income 0.1 0.0 >100.0% Net trading result 1.1 0.0 >100.0% General administrati
Slide 47: EB Group – quarterly income statement (IFRS)
> EB Group – quarterly income statement (IFRS) in EUR million Q2 05 Q3 05 Q4 05 Q1 06 Q2 06 Q3 06 Q4 06 Q1 07 Net interest income 696.8 694.0 730.7 724.0 757.8 779.7 927.8 903.7 Net fee and commission income 305.9 304.9 334.9 342.2 355.5 338.8 409.4 438.9 Net trading result 48.0 66.4 70.1 91.2 45.0
Slide 48: EB Group – quarterly balance sheet (IFRS)
> EB Group – quarterly balance sheet (IFRS) in EUR million Jun 05 Sep 05 Dec 05 Mar 06 Jun 06 Sep 06 Dec 06 Mar 07 Cash and balances with central banks 2,463 2,906 2,728 2,787 2,658 2,355 7,378 6,861 Loans and advances to credit institutions 19,840 20,058 16,858 18,604 19,890 18,307 16,616 20,877 Lo
Slide 49: EB Group quarterly segment reporting – overview
> EB Group quarterly segment reporting – overview in EUR million Austria Central and Eastern Europe Q1 06 Q2 06 Q3 06 Q4 06 Q1 07 Q1 06 Q2 06 Q3 06 Q4 06 Q1 07 Net interest income 382.8 383.7 411.2 415.2 398.9 304.2 323.7 319.7 496.8 473.5 Risk provisions (80.4) (78.5) (93.3) (60.6) (80.0) (24.1) (2
Slide 50: EB Group quarterly segment reporting – Austria
> EB Group quarterly segment reporting – Austria in EUR million Savings Banks Retail & Mortgage Q1 06 Q2 06 Q3 06 Q4 06 Q1 07 Q1 06 Q2 06 Q3 06 Q4 06 Q1 07 Net interest income 201.1 198.4 222.5 217.6 206.5 133.8 132.0 133.6 137.9 136.6 Risk provisions (44.1) (43.1) (46.1) (38.0) (43.1) (24.5) (24.4)
Slide 51: EB Group quarterly segment reporting – CEE 1
> EB Group – quarterly segment reporting – CEE 1 in EUR million Czech Republic Romania Q1 06 Q2 06 Q3 06 Q4 06 Q1 07 Q1 06 Q2 06 Q3 06 Q4 06 Q1 07 Net interest income 168.1 176.7 170.9 189.9 191.8 0.0 0.0 0.0 127.8 119.4 Risk provisions (10.8) (11.3) (10.4) (20.0) (14.3) 0.0 0.0 0.0 (8.2) (5.4) Net
Slide 52: EB Group quarterly segment reporting – CEE 2
> EB Group – quarterly segment reporting – CEE 2 in EUR million Croatia Serbia Q1 06 Q2 06 Q3 06 Q4 06 Q1 07 Q1 06 Q2 06 Q3 06 Q4 06 Q1 07 Net interest income 28.0 26.8 25.7 30.7 33.9 1.3 1.8 2.4 3.7 3.6 Risk provisions (2.6) (4.7) (3.0) (2.0) (2.4) (1.4) 0.3 (0.5) (1.7) (0.6) Net fee and commission
Slide 53: Group capital adequacy
> Group capital adequacy* Tier 1 and solvency ratios remain within the target ranges in EUR million 1998 1999 2000 2001 2002 2003 2004 2005 2006 Mar 07 Tier 1 Capital pursuant to § Austrian Banking Act 1,611 1,753 2,125 2,337 3,800 3,912 4,377 5,112 6,185 5,996 Total own funds pursuant to 1 § Austri
Slide 54: Current shareholder structure
> Current shareholder structure Total number of shares: 315,296,185 (Dec 2006) By investor By region Austria Verein Others Capital Research 4.9% 2.5% DIE ERSTE Continental Europe and Mgmt. österreichische 14.4% 5.0% Spar-Casse Privatstiftung 30.6% UK & Ireland 14.0% Austria 53.1% Institutional inves
Slide 55: 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 ISIN: AT0000652011 Investor relations Gabriele Werzer Tel: +43 (0)5 0100-11286 E-Mail: gab