Raiffeisen Bank International Q3/2016 Results

Transcription

1 Raiffeisen Bank International Q3/2016 Results

2 Disclaimer Certain statements contained herein may be statements of future expectations and other forward-looking statements, which are based on management's current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. In addition to statements which are forward-looking by reason of context, words such as "may", "will", "should", "expects", "plans", "contemplates", "intends", "anticipates", "believes", "estimates", "predicts", "potential", or "continue" and similar expressions typically identify forward-looking statements. By their nature, forward-looking statements involve known and unknown risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. As such, no forward-looking statement can be guaranteed. Undue reliance should not be placed on these forward-looking statements. Many factors could cause our results of operations, financial condition, liquidity, and the development of the industries in which we compete, to differ materially from those expressed or implied by the forward-looking statements contained herein. These factors include, without limitation, the following: (i) our ability to compete in the regions in which we operate; (ii) our ability to meet the needs of our customers; (iii) our ability to leverage synergies from acquisitions, cost reduction programs or other projects; (iv) uncertainties associated with general economic conditions particularly in CEE; (v) governmental factors, including the costs of compliance with regulations and the impact of regulatory changes; (vi) the impact of currency exchange rate and interest rate fluctuations; and (vii) other risks, uncertainties and factors inherent in our business. Subject to applicable securities law requirements, we disclaim any intention or obligation to update or revise any forward-looking statements set forth herein, whether as a result of new information, future events or otherwise. This document is for information purposes only and shall not be treated as giving any investment advice and/or recommendation whatsoever. This presentation and any information (written or oral) provided to you does not constitute an offer of securities, nor a solicitation for an offer of securities, nor a prospectus or advertisement or a marketing or sales activity for such securities. The shares of Raiffeisen Bank International AG ( RBI ) have not been registered under the U.S. Securities Act of 1933 (the Securities Act ) nor in Canada, U.K. or Japan. No securities may be offered or sold in the United States or in any other jurisdiction, which requires registration or qualification, absent any such registration or qualification or an exemption therefrom. These materials must not be copied or otherwise distributed to U.S. persons (according to the definition under Regulation S of the Securities Act as amended from time to time) or publications with general circulation in the United States. The circulation of this document may be restricted or prohibited in certain jurisdictions. For the United Kingdom: This presentation and related material (these "Materials") are for distribution only to persons who are members of RBI falling within Article 43(2) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended, the "Financial Promotion Order") or who (i) have professional experience in matters relating to investments falling within Article 19(5) of the Financial Promotion Order), (ii) are persons falling within Article 49(2)(a) to (d) ("high net worth companies, unincorporated associations etc") of the Financial Promotion Order, (iii) are outside the United Kingdom, or (iv) are persons to whom an invitation or inducement to engage in investment activity (within the meaning of section 21 of the Financial Services and Markets Act 2000) in connection with the issue or sale of any securities may otherwise lawfully be communicated or caused to be communicated (all such persons together being referred to as "relevant persons"). These Materials are directed only at relevant persons and must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which these Materials relate is available only to relevant persons and will be engaged in only with relevant persons. Figures shown in the presentation are based on figures disclosed in the annual report as well as the interim reports of RBI. However, figures used in this document have been rounded, which could result in percentage changes differing slightly from those provided in such reports. We have diligently prepared this presentation. However, rounding, transmission, printing, and typographical errors cannot be ruled out. We are not responsible or liable for any omissions, errors or subsequent changes which have not been reflected herein and we accept no liability whatsoever for any loss or damage howsoever arising from any use of this document or its content or third party data or otherwise arising in connection therewith. 2

3 Table of Contents Executive Summary Financials Risk Management Merger Update Appendix

4 Executive Summary 1-9/2016 Consolidated profit EUR 394 mn CET1 ratio further improved (12.6% transitional, 12.3% fully loaded) Net interest margin stabilizing Substantial reduction in risk costs, especially in retail NPLs significantly reduced; NPL ratio improving and coverage ratio stable Resolution passed in principle to merge RZB and RBI Raiffeisen Leasing Polska: Sales agreement signed with PKO Leasing resulting in approx. 33BP increase in CET1 ratio (fully loaded) at closing Exclusive negotiations with Polish Alior Bank regarding the sale of Raiffeisen Polbank Romanian mortgage Walkaway Law partially repealed by Constitutional Court 4

5 1-9/2016 Financial Highlights in EUR mn 1-9/ /2015 y-o-y Net interest income 2,187 2,495 (12.3)% Net fee and commission income 1,097 1,129 (2.8)% Net trading income 136 (12) - Operating income 3,470 3,660 (5.2)% Profitability General administrative expenses (2,100) (2,101) (0.1)% Net provisioning for impairment losses (503) (795) (36.7)% Other results (122) (56) 115.7% Profit before tax % Profit after tax (6.9)% Asset Quality Regulatory Capital Ratios Consolidated profit (14.7)% 30/09/ /09/2015 y-o-y NPL ratio 10.2% 12.2% (1.9)PP NPL coverage ratio 72.0% 66.8% 5.2PP Loans to customers 69,791 73,284 (4.8)% 30/09/ /09/2015 y-o-y Common equity tier 1 ratio (fully loaded) 12.3% 10.7% 1.6PP Common equity tier 1 ratio (transitional) 12.6% 11.3% 1.3PP Total capital ratio (fully loaded) 17.6% 16.1% 1.5PP Total capital ratio (transitional) 17.8% 16.7% 1.1PP 5

6 Transformation Program Update Targets FY/ /2016 Progress Update 2017 >12% CET1 ratio (fully loaded) >16% Total capital ratio (fully loaded) % 15.1% 12.3% 17.6% Poland: Sales process continues Raiffeisen Leasing Polska: Sales agreement signed with PKO Leasing Exclusive negotiations with Alior Bank regarding the sale of Raiffeisen Polbank Asia: Downscaling RWA reduction ongoing (around 80% reduction since end 2014) US: Winding down operations Wind down ongoing (around 60% RWA-reduction since end 2014) RWA reduction to support CET1 target EUR 69 bn EUR 62 bn Russia: Resizing of footprint Branch optimization completed with reduction of presence from 65 to 44 cities Ukraine: Return to profitability Turnaround accomplished; very low risk charges Post Transformation EUR 3,024 mn Zuno: Integration Decision taken to integrate Zuno into subsidiaries in Czech Republic and Slovakia ~20% reduction of cost base vs 2014 EUR 2,100 mn Slovenia: Bank sale completed Sale of banking operations closed as of end June 2016 Hungary: Visible turnaround Repositioning completed; costs down around 20% (y-o-y) 6

