Slide 1: Erste Bank: record earnings and strategic acquisitions
> Erste Bank: - record earnings and strategic acquisitions > Full Year 2005 (preliminary) results > Teleconference Vienna, 28 February 2006 > Andreas Treichl, CEO Reinhard Ortner, CFO
Slide 2: Presentation topics
> Presentation topics 1. FY 2005 highlights 2. Financial statements 3. Divisional information 4. Asset quality 5. Outlook and targets 6. Appendix NB According to the revised IASB standards IAS 32 (Financial Instruments: Disclosure and Presentation) and IAS 39 (Financial Instruments: Recognition and
Slide 3: FY 2005 financial highlights
> FY 2005 financial highlights Erste Bank surpasses all 2005 targets: EPS (in EUR) 2.96 2005 target FY 2005 result 2.18 1.83 Net profit: > EUR 660m EUR 711.7m 1.45 1.23 1.31 ROE: at least 18% 19.0% 0.82 1.01 CIR: maximum 62% 61.8% FY 98 FY 99 FY 00 FY 01 FY 02 FY 03 FY 04 FY 05 Cost/Income ratio ROE
Slide 4: Operating results per segment
> Operating results per segment Austrian Retail & Mortgage reaches goals – CE continues to grow EUR m FY 2005 FY 2004 % Change Austria 888.3 863.1 2.9 Savings banks 387.2 385.5 0.5 Retail & Mortgage 240.5 200.6 19.9 thereof - Retail Branches 99.4 82.7 20.2 - SME 26.5 18.2 45.6 - Own savings banks 51
Slide 5: Key figures of EB subsidiaries in Central Europe
> Key figures of EB subsidiaries in Central Europe Preliminary 2005 Results (IFRS) as reported by local entities 97.97% 100.00% 99.90% 61.95% 95.60%² FY 05 FY 04 +/- % FY 05 FY 04 +/- % FY 05 FY 04 +/- % FY 05 FY 04 +/- % FY 05 FY 04 +/- % Net profit (EUR m) 306.0 272.6 12% 92.5 81.0 14% 75.8 27.7>1
Slide 6: Loan growth by region
> Loan growth by region Strong loan growth in Central Europe: +30.3% » Loan growth in CE subsidiaries main driver of Erste Bank Group’s lending business growth » Strong demand for retail lending products supports 30% overall loan growth in CE » Based on continuing strong GDP growth and declining int
Slide 7: Acquisition of Banca Comerciala Romana (BCR)
> Acquisition of Banca Comerciala Romana (“BCR”) Acquisition & Integration progress… funding Dec. 05 & Jan. 06 After closing of the acquisition in Q2 2006 » 61.88% stake acquired as of » Transition programme headed by Erste Bank CEO Dec. 21, 2005 (Purchase » Full focus on realising BCR‘s revenue pot
Slide 8: New Group Architecture (NGA) - Update
> New Group Architecture (NGA) - Update NGA projects proceeding according to plan Retail 2008 Group Procurement » Structured investment products » Established a new Group procurement company to drive further cost reductions » Successful rollout throughout the Group » Sales management techniques » Ac
Slide 9: New Group Architecture (NGA) - Update
> New Group Architecture (NGA) - Update P & L impacts of NGA projects visible in 2005 NGA projects 2005 2008E Group Large Corporates EUR +25m New revenues Group Cards Synergy Project EUR +45m Retail 2008 EUR +45m Sale of struct. investment products EUR +14m Cost reduction EUR +40m Information Techno
Slide 10: Presentation topics
> Presentation topics 1. Q3 2005 highlights 2. Financial statements 3. Divisional information 4. Asset quality 5. Outlook and targets 6. Appendix FY 2005 Results 28 February 2006 10
Slide 11: Group income statement (IFRS)
> Group income statement (IFRS) Strong operating performance continues to drive net profit growth EUR m FY 2005 FY 2004 % Change Net interest income 2,794.2 2,660.3 5.0 Risk provisions for loans and advances (421.6) (406.2) 3.8 Net commission income 1,256.8 1,135.4 10.7 Net trading result 241.7 216.
Slide 12: Group balance sheet (IFRS) - Assets
> Group balance sheet (IFRS) Assets – CE loan business drives asset growth EUR m 31-Dec-05 31-Dec-04 % Change Cash and balances with central banks 2,728 2,723 0.2 Loans and advances to credit institutions 16,858 15,684 7.5 Loans and advances to customers 80,419 72,843 10.4 Risk provisions for loans
Slide 13: Group balance sheet (IFRS) - Liabilities
> Group balance sheet (IFRS) Liabilities – moderate growth in retail funding EUR m 31-Dec-05 31-Dec-04 % Change Amounts owed to credit institutions 33,911 28,551 18.8 Amounts owed to customers 72,793 68,213 6.7 Debts evidenced by certificates 21,291 19,710 8.0 Provisions 8,635 7,500 15.1 Other liabi
Slide 14: Presentation topics
> Presentation topics 1. FY 2005 highlights 2. Financial statements 3. Divisional information 4. Asset quality 5. Outlook and targets 6. Appendix FY 2005 Results 28 February 2006 14
Slide 15: Divisional figures – Core segments
> Divisional figures – Core segments Net profit improves in all core divisions Austria CE Subsidiaries Int. Business Corp. Center TOTAL EB GROUP In EUR m FY 05 FY 04 FY 05 FY 04 FY 05 FY 04 FY 05 FY 04 FY 05 FY 04 Net interest income 1,550.2 1,607.9 1,096.6 948.5 152.7 150.8 (5.3) (46.8) 2,794.2 2,6
Slide 16: Core Segment Austria
> Core Segment Austria Austria – Retail & Mortgage segment drives net profit Savings banks Retail & Mortgage Large Corp. Trading & Inv.B. TOTAL AUSTRIA In EUR m FY 05 FY 04 FY 05 FY 04 FY 05 FY 04 FY 05 FY 04 FY 05 FY 04 Net interest income 834.0 849.6 511.0 516.1 142.9 139.9 62.2 102.4 1,550.2 1,60
Slide 17: Savings Banks
> Savings Banks FY 2005 highlights » Operating result improves slightly by 0.5% yoy Segment Savings Banks FY 05 FY 04 % chg » 37.5% up on Q3 05 on stronger NII and fee income Operating income (EUR m) 1,212.8 1,187.2 2.2 » NII improves by 3.1% on third quarter although Operating expenses (EUR m) (825
Slide 18: Retail and Mortgage
> Retail and Mortgage FY 2005 highlights » Ambitious targets reached - net profit more than Segment Retail & M'ge FY 05 FY 04 % chg doubles on strong operating performance of all Operating income (EUR m) 864.5 835.4 3.5 business units Operating expenses (EUR m) (624.1) (634.8) (1.7) » ROE goal of 10
Slide 19: Retail and Mortgage - details
> Retail and Mortgage - details Retail & Mortgage – improving net profits in all business units Operating profit Net profit (EUR m) (EUR m) 99.4 FY 2004 FY 2005 FY 2004 FY 2005 82.7 51.3 45.7 37.9 38.4 26.5 26.4 25.1 27.6 24.4 22.2 20.4 18.2 17.0 12.6 7.6 4.5 -2.1 Branches SME Own SBs Mortgage Subsi
Slide 20: Large Corporates
> Large Corporates FY 2005 highlights » Net profit contribution flat despite 6.1% increase in Segment Large Corp FY 05 FY 04 % chg operating result Operating income (EUR m) 226.6 212.2 6.8 » Mainly due to yoy decline in OOR (-EUR 21.3m) Operating expenses (EUR m) (89.4) (83.0) 7.7 » NII increases by
Slide 21: Trading & Investment Banking
> Trading & Investment Banking FY 2005 highlights » Net profit contribution declines by EUR 15.2m Segment Trading & IB FY 05 FY 04 % chg (-14.4%) due to lower NII from ALM Operating income (EUR m) 217.5 241.3 (9.8) Operating expenses (EUR m) (94.1) (93.5) 0.7 » NII decreases by 39.3% (EUR 40.3m) Ope
Slide 22: Core segment Central Europe
> Core segment Central Europe CE subsidiaries – continuing strong increase in net profit contribution CS SLSP EB Hungary EB Croatia EB Serbia* TOTAL CE In EUR m FY 05 FY 04 FY 05 FY 04 FY 05 FY 04 FY 05 FY 04 FY 05 FY 04 FY 05 FY 04 Net interest income 595.0 504.2 194.9 185.8 204.4 174.0 100.3 84.5
Slide 23: Ceska sporitelna
> 8eská spo:itelna FY 2005 highlights » Net profit contribution up by 37.1% (28.1%)* Segment contribution FY 05 FY 04 % chg » Supported by a 23.2% (15.1%) improvement of operating Operating income (EUR m) 939.2 816.5 15.0 result Operating expenses (EUR m) (550.1) (500.5) 9.9 » NII increases by 18% y
Slide 24: Slovenská sporitelna
> Slovenská sporitel’<a FY 2005 highlights » Net profit contribution rises by 52.5% (46.7%)* yoy Segment contribution FY 05 FY 04 % chg on operating performance and buyout of minorities Operating income (EUR m) 292.3 268.7 8.8 in Q1 2005 Operating expenses (EUR m) (167.3) (158.5) 5.5 » NII up 4.9% y
Slide 25: Erste Bank Hungary
> Erste Bank Hungary FY 2005 highlights » Net profit contribution more than doubles to Segment contribution FY 05 FY 04 % chg EUR 67.1m yoy Operating income (EUR m) 303.8 257.9 17.8 » NII up 17.5% yoy Operating expenses (EUR m) (185.8) (175.7) 5.8 » Driven by strong loan growth and stable margins Op
Slide 26: Erste Bank Croatia
> Erste Bank Croatia FY 2005 highlights » Net profit contribution up by 15.7% on strong Segment contribution FY 05 FY 04 % chg operating result (up 39.0%) Operating income (EUR m) 143.9 113.7 26.6 » Despite increased minorities Operating expenses (EUR m) (75.3) (64.3) 17.0 » NII increased by 18.7% y
Slide 27: Core segments – Int'l Business and Corp. Center
> Core segments – Int’l Business and Corp. Center Int’l Business – FY 05 highlights Corporate Center – FY 05 highlights » Increase in net profit – up 20.8% yoy » Improvement in NII » Supported by significant release of risk provisions in Q4 05, » Due to better at equity results, reduced funding cost
Slide 28: Presentation topics
> Presentation topics 1. FY 2005 highlights 2. Financial statements 3. Divisional information 4. Asset quality 5. Outlook and targets 6. Appendix FY 2005 Results 28 February 2006 28
Slide 29: Asset quality
> Asset quality NPL cover ratio continues to improve Low Risk Mgmt. Att'n Sub-standard Non-Perform. Total¹ Risk Provisions NPL Coverage2 YE 05 YE 04 YE 05 YE 04 YE 05 YE 04 YE 05 YE 04 YE 05 YE 04 YE 05 YE 04 YE 05 YE 04 Austria Total 75,544 70,733 12,267 10,440 2,431 3,075 3,275 3,327 93,517 87,575
Slide 30: Presentation topics
> Presentation topics 1. FY 2005 highlights 2. Financial statements 3. Divisional information 4. Asset quality 5. Outlook and targets 6. Appendix FY 2005 Results 28 February 2006 30
Slide 31: Erste Bank Group's new targets
> Erste Bank Group’s new targets Old Target New Target 15% p.a. average More than 20% p.a. average Net profit(1) growth for 2005-2008 for 2005-2009 Cost-income ratio 57% in 2008 Below 55% in 2009 Return on equity(2) 20% in 2008 18-20% in 2009 The acquisition of BCR significantly increases Erste Bank
Slide 32: Presentation topics
> Presentation topics 1. FY 2005 highlights 2. Financial statements 3. Divisional information 4. Asset quality 5. Outlook and targets 6. Appendix FY 2005 Results 28 February 2006 32
Slide 33: Macro overview
> Macro overview Real GDP growth Consumer price inflation (annual average) 10% 24% 9% 8% 20% 7% 16% 6% 5% 12% 4% 3% 8% 2% 4% 1% 0% 0% 2002 2003 2004 2005e 2006e 2007e 2002 2003 2004 2005e 2006e 2007e Austria Czech R Slovakia Romania Hungary Croatia Serbia Austria Czech R Slovakia Romania Hungary Ser
Slide 34: Overview of international exposures
> Overview of international exposures Credit Risk1 by regions at EB Group Low Risk Management Substandard Non performing Total outstanding attention in EUR m YE 05 YE 04 YE 05 YE 04 YE 05 YE 04 YE 05 YE 04 YE 05 YE 04 % of total % of total Core Markets 89,322 79,604 12,890 10,891 2,826 3,310 3,537 3
Slide 35: Overview of international exposures (cont)
> Overview of international exposures (cont) Credit Risk1 by industry sectors at EB Group Low Risk Management Substandard Non performing Total outstanding attention in EUR m YE 05 YE 04 YE 05 YE 04 YE 05 YE 04 YE 05 YE 04 YE 05 YE 04 % of total % of total Banking & insurance 47,514 42,414 799 682 66
Slide 36: Financials (IFRS) of CE subsidiaries
> Financials (IFRS) of CE subsidiaries Neská spoPitelna EUR m FY 2005 FY 2004 % Change Net interest income 622.4 577.5 7.8 Risk provisions for loans and advances (12.9) (16.9) (23.7) Net commission income 287.0 281.3 2.0 Net trading result 49.4 43.9 12.5 General administrative expenses (550.1) (532.
Slide 37: Financials (IFRS) of CE subsidiaries (cont)
> Financials (IFRS) of CE subsidiaries (cont) Slovenská sporiteQRa EUR m FY 2005 FY 2004 % Change Net interest income 204.3 202.3 1.0 Risk provisions for loans and advances (11.1) 0.8 > 100.0 Net commission income 82.5 69.0 19.6 Net trading result 14.9 17.2 (13.4) General administrative expenses (16
Slide 38: Financials (IFRS) of CE subsidiaries (cont)
> Financials (IFRS) of CE subsidiaries (cont) Erste Bank Hungary EUR m FY 2005 FY 2004 % Change Net interest income 224.3 198.0 13.3 Risk provisions for loans and advances (26.0) (50.9) (48.9) Net commission income 64.8 53.2 21.8 Net trading result 34.6 31.7 9.1 General administrative expenses (185.
Slide 39: Financials (IFRS) of CE subsidiaries (cont)
> Financials (IFRS) of CE subsidiaries (cont) Erste Bank Croatia EUR m FY 2005 FY 2004 % Change Net interest income 106.5 91.4 16.5 Risk provisions for loans and advances (14.4) (5.0) > 100.0 Net commission income 23.3 16.9 37.9 Net trading result 20.4 12.7 60.6 General administrative expenses (75.2
Slide 40: Financials (IFRS) of CE subsidiaries (cont)
> Financials (IFRS) of CE subsidiaries (cont) Erste Bank Serbia EUR m FY 2005 1) FY 2004 % Change Net interest income 8.8 5.7 (54.4) Risk provisions for loans and advances (10.2) (28.9) (64.7) Net commission income 4.2 3.4 23.5 Net trading result 6.5 2.1 >100.0 General administrative expenses (16.7)
Slide 41: EB Group quarterly results (IFRS)
> EB Group quarterly results (IFRS) Profit & loss statement - details EUR m Q1'04 Q2'04 Q3'04 Q4'04 Q1'05 Q2'05 Q3'05 Q4'05 Net interest income 650 652 666 693 673 697 694 731 Net commission income 281 283 285 287 311 306 305 335 Net trading result 62 46 48 60 57 48 66 70 Income from insurance 8 5 1
Slide 42: EB Group quarterly balance sheet (IFRS)
> EB Group quarterly balance sheet (IFRS) Balance sheet - details EUR m Q1'04 Q2'04 Q3'04 Q4´04 Q1'05 Q2'05 Q3'05 Q4'05 Total assets 136,128 137,517 142,221 139,812 148,202 152,660 156,931 152,660 Loans & advances credit inst. 18,747 17,846 19,304 15,684 19,545 19,840 20,058 16,858 Loans & advances
Slide 43: EB Group quarterly by divisions
> EB Group quarterly by divisions Core segments In EUR m Total Austria Total CE Q2 04 Q3 04 Q4 04 Q1 05 Q2 05 Q3 05 Q4 05 Q2 04 Q3 04 Q4 04 Q1 05 Q2 05 Q3 05 Q4 05 Net interest income 394.6 398.7 416.4 384.2 388.4 383.4 394.2 229.7 232.5 261.4 259.8 273.0 273.6 290.3 Risk provisions (78.4) (86.7) (8
Slide 44: EB Group quarterly by divisions - Austria details
> EB Group quarterly by divisions Austria - details In EUR m Savings Banks Retail & Mortgage Q2 04 Q3 04 Q4 04 Q1 05 Q2 05 Q3 05 Q4 05 Q2 04 Q3 04 Q4 04 Q1 05 Q2 05 Q3 05 Q4 05 Net interest income 199.4 208.5 231.5 204.1 204.9 209.2 215.7 131.1 127.0 132.1 128.4 128.9 126.6 127.2 Risk provisions (38
Slide 45: EB Group quarterly by divisions - Central Europe details
> EB Group quarterly by divisions Central Europe - details In EUR m Ceska sporitelna Slovenska sporitelna Q2 04 Q3 04 Q4 04 Q1 05 Q2 05 Q3 05 Q4 05 Q2 04 Q3 04 Q4 04 Q1 05 Q2 05 Q3 05 Q4 05 Net interest income 121.2 123.5 138.8 139.7 145.6 149.5 160.2 47.0 47.8 45.5 45.6 47.2 47.0 55.1 Risk provisio
Slide 46: EB Group quarterly by divisions - Central Europe details
> EB Group quarterly by divisions Central Europe - details In EUR m Erste Bank Croatia Erste Bank Serbia* Q2 04 Q3 04 Q4 04 Q1 05 Q2 05 Q3 05 Q4 05 Q2 04 Q3 04 Q4 04 Q1 05 Q2 05 Q3 05 Q4 05 Net interest income 19.5 21.9 23.2 27.4 29.7 23.7 19.5 - - - - - 0.9 1.2 Risk provisions (2.9) (5.6) (1.4) (2.
Slide 47: Key financial data
> FY 2005 Results Key financial data EUR m YE 1998 YE 1999 YE 2000 YE 2001 YE 2002 YE 2003 YE 2004 YE 2005 Tier 1 Capital pursuant to § Austrian Banking Act 1,611 1,753 2,125 2,337 3,800 3,912 4,377 5,112 Total own funds pursuant to § Austrian Banking Act 1 3,176 3,296 3,956 4,308 6,983 7,009 7,286
Slide 48: Current shareholder structure
> Current shareholder structure Total numbers of shares: 308,032,560* By Investor Type By Region Others Austria Verein 5.0% Continental Europe 0.9% 6.4% 30.5% UK & Ireland 17.2% Employees 1.5% Savings banks Institutional investors 7.2% North America Austria 48.6% Private investors 17.6% 7.2% 57.9% F
Slide 49: 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 * The new EB shares out of the capital increase in January 2006 are lis