Erste Group Bank Ag · VIE:EBS
Erste Group Bank — 1-9 2011 Earnings Presentation
88 slides from Erste Group Bank's earnings presentation, Oct 28, 2011
Slide 1: Erste Group – 1-9 2011 results presentation
Erste Group – 1-9 2011 results presentation 28 October 2011 Erste Group posts net loss, significantly reduces CDS exposure Andreas Treichl, Chief Executive Officer Manfred Wimmer, Chief Financial Officer Bernhard Spalt, Chief Risk Officer
Slide 2: Disclaimer – Cautionary note regarding forward-looking statements
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 CORREC
Slide 3: Presentation topics
Presentation topics − Restatement & operating trends − Income statement and balance sheet trends − Segment highlights − On and off balance sheet drilldown − Update on Romania and Hungary − Credit risk − Loan book − Asset quality − Funding − Deposits − LT & ST funding round-up − Capital − Outlook − A
Slide 4: 1-9 2011 executive summary
1-9 2011 executive summary – Focusing on banking in the eastern part of the EU − 80% of our loans and 90% of our deposits (ex savings banks) relate to profitable and growing operations in Austria (EB Oesterreich), Czech Republic, Slovakia & Croatia − Main operating features (1-9 11 vs 1-9 10 compari
Slide 5: Income statement (IFRS) – Restatement reconciliation & YTD performance
Income statement (IFRS) – Restatement reconciliation & YTD performance restated in EUR million 1-9 10 CDS EIR 1-9 10 * Comment 1-9 11 Change Net interest income 4,075.5 20.3 4,095.8 up on retail across region except RO 4,134.1 0.9% Risk provisions for loans (1,588.4) = (1,588.4) up HU, down all othe
Slide 6: Income statement (IFRS) – Restatement reconciliation & QoQ performance
Income statement (IFRS) – Restatement reconciliation & QoQ performance restated in EUR million Q2 11 CDS EIR Q2 11 * Comment Q3 11 Change Net interest income 1,394.1 7.8 1,401.9 up on retail across region except RO 1,430.2 2.0% Risk provisions for loans (479.9) 19.2 (460.7) up HU & RO, down all othe
Slide 7: Income statement (IFRS) – Key financial indicators (YTD view)
Income statement (IFRS) – Key financial indicators (YTD view) YTD cost income ratio YTD net interest margin 60.4% 58.2% 2.98% 3.09% 3.03% 50.9% 52.4% 2.77% 49.9% 2.42% 1-9 07 1-9 08 1-9 09 1-9 10 * 1-9 11 1-9 07 1-9 08 1-9 09 1-9 10* 1-9 11 Cash earnings per share** Cash return on equity** 4.78 24%
Slide 8: Segment highlights – CZ, AT, SK & HR doing well, RO and HU underperform
Segment highlights – CZ, AT, SK & HR doing well, RO and HU underperform Top segment performers in 1-9 2011: Czech Republic Slovakia EBOe in EUR m 1-9 10 1-9 11 Change 1-9 10 1-9 11 Change 1-9 10 1-9 11 Change Operating income 1,207 1,253 4% 396 414 5% 747 751 0% Operating expenses -532 -544 2% -173
Slide 9: Balance sheet (IFRS) – Restatement reconciliation & YTD performance
Balance sheet (IFRS) – Restatement reconciliation & YTD performance Dec 10 in EUR million Dec 10 CDS EIR restated * Comment Sep 11 Change Cash and balances with central banks 5,839 = 5,839 5,743 (1.6%) Loans to credit institutions 12,496 = 12,496 13,559 8.5% Loans to customers 132,729 (395) 132,334
Slide 10: Balance sheet (IFRS) – Restatement reconciliation & YTD performance
Balance sheet (IFRS) – Restatement reconciliation & YTD performance Dec 10 in EUR million Dec 10 CDS EIR restated * Comment Sep 11 Change Deposits by banks 20,154 = 20,154 21,720 7.8% Customer deposits 117,016 = 117,016 growth in CZ, AT & HU 121,594 3.9% Debt securities in issue 31,298 = 31,298 exte
Slide 11: Balance sheet drill-down – Trading assets as at 30 Sept 2011
Balance sheet (IFRS) drill-down – Trading assets as at 30 Sept 2011 − YTD rise in trading assets mainly due to short term T-bill investments − Investment of surplus liquidity mainly in Hungary and the Czech Republic in EUR m Sovereign Banks Other Total Trading CZ 1,683 29.3% 6 0.7% 15 2.2% 1,704 23.
Slide 12: Balance sheet drill-down – Held-to-maturity portfolio
Balance sheet (IFRS) drill-down – Held-to-maturity portfolio as at 30 Sept 2011 − 79% of HtM is sovereign exposure, of which 97% is related to core markets − 80% of eurozone peripheral exposure is related to Italy and Spain − Market value above book value in EUR m Sovereign Banks Other Total HTM CZ
Slide 13: Off-balance sheet items – Exclusively related to customer business
Off-balance sheet items – Exclusively related to customer business 31 Dec 2010 31 Dec 10 restated 30 Sep 11 Guarantees and warranties 7,826 7,826 6,711 of which: in relation to corporate business 5,927 Credit default swaps (protection sold) 6,602 0 0 Undrawn lines, loan commitments, promissory notes
Slide 14: Peripheral Europe exposure update
Peripheral Europe exposure update – Further significant exposure reduction by 31 October − No meaningful sovereign exposure to GR, IE, ES, PT as at 31 October 2011 − Net sovereign exposure amounts to EUR 449 million Total net exposure of Erste Group (excluding savings banks) to selected European cou
Slide 15: Presentation topics
Presentation topics − Restatement & operating trends − Income statement and balance sheet trends − Segment highlights − On and off balance sheet drilldown − Update on Romania and Hungary − Credit risk − Loan book − Asset quality − Funding − Deposits − LT & ST funding round-up − Capital − Outlook − A
Slide 16: Romania update – Macroeconomy and banking market
Romania update – Macroeconomy and banking market − Economic growth still below potential − Slower than expected economic recovery driven mainly by industry and exports − Industrial output has accelerated in August posting the fastest annual growth in the last six months − Agriculture has performed w
Slide 17: Romania update – Banca Comerciala Romana
Romania update – Banca Comerciala Romana − SIF transaction update − 4 out of 5 SIFs signed the agreement in principle, SIF Muntenia already signed binding transaction agreement to sell 6% on 13 October 2011 − SIF Moldova has not entered into agreement in principal, but a shareholder meeting called f
Slide 18: Hungary update – Strategic repositioning of Erste Bank Hungary
Hungary update – Strategic repositioning of Erste Bank Hungary − The new political reality requires a complete strategic rethink − Introduction of a disproportionate banking tax as of 2010 − Nationalisation of private pension system − Early repayment (of FX loans) act − Threat of renegotiating count
Slide 19: Hungary update – FX loan repayment scheme
Hungary update – FX loan repayment scheme as per 26 Oct 2011 Erste Bank Hungary – Erste Bank Hungary – Update on the number of involved clients Update on loan amounts in EUR million 25,000 100 20,967 86 20,000 80 15,000 60 10,000 40 4,499 5,000 20 15 0 0 # of interested # of clients made Repaid loan
Slide 20: Presentation topics
Presentation topics − Restatement & operating trends − Income statement and balance sheet trends − Segment highlights − On and off balance sheet drilldown − Update on Romania and Hungary − Credit risk − Loan book − Asset quality − Funding − Deposits − LT & ST funding round-up − Capital − Outlook − A
Slide 21: Loan book review – Loan demand started to recover in corporate business
Loan book review – Loan demand started to recover in corporate business − Customer loans increased by 1.9% ytd Customer loans by main segments * 150 − Quarterly growth of around EUR 1.0bn driven 131.5 132.7 132.8 134.1 135.2 18.7 19.3 by GCIB, especially Austrian corporates 120 18.4 18.7 18.9 in EUR
Slide 22: Asset quality review – Group trends: NPL formation up on RO and HU
Asset quality review – Group trends: NPL formation up on RO and HU − NPL growth driven by Romania and Hungary Erste Group: NPL ratio vs NPL coverage − Increase of new NPL formation amounted to EUR 499 m in Q3 11 due to corporate portfolio 63.9% 30% 65% deterioration in Hungary and Romania and fewer
Slide 23: Asset quality review – Segment round-up
Asset quality review – Segment round-up: Austria excelled, CEE still mixed − Retail & SME/Austria: NPL ratio down to 5.6% NPL ratios in key segments − Growth in low risk SME business − NPL coverage ratio further increasing to 62.0% 25% 22.0% − Improvements visible in all segments and 20% pronounced
Slide 24: Asset quality review – Risk costs increased on one-offs in HU
Asset quality review – Risk costs increased on one-offs in HU − GCIB: demand is growing in GLC business Risk costs in key segments − Large corporate business shows recovery with 27.1% increased new sales in GLC, while International 10% business continues to shrink 8% 5.60% 6% − Risk costs up from 13
Slide 25: Presentation topics
Presentation topics − Restatement & operating trends − Income statement and balance sheet trends − Segment highlights − On and off balance sheet drilldown − Update on Romania and Hungary − Credit risk − Loan book − Asset quality − Funding − Deposits − LT & ST funding round-up − Capital − Outlook − A
Slide 26: Erste Group's funding profile – Continued deposit inflows in Q3 11
Erste Group’s funding profile – Continued deposit inflows in Q3 11 − Customer deposits grew by 3.9% in 1-9 11 (+0.6% qoq) − In 1-9 11, visible inflows especially in EBOe and in CZ Customer deposit trends by main segments 117.0 119.2 120.8 121.6 − Retail & SME deposits increased by 2.8% ytd 125 115.3
Slide 27: Erste Group's funding profile – Retail deposits key pillar
Erste Group’s funding profile – Retail deposits remained a key pillar in the funding mix − Customer deposits remained the primary source of funding Evolution of Erste Group's funding mix − Providing a solid funding base in all local currencies − Reflected in loan/deposit ratio improvement to 111.2%
Slide 28: Presentation topics
Presentation topics − Restatement & operating trends − Income statement and balance sheet trends − Segment highlights − On and off balance sheet drilldown − Update on Romania and Hungary − Credit risk − Loan book − Asset quality − Funding − Deposits − LT & ST funding round-up − Capital − Outlook − A
Slide 29: Capital position – IFRS total equity reconciliation
Capital position – IFRS total equity reconciliation Change in equity Own shares 1,006 75 16,558 Other 16,123 Restatement 134 15,695 143 3,445 in EUR million 15,441 3,414 Restatement Net loss 428 3,321 880 Dividends 446 3,555 12,709 12,374 13,113 11,886 Total R Total C R Total O T O D Total equity eq
Slide 30: Erste Group's capital position – EBA sets CT1 threshold of 9%
Erste Group’s capital position – EBA sets CT1 threshold of 9% by 30 June 2012 − Estimated EBA shortfall at 30 Sept 2011 Core tier 1 ratio excl. part capital amounted to about EUR 750 million (total risk) − Exclusion of EUR 540 million private 7.7% 7.4% participation capital 6.9% − EBA scenario is ba
Slide 31: Conclusion – Outlook
Conclusion – Outlook − Erste Group is set to post a net loss of about EUR 700-800 million in 2011 − Before extraordinary charges: net profit of about EUR 850-950 million − Risk costs on group level are expected to amount to EUR 2.3 billion (before extraordinary charges: EUR 1.8 billion) in 2011 − Er
Slide 32: Presentation topics
Presentation topics − Restatement & operating trends − Income statement and balance sheet trends − Segment highlights − On and off balance sheet drilldown − Update on Romania and Hungary − Credit risk − Loan book − Asset quality − Funding − Deposits − LT & ST funding round-up − Capital − Outlook − A
Slide 33: Erste Group – Retail market leadership in the eastern part of the EU
Erste Group – Retail market leadership 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
Slide 34: Operating environment: macro outlook – CEE to grow ahead of euro zone
Operating environment: macro outlook – CEE to grow ahead of euro zone average − CEE to experience different growth patterns in Real GDP growth in CEE line with levels of export dependency and 8 2011 euro zone avg. 1.8% country-specific issues 6 4.0 3.2 3.0 − AT: to build on strong 2010 performance 2
Slide 35: Operating environment: macro outlook – CEE imbalances improved since 2008
Operating environment: macro outlook – CEE countries vastly improved imbalances since 2008 − Public debt remains at low levels in Public debt and deficits 2011e 10.0 CEE compared to Western USA Ireland 9.0 European economies Public deficit as % GDP 8.0 − Average public debt/GDP 50% in CEE 7.0 Spain
