Slide 1: Closing 2006 with a record performance
> Erste Bank – Closing 2006 with a record performance > 2006 Preliminary Results > Analyst Presentation London, 1 March 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. FY 2006 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 cal
Slide 4: 2006 financial highlights
> 2006 financial highlights » Net profit up 30.1% to EUR 932.2m Earnings per share (cash) * » Up 26.2% to 904.8m excluding BCR contribution » Total assets up 19.0% to EUR 181.7bn 3.5 3.14 2.98 3.0 3.10 » Tier 1 ratio at 6.6% 2.5 2.18 » After closing of BCR acquisition in Oct 2006 1.83 in EUR 2.0 1.4
Slide 5: 2006 operating highlights
> 2006 operating highlights Expanding the footprint » Successful EUR 2.9bn capital increase to fund acquisition Q1 2006 of BCR Q2 2006 » New management team appointed at Erste Bank Serbia to speed up transformation process » Outlook for 2008 confirmed Q3 2006 » Closing of BCR transaction in October
Slide 6: 2006 divisional highlights
> 2006 divisional highlights Strong growth momentum even Operating result per segment before consolidation of BCR in EUR million 2006 2005 Change Austria Austria 984.0 922.6 6.6% Savings Banks 406.0 394.7 2.9% » Improved operating performance supported by strong Retail & Mortgage segment in Q4 Retai
Slide 7: Update on BCR – Full year 2006 results (IFRS)
> Update on BCR – Full year 2006 results (IFRS) Banca Comercial@ Român@ (post restructuring costs) * in EUR million 2006 2005 Change Net interest income 478.3 398.5 20.0% Risk provisions for loans and advances (44.7) (29.0) 54.1% Net commission income 160.7 152.3 5.5% Net trading result 74.6 60.8 22
Slide 8: Update on BCR
> Update on BCR 2006 Full year local results * » BCR Group net profit increases by 16.4% to EUR 214.5m » Includes restructuring and revaluation expenses of EUR 39.7m » Excluding restructuring costs, net profit up by 38% to EUR 254.2m » Operating result increases by 22.2% » Excluding restructuring co
Slide 9: Update on BCR – Integration progress
> Update on BCR – Integration progress Integration & Development Programme (IDP) Milestones » 40 key projects initiated – covering all business lines » Project teams are co-headed by specialists from BCR and Erste Bank Group » IDP Projects will be completed between end of 2007 to mid-2008 » Key prin
Slide 10: New Group Architecture (NGA) - Update
> New Group Architecture (NGA) - Update Delivering promised results » Group Procurement achieved 2008 savings targets in 2006 - » Goals for 2008 take account of planned investments and costs for new outsourcing project NGA projects 2005 2006 2008E Group Large Corporates EUR +43m EUR +55m New revenue
Slide 11: CS: Development of Net Profit
> ,S: Development of Net Profit Ieská spoKitelna Net profit development (CZK m) 11,000 10,385 9,134 9,000 8,137 7,615 7,000 5,805 5,000 3,000 1,798 1,000 41 1999 2000 2001 2002 2003 2004 2005 2006 -1,000 -3,000 -5,000 -7,000 -6,222 2006 Preliminary Results – London presentation 1 March 2007 11
Slide 12: CS: Group Profit & Loss Statement
> ,S: Group Profit & Loss Statement IFRS, Consolidated, CZK m 2006 2005 % change Net interest income 21,153 18,575 13.9 Provisions on losses on loans and advances -1,487 -386 285.2 Net fee and commission income 9,170 8,565 7.1 Net profit/(loss) on financial operations 1,561 1,474 5.9 General adminis
Slide 13: CS: Loan Structure and Development
> ,S: Loan Structure and Development Bank Loans to Customers / Segment Overview CZK bn » Loan growth in the Bank is generated 300 +CZK 36.2 bn 296.5 mainly by Retail customers 275 260.3 » Retail up by record CZK 39.7 bn 250 (CZK 35.1 bn in 2005) 225 » Corporate (up by CZK 8.5 bn) are 200 172.0 132.3
Slide 14: CS: Total Client Funds under CS Group Management