7 Development in Russia Business Development and Environment Ongoing robust profit after tax of EUR 266 mn YTD NIM remains well above 5% RoE after tax 28.8% in 1-9/2016 Provisioning ratio of 1.38% in 1-9/2016 (down 0.86PP y-o-y) Decrease of NPL ratio to 7.8%; NPL coverage ratio of 71.0% RUB appreciated 14% YTD driven by rising oil prices Management Actions RWA reduction ongoing; impacted by RUB appreciation Branch optimization completed (down 16 or 8.1% y-o-y to 181) with reduction of presence from 65 to 44 cities Focus in corporate remains on multinationals, large Russian corporates and mid-market Retail: focus on premium customers and digital transformation Further back office centralization and optimization in operations and IT centers Central bank key rate slightly reduced, inflation moderate but growth remains subdued Key Figure Overview (in EUR mn) 1-9/2016 FY/2015 Risk-weighted assets (total) 7,956 7,687 Total assets 11,306 10,676 Employees 7,698 7,635 Intercompany funding NPL ratio 7.8% 8.0% Profit/loss after tax

8 Development in Poland Sale of Polish leasing business Sales agreement signed with PKO Leasing; purchase price of approx. EUR 200 mn Closing should still follow in 2016; approx. EUR 30 mn positive P&L effect to be booked at closing Positive impact on CET1 ratio (fully loaded) of around 33BP for RBI and 28BP for Combined Bank Sales process Raiffeisen Polbank Exclusive negotiations with Alior Bank regarding the sale of Raiffeisen Polbank Polish regulator will consider the IPO commitment fulfilled if commercial parameters of a sale (incl. spinoff) are determined by end of November 2016 and spin-off is executed no later than 30 June 2017 FX mortgage loans Legislative process in the parliament started officially in October 2016 for the draft bill related to the partial refund of FX conversion spreads NPL ratio for EUR 2.9 bn CHF portfolio remains at a low level of 3.0%, provisioning ratio of 0.21% in 1-9/2016 Separation of mortgage portfolio Spin-off of Polish bank operations excluding CHF and potentially other mortgages in the context of an M&A transaction Retained mortgage portfolio (CHF and potentially other FX and PLN mortgages) to be subsequently transferred by cross-border merger to a Polish branch of RBI 8

9 Macro Outlook Development of Real GDP (%) Country e 2017f 2018f CE Czech Republic Hungary Poland Slovakia Slovenia CE SEE Albania Bosnia & Herz Bulgaria Croatia Kosovo Romania Serbia SEE EE Belarus (3.9) (3.0) Russia (3.7) (0.5) Ukraine (9.9) EE (4.1) (0.5) Austria Germany Euro area Source: RBI/Raiffeisen Research as of 9 November 2016 General Market Trends Recent economic data underlines moderate, but robust recovery in the euro area. Moreover, the European Central Bank will continue its expansionary monetary policy well into 2017 Dynamics in Central Europe (CE) are expected to remain steady with expected growth of around 3% in Poland and Slovakia even stronger. Regional industry growth has been more volatile in recent months, but private consumption continues to support growth in the region and manufacturing sentiment turned upwards again Growth dynamics in South Eastern Europe (SEE) surprised to the upside, triggering higher estimates for Romania, Bulgaria and Croatia. In 2017 other SEE countries are expected to catch up. An expected economic slowdown in Turkey will have limited impact on SEE Economic stabilization seen in Russia and Ukraine, but the upcoming recoveries will remain weak in comparison to the past. Ukraine finally put the IMF program back on track. Russia s economy lacks domestic drivers with consumers still retrenching and both monetary and fiscal policy moderately tight 9

10 Outlook and Targets We target a CET1 ratio (fully loaded) of at least 12% and a total capital ratio (fully loaded) of at least 16% by the end of After the implementation of the strategic measures defined at the beginning of 2015, the cost base should be approximately 20% below the level of 2014 (general administrative expenses 2014: EUR 3,024 mn). We aim for a return on equity before tax of approximately 14% and a consolidated return on equity of approximately 11% in the medium term. We further aim to achieve a cost/income ratio of between 50 and 55% in the medium term. We expect net provisioning for impairment losses for 2016 to be below the level of 2015 (EUR 1,264 mn). General administrative expenses for 2016 should be slightly below the level of the previous year (2015: EUR 2,914 mn). 10

11 Table of Contents Executive Summary Financials Risk Management Merger Update Appendix

12 Q3/2016 Financial Highlights in EUR mn Q3/2016 Q2/2016 q-o-q Net interest income (0.8)% Net fee and commission income % Net trading income (7.7)% Operating income 1,186 1, % Profitability General administrative expenses (687) (694) (1.0)% Net provisioning for impairment losses (100) (297) (66.3)% Other results (103) 33 Profit/loss before tax % Profit/loss after tax % Asset Quality Regulatory Capital Ratios Consolidated profit/loss % 30/09/ /06/2016 q-o-q NPL ratio 10.2% 10.4% (0.2)PP NPL coverage ratio 72.0% 72.1% (0.0)PP Loans to customers 69,791 70,825 (1.5)% 30/09/ /06/2016 q-o-q Common equity tier 1 ratio (fully loaded) 12.3% 12.2% 0.1PP Common equity tier 1 ratio (transitional) 12.6% 12.5% 0.1PP Total capital ratio (fully loaded) 17.6% 17.6% 0.0PP Total capital ratio (transitional) 17.8% 17.8% 0.0PP 12

13 Development of Financial Ratios in 1-9/2016 RoE (Consolidated) and RoTE 1 Cost/Income Ratio 10.8% 7.7% 7.8% 7.1% 9.5% 57.4% 59.1% 65.0% 61.8% 60.5% 7.9% 4.8% 5.8% 5.3% 6.6% 1 9/ / / / / / / / / /2016 RoE RoTE Net Interest Margin 1 Provisioning Ratio % 3.00% 2.73% 2.76% 2.76% 1.35% 1.64% 1.11% 0.93% 0.46% 1 9/ / / / / / / / / /2016 1) Annualized 13

14 1-9/2016 Distribution of Profit before Tax in EUR mn 33.3% 15.3% % 49 >500.0% (135) 45.8% 522 (405) 5.3% 39.1% % Central Europe Southeastern Europe Eastern Europe Group Corporates Group Markets Non-Core Corporate Center 1 & Reconciliation Group Note: Percentage changes are y-o-y 1) Due to the mostly internal nature of Corporate Center, amount is netted with Reconciliation for illustration purposes 14

