Erste Group Bank Ag · VIE:EBS
Erste Group Bank — Erste Bank — H1 2002 Earnings Presentation
44 slides from Erste Group Bank's earnings presentation, Aug 20, 2002
Slide 1: Erste Bank – reliable in rough times
> Erste Bank – reliable in rough times > First Half 2002 Results Teleconference Vienna, 20 August 2002
Slide 2: Table of Contents
> Table of Contents Presentation Appendix 03 Financial Highlights 37 Erste Bank‘s Home Market 04 Key Ratios 38 CS - H1 2002 Financial Highlights 05 Highlights 39 SLSP – H1 2002 Financial Highlights 06 Financials 40 Quarterly Results 10 P&L Details 41 Quarterly Balance Sheet 16 Divisional Highlights
Slide 3: H1 2002 Financial Highlights
> H1 2002 Financial Highlights Financial Highlights Erste Bank Group Core Group Operating profit » Up 84.5% to EUR 579.8m » Up 20.5% to EUR 378.7m » Contribution from CE subsidiaries reaches 50% compensating market driven slow down in domestic operations Net profit » Increases by 2.8% to EUR » Sligh
Slide 4: H1 2002 Key ratios
> H1 2002 Key ratios Financial Highliights Erste Bank Group Core Group Return on equity » 12.9%, affected primarily by » Decrease to 10.8% one-off factors such as EU » compares with 12.4% for FY 2001 and fine provisioning 12.3% in H1 2001 Cost/Income ratio » 67.5%, due mainly to above » 68.0% agains
Slide 5: H1 2002 Highlights
> H1 2002 Highlights Financial Highlights Key developments May 2002 » Acquisition of Rijecka banka finalized - Mandatory tender offer increases Erste Bank stake to 92.9% - Final purchase price 51.02m reduces by 5.5% after post acquisition due diligence July 2002 » CS and SLSP complete restructuring
Slide 6: H1 2002 Financials
> H1 2002 Financials > Balance sheet > P& L > Divisionals
Slide 7: H1 2002 Erste Bank Group Balance Sheet (IAS) – Assets
> H1 2002 Erste Bank Group Balance Sheet (IAS) H1 2002 Balance Sheet Assets Erste Bank Group Core Group EUR m 30.6.2002 31.12.2001 % Change 30.6.2002 % Change Cash and balances with central banks 2,295 2,573 (10.8) 1,888 (26.6) Loans and advances to credit institutions 18,880 18,912 (0.2) 21,473 13.
Slide 8: H1 2002 Erste Bank Group Balance Sheet (IAS) – Liabilities
> H1 2002 Erste Bank Group Balance Sheet (IAS) H1 2002 Balance Sheet Liabilities Erste Bank Group Core Group EUR m 30.6.2002 31.12.2001 % Change 30.6.2002 % Change Amounts owed to credit institutions 24,754 28,642 (13.6) 25,998 (9.2) Amounts owed to customers 62,257 37,175 67.5 40,867 9.9 Debts evid
Slide 9: H1 2002 Erste Bank Group Income Statement (IAS)
> H1 2002 Erste Bank Group Income Statement (IAS) H1 2002 Profit & Loss Accounts Erste Bank Group Core Group EUR m HY 2002 HY 2001 % Change HY 2002 HY 2001 % Change Net interest income 1,219.2 670.0 82.0% 779.5 670.0 16.3% Risk provisions for loans and advances (183.5) (93.1) 97.1% (94.0) (93.1) 1.0
Slide 10: P&L Details: Net interest income
> P & L Details Net interest income H1 2002 Profit & Loss Accounts Erste Bank Group – continued strong growth 670.0 1,219.2 670.0 779.5 » Quarterly split » Equal contribution to (Core Group): double-digit growth in Core 1400 Q1=EUR 384.3 m Group by CE subsidiaries Core Group Q2=EUR 395.2 m and domes
Slide 11: P&L Details: Risk provisions
> P & L Details Risk provisions H1 2002 Profit & Loss Accounts Releases in Central Europe offset higher risk provisions in Austria 93.1 183.5 93.1 94.0 » Quarterly split » Provisions at Erste Bank (Core Group): Group nearly doubled by Q1=EUR 56.7 m SBs Q2=EUR 37.3 m 200 Core Group » Overall only mar
Slide 12: P&L Details: Net commission income
> P & L Details Net commission income H1 2002 Profit & Loss Accounts Sound growth in a difficult market 500 278.0 495.5 278.0 325.7 » Quarterly split 450 (Core Group): » Strong growth driven by Q1=EUR 169.9 m lending and insurance 400 Q2=EUR 155.8 m +68.9% business 350 Core Group 300 EUR m +17.2% »
Slide 13: P&L Details: Net trading result