> ,S: Total Client Funds under CS Group Management » Client funds under CS Group management increased by CZK 56.0 bn (10.1%) in 2006 to CZK 611.0 bn » Almost 30% of client funds are managed by CS subsidiaries » Building society (SSCS) gathered CZK 87.1 bn of client funds (14.2% of total funds) repre
Slide 15: Presentation topics
> Presentation topics 1. FY 2006 highlights 2. Financial statements 3. Divisional information 4. Asset quality 5. Outlook and targets 6. Appendix 2006 Preliminary Results – London presentation 1 March 2007 15
Slide 16: Group income statement (IFRS)
> Group income statement (IFRS) Strong, well balanced operating performance Excluding BCR in EUR million 2006 2005 Change 2006 Change Net interest income 3,189.3 2,794.2 14.1% 3,058.3 9.4% Risk provisions for loans and advances (439.1) (421.6) 4.2% (430.9) 2.2% Net commission income 1,445.9 1,256.8
Slide 17: Group balance sheet (IFRS) – Assets
> Group balance sheet (IFRS) Assets – retail lending continues to drive growth Excluding BCR* in EUR million Dec 06 Dec 05 Change Dec 06 Change Cash and balances with central banks 7,378 2,728 >100.0% 3,375 23.7% Loans and advances to credit institutions 16,616 16,858 (1.4%) 17,001 0.8% Loans and ad
Slide 18: Group balance sheet (IFRS) – Liabilities
> Group balance sheet (IFRS) Liabilities – rising interest rates drive increase in deposits Excluding BCR* in EUR million Dec 06 Dec 05 Change Dec 06 Change Amounts owed to credit institutions 37,688 33,911 11.1% 31,427 (7.3%) Amounts owed to customers 90,849 72,793 24.8% 83,581 14.8% Debts evidence
Slide 19: Presentation topics
> Presentation topics 1. FY 2006 highlights 2. Financial statements 3. Divisional information 4. Asset quality 5. Outlook and targets 6. Appendix 2006 Preliminary Results – London presentation 1 March 2007 19
Slide 20: Divisional figures – Core segments
> Divisional figures – Core segments* Profits grow throughout the region Austria CEE Int'l Business Corp. Center Total in EUR million 2006 2005 2006 2005 2006 2005 2006 2005 2006 2005 Net interest income 1,592.9 1,583.9 1,444.3 1,104.6 149.0 149.6 3.2 (43.9) 3,189.3 2,794.2 Risk provisions (312.7) (
Slide 21: Core Segment Austria
> Core Segment Austria Austria – Strong overall performance Savings Banks Retail & Mortgage Large Corporates Trading & IB Austria in EUR million 2006 2005 2006 2005 2006 2005 2006 2005 2006 2005 Net interest income 839.7 841.2 537.3 524.6 147.6 140.2 68.3 78.0 1,592.9 1,583.9 Risk provisions (171.3)
Slide 22: Savings Banks
> Savings Banks 2006 highlights » Operating result increases by 2.9% yoy as tight Savings Banks 2006 2005 Change cost control offsets margin pressure Operating income 1,230.1 1,219.9 0.8% » NII down slightly - 0.2% yoy Operating expenses (824.2) (825.2) (0.1%) » Strong Q3 06 result not repeated in Q
Slide 23: Retail and Mortgage
> Retail and Mortgage 2006 highlights » Retail Austria – net profit increases by 19.1% yoy Retail & Mortgage 2006 2005 Change » Driven by very positive operating performance +10.1% Operating income 900.9 878.1 2.6% (very strong Q4 06 + 34% qoq) » Branches – net profit up 39.0% yoy Operating expenses
Slide 24: Retail and Mortgage - details
> Retail and Mortgage - details R & M Austria – ROE goals for 2006 exceeded Operating profit (EUR m) Net profit (EUR m) 106.0 95.0 2005 2006 2005 2006 69.9 61.7 48.7 39.8 39.7 37.4 32.0 35.0 31.8 26.3 27.4 27.3 25.6 23.6 15.5 13.5 4.4 2.7 Branches SME Own SBs Mortgage Subsidiaries Branches SME Own S
Slide 25: Large Corporates
> Large Corporates 2006 highlights » Net profit up strongly by 55.3% Large Corporates 2006 2005 Change » Supported by strong operating performance (+14.5%) and Operating income 251.6 223.8 12.4% revaluation gains in OOR » NII increases by 5.3% Operating expenses (97.6) (89.4) 9.2% » Strong improveme
Slide 26: Trading & Investment Banking
> Trading & Investment Banking 2006 highlights » Net profit contribution improves by 21.0% Trading & IB 2006 2005 Change » Supported by sustained robust commission income and Operating income 246.5 233.4 5.6% very strong trading performance in Q1 06 Operating expenses (102.3) (94.1) 8.7% » NII decli
Slide 27: Core segment – Central and Eastern Europe (CEE)
> Core segment – Central and Eastern Europe (CEE) Strong operating performance across the board Czech Republic Romania Slovakia Hungary Croatia Serbia in EUR million 2006 2005 2006 2005 2006 2005 2006 2005 2006 2005 2006 2005 Net interest income 705.6 583.5 127.8 0.0 239.5 197.3 251.2 219.0 111.1 10
Slide 28: Czech Republic
> Czech Republic 2006 highlights » Net profit contribution up 26.3% yoy (19.9%)* Segment contribution 2006 2005 Change » Driven by strong operating result +28.9% (22.3%) Operating income 1,100.1 927.7 18.6% » NII increases by 20.9% yoy (14.8%) » Supported by rising interest rates Operating expenses
Slide 29: Romania
> Romania 2006 highlights » BCR consolidated since 12 October 2006 Segment contribution 2006 2005 Change Operating income 195.3 0.0 nm » Q4 2006 segment contribution includes: » Restructuring costs of EUR 14m for severance payments, Operating expenses (107.6) 0.0 nm early retirement and consultancy
Slide 30: Slovakia
> Slovakia 2006 highlights » Net profit contribution up 20.9% (16.4%)* Segment contribution 2006 2005 Change supported by strong NII Operating income 343.2 294.7 16.5% » NII up 21.4% (16.7%) despite maturity of high yield bonds in Jan 2006 Operating expenses (185.0) (167.3) 10.6% » Based on sustaine
Slide 31: Erste Bank Hungary
> Erste Bank Hungary 2006 highlights » Net profit contribution up 9.1% (15.6%)* Segment contribution 2006 2005 Change » Driven by a substantial increase in operating result - up Operating income 374.9 318.4 17.8% 26.7% (+34.3%) » Negative impact of higher tax rate in H2 06 Operating expenses (206.9)
Slide 32: Erste Bank Croatia
> Erste Bank Croatia 2006 highlights » Net profit contribution up by 22.5% * Segment contribution 2006 2005 Change » Despite substantial marginal reserve requirements on Operating income 160.6 145.6 10.3% assets and liabilities Operating expenses (84.5) (75.3) 12.3% » NII increases by 9.0% » Support
Slide 33: Erste Bank Serbia
> Erste Bank Serbia 2006 highlights » Restructuring year leads to negative contribution Segment contribution 2006 2005 Change of EUR 21.1m* Operating income 12.7 6.5 94.0% » Increase in risk provisions to bring levels in line with EB Group standards Operating expenses (30.3) (10.7) >100.0% » Severan
Slide 34: Core segments – Int'l Business and Corp. Center
> Core segments – Int’l Business and Corp. Center Int’l Business – 2006 highlights Corporate Center – 2006 highlights » Net profit up by 6.7% supported by sustained » NII supported by interest for nine months on positive asset quality and strong increase in capital increase commission income » Fundi
Slide 35: Presentation topics
> Presentation topics 1. FY 2006 highlights 2. Financial statements 3. Divisional information 4. Asset quality 5. Outlook and targets 6. Appendix 2006 Preliminary Results – London presentation 1 March 2007 35
Slide 36: Group asset quality
> Group asset quality1 Stable versus FY 2005 Low risk Mgmt attention Substandard Non-performing Total exposure Risk provisions NPL coverage Dec 06 Dec 05 Dec 06 Dec 05 Dec 06 Dec 05 Dec 06 Dec 05 Dec 06 Dec 05 Dec 06 Dec 05 Dec 06 Dec 05 Austria 81,200 75,544 10,119 12,267 1,875 2,431 3,370 3,275 96
Slide 37: Presentation topics
