Raiffeisen Bank International Investor Presentation

Transcription

1 Raiffeisen Bank International Investor Presentation

2 Disclaimer Certain statements contained herein may be statements of future expectations and other forward-looking statements about Raiffeisen Bank International AG ( RBI ) and its affiliates, 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. This presentation contains financial and non-financial information and statistical data relating to RaiffeisenBank International AG ( RBI ) including RaiffeisenZentralbankÖsterreichAktiengesellschaft("RZB") prior to the merger of RZB into RBI ( Combined Bank ) (whether or not identified as pro forma ) which are based on historical data of RBI and RZB. Such information and data are presented for illustrative purposes only. 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 recommendationwhatsoever. 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. Neither the shares of RBI nor securities issued by any subsidiary of RBI have 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 generalcirculation 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 onlytorelevant 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. None of RBI any of its affiliates, advisors or representatives shall be responsible or liable for any omissions, errors or subsequent changes which have not been reflected herein and 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 Appendix

4 Executive Summary Q1/2017 Consolidated profit of EUR 220 mn CET1 ratio (fully loaded) at 12.6% (including Q1 results) while RWA grew 3% YTD NPL ratio further reduced to 8.3% Ongoing favorable development in risk costs, notably in Eastern Europe Further stabilization of net interest margin Positive trend in operating result supported by FX movements Profit contribution from Eastern and Central Europe increased further Merger transaction/integration completed Note: As of January 2017 RZB contributed business is fully included. Current RBI figures refer to the Combined Bank; unless specified otherwise, historical data is pro forma Combined Bank 4

5 Financial Highlights 1-3/2017 In EUR mn Profitability NPL/NPE Capital Ratios 3 1-3/ /2016 y-o-y Net interest income % Net fee and commission income % Net trading income % Operating income 1,298 1, % General administrative expenses (815) (781) 4.4% Net provisioning for impairment losses (80) (105) (24.1)% Other results (73) (76) (3.4)% Profit/loss before tax % Profit/loss after tax % Consolidated profit/loss % 31/03/ /12/2016 YTD NPL ratio 8.3% 8.7% (0.3)PP NPE ratio 7.6% 8.6% (1.0)PP NPL coverage ratio % 75.2% (1.1)PP NPE coverage ratio % 66.7% (1.1)PP Loans and advances to customers 81,655 79, % 31/03/ /12/2016 YTD Common equity tier 1 ratio (transitional) 12.8% 12.7% 0.2PP Common equity tier 1 ratio (fully loaded) 12.6% 12.4% 0.2PP Total capital ratio (transitional) 17.4% 17.4% 0.0PP Total capital ratio (fully loaded) 17.2% 17.1% 0.1PP 1) Loan loss provisions to customers divided by non-performing loans to customers (LLP/NPL) 2) Individual loan loss provisions divided by non-performing exposure (ILLP/NPE) 3) Adjusted to include Q1/2017 results 5

6 Development of Financial Ratios in Q1/2017 RoE (Consolidated) and RoTE 1 Cost/Income Ratio 7.7% 8.7% 13.3% 7.0% 9.2% 12.1% 65.4% 59.6% 59.4% 61.7% 61.5% 62.8% 5.3% 5.9% 9.4% 4.0% 6.2% 9.6% Q1/2016 Q2/2016 Q3/2016 Q4/2016 FY/2016 Q1/2017 Q1/2016 Q2/2016 Q3/2016 Q4/2016 FY/2016 Q1/2017 RoE consolidated RoTE Net Interest Margin 1 Provisioning Ratio % 2.49% 2.40% 2.67% 2.48% 2.49% 1.49% 1.28% 0.93% 0.41% 0.49% 0.40% Q1/2016 Q2/2016 Q3/2016 Q4/2016 FY/2016 Q1/2017 Q1/2016 Q2/2016 Q3/2016 Q4/2016 FY/2016 Q1/2017 1) Annualized 6

7 Growing in Selected CEE Markets FY 2016 RWA Projected RWA growth 1 Projected RWA growth 1 FY 2016 RWA Albania Kosovo EUR 1,584 mn EUR 533 mn Belarus Poland EUR 1,399 mn EUR 6,315 mn Bosnia & Herzegovina (2) Romania EUR 1,559 mn EUR 4,357 mn Bulgaria EUR 1,728 mn Russia EUR 8,294 mn Croatia Serbia EUR 2,872 mn EUR 1,593 mn Czech Republic EUR 5,865 mn Slovakia EUR 5,024 mn Hungary (2) Ukraine EUR 3,597 mn EUR 1,867 mn 1) based on budgeted 3 year CAGR 2) RWA growth mainly driven by regulatory adjustments 7

