Erste Group Bank AG · VIE:EBS
Erste Group Bank — Shareholder Meeting (May 2012)
39 slides from Erste Group Bank's shareholder meeting presentation, May 15, 2012
Slide 1: 19th Annual General Meeting of Erste Group Bank AG
19th Annual General Meeting of Erste Group Bank AG 15 May 2012 Austria Center Wien
Slide 2: Heinz Kessler, Chairman of the Supervisory Board
Heinz Kessler Chairman of the Supervisory Board
Slide 3: First item on the agenda: Report on the financial year 2011
First item on the agenda Report on the financial year 2011 19th Annual General Meeting 3 15 May 2012
Slide 4: Report on the financial year 2011 of Erste Group Bank AG (consolidated)
Report on the financial year 2011 of Erste Group Bank AG (consolidated) Andreas Treichl Chairman of the Management Board
Slide 5: Economic environment in 2011
Economic environment in 2011 Continued escalation of European debt crisis − Debt crisis escalates in the peripheral Europe - „voluntary“ haircut for Greece − New EBA capital regime for European banks comes as a surprise − Austria loses Standard & Poor’s AAA rating − Austrian banks criticized for CEE
Slide 6: Erste Group vs. EURO STOXX Banks
Erste Group vs. EURO STOXX Banks From 1997 IPO to March 2012 (indexed, Dec 97 = 100) 600 Erste Group: +56% 500 400 EURO STOXX Banks: -48% 300 200 100 0 Dec97 Dec98 Dec99 Dec00 Dec01 Dec02 Dec03 Dec04 Dec05 Dec06 Dec07 Dec08 Dec09 Dec10 Dec11 Erste Bank EURO STOXX Banks Index 19th Annual General Meet
Slide 7: Economic growth in CEE outpaces the euro zone
Economic growth in CEE outpaces the euro zone Significant regional differences in 2011 − Austria: healthy economic growth; Austria again grows faster than EU Real GDP Growth 2011 (in %) − Czech Republic: exceptionally competitive export industry drives growth in 2011 3.3 3.1 2.5 − Slovakia: success
Slide 8: Cumulative profit since IPO: EUR 6.6 bn
Cumulative profit since IPO: EUR 6.6 bn Loss in 2011 as a result of one-off effects Net profit (in EUR m) 1175 932 860 903 879 717 -719 2005 2006 2007 2008 2009 2010 2011 19th Annual General Meeting 8 15 May 2012
Slide 9: Difficult environment in 2011
Difficult environment in 2011 Extraordinary events affect our result - Write-down of goodwill in Romania 700 - Write-down of goodwill in Hungary 312 - Extraordinary provisions for Hungary (incl. conversion of foreign currency loans) 450 - Closing of CDS Portfolio 183 in EUR m 19th Annual General Mee
Slide 10: Extraordinary charges (I): Write-down of goodwill in Romania
Extraordinary charges (I) Write-down of goodwill in Romania − EUR 700m write-down of goodwill as a result of the slower than expected recovery following the deep recession of 2009-2010 − Increase of the share in Romanian subsidiary BCR up to 93% − Intangible assets per year-end 2011: − EUR 1.1 bn go
Slide 11: Extraordinary charges (II): Hungary
Extraordinary charges (II) Hungary: Write-down of goodwill and extra provisions − EUR 312 m write-down of goodwill as a result of the losses connected to unorthodox economic policy of Orban government − Additional risk provisions of EUR 450 m for forced conversion of FX mortgage loans and to substan
Slide 12: Extraordinary charges (III): Valuation of credit default swaps
Extraordinary charges (III) Valuation of credit default swaps (CDS) at fair value − Erste Group built up a global portfolio for diversification purposes in 1999 − Investment portfolio: investments made until 2011 were always held to maturity and hence were valued as „financial guarantees” (held to m
Slide 13: Record net interest income in 2011
Record net interest income in 2011 Erste Group‘s earnings power not impaired Operating income (in EUR bn) 7.6 7.6 7.5 7.0 0.3 0.1 0.1 0.6 6.2 1.8 1.8 1.8 0.4 2.0 1.9 4.9 5.2 5.4 5.6 3.9 2007 2008 2009 2010 2011 Net interest income Net fee income Net trading result 19th Annual General Meeting 13 15 M
Slide 14: Operating expenses kept stable
Operating expenses kept stable Active cost management is one of our strengths Operating expense (in EUR bn) 4.0 3.8 3.8 3.9 3.6 0.4 0.4 0.4 0.4 0.4 1.3 1.2 1.2 1.2 1.1 2.2 2.3 2.2 2.3 2.3 2007 2008 2009 2010 2011 Personnel expenses Other administrative expenses Depreciation and amortisation 19th Ann
Slide 15: Solid operating result in a difficult environment
Solid operating result in a difficult environment Result of strict cost control and sustainable earnings power Cost income ratio 59% 57% 51% 50% 50% 2007 2008 2009 2010 2011 19th Annual General Meeting 15 15 May 2012
Slide 16: Risk costs driven by Hungary & Romania
Risk costs driven by Hungary & Romania Improvement in the core markets AT, CZ and SK Risk Costs Risk Costs 2011 (in EUR m) (in EUR m) 2,267 Romania 2,057 2,021 Rest of Group 499 1,071 956 455 812 Hungary 2007 2008 2009 2010 2011 19th Annual General Meeting 16 15 May 2012
Slide 17: Increase in coverage ratio while defaults are rising
Increase in coverage ratio while defaults are rising Crises affects primarily the middle class – our customers NPL Ratio & NPL Coverage NPL-ratios in key segments 14% 65% 24.3% 23.5% 12% 61.0% 10% 60.0% 60% 8% 6% 55% 8.0% 4% 7.6% 8.5% 5.6% 5.6% 2% 0% 50% Dec 10 Dec 11 AT CZ RO SK HU NPL ratio NPL co
Slide 18: Lending to real economy
Lending to real economy Core business of Erste Group Customer loans (in EUR bn) 129.1 132.7 134.7 134.8 126.2 114.0 19.5 18.7 19.8 19.8 20.1 20.7 48.6 48.6 49.0 85% of loans 44.6 46.6 38.4 to private customers or SMEs 60.5 62.0 64.7 65.8 65.5 53.3 2007 2008 2009 2010 2011 Mar 12 Retail &SME Austria
Slide 19: Reduction of exposure to peripheral Europe
Reduction of exposure to peripheral Europe Exposure against sovereigns down to EUR 145 million Exposure to selected countries (in EUR m) 2,115 2,160 1,602 777 553 145 Dec 10 Mar 11 Jun 11 Sep 11 Dec 11 Mar 11 Greece Ireland Portugal Spain Italy 19th Annual General Meeting 19 15 May 2012
Slide 20: Sustainable increase of customer deposits
Sustainable increase of customer deposits Confidence in Erste Group has increased Customer Deposits (in EUR bn) 117.0 118.9 122.3 112.0 109.3 6.1 5.5 5.8 100.1 5.9 6.1 5.6 48.1 47.8 49.2 45.3 43.5 39.3 55.9 59.3 60.9 62.3 63.6 50.2 2007 2008 2009 2010 2011 Mar 12 Retail &SME Austria Retail &SME CEE
Slide 21: Erste Group ready for Basel
Erste Group ready for Basel 3 Building up a portfolio of highly liquid assets Short term funding vs collateral coverage 60 141.7% 148.4% 160% 50 107.4% 116.3% 120% in EUR Mrd 40 32.1 72.9% 31.6 31.6 30 23.4 25.727.6 24.0 27.9 80% 22.3 21.3 20 40% 10 0 0% Dec 08 Dec 09 Dec 10 Dec 11 Mar 12 Short-term
Slide 22: Improving capital ratios show our strength
Improving capital ratios show our strength Complying with all requirements through internal capital generation Core tier 1 ratio Core tier 1 capital (in EUR bn) 10.2% 9.4% 11.0 11.4 9.2% 10.7 10.3 8.3% 1.7* 6.2 +78% 5.4 5.0% 5.2% Dec 07 Dec 08 Dec 09 Dec 10 Dec 11 Mar 12 Dec 07 Dec 08 Dec 09 Dec 10
Slide 23: Uncertainties regarding regulatory requirements
Uncertainties regarding regulatory requirements Quick adjustment to drastically changed environment necessary Capital requirements −Basel 3 (CRD IV) −European Banking Authority 9.0% −OeNB & FMA 2.8% 2007 Jun 2012 19th Annual General Meeting 23 15 May 2012
Slide 24: Strong start into 2012