> Presentation topics 1. FY 2006 highlights 2. Financial statements 3. Divisional information 4. Asset quality 5. Outlook and targets 6. Appendix 2006 Preliminary Results – London presentation 1 March 2007 37
Slide 38: Erste Bank outlook and targets
> Erste Bank outlook and targets Outlook 2007 Net profit of EB Group expected to increase by at least 25% » Based on generally positive outlook for CEE subsidiaries and Austria Mid term Group targets confirmed Net profit(1) growth More than 20% p.a. average until 2009 Cost/income ratio Below 55% in
Slide 39: Presentation topics
> Presentation topics 1. FY 2006 highlights 2. Financial statements 3. Divisional information 4. Asset quality 5. Outlook and targets 6. Appendix 2006 Preliminary Results – London presentation 1 March 2007 39
Slide 40: Overview of international exposures
> Overview of international exposures Credit risk by regions* Low risk Mgmt attention Substandard Non-performing Total exposure in EUR million Dec 06 Dec 05 Dec 06 Dec 05 Dec 06 Dec 05 Dec 06 Dec 05 Dec 06 Dec 05 Share of total Share of total Core market 104,573 89,322 15,901 12,890 2,791 2,826 4,02
Slide 41: 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 Dec 06 Dec 05 Dec 06 Dec 05 Dec 06 Dec 05 Dec 06 Dec 05 Dec 06 Dec 05 Share of total Share of total Agriculture and forestry 805 639 684 453
Slide 42: Summary financials of CEE subsidiaries
> Summary financials of CEE subsidiaries Results (IFRS) as reported by local entities* 97.99% 69.15% 100.00% in EUR million 2006 2005 Change 2006 2005 Change 2006 2005 Change Net profit after minorities 366.7 322.5 13.7% 214.5 184.3 16.4% 103.9 96.1 8.1% ROE based on net profit 23.0% 22.3% 18.8% 17.
Slide 43: Financials (IFRS) of CEE subsidiaries
> Financials (IFRS) of CEE subsidiaries Ieská spoKitelna * in EUR million 2006 2005 Change Net interest income 746.9 655.8 13.9% Risk provisions for loans and advances (52.5) (13.6) >100.0% Net commission income 323.8 302.4 7.1% Net trading result 55.1 52.0 6.0% General administrative expenses (612.
Slide 44: Financials (IFRS) of CEE subsidiaries (cont)
> Financials (IFRS) of CEE subsidiaries (cont) Slovenská sporiteUVa * in EUR million 2006 2005 Change Net interest income 238.2 212.2 12.3% Risk provisions for loans and advances (16.5) (11.6) 42.2% Net commission income 82.8 85.7 (3.4%) Net trading result 20.9 15.5 34.8% General administrative expe
Slide 45: Financials (IFRS) of CEE subsidiaries (cont)
> Financials (IFRS) of CEE subsidiaries (cont) Erste Bank Hungary * in EUR million 2006 2005 Change Net interest income 255.1 211.6 20.6% Risk provisions for loans and advances (34.2) (24.5) 39.6% Net commission income 88.4 61.2 44.4% Net trading result 33.9 32.6 4.0% General administrative expenses
Slide 46: Financials (IFRS) of CEE subsidiaries (cont)
> Financials (IFRS) of CEE subsidiaries (cont) Erste Bank Croatia * in EUR million 2006 2005 Change Net interest income 117.0 107.8 8.5% Risk provisions for loans and advances (12.3) (14.5) (15.2%) Net commission income 29.7 23.6 25.8% Net trading result 19.8 20.7 (4.3%) General administrative expen
Slide 47: Financials (IFRS) of CEE subsidiaries (cont)
> Financials (IFRS) of CEE subsidiaries (cont) Erste Bank Serbia * in EUR million 2006 2005 Change Net interest income 9.6 8.6 11.6% Risk provisions for loans and advances (10.7) (10.0) 7.0% Net commission income 4.3 4.1 4.9% Net trading result (0.8) 6.4 nm General administrative expenses (30.3) (16
Slide 48: EB Group – quarterly income statement (IFRS)
> EB Group – quarterly income statement (IFRS) in EUR million Q1 05 Q2 05 Q3 05 Q4 05 Q1 06 Q2 06 Q3 06 Q4 06 Net interest income 672.7 696.8 694.0 730.7 724.0 757.8 779.7 927.9 Net commission income 311.1 305.9 304.9 334.9 342.2 355.5 338.8 409.4 Net trading result 57.2 48.0 66.4 70.1 91.2 45.0 51.