Slide 36: Segment review – Core segments
Segment review – Core segments * Retail & SME GCIB Group Markets Corporate Center Total group in EUR million 1-9 11 1-9 10 1-9 11 1-9 10 1-9 11 1-9 10 1-9 11 1-9 10 1-9 11 1-9 10 Net interest income 3,539.3 3,482.4 394.0 445.5 99.4 86.6 101.4 81.3 4,134.1 4,095.7 Risk provisions for loans and advanc
Slide 37: Core segment – Austria
Core segment – Austria * Erste Bank Oesterreich drives improvement in Austria Savings banks EB Oesterreich Austria in EUR million 1-9 11 1-9 10 1-9 11 1-9 10 1-9 11 1-9 10 Net interest income 742.0 726.9 501.8 489.9 1,243.8 1,216.8 Risk provisions for loans and advances (190.0) (209.5) (92.7) (124.2
Slide 38: Core segment Central and Eastern Europe (1)
Core segment Central and Eastern Europe (1) – Diverging trends in operating performance … Czech Republic Romania Slovakia Hungary in EUR million 1-9 11 1-9 10 1-9 11 1-9 10 1-9 11 1-9 10 1-9 11 1-9 10 Net interest income 900.3 810.8 517.6 621.8 334.4 317.4 303.1 287.7 Risk provisions for loans and a
Slide 39: Core segment Central and Eastern Europe (2)
Core segment Central and Eastern Europe (2) – … and risk cost levels across the region continued Croatia Serbia Ukraine CEE in EUR million 1-9 11 1-9 10 1-9 11 1-9 10 1-9 11 1-9 10 1-9 11 1-9 10 Net interest income 194.7 182.8 27.1 20.0 18.3 25.0 2,295.5 2,265.6 Risk provisions for loans and advance
Slide 40: Segment Retail & SME – Positive performance hurt by HU & RO
Segment Retail & SME *– Positive performance in core business hurt by HU & RO − Operating result was down by slight 1.3% yoy in 1-9 Segment operating performance 11 on negative net trading result in Q3 2,000 1,635 − Operating income decreased by 0.2% yoy to EUR 4,818.4m 1,603 1,586 1,630 1,602 − Sup
Slide 41: Segment Retail & SME – Loan book analysis
Segment Retail & SME – Loan book analysis Segment Retail & SME - Segment Retail & SME - Customer loans by Basel II customer segment Customer loans by currency 112.5 113.3 113.3 114.8 115.2 120 100% 2.2% 2.2% 2.0% 2.0% 2.2% 5.9 6.4 6.6 6.7 6.3 14.6% 15.1% 14.3% 14.9% 14.4% 90 80% in EUR billion 43.3
Slide 42: Segment GCIB excl IB – Decrease in operating result
Segment GCIB excl IB – Decrease in operating result driven by margin pressure GCIB GCIB ex Int Bus International Business in EUR m 1-9 10 1-9 11 Change 1-9 10 1-9 11 Change 1-9 10 1-9 11 Change Operating income 439 341 -22% 418 409 -2% 22 -68 nm Operating expenses -135 -138 2% -112 -123 10% -23 -14
Slide 43: Segment Group Markets – Difficult market environment
Segment Group Markets – Difficult market environment led to declining results − Operating result decreased by 32.2% to EUR 175.5m Segment operating performance − NII increased 14.8% yoy on improved contribution from money market activities as a result of more favourable liquidity spreads − Fee incom
Slide 44: Segment Corporate Center – Impairment of Goodwill
Segment Corporate Center *– Impairment of Goodwill impacted result in Q3 and ytd − What is in the Corporate Center? Segment operating performance − Business areas which cannot be allocated to relevant business lines, one-offs, amortisation of customer relationships and 40 33 Group ALM 20 20 − Line-i
Slide 45: Retail & SME: Austria/EB Oesterreich
Retail & SME: Austria/EB Oesterreich *– On track to deliver sustainable RoE around 15% − Operating result increased by 2.1% yoy to EUR 296.2m Segment operating performance (+16.4% qoq) − NII improved by 2.4% to EUR 501.8m on increased deposit 300 249 254 249 264 237 volume and slightly higher margin
Slide 46: Retail & SME: Austria/EB Oesterreich – Loan book analysis
Retail & SME: Austria/EB Oesterreich – Loan book analysis Segment EB Oesterreich - Segment EB Oesterreich - Customer loans by Basel II customer segment Customer loans by currency 30 26.9 27.4 27.1 27.5 28.0 100% 2.0% 2.0% 1.8% 1.7% 2.0% 1.7 1.7 1.7 15.5% 16.0% 15.4% 16.0% 15.4% 1.5 1.7 80% in EUR bi
Slide 47: Retail & SME: Austria/Savings banks