Strong start into 2012 Early compliance with EBA requirement Return on Equity Net profit (in EUR m) 11.20% 347 9.60% 321 +7.8% +17% 1-3 11 1-3 12 1-3 11 1-3 12 19th Annual General Meeting 24 15 May 2012
Slide 25: Visible growth of customer deposits in Q1 2012
Visible growth of customer deposits in Q1 2012 Loan demand still weak Loans to customers Customer deposits (in EUR bn) (in EUR bn) 134.8 +0.0% 134.8 122.3 118.9 +2.9% Dec 11 Mar 12 Dec 11 Mar 12 19th Annual General Meeting 25 15 May 2012
Slide 26: Potential of Erste Group in CEE
Potential of Erste Group in CEE We will profit from growth of these markets Loan and deposit penetration 2011 (as % of GDP) Euro zone 2011: Total loans: 119% Total deposits: 114% 85% 73% 66% 65% 60% 58% 56% 53% 41% 34% CZ SK RO HU HR Total loans to non-financial sector Total deposits from non-financ
Slide 27: Strategy – Customer banking in the eastern part of the EU
Strategy – Customer banking in the eastern part of the EU Erste Group Slovakia Czech Republic Clients: 2.4m The leading retail bank with 16.9 m customers Clients: 5.2m Retail loans: 25.8% One of the leading corporate banks Retail loans: 24.7% Retail dep.: 26.1% Retail dep.: 28.6% Branches: 292 Stron
Slide 28: Proposals for resolutions
Heinz Kessler Chairman of the Supervisory Board Proposals for resolutions
Slide 29: Resolution on the appropriation of profit
Second item on the agenda Resolution on the appropriation of profit 19th Annual General Meeting 29 15 May 2012
Slide 30: Resolution granting discharge to the Management and Supervisory Boards
Third item on the agenda Resolution granting discharge to the members of the Management Board and the Supervisory Board 19th Annual General Meeting 30 15 May 2012
Slide 31: Request to speak to the agenda items
Request to speak to the agenda items 1, 2 and 3 −Report on the financial year 2011 −Appropriation of profit −Granting discharge to the members of the Management Board and the Supervisory Board 19th Annual General Meeting 31 15 May 2012
Slide 32: Resolution on the remuneration of the Supervisory Board members
Fourth item on the agenda Resolution in the remuneration of the members of the Supervisory Board 19th Annual General Meeting 32 15 May 2012
Slide 33: Resolution on elections to the Supervisory Board
Fifth item on the agenda Resolution on elections to the Supervisory Board 19th Annual General Meeting 33 15 May 2012
Slide 34: Appointment of an additional auditor
Sixth item on the agenda Appointment of an additional auditor 19th Annual General Meeting 34 15 May 2012
Slide 35: Resolution on extending the authorization to issue convertible bonds
Seventh item on the agenda Resolution on extending the authorization to issue convertible bonds, excluding the subscription rights of shareholders 19th Annual General Meeting 35 15 May 2012
Slide 36: Resolution on extending the applicability of the conditional capital
Eight item on the agenda Resolution on extending the applicability of the conditional capital 19th Annual General Meeting 36 15 May 2012
Slide 37: Authorization to join a horizontally organized group
Ninth item on the agenda Authorization to join a horizontally organized group (Gleichordnungskonzern) formed from the joint- liability scheme (Haftungsverbund) of the savings banks 19th Annual General Meeting 37 15 May 2012
Slide 38: Resolution on amendments to the articles of association
Tenth item on the agenda Resolution on amendments to the articles of association 19th Annual General Meeting 38 15 May 2012
Slide 39: Thank you for your attention!
19. Annual General Meeting Erste Group Bank AG Thank you for your attention!