Erste Group Bank Ag · VIE:EBS
Erste Group Bank — FY2018 Earnings Presentation
18 slides from Erste Group Bank's earnings presentation, Feb 28, 2019
Slide 1: Annual Results 2018
ERSTES Group Annual Results 2018 ERSTESS Group
Slide 2: Positive economic outlook for Erste Group's markets
Business environment Positive economic outlook for Erste Group's markets Wage growth ave.in) | | Summary > Economic growth in CEE countries will remain clearly above the euro area average also in 2019 > Solid economic environment provides basis for wage growth and low unemployment 2018 @ 2019f Sourc
Slide 3: Sustainable CEE public debt outlook well below euro area average
Business environment Sustainable CEE public debt outlook well below euro area average Gross public debt (in % of GDP) average for 46.5 “(2018) sd 1215 Maastricht limit 107.3 1067 for public debt as 987 99.8 702 729 697 | 735 5 ae 57.9 601 = 48.8 49.2 48.0 al ania otz 33.2 351 319 373 25.8 cz RO SK P
Slide 4: Volume of CEE households' financial assets approaching Austrian level
15 years of CEE in EU Volume of CEE households’ financial assets approaching Austrian level Financial Assets 2004 (EUR mn) Austria CEE (Erste) Deposits and cash @ Pensions and insurance Bonds @ other @ Shares and investment funds ERSTES Group Financial Assets 2017 (EUR mn) 654 634 Austria CEE (Erste
Slide 5: CEE catching up with Europe's Big Four, having overtaken Spain
Business environment CEE catching up with Europe's Big Four, having overtaken Spain Nominal GDP 2004 (EUR bn) Nominal GDP 2017 (EUR bn) 7 0 ES CEE NL CEE(Erste) SE PL BE AT CEE ES NL CEE (Erste) SE PL BE AT CEE: CZ, SK, HU, PL, BG, RO, SI, HR, RS Quelle: Eurostat CEE (Erste): CZ, SK, HU, RO, HR, RS
Slide 6: Rising interest rates in CEE countries
Interest rate environment Rising interest rates in CEE countries Austria 058 0.66 058 0.60 oo o——_——_* 2017 2018 a318 0418 > ECB cut discount rate to zero in March 2016 > Maintains expansionary monetary policy stance despite tapering announcement Slovakia 0.94 0.86 0.80 1.02 o—___+ -—— 2017 2018 031
Slide 7: Net profit of EUR 1.8 bn on improved operating performance
Business performance Net profit of EUR 1.8 bn on improved operating performance Qo0 net profit reconcilation (EUR mn) +24.5% ] 565 | Ea — Q318 Operating Operating Riskcosts Other Taxeson Minorities Q418, income expenses result income ERSTESS Group YoY net profit reconciliation (EUR mn) +36.3% 1 1793
Slide 8: Solid growth in customer loans (+7.0%) and deposits (+7.7%)
Business performance Solid growth in customer loans (+7.0%) and deposits (+7.7%) Customer loans (net; EUR bn) Customer deposits (EUR bn) Loan-Deposit ratio (%) Group ae SS 4 3 932 AT/EBOe |: 3 5 TE AT/SB 41 426 96.6 en ene «2 3 Z ee 0 | 7 4 ee 2 RO 72 113 637 a 7s is == sk "7 125 93.6 a 130 ee 37 Lc
Slide 9: Retail lending volume rises 6.3%
Business performance Retail lending volume rises 6.3% Retail Highlights for 2018 NEWLY-GRANTED MORTGAGES (Volume: -1.75%) INFLOW OF RETAIL DEPOSITS (Volume: +7.43%) EUR 7.33 bn ¢} EUR 5.79 bn & provided to over 95,500 households continued inflow in all markets CONSUMER LENDING (Volume: +7.40%) BANCA
Slide 10: Digital advances
Digital advances George is Europe's largest platform, with over 4.4 million users > 1billion customer engagements across all channels > Over 30% growth in digital sales of consumer loans, deposits and current account openings +> Mobile engagements rising at twice the rate of digital overall ERSTESS
Slide 11: SMEs driving growth in corporate loans
Business performance SMEs driving growth in corporate loans 2018 Corporate Highlights TOTAL GROSS LOANS TOP PERFORMING SUBSIDIARIES* E U R 51. 9 b n & Serbia Slovakia Hungary nee +30% +21% +20% SME LENDING TOP GROWTH SECTORS IN OUR PORTFOLIO* 11.5% growth in loan volume © 2,500 new SME clients acqui
Slide 12: Higher operating revenues due to strong net interest income and fees
Business performance Higher operating revenues due to strong net interest income and fees Operating revenues (EUR mn) Operating expenses (EUR mn) +3.7% +0.5% CT “4 CT “4 6,669 ENS = a 427 4158 4181 >=: 472 2017 2018 2017 2018 Net interest income @ Net trading result Personnel expenses @ Depreciation
Slide 13: Operating result rises on growth across markets
Business performance Operating result rises on growth across markets Operating result (EUR mn) Group - AT/EBOe fm 400 AT/SB 424 (WA 787 RO a 306 SK 207 HU sams 200 HR 208 RS 2 ERSTESS Group 2735 2017 © 2018
Slide 14: Cost/Income ratio declines slightly
Business performance Cost/Income ratio declines slightly Cost/Income ratio (in %) Group 605 AT/EBOe 624 AT/SB ma717 (WA 478 RO 537 SK ar HU 508 ae HR 506 RS 718 2017 ERSTESS Group 2018
Slide 15: Risk provisions releases continue
Business performance Risk provisions releases continue Absolute (EUR mn) Relative’ (in %) Group » ioe ou ml” AT/EBOe 2 oo AT/SB 28 02 | 4.00 AT/OA aaa « Pe Z hn 3.00 ke ies 2s ae SK ra ooo HU faa oe 0.00 HR 3 ue 0.00 RS S Seen O00) ERSTESS Group 2017 183 2018 Summary > Improved asset quality primari
Slide 16: NPL volumes decline in all markets, with NPL ratio improving to 3.2%
Business performance NPL volumes decline in all markets, with NPL ratio improving to 3.2% Group AT/EBOe AT/SB (WA RO SK HU HR RS ERSTESS Group 32 a 783 yim 4.881 NPL volume (EUR mn) 1,588 1,758 5,776 NPL ratio (%) 40 32 55 at 95 NPL coverage (excl. collateral; %) 688 73.0 2017
Slide 17: Excellent capital generation over past decade (+50% since 2009)
Business performance Excellent capital generation over past decade (+50% since 2009) DEC 2009 DEC 2010 DEC 2011 DEC 2012 DEC 2013 DEC 2014 DEC 2015 DEC 2016 DEC 2017 DEC 2018 ERSTES Group Vv
Slide 18: Outlook 2019
Outlook 2019 The outlook is based on a solid macroeconomic development in our markets. We expect real GDP growth of approximately 3% in CEE and above 2% in Austria on the back of continued strong domestic demand, rising real wages, low unemployment, and healthy public finances. Based on loan growth