Retail & SME: Austria/Savings banks*– NII & fees up in addition to decreasing risk costs − Operating result declined by 1.6% from EUR 333.0m in Segment operating performance 1-9 10 to EUR 327.5m in 1-9 11 − NII up by 2.1% yoy on slightly improved margins and volumes 400 345 347 341 358 332 − Fee inc
Slide 48: Retail & SME: Austria/Savings banks – Loan book analysis
Retail & SME: Austria/Savings banks – Loan book analysis Segment Savings Banks - Segment Savings Banks - Customer loans by Basel II customer segment Customer loans by currency 40 36.9 37.3 37.0 37.7 37.7 100% 3.4% 3.3% 3.2% 3.2% 3.5% 1.7 1.6 1.7 1.6 1.6 19.5% 20.2% 19.2% 20.1% 19.6% 80% 30 in EUR bi
Slide 49: Retail & SME: Czech Republic – Continued outstanding operating performance
Retail & SME: Czech Republic – Continued outstanding operating performance − Operating result improved by 5.2% (+0.6% FX- adjusted)1 yoy to EUR 709.7m Segment operating performance − NII strongly improved by 11.0% yoy (+6.2%); reflecting 500 424 419 425 429 400 improvement in asset mix and deposit m
Slide 50: Retail & SME: Czech Republic – Loan book analysis
Retail & SME: Czech Republic – Loan book analysis Segment Czech Republic - Segment Czech Republic - Customer loans by Basel II customer segment Customer loans by currency 20 17.9 17.5 18.0 18.1 17.9 100% 0.2% 3.5% 0.2% 0.2% 3.3% 0.2% 3.3% 0.3% 3.4% 3.9% 0.7 0.7 0.8 0.8 0.6 16 80% in EUR billion 5.4
Slide 51: Retail & SME: Romania – Still waiting for growth
Retail & SME: Romania – Still waiting for growth − Operating result decreased by 20.8% yoy (-20.4% FX- Segment operating performance adjusted)1 to EUR 371.6m − NII down 16.8% (-16.3%) on lower margins, decreasing 350 unsecured loan demand, and lower up-front fees 300 235 250 222 218 215 − Fees decli
Slide 52: Retail & SME: Romania – Loan book analysis
Retail & SME: Romania – Loan book analysis Segment Romania - Segment Romania - Customer loans by currency Customer loans by Basel II customer segment 15 100% 1.8% 1.6% 1.4% 1.3% 1.7% 12 11.2 11.2 11.3 11.1 11.0 80% in EUR billion 1.4 1.5 1.5 1.5 1.1 59.5% 60.6% 60.1% 60.4% 59.9% 9 60% 4.3 4.2 4.4 4.
Slide 53: Retail & SME: Slovakia – Continued good results
Retail & SME: Slovakia – Continued good results on record NII & reduced risk − Operating result increased by 10.8% to EUR Segment operating performance 247.3m in 1-9 2011 − NII continued to improve: up 5.3% yoy to EUR 200 334.4m on the back of growing retail housing 150 134 142 138 141 135 business;
Slide 54: Retail & SME: Slovakia – Loan book analysis
Retail & SME: Slovakia – Loan book analysis Segment Slovakia - Segment Slovakia - Customer loans by Basel II customer segment Customer loans by currency 8 100% 0.4% 0.4% 0.4% 0.4% 0.4% 5.7 5.7 5.8 5.9 6.0 6 0.1 80% in EUR billion 0.1 0.1 0.1 0.1 1.4 1.4 1.4 1.5 1.4 0.3 60% 0.3 0.3 0.3 4 0.3 99.6% 99
Slide 55: Retail & SME: Hungary – Strategic repositioning of Erste Bank Hungary
Retail & SME: Hungary – Strategic repositioning of Erste Bank Hungary − Operating result increased slightly by 2.2% yoy (0.7% Segment operating performance FX- adjusted)1 to EUR 233.0m 146 137 − NII rose by 5.3% yoy due to unwinding effects (leading to 150 127 120 125 increase in risk provisions) an
Slide 56: Retail & SME: Hungary – Loan book analysis
Retail & SME: Hungary – Loan book analysis Segment Hungary - Segment Hungary - Customer loans by currency Customer loans by Basel II customer segment 10 100% 0.2% 0.2% 0.3% 0.1% 0.1% 7.9 22.0% 20.8% 20.7% 19.7% 20.5% 7.6 7.8 7.6 7.7 8 0.4 0.4 0.4 0.4 80% 0.4 in EUR billion 2.3 2.3 2.3 2.3 2.3 6 60%
Slide 57: Retail & SME: Croatia – Solid operating result and lower risk costs
Retail & SME: Croatia – Solid operating result and lower risk costs − Operating result improved by 7.7% yoy (+10.0% FX- Segment operating performance adjusted)1 to EUR 152.4m − NII improved by 6.5% (+8.8%) on better margins and increased 100 87 86 88 91 82 volume in both retail as well as corporate
Slide 58: Retail & SME: Croatia – Loan book analysis
Retail & SME: Croatia – Loan book analysis Segment Croatia - Segment Croatia - Customer loans by currency Customer loans by Basel II customer segment 5.6 5.8 5.8 6 5.3 5.5 100% 0.1% 0.2% 0.2% 0.2% 0.3% 0.5 0.6 15.3% 15.4% 14.1% 14.2% 13.6% 0.3 0.4 0.5 80% in EUR billion 4 2.3 2.4 2.4 2.5 2.4 60% 61.
Slide 59: Retail & SME: Serbia – Operating performance continued to improve
Retail & SME: Serbia – Operating performance continued to improve − Operating result improved by 64.1% yoy to EUR 11.2m Segment operating performance from EUR 6.8m − NII increased by 35.6% (+35.6%) due to significantly increased 15 13 12 11 12 11 loan volume as well as margin expansion 10 − Fee inco
Slide 60: Retail & SME: Serbia – Loan book analysis
Retail & SME: Serbia – Loan book analysis Segment Serbia - Segment Serbia - Customer loans by currency Customer loans by Basel II customer segment 600 100% 1.1% 1.1% 1.0% 0.9% 0.9% 4.3% 4.4% 4.1% 4.1% 3.9% 461.7 480.3 417.0 431.3 436.0 2.2 2.5 80% in EUR million 2.3 2.2 2.3 400 274.9 60% 67.8% 67.3%
Slide 61: Retail & SME: Ukraine – Rightsizing still ongoing
Retail & SME: Ukraine – Rightsizing still ongoing − Operating result declined to EUR -8.3m from EUR 4.3m Segment operating performance − NII decreased by 26.9% yoy (-21.7% FX adjusted1) on reduced loan portfolio 20 − Net fee income improved by EUR 0.8m to EUR 3.7m on the back 14 15 11 of increased p
Slide 62: Retail & SME: Ukraine – Loan book analysis
Retail & SME: Ukraine – Loan book analysis Segment Ukraine - Segment Ukraine - Customer loans by currency Customer loans by Basel II customer segment 600 100% 1.5% 1.3% 1.4% 1.3% 1.2% 492.3 486.3 479.0 0.0 0.0 443.7 441.1 0.0 64.3 71.8 51.0 80% in EUR million 0.0 0.0 400 64.0 64.1 115.6 110.9 140.6
Slide 63: Financial statements – Frequently asked questions
Financial statements – Frequently asked questions − Investment properties Equity-related securities split by product − Amount to about EUR 1.2 billion as at 30 Sept 2011 (30 Sept 2011: EUR 3.0 bn) − Vast majority of properties are commercial buildings 5.0% (office and retail space) 4.9% − ~40% relat
Slide 64: Financial statements – Frequently asked questions (2)
Financial statements – Frequently asked questions (2) Intangibles composition 6 4.8 4.7 4.7 4.6 5 in EUR billion 0.6 0.6 0.6 0.6 4 0.4 0.4 0.4 0.4 3.5 0.3 0.3 0.3 0.3 0.6 3 0.5 0.5 0.5 0.5 0.3 0.5 0.5 0.5 0.5 0.0 2 0.3 0.3 0.3 0.3 0.5 0.4 0.3 1 1.8 1.8 1.9 1.8 1.1 0 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 BCR
Slide 65: Asset quality analysis – Key definitions
Asset quality analysis – Key definitions − Key asset quality indicators are based Risk category Agency ratings on on-balance sheet customer loans Low risk AAA to BB / Aaa to Ba − Reported NPL and NPL coverage ratios Management attention B exclude collateral Substandard CCC to C / − Broad NPL definit
Slide 66: Erste Group's asset quality – Loan book overview
Erste Group’s asset quality – Loan book overview Customer loans by Basel II customer segments Customer loans by industries 150 132.7 132.8 134.1 135.2 131.5 5.8% 7.2 7.6 7.7 7.8 7.6 3.1% 4.0% 120 2.9% 5.0% in EUR billion 39.1% 60.1 60.6 61.0 61.0 62.4 90 5.0% 60 13.6 13.5 13.4 13.4 13.4 5.0% 30 50.5
Slide 67: Asset quality analysis – Loan book by segments
Asset quality analysis – Loan book by segments Low risk Mgmt attention Substandard Non-performing Total loan book Risk provisions NPL coverage NPL ratio Sep 11 Dec 10 Sep 11 Dec 10 Sep 11 Dec 10 Sep 11 Dec 10 Sep 11 Dec 10 Sep 11 Dec 10 Sep 11 Dec 10 Sep 11 Dec 10 Retail & SME 81,675 81,200 19,829 1
Slide 68: Asset quality analysis – Loan book by region
Asset quality analysis – Loan book by region (country of origination) Low risk Mgmt attention Substandard Non-performing Total loan book in EUR million Sep 11 Dec 10 Sep 11 Dec 10 Sep 11 Dec 10 Sep 11 Dec 10 Sep 11 Dec 10 Share of total Share of total Core market 88,299 86,949 22,698 20,782 4,191 5,
Slide 69: Asset quality analysis – Loan book by industry sectors
Asset quality analysis – Loan book by industry sectors Low risk Mgmt attention Substandard Non-performing Total loan book in EUR million Sep 11 Dec 10 Sep 11 Dec 10 Sep 11 Dec 10 Sep 11 Dec 10 Sep 11 Dec 10 Share of total Share of total Agriculture and forestry 1,222 970 568 626 61 138 220 211 2,071
Slide 70: Asset quality analysis – Total exposure by region
Asset quality analysis – Total exposure by region (country of origination) * Low risk Mgmt attention Substandard Non-performing Total exposure in EUR million Sep 11 Dec 10 Sep 11 Dec 10 Sep 11 Dec 10 Sep 11 Dec 10 Sep 11 Dec 10 Share of total Share of total Core market 145,308 140,857 26,229 24,186
Slide 71: Asset quality analysis – Financial assets
Asset quality analysis – Financial assets Financial assets by country of origination Financial assets by currency (30 September 2011: EUR 37.8 bn) (30 September 2011: EUR 37.8 bn) 3.0% 15.7% 5.1% 5.7% 2.7% 23.6% 5.2% 2.5% 8.3% 20.3% 60.8% 5.4% 21.2% 10.0% 5.6% 5.0% EUR CZK USD HUF RON Other AT CZ SK
Slide 72: Key local entity data – Ceska sporitelna
Key local entity data (IFRS, consolidated) – Ceska sporitelna Key figures and ratios 1-9 11 1-9 10 Rate and margin environment Cost/income ratio 41.9% 41.4% Return on equity 17.3% 16.9% 80% 8% 68.7% 68.6% 66.5% 67.3% 67.3% Sep 11 Dec 10 Change Erste Group stake 97.99% Solvency ratio 14.4% 13.9% 60%
Slide 73: Key local entity data – BCR
Key local entity data (IFRS, consolidated) – BCR Key figures and ratios 1-9 11 1-9 10 Rate and margin environment Cost/income ratio 40.1% 35.0% 145.1% Return on equity 1.4% 9.5% 150% 138.1% 137.4% 134.1% 135.5% 15% Sep 11 Dec 10 Change Erste Group stake 69.17% 12% Solvency ratio 11.8% 13.0% 100% 7.0
Slide 74: Key local entity data – Slovenska sporitelna
Key local entity data (IFRS, consolidated) – Slovenska sporitelna Key figures and ratios 1-9 11 1-9 10 Rate and margin environment Cost/income ratio 39.3% 42.6% Return on equity 20.4% 15.3% 100% 8% Sep 11 Dec 10 Change 78.0% 77.3% 77.9% 74.5% 75.5% Erste Group stake 100.0% 80% Solvency ratio 14.5% 1
Slide 75: Key local entity data – Erste Bank Hungary
Key local entity data (IFRS, consolidated) – Erste Bank Hungary Key figures and ratios 1-9 11 1-9 10 Rate and margin environment Cost/income ratio 39.6% 39.4% Return on equity n.a. 2.0% 270% 12% Sep 11 Dec 10 Change 203.4% 203.1% 10% Erste Group stake 99.94% 184.4% 177.6% 177.5% Solvency ratio 12.7%
Slide 76: Key local entity data – Erste Bank Croatia
Key local entity data (IFRS, consolidated) – Erste Bank Croatia Key figures and ratios 1-9 11 1-9 10 Rate and margin environment Cost/income ratio 40.1% 38.0% 148% 145% Return on equity 11.2% 11.2% 150% 131% 6% Sep 11 Dec 10 Change 120% 123% Erste Group stake 69.25% 120% 4.1% 3.7% 3.7% 3.8% 3.9% Sol
Slide 77: Key local entity data – Erste Bank Serbia
Key local entity data (IFRS, consolidated) – Erste Bank Serbia Key figures and ratios 1-9 11 1-9 10 Rate and margin environment Cost/income ratio 66.3% 75.0% Return on equity 6.8% 1.3% 120% 103.8% 20% Sep 11 Dec 10 Change 93.6% 94.8% 99.2% 96.7% Erste Group stake 80.49% 100% Solvency ratio 18.2% 17.
