Erste Group Bank Ag · VIE:EBS
Erste Group Bank — Erste Bank — FY2004 Earnings Presentation
45 slides from Erste Group Bank's earnings presentation, Mar 14, 2005
Slide 1: Erste Bank - continuing the profit growth: Full Year 2004 Results
> Erste Bank - continuing the profit growth > Full Year 2004 (Preliminary) Results > Teleconference Vienna, 14 March 2005 > Andreas Treichl, CEO Reinhard Ortner, CFO Gabriele Werzer, IR
Slide 2: Presentation topics
> Presentation topics 1. FY 2004 Financial Highlights 2. FY 2004 (Preliminary) Financial Statements 3. Divisional Information 4. Asset quality 5. Outlook and Targets 6. Appendix YE 2004 (Preliminary) Results Teleconference 14 March 2005 2
Slide 3: FY 2004 – Financial highlights
> FY 2004 – Financial highlights » Net Profit + 54.1% to EUR 544.5m Cash EPS » Total Assets + 8.6% to EUR 139.7bn 2.28 » Tier 1 Ratio at 6.7% 1.83 1.45 1.23 1.31 » Cost/Income Ratio 63.4% 1.01 0.82 » ROE 18.0% » Proposed dividend for the year 2004: EUR 0.5 per share (+33.3%) 1998 1999 2000 2001 2002
Slide 4: FY 2004 – Operating performance per segment
> FY 2004 – Operating performance per segment Strong operating performance in CE despite 2003 one-off at SLSP EUR m YE 2004 YE 2003 % Change Austria 861.1 810.4 6.3 Savings banks 385.5 371.6 3.7 Retail & Mortgage 198.6 175.4 13.2 Retail Branches 82.7 70.4 17.4 SME 18.2 14.6 24.7 Own savings banks 45
Slide 5: Key figures of EB subsidiaries in Central Europe
> Key figures of EB subsidiaries in Central Europe Preliminary 2004 Results (IFRS) as reported by local entities 1 2 3 EB stake 97.97% 100.00% 99.90% 61.95% 2004 2003 +/-% 2004 2003 +/-% 2004 2003 +/-% 2004 2003 +/-% Net Profit (EUR m) 270.8 238.4 14% 80.9 68.1 19% 27.3 19.3 42% 38.6 30.4 27% ROE (%
Slide 6: Presentation Topics
> Presentation Topics 1. FY 2004 Financial Highlights 2. FY 2004 (Preliminary) Financial Statements 3. Divisional Information 4. Asset quality 5. Outlook and Targets 6. Appendix YE 2004 (Preliminary) Results Teleconference 14 March 2005 6
Slide 7: YE 04 Group Income Statement (IFRS)
> YE 04 Group Income Statement (IFRS) Core business growth underpins strong P&L EUR m YE 2004 1 YE 2003 2 % Change Net interest income 2,695.5 2,586.8 4.2 Risk provisions for loans and advances (406.2) (406.4) (0.1) Net commission income 1,141.1 996.6 14.5 Net trading result 216.5 214.6 0.9 General
Slide 8: YE 04 EB Group Balance Sheet (IFRS) – Assets
> YE 04 EB Group Balance Sheet (IFRS) Assets - loans and advances show strong increase group-wide EUR m 31.12.2004 31.12.2003 % Change Cash and balances with central banks 2,723 2,549 6.8 Loans and advances to credit institutions 15,513 13,140 18.1 Loans and advances to customers 72,722 67,766 7.3 R
Slide 9: YE 04 EB Group Balance Sheet (IFRS) – Liabilities
> YE 04 EB Group Balance Sheet (IFRS) Liabilities – tier 1 ratio strengthens to 6.7% EUR m 31.12.2004 31.12.2003 % Change Amounts owed to credit institutions 28,551 25,704 11.1 Amounts owed to customers 68,213 64,839 5.2 Debts evidenced by certificates 19,887 16,944 17.4 Provisions 7,328 6,366 15.1
Slide 10: Group P&L – Quarterly development of key line items
> Group P&L – Quarterly development of key line items » NII up 4.2% EURm Net Interest Income EURm Net Commission Income Group NIM at 2.21% 701.8 289.4 700 656.9 660.2 676.6 300 281.4 283.8 286.6 652.1 269.1 NIM YE 03 YE 04 600 250 % AUT 1.9% 1.8% 2004: + 4.2 5% 500 + 14. CS 3.6% 3.7% 200 2004: 400 S
Slide 11: YE 04 Other operating result
> YE 04 Other operating result Strong impact of one-off events Development in 2004 » Sale of non-life insurance in CZ in Q1 04 off-set In EUR m YE 2004 YE 2003 % chg by impairment of goodwill Amortisation of goodwill 0.0 (81.2) (100.0) Impairment of goodwill (80.0) 0.0 n.a. » Positive effects from r