> P & L Details Net trading result H1 2002 Profit & Loss Accounts Growth despite equity market turmoil 40.0 89.6 64.0 77.4 » Quarterly split » 20.9% increase in Core 90 (Core Group): Group m ainly driven by Q1=EUR 43.7 m contribution from CS 80 +68.9 Core Group Q2=EUR 33.7 m - profiting from CZK 70
Slide 14: P&L Details: General administrative expenses
> P & L Details General administrative expenses H1 2002 Profit & Loss Accounts Investments increase expenses in Austria 1350 697.8 1,203.2 697.8 803.9 » Quarterly split » Cost growth at Core Group 1200 (Core Group): due to: Q1=EUR 393.9 m -EUR 36.9m first time 1050 Q2=EUR 410.0 m consolidation of TI
Slide 15: P&L Details: Other operating result
> P & L Details Other operating result H1 2002 Profit & Loss Accounts One-off effect impacts result 0 » Quarterly split Main effects at Core Group: -10 (Core Group): -27.6 Q1=EUR –26.3 m -27.6 » Goodwill and payment to +68.8% Q2=EUR –20.3 m -20 deposit insurance in line with Q1 2002 EUR m -30 -46.6
Slide 16: Segment reporting
> Segment reporting
Slide 17: Divisional highlights: Savings banks
> H1 2002 divisional highlights H1 2002 Divisional highlights Savings banks Erste Bank Group » Negative result in H1 2002 of EUR –10.7m mainly due to funding costs, allocation of goodwill and restructuring costs for TISPA - Funding costs and goodwill reduce profit by a total of EUR 19.9m Core Group
Slide 18: Divisional highlights: Retail and real estate
> H1 2002 divisional highlights H1 2002 Divisional highlights Retail and real estate Erste Bank Group » Net profit more than double due to strong contribution from CS - ROE improved to 13.6% compared to 5.5% in H1 2001 » Majority-owned Erste & Steiermärkische fully consolidated - Main difference to
Slide 19: Divisional highlights: Large corporate clients
> H1 2002 divisional highlight H1 2002 Divisional highlights Large corporate clients Erste Bank Group » Net profit grew by 24% to EUR 63.4m in EB Group - ROE improved accordingly to 18.6% - CIR 36.6% down from 44.6% last year » Additional Immorent subsidiaries consolidated through Haftungsverbund Co
Slide 20: Divisional highlights: Trading and investment banking
> H1 2002 divisional highlights H1 2002 Divisional highlights Trading and investment banking Erste Bank Group » Decrease in net profit from EUR 33.3m to 24.8m in H1 2002 reflecting securities markets turmoil - ROE 21.7% down from 24.9% last year - Net interest income and net trading result improved
Slide 21: Divisional highlights: Asset gathering
> H1 2002 divisional highlights H1 2002 Divisional highlights Asset gathering Erste Bank Group » Net profit up 4.5% to EUR 21.0 - Main factor is inclusion of s Versicherung due to the Haftungsverbund » CIR improved to 41.8% Core Group » At Core Group segement results improved by 8.5% to EUR 21.8m »
Slide 22: Divisional highlights: Slovenská sporitelňa
> H1 2002 divisional highlights H1 2002 Divisional highlights Slovenská sporitel ' na » Pre-tax profit slightly above last years level - Changes in tax deduction on interest payments from securities and increase minorities reduce net profit » Funding costs and goodwill amount to EUR 9.5m » Sound gro
Slide 23: Targets and outlook
> Targets and outlook Outlook Erste Bank Group considers new targets for 2005 » Cautious outlook for full year 2002 in view of uncertain economic development » In spite of negative one-off effect of provisions for EU fine, management expects earnings for the full year to exceed last year‘s levels »
Slide 24: Divisional figures: Savings banks
> H1 2002 divisional figures H1 2002 Divisionals Savings banks Erste Bank Group Core Group In EUR m HY 2002 HY 2001 HY 2002 HY 2001 Net interest income 479.7 34.2 54.5 34.2 Risk provisions for loans and adv. (105.6) (6.5) (20.9) (6.5) Net commission income 169.4 21.5 33.8 21.5 Net trading result 11.
