Erste Group Bank Ag · VIE:EBS
Erste Group Bank — H1 2023 Earnings Presentation
22 slides from Erste Group Bank's earnings presentation, Jul 31, 2023
Slide 1: Half-year results 2023
PRESS CONFERENCE, 31 JULY 2023 Half-year results 2023 Willi Cernko, Chief Executive Officer Stefan Dörfler, Chief Financial Officer Alexandra Habeler-Drabek, Chief Risk Officer Ingo Bleier, Chief Corporates & Markets Officer
Slide 2: GDP growth in 2022: A strong starting base
GDP growth in 2022: A strong starting base +2.5% +1.7% +4.9% +4.6% +4.7% +6.2% eurozone +3.5% +2.3% Erste region Ø +4.0% Source: Erste Group Research 2
Slide 3: GDP forecast for 2023: Growth – but significantly lower
GDP forecast for 2023: Growth – but significantly lower +0.2% +1.5% +0.6% +0.5% +2.1% +2.6% eurozone +0.5% +1.6% Erste region Ø +1.0% Source: Erste Group Research 3
Slide 4: GDP forecast for 2024: CEE back to solid growth
GDP forecast for 2024: CEE back to solid growth +2.8% +2.5% +1.6% +4.1% +4.2% +2.6% eurozone +1.3% +3.8% Erste region Ø +2.9% Source: Erste Group Research 4
Slide 5: Budget deficits: Significant improvements expected in 2024
Budget deficits: Significant improvements expected in 2024 IN % OF GDP eurozone Ø 2022 2023e 2024e Maastricht criteria 2022: -3.6% 2023e: -3.2% 2024e: -2.4% AT CZ SK HU RO HR RS 0.4 -0.8 -1.6 -2.0 -2.2 -2.8 -2.8 -3.0 -3.2 -3.2 -3.2 -3.4 -3.5 -3.6 -4.0 -4.0 -4.2 -4.7 -5.5 -6.2 -6.2 Source: Erste Grou
Slide 6: Public debt levels declining in CEE
Public debt levels declining in CEE IN % OF GDP eurozone Ø 2022 2023e 2024e Maastricht criteria 2022: 93.2% 2023e: 90.8% 78 2024e: 89.9% 77 75 73 70 69 68 64 62 58 58 56 55 53 53 47 47 46 44 45 45 AT CZ SK HU RO HR RS Source: Erste Group Research 6
Slide 7: Inflation dynamics: Cooling-off phase in sight
Inflation dynamics: Cooling-off phase in sight IN % eurozone Ø 2022 2023e 2024e 2022: 8.4% 2023e: 5.6% 18.6 2024e: 2.8% 15.1 14.5 13.7 13.3 12.8 12.0 11.9 10.7 10.8 10.4 8.6 7.4 7.0 6.8 6.7 6.2 5.3 3.9 3.5 2.6 AT CZ SK HU RO HR RS Source: Erste Group Research 7
Slide 8: Central banks in CEE: Early hikes in key interest rates
Central banks in CEE: Early hikes in key interest rates IN % Czechia Hungary Romania Serbia Eurozone 14 12 10 8 6 4 2 0 1 01 1 01 1 1 1 01 1 01 -0 7- -0 7- -0 -0 -0 7- -0 7- -01 -0 -01 0 -01 -07 -01 0 -01 0 19 19 20 2 0- 21 21 22 2 2- 23 2 3- 20 20 20 20 20 20 20 20 20 20 Source: Erste Group Researc
Slide 9: Unemployment rates: Stable at a low level
Unemployment rates: Stable at a low level IN % 2022 2023e 2024e 9.4 9.3 9.0 7.0 6.9 6.6 6.3 6.3 6.1 5.8 5.7 5.6 4.8 4.6 4.5 3.9 3.6 3.5 3.4 2.9 2.4 AT CZ SK HU RO HR RS Source: Erste Group Research 9
Slide 10: Risk costs continue to be low
Risk costs continue to be low Risk costs Crisis-induced performing risk provisions In basis points of gross customer loans In EUR mn Macro Covid Ukraine 928 909 78 773 734 56 15 15 9 9 117 2 41 -4 -3 2015 2016 2017 2018* 2019 2020 2021 2022 H1 2018 2019 2020 2021 2022 H1 2023* 2023 *Net release of r
Slide 11: NPL ratio remains at historically low level
NPL ratio remains at historically low level IN % NPL ratio NPL coverage ratio 94.6 96.7 2.0 2.0 Dec 2022 June 2023 Dec 2022 June 2023 11
Slide 12: Operating income rises significantly
Operating income rises significantly IN EUR MN +24.5% 5,161 Net interest income Net fee and commission income Net trading result and gains/losses from financial instruments at FVPL 4,147 Other income 3,561 2,837 1,275 1,215 207 -16 111 119 H1 2022 H1 2023 12
Slide 13: Operating expenses: Higher due to inflationary pressures
Operating expenses: Higher due to inflationary pressures IN EUR MN +8.2% Personnel expenses 2,472 Other administrative expenses 2,285 Depreciation and amortisation 1,459 1,295 718 738 273 275 H1 2022 H1 2023 13
Slide 14: Subdued loan demand as deposits rise
Subdued loan demand as deposits rise Loan demand Deposits Loan-deposit-ratio in EUR bn in EUR bn in % +7.6% 241.1 +1.4% 224.0 202.1 204.9 90.2 85.0 Dec 2022 June 2023 Dec 2022 June 2023 Dec 2022 June 2023 14
Slide 15: Strong net result thanks to solid operating performance
Strong net result thanks to solid operating performance IN EUR MN +31.0% 187 3 477 1,014 1,490 1,137 H1 2022 Operating Operating Risk costs* Taxes and H1 2023 income expenses Other result *Net release of risk provisions 15
Slide 16: Capitalization: Strong basis for financing the economy
Capitalization: Strong basis for financing the economy CET1 RATIO IN % (CRR, FINAL) 14.9 14.5 14.2 14.2 13.5 13.7 12.8 12.9 12.0 11.2 11.4 10.6 9.2 9.4 8.3 Dec 09 Dec 10 Dec 11 Dec 12 Dec 13 Dec 14 Dec 15 Dec 16 Dec 17 Dec 18 Dec 19 Dec 20 Dec 21 Dec 22 June 23 16
Slide 17: Corporates and Markets segment
Corporates and Markets segment Corporate loans Issuances Assets under Management Net loan stock Total volume in EUR bn in EUR bn in EUR bn of which: sustainable funds +12.0% +15.1% +9.2% 75.3 94.0 74.5 72.7 69.4 67.2 68.2 81.7 1 bn EUR of new green loans in H1 2023 13.4 15.0 16.2 June 2022 Dec 2022
Slide 18: George Business goes CEE
George Business goes CEE 🚀 Launched in Austria Very positive feedback 💛 from first users More than 47,000 users in 🤳 9,000 companies in Austria Roll-out phase in Romania and 🇷🇴 additional plans for the core markets 18
Slide 19: Retail segment
Retail segment Securities savings plans Housing loans New housing loans Stock, in quantities Stock volume Volume of new business in the quarter In EUR bn In EUR bn +18.3% +5.2% -60% 1,060,000 71.7 73.2 5.1 69.6 896,500 3.0 2.1 2.0 1.7 June 2022 June 2023 June 2022 Dec 2022 June 2023 Q2/22 Q3/22 Q4/2
Slide 20: Outlook 2023
Outlook 2023 Lending growth of around 5% on the back of slowly recovering demand Favourable risk environment, strong job market Risk costs below 10 basis points Planned dividend of EUR 2.70 for 2023 Financing the green transition in Europe remains a focus 20
Slide 21: It’s time to take the right path
For Europe's economy: It’s time to take the right path Strongly positioned banks Unbureaucratic access to Implementing the Capital to finance the economy EU and national funding Markets Union in Europe 21
Slide 22: Erste Group
ERSTES Group