Slide 49: EB Group – quarterly balance sheet (IFRS)
> EB Group – quarterly balance sheet (IFRS) in EUR million Mar 05 Jun 05 Sep 05 Dec 05 Mar 06 Jun 06 Sep 06 Dec 06 Cash and balances with central banks 2,505 2,463 2,906 2,728 2,787 2,658 2,355 7,378 Loans and advances to credit institutions 19,545 19,840 20,058 16,858 18,604 19,890 18,307 16,616 Lo
Slide 50: EB Group quarterly segment reporting – overview
> EB Group quarterly segment reporting – overview in EUR million Austria Central and Eastern Europe Q4 05 Q1 06 Q2 06 Q3 06 Q4 06 Q4 05 Q1 06 Q2 06 Q3 06 Q4 06 Net interest income 403.1 382.8 383.7 411.2 415.2 292.5 304.2 323.7 319.7 496.8 Risk provisions (83.9) (80.4) (78.5) (93.3) (60.6) (28.2) (2
Slide 51: EB Group quarterly segment reporting – Austria
> EB Group quarterly segment reporting – Austria in EUR million Savings Banks Retail & Mortgage Q4 05 Q1 06 Q2 06 Q3 06 Q4 06 Q4 05 Q1 06 Q2 06 Q3 06 Q4 06 Net interest income 217.4 201.1 198.4 222.5 217.6 131.0 133.8 132.0 133.6 137.9 Risk provisions (70.7) (44.1) (43.1) (46.1) (38.0) (25.3) (24.5)
Slide 52: EB Group – quarterly segment reporting – CEE 1
> EB Group – quarterly segment reporting – CEE 1 in EUR million Czech Republic Romania Q4 05 Q1 06 Q2 06 Q3 06 Q4 06 Q4 05 Q1 06 Q2 06 Q3 06 Q4 06 Net interest income 157.0 168.1 176.7 170.9 189.9 0.0 0.0 0.0 0.0 127.8 Risk provisions (13.8) (10.8) (11.3) (10.4) (20.0) 0.0 0.0 0.0 0.0 (8.2) Net comm
Slide 53: EB Group – quarterly segment reporting – CEE 2
> EB Group – quarterly segment reporting – CEE 2 in EUR million Croatia Serbia Q4 05 Q1 06 Q2 06 Q3 06 Q4 06 Q4 05 Q1 06 Q2 06 Q3 06 Q4 06 Net interest income 20.0 28.0 26.8 25.7 30.7 1.8 1.3 1.8 2.4 3.7 Risk provisions (6.1) (2.6) (4.7) (3.0) (2.0) (3.2) (1.4) 0.3 (0.5) (1.7) Net commission income
Slide 54: Group capital adequacy
> Group capital adequacy Tier 1 and solvency ratios remain at comfortable levels in EUR million 1998 1999 2000 2001 2002 2003 2004 2005 2006 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 Total own funds pursuant to § Austrian Banking Act 1 3,
Slide 55: Current shareholder structure
> Current shareholder structure Total number of shares: 315,296,185 (Dec 2006) Austria Verein By investor Capital Research and Mgmt. 4.9% By DIE region ERSTE 5.0% österreichische Spar-Casse Privatstiftung Others 30.6% 2.5% Continental Europe 14.4% Institutional investors Employees UK & Ireland 41.8%
Slide 56: 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