Slide 78: Key local entity data – Erste Bank Ukraine
Key local entity data (IFRS, consolidated) – Erste Bank Ukraine Key figures and ratios 1-9 11 1-9 10 Rate and margin environment Cost/income ratio 94.6% 68.1% Return on equity 0.0% na 500% 20% Sep 11 Dec 10 Change 405% Erste Group stake 100.0% 400% 358% 324% 15% Solvency ratio 21.8% 24.7% 263% 10.8%
Slide 79: Erste Group historic financials – Quarterly income statement
Erste Group historic financials – Quarterly income statement (IFRS) * in EUR million Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Net interest income 1,335.6 1,380.0 1,330.3 1,368.0 1,397.5 1,343.4 1,302.0 1,401.9 1,430.2 Net fee and commission income 425.1 459.5 448.1 469.5 452.4 472.5 455
Slide 80: Erste Group historic financials – Quarterly balance sheet
Erste Group historic financials – Quarterly balance sheet (IFRS)* in EUR million Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10 Dec-10 Mar-11 Jun-11 Sep-11 Cash and balances with central banks 5,897 6,897 5,458 5,996 5,965 6,540 5,030 5,839 5,043 6,605 5,743 Loans and advances to credit institutio
Slide 81: Quarterly segment reporting – Overview of main segments
Quarterly segment reporting – Overview of main segments * in EUR million Retail & SME GCIB Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Net interest income 1,176.9 1,141.5 1,135.9 1,190.8 1,212.6 152.5 128.7 127.7 134.0 132.2 Risk provisions for loans and advances (487.6) (454.3) (404
Slide 82: Quarterly segment reporting – Austria sub-segments
Quarterly segment reporting – Austria sub-segments* in EUR million EB Oesterreich Savings banks Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Net interest income 165.1 165.3 152.9 168.6 180.3 240.0 233.7 234.1 258.0 249.8 Risk provisions for loans and advances (36.5) (24.1) (35.0) (30.
Slide 83: Quarterly segment reporting – CEE sub-segments (1)
Quarterly segment reporting – Central and Eastern Europe sub-segments (1) in EUR million Czech Republic Romania Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Net interest income 274.7 276.4 284.4 305.6 310.3 206.6 176.8 186.0 168.9 162.7 Risk provisions for loans and advances (96.0) (8
Slide 84: Quarterly segment reporting – CEE sub-segments (2)
Quarterly segment reporting – Central and Eastern Europe sub-segments (2) in EUR million Croatia Serbia Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Net interest income 65.2 65.1 61.3 66.6 66.8 7.6 7.5 8.6 9.6 8.9 Risk provisions for loans and advances (30.3) (27.1) (23.2) (27.2) (22.
Slide 85: Group statistical data – Tier 1 and solvency ratios within target ranges
Group statistical data – Tier 1 and solvency ratios within target ranges in EUR million 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Sep 11 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 6,674 7,448 11,450 12,219 11,798 Total
Slide 86: Operating performance history
Operating performance history Erste Group: operating income history * 2,500 2,087 1,994 1,905 1,625 1,752 1,814 1,922 1,921 1,922 1,949 1,720 1,847 2,000 1,665 1,725 1,767 1,755 160 82 171 237 237 52 199 32 1,467 1,495 1,528 59 82 102 1 144 452 451 446 in EUR million 482 425 460 448 470 473 455 1,50
Slide 87: Shareholder structure – Total number of shares: 378,466,384
Shareholder structure – Total number of shares: 378,466,384 By investor By region CaixaBank Other 10.1% 2.8% Continental 25.6% Europe 21.7% Employees Austria 2.2% 48.7% UK & Ireland Savings banks 6.0% 4.2% Institutional Retail investors investors 5.5% 52.4% North America 20.8% Free float: 64.3% Upda
Slide 88: Investor relations contacts
Investor relations contacts − Erste Group Bank AG, Graben 21, 1010 Vienna Fax +43 (0)5 0100-13112 E-mail: investor.relations@erstegroup.com Internet: www.erstegroup.com Reuters: ERST.VI Bloomberg: EBS AV Datastream: O:ERS ISIN: AT0000652011 − Investor relations Thomas Sommerauer Tel: +43 (0)5 0100 1