15 Overview of Key Financials in EUR mn Q3/2016 Q2/2016 q-o-q 1-9/ /2015 y-o-y Net interest income (0.8)% 2,187 2,495 (12.3)% Net fee & commission income % 1,097 1,129 (2.8)% Net trading income (7.7)% 136 (12) Recurring other net operating income % % Operating income 1,186 1, % 3,470 3,660 (5.2)% General admin expenses (687) (694) (1.0)% (2,100) (2,101) (0.1)% Staff expenses (347) (353) (1.8)% (1,048) (1,008) 3.9% Other admin expenses (245) (267) (8.2)% (815) (860) (5.2)% - Hereof regulatory charges (20) (28) (27.9)% (123) (132) (7.0)% Depreciation (95) (74) 28.5% (237) (233) 1.6% Operating result % 1,370 1,559 (12.1)% Net provisioning for imp losses (100) (297) (66.3)% (503) (795) (36.7)% Other results (103) 33 (122) (56) 115.7% Net inc from derivatives (71) (34) 106.9% (133) 11 Net inc fin investments (6) % Bank levies (34) (33) 2.4% (115) (93) 23.3% Goodwill impairment (3) Profit/loss before tax % % Consolidated profit/loss % (14.7)% Net interest margin (%) 2.77% 2.80% (3)BP 2.76% 2.99% (23)BP RoE (consolidated) (%) 9.2% 4.8% 4.4PP 6.6% 7.9% (1.3)PP RoTE (%) 13.1% 6.4% 6.7PP 9.5% 10.8% (1.3)PP Development (q-o-q) Net interest income down mainly due to EUR 15 mn dividends received from affiliated companies in Q2, partly offset by lower interest expenses on deposits from banks Recurring other net operating income up mostly from release of specific provisions subsequent to Constitutional Court decision in Romania General administrative expenses down mainly triggered by lower staff expenses, office space (down EUR 7 mn) and IT expenses (down EUR 3 mn); in contrast higher depreciation due to brand impairment (EUR 23 mn) in Poland Provisioning decrease mostly from Asia (down EUR 90 mn) and Group Corporates (down EUR 65 mn) Other results down due to one-off from sale of Visa Europe shares (EUR 132 mn) in Q2; negative effects in Q2 from Romanian Walkaway Law (EUR 43 mn) and in Q3 lower valuation result from derivatives driven by own credit spread changes (down EUR 35 mn) 15

16 Overview of Balance Sheet RBI Balance Sheet (Sep 2016) in EUR mn Sep 2016 Jun 2016 q-o-q Sep 2016 Dec 2015 YTD 17% 15% EUR 114 bn 12% 8% 6% Total assets 113, ,969 (0.1)% 113, ,427 (0.5)% Loans and adv to banks 12,692 13,747 (7.7)% 12,692 10, % 57% 62% Loans and adv to customers 69,791 70,825 (1.5)% 69,791 69,921 (0.2)% 11% 13% Deposits from banks 14,541 16,655 (12.7)% 14,541 16,369 (11.2)% Other assets Assets Loans and advances to banks (net) Loans and advances to customers (net) Securities (including trading assets and investments in associates) Liabilities Deposits from banks Deposits from customers Debt securities issued Other liabilities Equity and subordinated liabilities Deposits from customers 70,454 68, % 70,454 68, % Equity 9,022 8, % 9,022 8, % Assets Loans and advances to customers down EUR 0.1 bn YTD; repo business up EUR 1.0 bn in head office; corporate loans down EUR 1.4 bn due to reductions in Asia, US and IFRS 5 reclassification of Leasing Poland (EUR 0.6 bn); retail loans up EUR 0.4 bn mainly due to portfolio acquisition in Czech Republic, FX-related increase in Russia and growth in Slovakia, while reduction from IFRS 5 reclassification of Leasing Poland (EUR 0.8 bn) Interbank business up EUR 1.9 bn YTD; repo business up EUR 3.7 bn while short term placements with ECB and banks decreased in head office and Slovakia Liabilities Deposits from customers up EUR 1.5 bn YTD; retail deposits up EUR 3.1 bn mostly in Czech Republic (portfolio acquisition), Russia and Slovakia; corporate deposits down EUR 1.3 bn mostly in head office, Slovakia and Poland while increase in Russia; deposits from sovereigns down EUR 0.3 bn mainly in head office Deposits from banks down EUR 1.8 bn YTD mainly from money market business in head office 16

17 Revenue Composition Split of Operating Income (in EUR mn) 1,216 1, ,180 1,186 (14) 29 1, Development (q-o-q) Net interest income down EUR 6 mn; in Q3 NIM fell to 2.77% (down 3 bps) mainly driven by EUR 15 mn dividends received from affiliated companies in Q2, partly offset by lower interest expenses on deposits from banks; positive development in Russia was due to FX effect and deposit repricing, offset by falling interest rates in Belarus and Ukraine Q3/2015 Q4/2015 Q1/2016 Q2/2016 Q3/2016 Net interest income Net trading income Net Interest Margin Net fee and commission income Recurring other net operating income Net Fee and Commission Income Net fee and commission income up EUR 5 mn mainly due to higher volumes in Q3 and support from RUB appreciation; payment transfer business increase mainly in Ukraine, head office and Croatia due to higher volumes and margins; increase in other banking services mainly in Russia 2.80% 2.77% Net trading income down EUR 4 mn mainly from interest-based business (down EUR 13 mn) triggered by valuation losses and lower interest income from derivatives and securities in head office, Poland and Russia Q2/2016 Q3/ Q2/2016 Q3/2016 Payment transfers Foreign currency Loan & guarantee Other Recurring other net operating income up EUR 11 mn mostly from release of specific provisions subsequent to Constitutional Court decision in Romania 17

18 Expense Base Breakdown Development of General Administrative Expenses (in EUR mn) Split of Other Administrative Expenses Total Q3/2016: EUR 245 mn Q3/2015 Q4/2015 Q1/2016 Q2/2016 Q3/2016 Staff expenses Other administrative expenses Depreciation Deposit insurance 8% Communication 7% Other 19% Legal and consulting 8% Advertising 9% IT expenses 26% Office space expenses 23% Development (q-o-q) General administrative expenses down EUR 7 mn mainly due to lower other administrative expenses and staff expenses partly offset by brand impairment in Poland; negative influence from FX of EUR 2 mn mainly from Eastern European currencies Staff expenses down EUR 6 mn triggered by higher provisions due to lower discount rate applied in head office in Q2 and provision for unused vacation allocated in Poland in Q2 Other administrative expenses down EUR 22 mn mainly due to lower office space expenses (down EUR 7 mn), lower resolution fund fees (down EUR 5 mn bulk was already booked in previous quarters for full year 2016), lower deposit insurance fees (down EUR 3 mn), lower IT (down EUR 3 mn) and legal expenses (down EUR 2 mn) Depreciation of tangible and intangible assets up EUR 21 mn mainly due to brand impairment in Poland (EUR 23 mn) 18

19 Regulatory Capital Overview Regulatory Capital Structure in EUR mn Sep 2016 Dec 2015 CET1 (before deductions) 8,383 8,034 Deduction items (568) (363) CET1 (after deductions) 7,815 7,671 Additional Tier 1 (after deductions) 0 0 Tier 1 (after deductions) 7,815 7,671 Tier 2 (after deductions) 3,224 3,316 Total capital 11,039 10,987 RWA (total) 62,078 63,272 CET1 ratio (fully loaded) 12.3% 11.5% CET1 ratio (transitional) 12.6% 12.1% Changes in Regulatory Capital (YTD) Common equity tier 1 ratio (fully loaded) of 12.3% (up 0.8PP) and transitional of 12.6% (up 0.5PP); this includes H1 interim profit; including Q3 profit CET1 ratios would increase by 0.4PP to 12.7% (fully loaded) and 13.0% (transitional) Common equity tier 1 capital up EUR 144 mn to EUR 7,815 mn; increase resulting from inclusion of half year profit 2016 and currency revaluation (RUB), partly offset by phase-in rules for 2016 and higher deduction items RWA decreased by EUR 1,194 mn primarily driven by credit risk, down EUR 928 mn (volume decrease; rating improvement of Belarus); market risk down EUR 484 mn; operational risk up EUR 217 mn Leverage ratio (fully loaded) of 5.7% (transitional: 5.8%) 11.5% Development of CET1 ratio (fully loaded) in % 0.4% 0.2% (0.1)% 12.3% Tier 1 ratio (transitional) 12.6% 12.1% Total capital ratio (fully loaded) 17.6% 16.8% Total capital ratio (transitional) 17.8% 17.4% 31/12/2015 FX effect incl. hedging H1/2016 profit RWA decrease Other 30/09/

20 Funding Overview Funding Structure (Sep 2016) Short-term funding 10% Subordinated liabilities 4% 111% 107% 107% 105% Loan/deposit ratio Medium & long-term funding 12% Customer deposits 73% 98% 92% 94% 93% 91% Sep 14 Dec 14 Mar 15 Jun 15 Sep 15 Dec 15 Mar 16 Jun 16 Sep 16 Total: EUR 96 bn Overview 2016 Funding Plan Funding mix dominated by 73% share of customer deposits (up 2.3PP q-o-q) Loan/deposit ratio down by 1.9PP q-o-q to 91.5% Retail deposits are planned to further increase in 2017, high stickiness remains despite historically low interest rates in most markets Wholesale funding demand for 2017 approximately EUR 3.5 bn Diversification of funding continues, including unsecured and covered bonds, international and local markets 20

21 Table of Contents Executive Summary Financials Risk Management Merger Update Appendix

22 Diversified Risk Profile FX Risk Risk Buffer Capital 5% Position Market Risk 5% 3% Operational Risk 12% Other 16% Financial Institutions 3% Economic Capital Sovereigns 6% Retail 23% Corporates 28% Credit Risk: 60% Comments Risk-adjusted return on economic capital as key group steering measure Total economic capital requirement of EUR 5.5 bn was stable compared to June 2016 (down EUR 26 mn) and below the level of 2015 (down EUR 132 mn) EUR 3.26 bn or 60% of economic capital is consumed by credit risk; in absolute terms this corresponds to a YTD decrease of EUR 100 mn that was largely driven by the reduction of corporate exposure in Asia Market risk decreased by EUR 57 mn during Q3 to EUR 181 mn or 3% of economic capital and explains the majority of the remainder of the overall decline in economic capital, due to lower credit spread and interest rate risk Operational risk increased by EUR 45 mn in Q3 to EUR 640 mn or 12% due to the inclusion of historical losses from mandatory FX loan conversions in Hungary; however on a YTD basis it remained nearly unchanged FX risk from capital position declined by EUR 52 mn in Q3 as the FX volatility in recent months has been significantly lower than at the beginning of 2016 Other risk includes macroeconomic risk, other tangible fixed assets, equity participation risk, liquidity risk and CVA risk; the overall volume of those categories has remained stable over the business year 22

23 Portfolio Overview 51 22% Exposure to Business Lines by Region at end of September 2016 (in EUR bn) 1% Total: EUR 149 bn 21 26% 64% 10% 34% 43% % 19 9% 33% 22% 8% 44% 44% 62% 48% 8% 3 13% 16% 30% 6 21% 57% 64% Austria CE SEE Eastern Europe Other EU Asia RoW Corporates Retail Financial Institutions Sovereigns Highlights (YTD) The corporate portfolio is spread over all regions and dominates RBI Group s business model; the exposure decreased by EUR 1.9 bn to EUR 74.9 bn within the first nine months of 2016, driven by reductions in Asia (minus EUR 1.6 bn), Austria (minus EUR 1.3 bn) and the US (minus EUR 0.8 bn), partially offset by increased repo and derivative business with Western European customers The overall retail portfolio increased by EUR 1.7 bn to EUR 29.5 bn, driven mostly by private customers in the Czech Republic (portfolio acquisition) and growth in Slovakia, but also in Bosnia & Herzegovina and Romania. In Russia the increase was due to the RUB appreciation, while adjusted for FX the portfolio decreased due to the exit from car financing business. FX lending further decreased YTD and makes up 24.5% of the total portfolio The financial institutions portfolio increased by EUR 3.3 bn to EUR 20.3 bn driven by higher volumes in repo business and swaps, while at the same time loans to banks and bond investments were reduced The sovereign portfolio decreased by EUR 5.3 bn to EUR 24.0 bn mainly as a result of lower liquidity placements with the Austrian National Bank (down EUR 4.5 bn) 23

24 RWA (Total) Overview Overview by Country 30/9/ 31/12/ Change 31/12/ in EUR mn (YTD) 2014* Change Czech Republic 4,901 4, % 5,113 (4.1)% Hungary 3,464 2, % 4,060 (14.7)% Slovakia 5,363 5,493 (2.4)% 5, % Central Europe 13,728 12, % 14,475 (5.2)% Albania 1,500 1,725 (13.0)% 1,707 (12.1)% Bosnia and Herzegovina 1,549 1, % 1, % Bulgaria 1,773 1,775 (0.1)% 1,826 (2.9)% Croatia 2,890 2,966 (2.6)% 3,073 (5.9)% Kosovo % 524 (0.4)% Romania 4,313 4, % 4, % Serbia 1,707 1, % 1, % Southeastern Europe 14,253 13, % 13, % Belarus 1,346 1,606 (16.2)% 1,552 (13.3)% Kazakhstan % 27 (71.4)% Russia 7,956 7, % 8,372 (5.0)% Ukraine 2,173 2,345 (7.3)% 3,047 (28.7)% Eastern Europe 11,483 11,642 (1.4)% 12,998 (11.7)% Group Corporates 8,922 8, % 9,106 (2.0)% Group Markets 3,249 3,781 (14.1)% 3,916 (17.0)% Corporate Center 14,136 14,777 (4.3)% 18,622 (24.1)% Asia 598 1,289 (53.6)% 2,528 (76.3)% Poland 8,058 8, % 7, % Slovenia (68.5)% 486 (79.9)% USA (52.4)% 1,013 (60.7)% Zuno (14.1)% % Non-Core 9,272 10,611 (12.6)% 11,829 (21.6)% Reconciliation (12,966) (13,007) (0.3)% (15,966) (18.8)% Total RBI Group 62,078 63,272 (1.9)% 68,721 (9.7)% * Basis for transformation program Comments (YTD) Decrease of RWA mainly driven by: Credit risk RWA: decrease of EUR 928 mn Non-retail RWA down EUR 1,286 mn due to exposure decrease mainly in Asia and US, revaluation of RUB partly offset by devaluation of UAH/PLN/USD and rating improvement for Belarus Retail RWA up EUR 358 mn due to purchase of retail portfolio in Czech Republic and increase in Russia and Slovakia; in contrast default probability changes in Romania, Slovenian bank sale Market risk RWA: down EUR 484 mn primarily from RWA for open FX positions (down EUR 267 mn) due to reduced positions in USD, ALL, HUF and RON Operational risk RWA: up EUR 217 mn due to updated gross income figures RWA (Total) Split by Risk Category (30 Sep 2016) Market risk 4% Operational risk 15% Credit risk standard approach 35% Total: EUR 62 bn Credit risk CVA risk 1% Credit risk internal rating approach 46% 24

25 NPL Development NPLs as % of Customer Loans and NPL Coverage Ratio NPL Breakdown by Segment (30 Sep 2016) 67% 71% 70% 72% 72% 70.9% 74.5% 83.7% 61.1% 73.5% 68.3% 12.2% 11.9% 11.4% 10.4% 10.2% 6.7% 11.2% 16.4% 5.0% 1.3% 16.5% Sep 15 Dec 15 Mar 16 Jun 16 Sep16 CE SEE EE Group Corporates Group Markets 1) Non-Core NPLs as % of customer loans Coverage ratio NPLs as % of customer loans Coverage ratio 1) Including exposure to banks 11.9% NPL ratio Dec 15 NPL Ratio Development in 1-9/2016 (0.1)% FX effects 0.0% Loan volume change (1.6)% Organic Changes 10.2% NPL Ratio Sep 16 NPLs of EUR 7,148 mn (down EUR 1,180 mn YTD, thereof minus EUR 1,117 mn organic change) FX impact of minus EUR 63 mn YTD, mainly from UAH, USD, CHF devaluation; RUB revaluation NPL allocation (YTD net of FX effects) mainly Asia (up EUR 82 mn), Belarus (up EUR 49 mn), Czech Republic (up EUR 33 mn) NPL release (YTD net of FX effects) due to write-offs in Group Corporates (down EUR 544 mn), Ukraine (down EUR 243 mn), and Group Markets (down EUR 233 mn); Slovenia down EUR 118 mn due to sale of bank NPL ratio down 1.7PP to 10.2% YTD; highest decrease in Group Markets with 4.5PP and Group Corporates with 4.4PP NPL coverage ratio up 0.8PP to 72.0% YTD driven by Non-Core (up 5.9PP) and Group Corporates (up 4.4PP); decrease in Group Markets (down 8.4PP) 25

26 Provisioning Quarterly Change in NPL Stock (in EUR mn) Comments (y-o-y) (2)% (7)% (3)% (10)% (3)% Loan loss provisioning for loans and advances decreased by 36.7% or EUR 292 mn y-o-y due to improved risk situation in most markets while higher provisioning in Non-Core (Asia, US) (202) (606) (222) (742) 1) Relative to NPLs recorded at previous end of period; NPLs at the end of Q3/2016 EUR 7,148 mn Development of Provisioning Ratio (216) Q3/2015 Q4/2015 Q1/2016 Q2/2016 Q3/ % 191 Absolute NPL net change 2.62% % 106 Relative NPL net change 1.68% % 100 Q3/2015 Q4/2015 Q1/2016 Q2/2016 Q3/2016 Net provisioning for impairment losses in EUR mn Net provisioning ratio (q-o-q) (average customer loans) Main y-o-y developments: lower individual loan loss provisioning (down EUR 280 mn) and lower portfolio-based loan loss provisioning (down EUR 14 mn) The loan loss provisioning mainly derives from EUR 346 mn (down EUR 124 mn y-o-y) corporate and EUR 141 mn (down EUR 168 mn y-o-y) retail provisioning Individual loan loss provisioning down EUR 280 mn y-o-y mainly driven by Ukraine (down EUR 163 mn), Hungary (down EUR 55 mn), Group Corporates (down EUR 51 mn) and Russia (down EUR 43 mn) while increases recorded in Albania (up EUR 33 mn), US (up EUR 29 mn) and Group Markets (up EUR 27 mn) Portfolio-based loan loss provisioning down EUR 14 mn y-o-y; decreases were recorded in Russia (down EUR 29 mn as a result of two new large corporate defaults); further decrease also in Czech Republic (down EUR 13 mn) and Belarus (down EUR 5 mn) while increases in Ukraine (up EUR 11 mn), Asia (up EUR 10 mn) and Croatia (up EUR 6 mn) 26

27 Breakdown CHF Loan Exposures CHF Loan Exposures (30 Sep 2016, in EUR mn) CHF NPL Ratio & NPL Coverage Ratio (30 Sep 2016) 2, % % 69.3% 63.5% 74.4% 40.0% % 16.9% 20.3% 23.6% Poland Romania Serbia Hungary Croatia Poland Romania Serbia Hungary Croatia NPL Ratio NPL Coverage Ratio Poland, Romania, Serbia: CHF exposure predominantly in retail 94% (EUR 245 mn) of the CHF loan portfolio in Croatia was converted YTD, while the related charge was already booked in 2015; remaining NPL portfolio to be converted during Q4/2016 In Romania the CHF portfolio decreased by 23% (EUR 77 mn) YTD driven by restructuring and discounted conversions; since June the reduction was also driven by Walkaway Law notifications (EUR 10 mn) Remaining exposure in Hungary predominantly corporate (retail EUR 4 mn) 27

28 Table of Contents Executive Summary Financials Risk Management Merger Update Appendix

29 Timeline On 10 May 2016 the Boards of Raiffeisen Zentralbank Österreich AG (RZB) and Raiffeisen Bank International AG (RBI) resolved to examine a potential consolidation of RZB and RBI On 5 October 2016 the Boards of RZB and RBI passed in principle a resolution to merge RZB into RBI Based on the relative valuation of the RZB Contributed Business and RBI, the preliminary valuation range determined for the entities to be merged would translate into an expected shareholding of 34.6% to 35.7% for the current RBI free float shareholders in the Combined Bank 1 The Combined Bank will continue to be listed on the stock exchange The extraordinary general meeting (EGM) of RBI is planned for 24 January The full merger documentation will be published by 23 December November December January February March 16 November 2016: Q3 results publication By 23 December 2016: Invitation RBI EGM & publication of merger documentation 23 January 2017: RZB EGM 24 January 2017: RBI EGM 15 March 2017: FY 2016 results publication By end of Q1/2017: Closing (Commercial Register entry) 1) Compared to RBI s current free float shareholding of 39.2% of total shares outstanding (excl. Treasury shares of 509,977 as of 30 September 2016) 29

30 Key Objectives of Transaction Improved Overall Capitalization of Ultimate Group Optimization of capital planning and allocation Elimination of current and future minority deductions on RZB level Increased Transparency Alignment of shareholder (RBI-centric) and regulatory (RZB-centric) views Improved transparency for all stakeholder groups through reduction of structural complexity Limited Adaptation of Proven Business Model Improved Governance More efficient organizational and governance structure Faster and more focused decision making processes within the organization Elimination of overlapping functions Financial Targets to remain unchanged for Combined Bank 30

31 Strengths of Combined Bank Attractive Geographic Footprint Higher interest rates and better growth prospects in CEE compared to Western Europe present in 14 markets with Top 5 positions in 9 Stable business in Austria complemented by distribution channels of Austrian Raiffeisen Banks strong market positions with CEE-focused corporates and through specialized subsidiaries (e.g. asset management and mortgage products) Proven Customer Coverage Focus on locally serviced long term customer relationships Wholesale: customer oriented solutions through use of extensive network and local market access Retail: comprehensive multi-channel offering in CEE Continued Emphasis on Efficiency Transformation Program on track Ongoing focus on costs remains a top priority Streamlined organizational structure to improve efficiency and transparency Sustainable Value Creation At least 12% CET1 ratio (fully-loaded) by end of 2017; to be further increased in the medium term Consolidated return on equity of approximately 11% in the medium term Cost/income ratio between 50 and 55% in the medium term 31

32 Shareholder Structure of Combined Bank Range of Free Float 1 Pro Forma Shareholder Structure 1 Both Management and Supervisory Boards have agreed on a preliminary exchange ratio range that would translate into a shareholding of 34.6% to 35.7% for the current RBI free float shareholders in the Combined Bank This preliminary range was determined on the basis of the valuations as conducted by BDO and EY that were engaged by RZB and RBI respectively The invitation to the EGM and the full merger documentation will be published by 23 December 2016 RZB 60.8% Pre transaction Free float 39.2% Raiffeisen Bank International In addition, three international investment banks will provide fairness opinions on the relative valuation of the two entities Number of shares issued will increase from 292,979,038 RBI shares to between 321,400,276 and 332,010,469 in the Combined Bank Former RZB shareholders 64.3% 65.4% Post transaction Former RBI free float 34.6% 35.7% Combined Bank 1) Based on shares outstanding (which exclude 509,977 treasury shares as of 30 September 2016) 32

33 Key Financials of Combined Bank (1-9/2016) Total Assets (in EUR bn) RZB Contributed Business 17% RZB Contributed Business 11% RWA (in EUR bn) RBI 83% RBI 89% Total: EUR bn Total: EUR 70.1 bn Operating Income (in EUR mn) RZB Contributed Business 7% Consolidated Profit (in EUR mn) RZB Contributed Business 9% RBI 93% RBI 91% Total: EUR 3,737 mn Total: EUR 433 mn Note: Pro forma figures; income statement figures adjusted to exclude impact from planned 15.4% net reduction of UNIQA stake and any related contribution from this stake 33

34 RZB Contributed Business Key Financials in EUR mn Central Institution and Specialized Subsidiaries Other Equity Participations Reconciliation and allocation to segment RBI RZB Contributed Business 1-9/2016 FY/ /2016 FY/ /2016 FY/ /2016 FY/2015 Income statement Operating income (64) (96) General administrative expenses (182) (232) (33) (48) (194) (256) Operating result (43) (72) Net provisioning for impairment losses (2) Other result (34) (31) 0 24 (5) (35) (40) (41) Profit/loss before tax (50) (105) Profit/loss after tax (39) (91) Profit attributable to non-controlling interests (5) (16) (4) (13) Consolidated profit/loss (39) (87) Statement of financial position Assets 24,666 26,120 1,498 1,531 (2,690) (3,922) 23,474 23,728 Average Equity (620) (426) Risk-weighted assets (total RWA) 6,707 6,520 1,418 1,403 (103) (77) 8,022 7,846 Key ratios Return on equity before tax 2.2% 5.5% 25.7% 63.5% 6.2% 9.2% Cost/income ratio 76.4% 74.3% 35.5% 33.5% 72.6% 71.3% Note: Pro forma figures; income statement figures adjusted to exclude impact from planned 15.4% net reduction of UNIQA stake and any related contribution from this stake 34

35 RZB Contributed Business Detailed Financials (1-9/2016) Contributed Business Detail (1-9/2016) Comments Consolidated Profit, in EUR mn 1-9/2016 Segment Central institution and specialized subsidiaries 20 R-Bausparkasse Group 15 Raiffeisen Capital Management 10 RZB Central Institution Business (20) Raiffeisen Informatik GmbH (13) R-Leasing Group 16 Valida Group 9 Other Verbundunternehmen/subsidiaries 3 Segment Other equity participations 58 card complete Service Bank AG 21 Leipnik-Lundenburger Invest Beteiligungs AG 13 UNIQA Insurance Group AG 14 Other 10 R-Bausparkasse: Valuation losses on swaps used to hedge fixed rate loans (EUR 45 mn); effect only arises as hedge accounting not yet applied RZB Central Institution Business: RZB AG result from Central Institution business and Group management functions Raiffeisen Informatik: 2016 negatively impacted by adjustment in relation to 2015 result and various effects relating to Comparex subsidiary; positive result in FY 2015 R-Leasing: Gain on sale of real estate in Czech Republic, Sweden and Austria (EUR 17 mn); impairment of goodwill (hotel in Czech Republic, EUR 5 mn) card complete: Extraordinary income of EUR 17 mn from sale of Visa Europe shares Reconciliation and allocation to segment RBI (39) Consolidated profit 40 Note: Pro forma figures; income statement figures adjusted to exclude impact from planned 15.4% net reduction of UNIQA stake and any related contribution from this stake 35

36 Combined Bank Route to Target CET1 Ratio (fully loaded) 1.3% (0.7)% (0.5)% 11.3% 0.3% 0.2% Target CET1 ratio (fully loaded) of at least 12% by the end of Q3/2016 Q3 profit Sale of Polish leasing unit 2 RWA relief Business growth (EUR 3.7 bn) Regulatory & other effects (EUR 2.2 bn) Retained earnings Note: Pro forma figures; RWA relief displayed without effects of potential sales prices 1) Figures of Combined Bank include impact from planned 15.4% net reduction of UNIQA stake 2) RWA relief only; further 0.1% from gain on sale included in retained earnings 36

37 Pro Forma Capitalization Levels of Combined Bank Regulatory Capital Structure (September 2016) Impact of Merger on CET 1 Ratio (transitional and fully loaded, September 2016) in EUR mn RBI RZB Combined Bank CET1 (before deductions) 8,383 8,397 8, % 12.6% 0.5% 11.3% 0.6% 11.6% Deduction items 568 1, CET1 (after deductions) 7,815 7,361 8,098 Additional Tier 1 (after deductions) Tier 1 (after deductions) 7,815 7,361 8,098 Tier 2 (after deductions) 3,224 1,902 3,229 Total capital 11,039 9,263 11,327 RWA (total) 62,078 70,680 70,100 RBI (1.6)% (1.6)% RWA of Contributed Business Capital of Contributed Business 10.5% 0.6% 0.0% 0.1% Combined Bank 11.3% 10.4% 0.4% 0.6% 0.1% 11.6% CET 1 ratio (transitional) 12.6% 10.4% 11.6% CET 1 ratio (fully loaded) 12.3% 10.5% 11.3% Tier 1 ratio (transitional) 12.6% 10.4% 11.6% Total capital ratio (transitional) 17.8% 13.1% 16.2% Total capital ratio (fully loaded) 17.6% 12.7% 16.0% Leverage ratio (fully loaded) 5.7% 4.6% 4.9% Leverage exposure (total) 135, , ,893 Note: Pro forma figures of Combined Bank include impact from planned 15.4% net reduction of UNIQA stake RZB Partial UNIQA stake sale Elimination of minority deduction Minority deduction effect for RZB's shareholding in RBI is 0.0% on a fully loaded basis at Q In the present corporate group structure minority deduction effects on RZB level would however again increase with future capital generation of RBI. fully-loaded basis Other Combined Bank 37

38 Combined Bank Financial Targets Capital Ratios We target a CET1 ratio (fully loaded) of at least 12% and a total capital ratio (fully loaded) of at least 16% by the end of 2017; to be further increased in the medium term Return on Equity We aim for a return on equity before tax of approximately 14% and a consolidated return on equity of approximately 11% in the medium term Cost/Income Ratio We further aim to achieve a cost/income ratio of between 50 and 55% in the medium term 38

39 Table of Contents Executive Summary Financials Risk Management Merger Update Appendix

40 Geographic Footprint Poland, #9 Russia, #11 Central Europe (CE) Southeastern Europe (SEE) Austria, #3 Loans: 19.9 bn Customers: 9,760 Business Outlets: 3 Hungary, #5 Loans: 3.4 bn Customers: 542,292 Business Outlets: 72 Slovakia, #3 Loans: 8.4 bn Customers: 846,434 Eastern Europe (EE) Non-Core Loans: 9.7 bn Customers: 796,222 Business Outlets: 320 Loans: 7.5 bn Customers: 2,396,796 Business Outlets: 181 Belarus, #7 Loans: 0.9 bn Customers: 761,969 Business Outlets: 93 Ukraine, #9 Loans: 1.8 bn Customers: 2,557,057 Business Outlets: 533 Romania, #5 Loans: 4.8 bn Customers: 2,110,921 Leading regional player with CEE presence of over 25 years Covering 15 markets (incl. Austria), thereof eight are EU members and Serbia and Albania have candidate status Business Outlets: 200 Czech Republic, #5 Loans: 7.9 bn Customers: 607,773 Business Outlets: 487 Bulgaria, #6 Loans: 2.1 bn Customers: 642,366 Top 5 market position in 10 countries Business Outlets: 140 Croatia, #4 Loans: 2.8 bn Customers: 450,021 Business Outlets: 78 Bosnia & Herzeg., #2 Loans: 1.2 bn Customers: 448,724 Business Outlets: 98 Albania, #2 Loans: 0.8 bn Customers: 749,567 Business Outlets: 87 Kosovo, #1 Loans: 0.5 bn Customers: 308,321 Business Outlets: 52 Business Outlets: 149 Serbia, #5 Loans: 1.1 bn Customers: 691,098 Business Outlets: 86 Strong market position with Austrian corporates focusing on CEE Note: Position based on loans and advances to customers as of Q2/2016. All loan data in EUR. Additionally, RBI operates leasing units in Slovenia, Moldova and Kazakhstan. 40

41 Bank levies and resolution fund Impact in EUR mn FY 2015 RBI 1-9/2016 RBI FY 2016e RBI FY 2017e RBI FY 2017e Combined Bank Austria Bank levy based on balance sheet total (excluding derivatives) and including a one-off payment 1 from 2017 on (spread over 4 years) ~76 ~43 ~59 Hungary Provision for additional bank levy charge of EUR 21mn from 2014 released in 2015, in 2016 the bank levy was halved to 0.24% ~19 ~13 ~13 Poland Bank levy of 0.44%, based on balance sheet total less 4 bn PLN flat amount, own funds and treasury securities 25 ~34 ~35 ~35 Slovakia Bank levy of 0.2 % on total liabilities less own funds and subordinated debt ~19 ~20 ~20 Total Bank levies ~148 Austria ~27 Croatia Czech Republic Based on balance sheet total less equity and unencumbered assets ~3 ~7 Bulgaria Hungary Romania Full amounts booked in Q1/2016 according to IFRIC 21 In Austria period for achieving the fund s target level was reduced from 10y to 8y, additionally calculation base reduced ~3 ~3 ~2 Slovakia 8 6 ~6 Total Resolution fund ~51 1) RBI EUR 120 mn, Combined Bank EUR 163 mn 2) Of which EUR 28 mn booked in Corporate Center, EUR 15 mn in Group Corporates, EUR 13 mn in Group Markets and EUR 1 mn in Non-Core ~111 ~26 ~3 ~8 ~3 ~6 ~2 ~6 ~54 ~126 ~27 ~3 ~8 ~3 ~6 ~2 ~6 ~55 41

42 Overview Raiffeisen Banking Group Raiffeisen Banking Group (RBG) structure 1.7 million members 474 Raiffeisen Banks 8 Raiffeisen Landesbanks Other shareholders 90.4% 9.6% 39.2% free float 1 Central institution and specialized subsidiaries Other equity participations Note: Data as of 12/2015 1) Based on shares outstanding (which exclude 509,977 treasury shares as of 30 September 2016) RZB Contributed Business 42

43 Overview of RZB Contributed Business RZB business areas Central Institution Specialized Subsidiaries Other Equity Participations Central Institution RZB is the lead institution of RBG Key responsibilities include Raiffeisen Group business and liquidity management Centralized management of RBG wide projects and participation management Savings products and credit facilitation for housing, educational and care purposes in Austria, Czech Republic, Slovakia and Romania EUR 7.7 bn customer loans / EUR 8.8 bn customer deposits 100.0% stake Umbrella brand for RBG asset management activities Present in Austria and in Western and Eastern Europe EUR 29 bn AuM 100.0% stake Specialist provider of factoring solutions and receivables financing EUR 164 mn total assets 100.0% stake Centralized service functions provided for RBG (e.g. management of the Raiffeisen brand) EUR 8.5 bn liquidity reserve pool Vehicle, movable asset, aircraft and real estate leasing; vehicle fleet management and real estate development EUR 1.9 bn customer loans 100.0% stake Issuer of residential construction bonds with favorable tax treatment for distribution via Austrian Raiffeisen Banks EUR 1.7 bn total assets 100.0% stake Employee retirement benefits provider (employee benefits, pension funds, corporate advisory services for employee retirement plans) EUR 8.8 bn AuM 57.4% stake Note: All figures per 30 September

44 Overview of RZB Contributed Business RZB business areas Central Institution Specialized Subsidiaries Other Equity Participations Selected other (% stake) 1 UNIQA is one of the leading insurance groups in its core markets of Austria and CEE Market capitalization of approx. EUR 1.8 bn as of beginning of November 2016; ca. 10 mn customers in 19 countries EUR 6.3 bn group gross written premiums and EUR 423 mn pre-tax profit in FY % stake will be contributed into Combined Bank (post closing of planned transactions) Preferred partnership with RBI in CEE and RBG in Austria remains unaffected Leipnik-Lundenburger Invest is a holding company, comprising the main segments Flour & Milling and Vending Other activities include minority holdings in various industries (e.g. sugar, agricultural products, energy, construction and casinos) EUR 1.0 bn group revenues and EUR 37.2 mn group profit after tax in FY 2014/ % stake Raiffeisen Informatik offers expert IT services to large customers domestically and overseas, with a focus on provision of services to companies within the RBG The portfolio ranges from high availability IT operations to outsourcing, security services, consulting, licence management and full support at work station level EUR 2.1 bn group revenues and EUR 36.6 mn post-tax group profit in FY % stake card complete: payment services provider (25.0%) Medicur: Austrian media holding company (25.0%) NOTARTREUHANDBANK: fiduciary transactions for notaries (26.0%) Österreichische Hotel- und Tourismusbank: finance for tourism business (27.5%) Oesterreichische Kontrollbank: provider of financial and information services to the export industry and the capital market (8.1%) 1) Other Equity Participations selected based on size/relevance for RZB Group 44

45 RZB Contributed Business Overview Income Statement & Key Ratios in EUR mn 1-9/ /2015 Change FY/2015 Net interest income (12.8)% 252 Net fee and commission income % 75 Net trading income 4 0 (1) Recurring other net operating income Operating income % 359 Net provisioning for impairment losses % 5 General administrative expenses (194) (164) 18.6% (256) Profit/loss before tax (68.0)% 66 Balance Sheet in EUR mn 1-9/2016 FY/2015 Total assets 23,474 23,728 Loans and advances to banks 1,974 1,838 Loans and advances to customers 9,404 9,536 Deposits from banks 11,733 11,744 Deposits from customers 8,515 9,188 Equity Profit/loss after tax (62.8)% 71 Consolidated profit/loss (61.1)% 58 Return on equity before tax 6.2% 9.2% Consolidated return on equity Cost/income ratio 72.6% 70.5% 2.1PP 71.3% Return on assets before tax Net interest margin 0.90% 1.04% (0.14)PP 1.11% Provisioning ratio (0.11)% (0.26)% 0.15PP (0.19)% NPL ratio 4.8% 4.8% NPL coverage ratio 70.6% 70.4% Risk-weighted assets (total RWA) 8,022 7,846 Czech Republic 11% Country Italy 4% Total RWA (30/09/2016) by Other 1% FI & Sovereigns 19% Op Risk 9% Risk type Other 5% Corporate Customers 36% Common equity tier 1 ratio (fully loaded) Common equity tier 1 ratio (transitional) Total capital ratio (fully loaded) Total capital ratio (transitional) Austria 84% Total: EUR 8.0 bn Retail 31% Note: Pro forma figures; income statement figures adjusted to exclude impact from planned 15.4% net reduction of UNIQA stake and any related contribution from this stake 45