Slide 25: Divisional figures: Retail and real estate
> H1 2002 divisional figures H1 2002 Divisionals Retail and real estate Erste Bank Group Core Group EB "domestic" CS Total EB "domestic" CS Total In EUR m HY 2002 HY 2001 HY 2002 HY 2001 HY 2002 HY 2001 HY 2002 HY 2001 HY 2002 HY 2001 HY 2002 HY 2001 Net interest income 247.1 219.8 202.5 165.1 449.6
Slide 26: Divisional figures: Large corporate customers
> H1 2002 divisional figures H1 2002 Divisionals Large corporate customers EB "domestic" CS Total EB "domestic" CS Total In EUR m HY 2002 HY 2001 HY 2002 HY 2001 HY 2002 HY 2001 HY 2002 HY 2001 HY 2002 HY 2001 HY 2002 HY 2001 Net interest income 132.7 124.0 40.5 24.8 173.2 148.8 132.7 124.0 40.5 24.
Slide 27: Divisional figures: Trading and investment banking
> H1 2002 divisional figures H1 2002 Divisionals Trading and investment banking Erste Bank Group Core Group EB "domestic" CS Total EB "domestic" CS Total In EUR m HY 2002 HY 2001 HY 2002 HY 2001 HY 2002 HY 2001 HY 2002 HY 2001 HY 2002 HY 2001 HY 2002 HY 2001 Net interest income 40.2 37.5 8.4 0.8 48.
Slide 28: Divisional figures: Asset gathering
> H1 2002 divisional figures H1 2002 Divisionals Asset gathering 1 Erste Bank Group Core Group In EUR m HY 2002 HY 2001 HY 2002 HY 2001 Net interest income (0.5) 0.4 0.7 0.4 Risk provisions for loans and adv. 0.0 0.0 0.0 0.0 Net commission income 47.5 47.9 47.5 47.9 Net trading result 0.0 0.0 0.0 0.
Slide 29: Divisional figures: Corporate centre
> H1 2002 divisional figures H1 2002 Divisionals Corporate centre Erste Bank Group Core Group EB "domestic" CS Total EB "domestic" CS Total In EUR m HY 2002 HY 2001 HY 2002 HY 2001 HY 2002 HY 2001 HY 2002 HY 2001 HY 2002 HY 2001 HY 2002 HY 2001 Net interest income (4.4) 0.8 (3.7) (0.6) (8.1) 0.2 (3.
Slide 30: Divisional figures: Slovenská sporitelňa
> H1 2002 divisional figures H1 2002 Divisionals Slovenská sporitel ' na Erste Bank Group Core Group In EUR m HY 2002 HY 2001 HY 2002 HY 2001 Net interest income 76.7 63.2 76.7 63.2 Risk provisions for loans and adv. (4.5) (3.5) (4.5) (3.5) Net commission income 19.1 13.9 19.1 13.9 Net trading resul
Slide 31: Divisional figures: Total
> H1 2002 divisional figures H1 2002 Divisionals Total Erste Bank Group Core Group EB "domestic" CS Total 1 EB "domestic" CS Total 1 Total Total Total Total In EUR m HY 2002 HY 2001 HY 2002 HY 2001 HY 2002 HY 2001 HY 2002 HY 2001 HY 2002 HY 2001 HY 2002 HY 2001 Net interest income 415.1 382.5 247.7
Slide 32: Credit risk at Erste Bank
> Credit risk at Erste Bank
Slide 33: Overview of exposures by regions
> Overview of exposures by regions Credit risk Structure of Credit Risk at Group Group 1 Low Risk Management Substandard Doubtful Total outstanding attention in EUR m HY 2002 FY 2001 HY 2002 FY 2001 HY 2002 FY 2001 HY 2002 FY 2001 HY 2002 FY 2001 2 share in % share in % Austria 28,608 30,614 4,523 4
Slide 34: Overview of exposures by sectors
> Overview of exposures by sectors Credit risk Credit Risk by industry sectors at Core Group 1 Low Risk Management Substandard Doubtful Total outstanding attention in EUR m HY 2002 FY 2001 HY 2002 FY 2001 HY 2002 FY 2001 HY 2002 FY 2001 HY 2002 FY 2001 share in % share in % Banking and insurance 36,