Slide 12: Presentation Topics
> Presentation Topics 1. FY 2004 Financial Highlights 2. FY 2004 (Preliminary) Financial Statements 3. Divisional Information 4. Asset quality 5. Outlook and Targets 6. Appendix YE 2004 (Preliminary) Results Teleconference 14 March 2005 12
Slide 13: Preliminary 2004 Divisional Figures - Overview
> Preliminary 2004 Divisional Figures - Overview Austria CE Subsidiaries Int. Business Corp. Center TOTAL EB GROUP In EUR m YE 04 YE 03 YE 04 YE 03 YE 04 YE 03 YE 04 YE 03 YE 04 YE 03 Net interest income 1,607.9 1,622.8 950.9 829.4 150.8 146.8 (14.1) (12.1) 2,695.5 2,586.8 Risk provisions (341.3) (3
Slide 14: Preliminary 2004 Divisional Figures - Austria
> Preliminary 2004 Divisional Figures - Austria Savings banks Retail & Real Est. Large Corp. Trading & Inv.B. TOTAL AUSTRIA In EUR m YE 04 YE 03 YE 04 YE 03 YE 04 YE 03 YE 04 YE 03 YE 04 YE 03 Net interest income 849.6 841.3 516.1 521.8 139.9 147.7 102.4 112.1 1,607.9 1,622.8 Risk provisions (184.5)
Slide 15: Savings banks
> Savings banks FY 2004 Highlights Segment Savings banks YE 04 YE 03 % chg » Operating result improvement driven by decreasing expenses Operating Income 1,187.2 1,192.1 (0.4%) Operating Expenses (801.7) (820.5) (2.3%) » NII up 1% on slightly higher volumes compensating Operating Result 385.5 371.6 3
Slide 16: Retail and Mortgage business
> Retail and Mortgage business FY 2004 Highlights Segment Retail & Mortg YE 04 YE 03 % chg » Strong improvement of operating result (+13%) driven by successful cost reduction and improved Operating Income 833.4 828.4 0.6% commission income Operating Expenses (634.8) (653.0) (2.8%) » Branches - Opera
Slide 17: Large Corporates
> Large Corporates FY 2004 Highlights Segment Large Corp YE 04 YE 03 % chg » Operating result improvement (6.8%) yoy on a very strong Q4 03 Operating Income 212.2 202.3 4.9% » Supported by strong commission income Operating Expenses (83.0) (81.2) 2.1% Operating Result 129.3 121.1 6.8% » NII decline
Slide 18: Trading & Investment banking
> Trading & Investment banking FY 2004 Highlights Segment Trading & IB YE 04 YE 03 % chg » Operating result up 3.9% on very strong 2003 Operating Income 241.3 243.2 (0.8%) » NII decrease of 8.6% mainly due to interest rate Operating Expenses (93.5) (100.9) (7.4%) environment and FX hedging effect fo
Slide 19: Preliminary 2004 Divisional Figures – Central Europe
> Preliminary 2004 Divisional Figures – Central Europe CS SLSP EB Hungary 3 Croatia TOTAL CE In EUR m YE 04 YE 03 YE 04 YE 03 YE 04 YE 03 YE 04 YE 03 YE 04 YE 03 Net interest income 506.6 460.8 185.8 234.7 174.0 58.5 84.5 75.4 950.9 829.4 Risk provisions (15.8) 1.3 0.8 3.3 (30.0) (7.5) (4.9) (6.9) (
Slide 20: Česká spořitelna
> Česká spořitelna FY 2004 Highlights » Operating result improved by 13.5% supported by Segment contribution YE 04 YE 03 % chg stronger than expected NII and controlled cost Operating Income 824.6 761.4 8.3% growth Operating Expenses (498.5) (474.1) 5.2% » NII improved by nearly 10% on strong lendin
Slide 21: Slovenská sporiteľňa
> Slovenská sporitel’ňa FY 2004 Highlights Segment contribution YE 04 YE 03 % chg » Operating result decreased by 21.2% due to 9.6% reduction in operating income1 but supported by Operating Income 268.7 297.1 (9.6%) flat costs Operating Expenses (158.5) (157.3) 0.8% » NII declined by 20.8% Operating
Slide 22: Erste Bank Hungary
> Erste Bank Hungary FY 2004 Highlights Segment contribution YE 04 1 YE 03 % chg » EB Hungary substantially surpassed the targets set for 2004 Operating Income 257.9 99.0 >100% » Q4 04 showed very strong performance with net Operating Expenses (175.7) (69.3) >100% profit doubling from Q3 04 Operatin
Slide 23: Erste Bank Croatia
> Erste Bank Croatia FY 2004 Highlights Segment contribution YE 04 YE 03 % chg » Operating result strongly improved by 52.5% on 15.5% income growth and a cost reduction of 2.7% Operating Income 113.7 98.5 15.5% » NII improved by 12.1% on sound volume growth Operating Expenses (64.3) (66.1) (2.7%) bo
Slide 24: International business and Corporate center
> International business and Corporate center International business – Highlights Corporate Center - Highlights » Operating performance improved by 5.6% » Extraordinary items and consolidation effects have a strong impact in Q4 04 » NII increased by 2.7% despite pressure on margins » Commission inco
Slide 25: Presentation Topics
> Presentation Topics 1. FY 2004 Financial Highlights 2. FY 2004 (Preliminary) Financial Statements 3. Divisional Information 4. Asset quality 5. Outlook and Targets 6. Appendix YE 2004 (Preliminary) Results Teleconference 14 March 2005 25
Slide 26: Asset quality
> Asset quality Coverage ratio increases Mgmt Sub- Non- Risk NPL Low Risk Attention standard Perform. Total Prov‘s Coverage Austria Total 70,733 10,440 3,075 3,327 87,575 2,122 63.8% CE Total 27,642 1,306 331 483 29,761 573 118.6% Int'l Business 13,538 660 67 69 14,334 119 172.9% Corp. Centre 143 0
Slide 27: Presentation Topics
> Presentation Topics 1. FY 2004 Financial Highlights 2. FY 2004 (Preliminary) Financial Statements 3. Divisional Information 4. Asset quality 5. Outlook and Targets 6. Appendix YE 2004 (Preliminary) Results Teleconference 14 March 2005 27
Slide 28: Group Outlook and Targets
> Group Outlook and Targets Outlook 2005 » Current expectation for 2005 is for net profit of at least EUR 600m » More detailed outlook for the year will be presented with Q1 2005 results Target 2006 » Erste Bank is now confident of reaching EUR 750m net profit in 2006 » Resulting in a ROE of at leas
Slide 29: Extending the home market?
> Extending the home market? Moving from CE to CEE Priorities » Look at possible smaller acquisitions in Hungary » Grow organically in Croatia » Look for opportunities in Romania and Serbia Criteria » Following its successful expansion to date, Erste Bank is broadening the regional scope » Aiming to
Slide 30: Presentation Topics
> Presentation Topics 1. FY 2004 Financial Highlights 2. FY 2004 Financial Statements 3. Divisional Information 4. Asset quality 5. Outlook and Targets 6. Appendix YE 2004 (Preliminary) Results Teleconference 14 March 2005 30
Slide 31: Macro overview
> Macro overview 6.0 GDP Growth (%) 3 mth interest rates (%) 5.4 14 5.2 5.0 12 11.8 4.3 4.0 4.2 4.0 4.2 3.9 10 9.3 3.7 3.6 3.1 8 7.6 3.0 7.2 2.9 7.3 6 6.2 1.9 2.2 2.0 5.4 4.7 4 3.8 1.0 2.4 2.7 0.8 2.3 2.5 2 2.1 0.0 2003 2004e 2005e 0 2003 2004e 2005e Austria Czech Republic Slovak Republic Hungary Cr
Slide 32: Overview of international exposures
> Overview of international exposures 1 Credit Risk by regions at EB Group in EUR m FY 2004 FY 2003 FY 2004 FY 2003 FY 2004 FY 2003 FY 2004 FY 2003 FY 2004 FY 2003 % of total % of total Core Markets 79,450 71,435 10,891 10,875 3,310 3,806 3,614 3,704 97,264 73.8% 89,820 74.6% - Austria 49,446 46,545
Slide 33: Overview of international exposures (cont)
> Overview of international exposures (cont) Credit Risk1 by industry sectors at EB Group Low Risk Management Substandard Non- Total outstanding attention performing in EUR m FY 2004 FY 2003 FY 2004 FY 2003 FY 2004 FY 2003 FY 2004 FY 2003 FY 2004 FY 2003 % of total % of total Banking & insurance 42,
Slide 34: Preliminary 2004 Financials (IFRS) of CE subsidiaries
> Preliminary 2004 Financials (IFRS) of CE subsidiaries Česká spořitelna Group EUR m YE 2004 YE 2003 % Change Net interest income 536.1 487.9 9.9 Risk provisions for loans and advances (15.8) 61.7 >100,0 Net commission income 268.6 250.8 7.1 Net trading result 41.0 41.3 (0.7) General administrative
Slide 35: Preliminary 2004 Financials (IFRS) of CE subsidiaries (cont)
> Preliminary 2004 Financials (IFRS) of CE subsidiaries (cont) Slovenská sporiteľňa Group EUR m YE 2004 YE 2003 % Change Net interest income 194.6 249.0 (21.8) Risk provisions for loans and advances 0.8 3.4 76.5 Net commission income 66.4 53.0 25.3 Net trading result 16.5 10.6 55.7 General administr
Slide 36: Preliminary 2004 Financials (IFRS) of CE subsidiaries (cont)
> Preliminary 2004 Financials (IFRS) of CE subsidiaries (cont) Erste Bank Hungary Group EUR m YE 2004 YE 2003 1 % Change Net interest income 195.5 153.8 27.1 Risk provisions for loans and advances (50.2) (4.4) >100,0 Net commission income 52.6 37.7 39.5 Net trading result 31.3 20.4 53.4 General admi
Slide 37: FY 2004 Financials (IFRS) of CE subsidiaries (cont)
> FY 2004 Financials (IFRS) of CE subsidiaries (cont) Erste Bank Croatia EUR m YE 2004 YE 2003 % Change Net interest income 90.3 83.3 8.4 Risk provisions for loans and advances (4.9) (12.6) (61.1) Net commission income 16.7 12.6 32.5 Net trading result 12.6 11.2 12.5 General administrative expenses
Slide 38: EB Group Quarterly Results (IFRS)
> EB Group Quarterly Results (IFRS) P&L Details EUR m Q1'02 Q2'02 Q3'02 Q4´02 Q1'03 Q2'03 Q3'03 Q4'03 Q1'04 Q2'04 Q3'04 Q4'04 Net interest income 585 634 616 628 618 673 645 652 657 660 677 702 Net commission income 244 226 226 249 229 253 246 269 281 284 287 290 Net trading result 51 39 37 41 60 55
Slide 39: EB Group Quarterly Balance Sheet (IFRS)
> EB Group Quarterly Balance Sheet (IFRS) Balance Sheet Details EUR m Q1'03 Q2'03 Q3'03 Q4'03 Q1'04 Q2'04 Q3'04 Q4´04 Total assets 125,081 129,153 130,481 128,575 136,091 137,574 142,238 139,682 Loans & advances credit inst. 19,185 20,867 20,363 15,689 20,718 20,390 21,915 18,236 Loans & advances to
Slide 40: EB Group Quarterly Divisionals
> EB Group Quarterly Divisionals Overview In EUR m Total Austria Total CE Q1 03 Q2 03 Q3 03 Q4 03 Q1 04 Q2 04 Q3 04 Q4 04 Q1 03 Q2 03 Q3 03 Q4 03 Q1 04 Q2 04 Q3 04 Q4 04 Net interest income 395.5 405.6 419.0 402.5 398.3 394.6 398.7 416.4 193.9 222.2 202.4 210.9 225.5 230.3 233.2 261.8 Risk provision
Slide 41: EB Group Quarterly Divisionals - Austria Details
> EB Group Quarterly Divisionals Austria - Details In EUR m Savings Banks Retail & Mortgage Q1 03 Q2 03 Q3 03 Q4 03 Q1 04 Q2 04 Q3 04 Q4 04 Q1 03 Q2 03 Q3 03 Q4 03 Q1 04 Q2 04 Q3 04 Q4 04 Net interest income 202.8 220.5 202.6 215.4 210.2 199.4 208.5 231.5 128.9 130.3 135.5 126.9 125.9 131.1 127.0 13
Slide 42: EB Group Quarterly Divisionals - Central Europe Details
> EB Group Quarterly Divisionals Central Europe - Details In EUR m Ceska sporitelna Slovenska sporitlena Q1 03 Q2 03 Q3 03 Q4 03 Q1 04 Q2 04 Q3 04 Q4 04 Q1 03 Q2 03 Q3 03 Q4 03 Q1 04 Q2 04 Q3 04 Q4 04 Net interest income 113.3 116.9 111.6 119.1 121.5 121.8 124.1 139.2 51.4 70.7 57.2 55.4 45.5 47.0 4
Slide 43: Preliminary 2004 Results – Key financial data
> Preliminary 2004 Results Key financial data in EUR m YE 1998 YE 1999 YE 2000 YE 2001 YE 2002 YE 2003 YE 2004 Tier 1 Capital pursuant to § Austrian Banking Act 1,611 1,753 2,125 2,337 3,800 3,912 4,377 Total own funds pursuant to § Austrian Banking Act 3,176 3,296 3,956 4,308 6,983 7,146 7,451 Risk
Slide 44: Current shareholder structure
> Current shareholder structure Total numbers of shares: 241,442,892 By Investor Type By Region Austria Verein Others 6.0% Continental Europe 0.9% 32.5% 5.8% UK & Ireland 17.4% Employees 1.9% Savings banks North America Institutional investors 7.0% Austria Private 17.7% 45.6% 58.2% investors 7.0% Fr
Slide 45: 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: