Erste Group Bank Ag · VIE:EBS
Erste Group Bank — H1 2007 Earnings Presentation
35 slides from Erste Group Bank's earnings presentation, Jul 31, 2007
Slide 1: Balance sheet press conference Half Year 2007
Balance sheet press conference Half Year 2007
Slide 2: Erste Bank - Organisational structure
Erste Bank - Organisational structure By mid-2008: Two operating units (holding company and Erste Bank Österreich) in ONE legal unit “Erste Bank der oesterreichischen Sparkassen AG” Erste Bank der oesterreichischen Sparkassen AG Holding Commitee Austrian Commitee Group CFO/ COO/ GCIB GCM CRO CEO CFO
Slide 3: Holding (Erste Group): company organisation structure
Holding (Erste Group): company organisation structure CEO CFO/CPO CRO COO/CIO Group Division Group Division Group Board Head GCIB Head GCM Andreas Treichl Péter Kisbenedek Bernhard Spalt Herbert Juranek Johannes Kinský Franz Hochstrasser Group Develop- Group Performance Group Group Real Estate Group
Slide 4: Erste Bank Austria: company organisation structure
Erste Bank Austria: company organisation structure CEO CFO/Corporates Retail CRO Elisabeth Bleyleben-Koren Thomas Uher Peter Bosek Bernhard Spalt Savings banks Corporates Branches Austria Risk Management Infrastructure & Private Banking & Marketing Credit Restructuring Services Asset Management Bala
Slide 5: Emergence of a regional player
Emergence of a regional player Czech R – market entry: 2000 Slovakia – market entry: 2001 Hungary – market entry: 1997 Ukraine – market entry: 2007 Population: 10.2m Population: 5.4m Population: 10.1m Population: 47.0m GDP/capita: EUR 11,000 GDP/capita: EUR 8,100 GDP/capita: EUR 8,900 GDP/capita: 1,
Slide 6: Update on BCR
Update on BCR Half Year 2007 financial highlights *) » Net profit of BCR Group strongly improved by 21.6% on H1 06 » Net Interest Income improves substantially by 12.2% » Overall NIM for BCR improved to 5.3% (Q1 07 – 5.2%) » Loans to customers continued to grow strong strongly – up 14.3% ytd – Drive
Slide 7: Update on BCR – integration milestones
Update on BCR – integration milestones Integration and development programme – 35 projects in progress » Main emphasis on retail business » New business structure for retail, SME and corporate successfully implemented in July 07 » Opening of dedicated mortgage centers starting in Bucharest in August
Slide 8: Update on BCR – Outlook 2007
Update on BCR – Outlook 2007 Erste Bank confirms full year 2007 outlook » Loan growth fully in line with business plan expectations » Operating performance expected to accelerate in H2 2007 » Tangible benefits from integration projects implemented in H1 2007 » Leveraging BCR’s strong position in the
Slide 9: Update on EB Ukraine – Half Year Highlights 2007
Update on EB Ukraine – Half Year Highlights 2007 Development programme covering 12 specific projects in progress » EB Ukraine showed strong operating growth since beginning 2006 » 35 branches have been opened so far » Year-end number expected to reach 75 – 80 outlets » Branch network to be expanded
Slide 10: Strong lending growth (by region)
Strong lending growth (by region) Growth in Central Europe Rising demand for personal and residential loans leads to strong loan growth in Central Europe Moderate growth in Austria based on retail and residential volume increases Customer loans by region (in EUR m) + 7. 5% 104,389 97,107 31,881 36,2
Slide 11: Strong lending growth (by region)
Strong lending growth (by region) Growth in Central Europe Customer loans in Central Europe (in EUR m) 12.772 + 13.6% 36,224 11.974 31,881 593 9.563 117 9,563 7.748 7,748 3,500 3,091 5.190 5.392 5,392 5,190 4.404 3.761 3,761 4,404 3.091 3.500 11,974 12,772 593 117 CS SLSP EBH EBC BCR restl. CEE 31.1
Slide 12: Strong growth in deposits (by region)
Strong growth in deposits (by region) Growth in Central Europe Customer deposits by region (in EUR m) + 2.6% 93,235 90,849 39,216 42,686 51,633 50,549 31.12.2006 30.06.2007 Austria & other countries CEE *) *) Based on local figures July 31, 2007 12
Slide 13: Strong growth in deposits (by region)
Strong growth in deposits (by region) Growth in Central Europe Customer deposits in Central Europe (in EUR m) 21.184 19.556 + 8,8% 42.686 39.216 317 94 8.014 7.268 3.242 3.002 3.273 3.197 8.014 6.655 7.268 6.099 6.655 6.099 3.242 3.197 3.273 3.002 19.556 21.184 94 317 CS SLSP EBH EBC BCR restl. CEE
Slide 14: Financial highlights: 1-6 07
Financial highlights: 1-06 07 Cash earnings per share * » Consolidated net profit increased by 25.1% to EUR 566.0 million (2006: EUR 452.7m) » Total assets increased 8.6% to EUR 197.4 billion 1,89 2,0 1,54 » Core capital ratio: 6.4% (2006: 6.6%) 1,41 1,82 1,5 1,00 in EUR » Cash earnings per share re
Slide 15: Key figures at a glance
Key figures at a glance Change to HY 2006 HY 2007 Net interest income + 25.4% to EUR 1,857.5 million Net commission income + 26.8% to EUR 884.9 million Operating income + 28.4% to EUR 2,991.5 million General and administrative expenses + 28.0% to EUR 1,791.8 million Operating results + 28.8% to EUR
Slide 16: Key figures at a glance
Key figures at a glance Change to 31.12.2006 HY 2007 Total assets + 8.6 % to EUR 197.4 billion Customer loans +7.5 % to EUR 104.4 billion Customer deposits + 2.6 % to EUR 93.2 billion Core capital ratio 6.4 % 6.6 % July 31, 2007 16
Slide 17: Operating results – segmental level detail
Operating results – segmental level detail in EUR million 1-6 07 1-6 06 Chg. Austria 536.9 480.3 11.8% Joint liability scheme 200.6 182.5 9.9% Retail & residential 156.2 138.9 12.5% Own branches 56.5 52.9 6.7% SMEs 17.9 13.1 36.6% Own Savings Bank 34.6 32.2 7.5% Residential 21.3 17.7 20.2% Major cus
Slide 18: Operating result & consolidated net profit
Operating result & consolidated net profit in EUR m 1.400,0 % 1,199.7 8.8 1.200,0 +2 1.000,0 931.1 800,0 5 .1% 566.0 600,0 +2 452.6 400,0 200,0 0,0 Operating result Consolidated net profit Half Year 2006 Half Year 2007 July 31, 2007 18
Slide 19: Development in Central Europe
Development in Central Europe Local net earnings 1-6 2007 (IFRS) *) 97,99% 69,17% in EUR m 1-6 07 1-6 06 Vdg. 1-6 07 1-6 06 Vdg. Consolidated net profit 185,6 173,1 7,3% 139,7 115,1 21,4% Return on equity 21,0% 22,0% 21,2% 19,9% Cost/income ratio 52,8% 52,8% 54,0% 55,7% Jun 07 Dez 06 Vdg. Jun 07 Dez
Slide 20: Development in Central Europe
Development in Central Europe Local net earnings 1-6 2007 (IFRS)*) 100.00% 99.94% in EUR m 1-6 07 1-6 06 Chg. 1-6 07 1-6 06 Chg. Consolidated net profit 66.2 52.0 27.3% 38.9 42.8 -9.1% Return on equity 21.7% 18.9% 16.8% 25.2% Cost/income ratio 54.4% 57.4% 59.4% 55.4% Jun 07 Dec 06 Chg. Jun 07 Dec 06
Slide 21: Development in Central Europe
Development in Central Europe Local net earnings 1-6 2007 (IFRS)*) 65.03% 80.49% 100.00% in EUR m 1-6 07 1-6 06 Chg. 1-6 07 1-6 06 Chg. 1-6 07 1-6 06 Chg. Consolidated net profit 37.7 22.6 66.8% -1.8% -11.0% 84.0% -1.0% -0.1% >100.0% Return on equity 18.7% 18.1% na na na na Cost/income ratio 48.0% 5
Slide 22: Erste Bank Group Balance sheet & income statement Half Year 2007
Erste Bank Group Balance sheet & income statement Half Year 2007
Slide 23: Balance sheet
Balance sheet in EUR million ASSETS Jun 07 Dec 06 Chg. in % Loans and advances to credit institutions 21,405 16,616 28.8% Loans and advances to customers 104,389 97,107 7.5% Risk provisions -3,239 -3,133 3.4% Trading and financial assets 45,066 42,497 6.0% Other assets 29,732 28,616 3.9% Total asset
Slide 24: Balance sheet
Balance sheet in EUR million LIABILITIES AND SHAREHOLDERS‘ EQUITY Jun 07 Dec 06 Chg. in % Amounts owed to credit institutions 40,989 37,688 8.8% Amounts owed to customers 93,235 90,849 2.6% Debts evidenced by certificates 29,128 21,814 33.5% Other liabilities 17,149 15,238 12.5% Subordinated capital
Slide 25: 1-6 07 income statement according to IFRS
1-06 07 income statement according to IFRS in EUR million 1-6 07 1-6 06 Chg. Net interest income 1,857.5 1,481.8 25.4% Risk provisions for loans and advances -239.3 -218.3 9.6% Net commission income 884.9 697.7 26.8% Net trading result 219.6 136.2 61.2% General and administrative expenses -1,791.8 -
Slide 26: Divisional results – core segments
Divisional results – core segments Results increased in all core segments Cost/income ratio reduced in almost all segments Austria performs strongly CEE share increased substantially Operating results Net profit after tax and minorities 1,199.8 % +28.8 72.3 931.2 % 566.0 69.3 665.9 +25.0 452.7 49.3
Slide 27: Retail & residential – details
Retail & residential – details Retail and residential – positive trend continues Operating results Net profit 56,5 52,9 1-6 06 1-6 07 1-6 06 1-6 07 34,6 32,2 26,3 28,3 23,3 24,5 21,3 17,9 17,7 13,1 14,9 11,8 12,9 13,8 12,6 8,3 6,0 2,0 Branches SME Own SBs Mortgage Subsidiaries Branches SME Own SBs M
Slide 28: Segmental reporting
Segmental reporting Austria CEE Int. Business Corp. Center Total in EUR million 1-6 07 1-6 06 1-6 07 1-6 06 1-6 07 1-6 06 1-6 07 1-6 06 1-6 07 1-6 06 Net interest income 807.2 766.5 989.5 627.9 73.6 70.7 -12.8 16.8 1,857.5 1,481.8 Risk provisions -146.0 -158.8 -88.1 -52.2 -5.2 -7.4 0.0 0.2 -239.3 -2
Slide 29: Segmental reporting – Austria
Segmental reporting – Austria Joint liability Retail & Major Treasury & IB Austria scheme residential customers in EUR million 1-6 07 1-6 06 1-6 07 1-6 06 1-6 07 1-6 06 1-6 07 1-6 06 1-6 07 1-6 06 Net interest income 420.0 399.5 272.6 265.8 83.0 75.0 31.6 26.2 807.2 766.5 Risk provisions -82.5 -87.2
Slide 30: Segmental reporting – Central and Eastern Europe
Segmental reporting – Central and Eastern Europe Czech Republic Romania Slovakia Hungary in EUR million 1-6 07 1-6 06 1-6 07 1-6 06 1-6 07 1-6 06 1-6 07 1-6 06 Net interest income 387.0 344.8 256.1 0.0 145.5 107.9 116.1 117.4 Risk provisions -32.6 -22.1 -8.3 0.0 -16.3 -7.6 -22.1 -14.1 Net commission
Slide 31: Segmental reporting – Central and Eastern Europe
Segmental reporting – Central and Eastern Europe Croatia Serbia Ukraine CEE in EUR million 1-6 07 1-6 06 1-6 07 1-6 06 1-6 07 1-6 06 1-6 07 1-6 06 Net interest income 74.2 54.7 7.0 3.1 3.6 0.0 989.5 627.9 Risk provisions -5.9 -7.3 -0.3 -1.1 -2.5 0.0 -88.1 -52.2 Net commission income 28.0 13.1 2.2 2.
Slide 32: Share price development: Erste Bank, DJ Euro Stoxx Bank Index and ATX
Share price development: Erste Bank DJ Euro Stoxx Bank Index und ATX (indexed) 140 Austrian Traded Index (ATX) 130 DJ Euro Stoxx Banks Index 120 Erste Bank share 110 100 90 80 Jän 06 Apr 06 Jul 06 Okt 06 Jän 07 Apr 07 Jul 07 July 31, 2007 32
Slide 33: Erste Bank Group – outlook and objectives
Erste Bank Group – outlook and objectives By 2009: Consolidated net profit(1) On average exceeding 20% p.a. Cost/income ratio 2009: below 55% Return on equity(2) 2009: 18-20% 1) Profit after taxes and minority interests 2) Based on a core capital ratio of at least 7% July 31, 2007 33
Slide 34: Shareholder structure
Shareholder structure By investor groups By regions Austria Insurance Capital Association Other Research and 4.9% Continental 2.5% Mgmt. Europe DIE ERSTE österreichische Spar- 14.4% 5.0% Casse Privatstiftung 30.6% Austria 53,1% UK & Ireland 14.0% Institutionals Employees 41.8% 3.0% Savings banks Nor
Slide 35: 8 Länder – 16 Mio Kunden – eine Bankengruppe
8 Länder – 16 Mio Kunden – eine Bankengruppe Croatia Hungary Serbia Ukraine Austria Czech Republic Slovakia Romania July 31, 2007 35