Slide 35: Credit risk details
> Credit risk details Credit risk Asset quality and NPLs: » Asset quality negatively affected by economic environment in Austria and Western Europe » Downward trends throughout all industry segments – EB has no concentration on specific industries » Ongoing portfolio review and application of strict
Slide 36: Appendix
> Appendix > Additional information
Slide 37: Erste Bank's home market in Central Europe with a population of 40 million
> Erste Bank’s home market in Central Europe with a population of 40 million Extended home market Strong presence - servicing 10.6 million customers in Central Europe Branches: 684 Clients: 4.9m Erste Bank Branches: 441 Branches: 315 Clients: 2.3m Czech Republic Clients: 0.6m 10.3m Savings Banks Slo
Slide 38: Ceská sporitelna: H1 2002 financial highlights
> Ceská sporitelna: H1 2002 financial highlights Extended home market CS increases net profit by almost 4 times yoy » Total operating income increased by 14% while administrative expenses decreased by 2.5% underlying CS’s earnings power » Risk provisions decreased by 85% supported by one-off cash re
Slide 39: Slovenská sporitelňa: H1 2002 financial highlights
> Slovenská sporitel na: H1 2002 financial highlights Extended home market Strong focus on milestones to push transformation process » Customer deposits increased by 4% to SKK 172.6bn (EUR 4 bn) – 85% of total assets, customer loans grew by 30% to SKK 27.9bn (EUR 650m) » Successfull placement of new
Slide 40: Quarterly results (IAS)
> Quarterly results (IAS) Additional financial information P & L details Erste Bank Group Core Group EUR m Q2'00 Q3'00 Q4'00 Q1'01 Q2'02 Q3'01 Q4'01 Q1'02 Q2'02 Q1'02 Q2'02 Net interest income 196 253 295 313 357 389 380 585 634 384 395 Risk provisions for loans and advances (33) (52) (50) (48) (45)
Slide 41: Quarterly balance sheet (IAS)
> Quarterly balance sheet (IAS) Additional financial information Balance sheet details Erste Bank Group Core Group EUR m Q3'00 Q4'00 Q1'01 Q2'02 Q3'01 Q4'01 Q1'02 Q2'02 Q1'02 Q2'02 Total assets 69,008 71,196 80,114 82,327 81,485 86,033 117,684 121,068 88,508 90,893 Loans & advances credit inst. 18,6
Slide 42: Quarterly results (IAS): Key financial data
> Quarterly results (IAS) Additional financial information Key financial data in EUR m YE 1998 YE 1999 YE 2000 YE 2001 Q1 2002 Q2 2002 Tier 1 Capital pursuant to § Austrian Banking Act 1,611 1,753 2,125 2,337 2,465 2,350 Total own funds pursuant to § Austrian Banking Act 3,176 3,296 3,956 4,308 4,50
Slide 43: Current shareholder structure
> Current shareholder structure Total number of shares: 59,825,114 Five largest institutional shareholders: Austria Versicherungsverein: 3.6% Uniqa: 2.5% Generali: 3.6% AVS Swedbank: 3.4% 34.4% Dexia Bank: 1.8% Commerzbank: 1.7% Shareholders < 5% Four largest savings banks 65.6% shareholders: Kärntn
Slide 44: Investor Relations Contacts
> Investor Relations Contacts Erste Bank, Graben 21, 1010 Vienna Fax: +43-(0)-50100-13112 E-mail: investor.relations@erstebank.at Internet: www.erstebank.at Reuters: ERST.VI Bloomberg: DESC AV Datastream: O:ERS Securities ID: 065201 Investor Relations Gabriele Werzer Tel: +43 (0) 50100-11286 E-Mail: