Erste Group Bank Ag · VIE:EBS
Erste Group Bank — FY2015 Earnings Presentation
14 slides from Erste Group Bank's earnings presentation, Feb 26, 2016
Slide 1: Erste Group financial results: net profit of EUR 968.2 million in 2015
Erste Group financial results: net profit of EUR 968.2 million in 2015; 4.2% lending growth; CET 1 ratio 12.3%; dividend EUR 0.5 per share Press Conference February 26th, 2016 Page
Slide 2: General Economic Conditions – Robust economic environment in Erste Group's markets
General Economic Conditions – 2015 Robust economic environment in Erste Group's markets 2016 Real GDP growth (in %) Domestic demand contribution to GDP growth (in pps) 4.5 4.9 4.6 4.5 3.8 4.3 3.4 3.5 3.6 2.7 2.4 2.2 1.7 2.0 2.1 1.5 1.5 1.7 1.3 1.1 0.9 0.8 0.9 0.7 AT CZ SK RO HU HR AT CZ SK RO HU HR
Slide 3: General economic conditions – Sound public finances in Erste Group's markets
General economic conditions – 2015 Sound public finances in Erste Group's markets 2016 Budget deficit in (% of GDP) Government debt (in % of GDP) 92 87 85 88 Maastricht threshold: 60% 76 76 -1.4 -1.5 -1.3 -1.6 53 52 -1.9 -2.0 -2.0 -2.0 41 41 38 39 -2.7 -2.8 Maastricht threshold: -3% -4.3 -4.8 AT CZ
Slide 4: Business environment – All-time low interest rates create challenging environment
Business environment – 3m Interbank All-time low interest rates create challenging environment 10-year Gov Austria Czech Republic Romania 1.48% 1.55% 4.57% 4.03% 1.11% 1.11% 0.21% 0.36% 0.33% 0.10% 2.29% 1.70% 2014 2015 2014 2015 2014 2015 ECB lowered discount rate in Central bank has kept interest
Slide 5: Loans to customers and deposits – Lending and deposit volume increased
Dec. 14 Development of business: Loans to customers and deposits – Dec. 15 Lending and deposit volume increased by over 4%, stable loan-to-deposit ratio Loans to customers (net) Customer deposits Loan-to-deposit ratio 120.8 122.6 98.6% Group 125.9 127.9 98.4% 28.3 29.9 94.6% AT/EBOe 29.5 30.3 97.4%
Slide 6: Operating income and expenses – Lower NII & net trading result
Development of business: Operating income and expenses – Lower NII & net trading result due to interest rate environment Operating income Operating expenses -1.5% in EUR in EUR 6.878 6.772 million million 271 255 242 210 +2.2% 1.870 1.862 3.787 3.869 466 445 1.137 1.179 4.495 4.445 2.184 2.245 2014
Slide 7: Operating result and cost/income ratio – Operating result impacted by low interest rates
Development of business: Operating result and cost/income ratio – 2014 2015 Operating result impacted by low interest rate environment Geographic segments Summary 3.091 55.1% • Stable development of business, especially Group 57.1% 2.903 in: 390 61.8% AT/EBOe 398 61.6% • EB Oesterreich AT/SK 447 67.
Slide 8: Risk costs – Risk costs improved (-65%) nearly everywhere
Development of business: Risk costs – 2014 2015 Risk costs improved (-65%) nearly everywhere, especially in Romania Geographic segments Summary 2.084 1.63% • Healthy and improved credit risk Group 729 0.56% environment in almost all countries, AT/EBOe 104 0.36% especially in: 59 0.20% 199 0.50% • Ro
Slide 9: Asset quality – Clear improvement in asset quality
Development of business: Asset quality – Dec.14 Dec.15 Clear improvement in asset quality, especially in Romania, Hungary NPL volume NPL ratio NPL coverage (excl collateral) Group 10.878 8.5% 68.9% 9.314 7.1% 64.5% AT/EBOe 1.012 3.5% 68.9% 861 2.9% 62.6% AT/SK 2.441 6.3% 64.0% 2.219 5.6% 57.7% AT/SO
Slide 10: Other result – Reduced impact from one-offs, banking taxes still high
Development of business: Other result – Reduced impact from one-offs, banking taxes still high Other result* Banking taxes in EUR in EUR million million -535 -236 -1.735 -256 2014 2015 2014 2015 Improvement in other result due to lower one- Still substantial banking taxes: Austria (EUR offs: CHF con
Slide 11: Pre-tax result and taxes on income – Pre-tax profit at highest level since 2007
Development of business: Pre-tax result and taxes on income – Pre-tax profit at highest level since 2007 Pre-tax results Taxes on income in EUR in EUR 1.639 million million -364 -728 -521 2014 2015 2014 2015 Pre-tax result was supported by Normalisation of tax rate around 22% normalisation of risk c
Slide 12: Net profit and dividend – Strong profitability, dividend payout around 22%
Development of business: Net profit and dividend – Strong profitability, dividend payout around 22% Net result Dividend 968 in EUR in EUR million million 214.9 -1.383 0.0 2014 2015 2014 2015 Dividend proposal for the AGM: EUR 0.5 for the financial year 2015 Page 12
Slide 13: Capital & RWA – CET 1 increased to 12.3% vs. 9.75% required
Development of business: Capital & RWA – CET 1 (Basel 3 phased-in) increased to 12.3% vs. 9.75% required Regulatory capital (in EUR bln) Risk-weighted assets (in EUR bln) Capital ratios (in %) 17.9 17.6 100.6 98.3 15.7 15.8 3.2 2.8 10.3 10.8 5.4 12.3 12.3 5.2 10.6 10.6 0.0 0.0 87.1 84.7 12.1 10.6 31
Slide 14: Conclusion – Outlook 2016
Conclusion – Outlook 2016 • CEE economic environment anticipated to be conducive to credit expansion • Real GDP growth of between 1.5-3.8% expected in 2016 in all major CEE markets, including Austria • Real GDP growth to be driven by solid domestic demand • Return on tangible equity (ROTE) expected