8 Increasing value generation Cost/Income Ratio 61.5% Targets Main levers Volume Growth in selected markets especially in CZ, SK and RO Resume loan growth with an average yearly percentage increase in low single digit area 50-55% Revenues Macroenvironment First interest rate increases expected in 2018, mitigating potential further rate cuts in Russia and Ukraine Product mix Increase share of retail lending in overall business to benefit from higher margin products FY2016 mid term Risk management Normalization Risk costs expected to further decrease in medium term NPL ratio of around 8% expected by the end of 2017 and over medium term expected to reduce further Consolidated RoE 6.2% 11% General administrative expenses Exiting operations Rightsizing Poland Other initiatives General administrative expenses of Asia and US will be negligible from 2018 onwards 2016 cost base still included Polish leasing business and Slovenian bank Planned cost savings of around EUR 50 mn by end 2019 (vs general admin expenses before intangible impairments of EUR 27 mn) Branch closure and FTE reduction Ongoing optimization/digitalization of branch network throughout the Group Procurement centralization, IT hardware standardization and review of end-to-end processes to improve operational efficiency FY2016 mid term Other Other results Austrian bank tax significantly reduced from 2021 onwards 8

9 Poland: Reshaping our Franchise Ongoing recovery of net interest margin in Q1 (Q1/2017: 2.12% vs. Q1/2016: 1.77%) Key developments Various proposals from political parties on Swiss franc denominated mortgages, but nothing tangible yet Preparation for the IPO began in January, with commitment to float 15% on the Warsaw stock exchange Rightsizing program launched From 2019 we strive to operate with a cost/income ratio of below 55% Increase digitalization in retail with focus on self-service solutions, remote channels and digital behaviors Strategy Optimization of branch footprint: 60 to 70 branches closed by 2018 and up to 90 branches converted to cost efficient formats by end 2019 Planned cost saving initiatives of around EUR 50 mn by end 2019 (vs general administrative expenses before intangible impairments of EUR 27 mn), FTE reduction between 850 and 950, restructuring costs of around EUR 11 mn booked in Q1/2017 Digital transformation investment of around EUR 25 mn over the next two years Continue successful corporate coverage and optimize product offerings 9

10 Russia: Benefiting from our Strong Position Key developments Net interest margin increased to 5.66% in Q1/2017 (from 5.48% in Q1/2016) supported by FX appreciation Lower provisioning ratio of 0.19% in Q1/2017 (vs. 2.23% in Q1/2016) reflecting improved credit risk situation NPL ratio strongly improved to 5.6% (down 3.8PP y-o-y); NPL coverage ratio improved to 76.1% (up 8.3PP y-o-y) Average RUB rate appreciated 29% y-o-y driven by rising oil prices Central bank key rate slightly reduced, growth remains subdued and inflation moderate We remain committed to the Russian market, focusing on high quality customer service and further improvements in operational efficiency Strategy RWA reduction program is complete. The fundamentals are good and we look to focused growth in selected areas Corporate market: targeting multinational customers and largest local corporates, expanding coverage of midcaps with a balanced risk approach and with a particular focus on commission based products Retail market: targeting affluent customers and SME business and increasing our digital presence 10

11 Macro Outlook Development of Real GDP (%) Country e 2018f CE Czech Republic Hungary Poland Slovakia Slovenia CE SEE Albania Bosnia & Herz Bulgaria Croatia Kosovo Romania Serbia SEE EE Belarus (3.8) (2.6) (0.5) 1.5 Russia (2.8) (0.2) Ukraine (9.9) EE (3.3) (0.1) Austria Germany Euro area General Market Trends Sentiment indicators point to higher GDP growth in the euro area and Austria this year. However, survey results are not yet fully matched by real indicators. The ECB will only slowly reduce its accommodation. In 2017 no change of policy measures but a change in wording is expected which should lead to moderate yield curve steepening Dynamics in Central Europe (CE) expected to remain steady with GDP growth of around 3% in Leading indicators and industrial output performance point to a strong start to the year in CE as a whole. Private consumption and stronger EU transfers are expected to support growth going forward Growth in Southeastern Europe (SEE) continues to outperform, with continued strong growth in Romania on fiscal loosening. Bulgaria, Serbia and Croatia are also seeing robust growth Russia is expecting a modest recovery for Recently weaker industrial output numbers, but consumer demand slightly improving. Expectations for a quick improvement in US-Russia relations were premature. Growth in Ukraine recovers, but (geo)political risks remain amidst challenging IMF conditions Source: RBI/Raiffeisen Research as of 11 May

12 Outlook and Targets We target acet1ratio(fullyloaded) ofaround13% in the medium term After stabilizing loan volumes, we look to resume growth with an average yearly percentage increase in low single digit area We expect net provisioning for impairment losses for 2017 to be below the level of 2016 (EUR 758 million) We expect an NPL ratio of around8%bytheendof2017, and over the medium term we expect this to reduce further We further aim to achieve a cost/income ratio of between 50 and 55% in the medium term, unchanged from our previous target Our medium term return on equity before tax target is unchanged at approximately 14%, with a consolidated return on equity of approximately 11% 12

13 Table of Contents Executive Summary Financials Risk Management Appendix

14 Overview of Key Financials In EUR mn Q1/2017 Q4/2016 q-o-q Q1/2017 Q1/2016 y-o-y Net interest income (7.1)% % Net fee & commission income (2.3)% % Net trading income (19.2)% % Recurring other net operating income % % Operating income 1,298 1,374 (5.6)% 1,298 1, % Staff expenses (388) (403) (3.7)% (388) (379) 2.5% Other admin expenses (350) (324) 7.9% (350) (328) 6.7% - Hereof regulatory charges (97) (22) 348.9% (97) (76) 27.0% Depreciation (76) (120) (36.2)% (76) (74) 3.3% General administrative expenses (815) (847) (3.9)% (815) (781) 4.4% Operating result (8.3)% % Net provisioning for impairment losses (80) (257) (68.9)% (80) (105) (24.1)% Other results (73) (105) (30.3)% (73) (76) (3.4)% Net inc from derivatives 8 31 (72.5)% 8 (112) Net inc from financial investments (32) (117) (72.5)% (32) 87 Bank levy (71) (44) 63.2% (71) (54) 31.4% Impairment of goodwill 0 (4) 0 (3) Profit/loss before tax % % Consolidated profit/loss % % Net interest margin (%) 2.49% 2.67% (0.18)PP 2.49% 2.35% 0.15PP RoE (consolidated) (%) 9.6% 4.0% 5.6PP 9.6% 5.3% 4.3PP RoTE (%) 12.1% 7.0% 5.1PP 12.1% 7.7% 4.4PP Development (q-o-q) Net interest income down mainly due to EUR 61 mn one-off (dividends received) in Q4/2016 from affiliated companies; underlying business income stable Recurring other net operating income up EUR 9 mn mostly resulting from higher net income arising from non-banking activities and lower allocations to other provisions General administrative expenses down EUR 33 mn (despite negative FX effects of EUR 28 mn) mainly due to impairment of investment property in previous quarter and seasonality effect Loan loss provisioning down EUR 177 mn showing seasonal peak in Q4; decrease in Q1 mostly from EE countries (down EUR 89 mn, mainly from Russia), Asia (down EUR 60 mn), SEE countries (down EUR 43 mn) Other results up EUR 32 mn due to higher net income from financial investments which suffered in Q4/2016 from valuation of sovereign bonds and equity participations 14

15 Distribution of Profit before Tax Q1/2017 In EUR mn 63 (160) Central Europe Southeastern Europe Eastern Europe Group Corporates & Markets Corporate Center 1 & Reconciliation RBI Group Czech Republic Hungary Slovakia Poland Slovenia (Leasing) Albania Bosnia & Herzegovina Bulgaria Croatia Kosovo Romania Serbia Belarus Russia Ukraine Corporates Vienna Markets Vienna FI & Sovereigns Specialized FI Subsidiaries 2 Remaining Asia and USA Group Treasury Minority holdings Group overhead 1) Due to the mostly internal nature of Corporate Center, amount netted with Reconciliation for illustrative purposes 2) Includes: Raiffeisen Leasing, Raiffeisen Centrobank, Raiffeisen Capital Management, Kathrein Privatbank, Raiffeisen Factorbank, Raiffeisen Bausparkasse 15

16 Revenue Composition Split of Operating Income (in EUR mn) Development (q-o-q) 1, , , , , Net interest income down due to EUR 61 mn dividend income in Q4/2016 from affiliated companies; in Q1 NIM decreased to 2.49% (down 18BP) while underlying business margin remained stable Q1/2016 Q2/2016 Q3/2016 Q4/2016 Q1/2017 Net interest income Net fee and commission income Net trading income Recurring other net operating income Net Interest Margin Net Fee and Commission Income Net fee and commission income down slightly by EUR 10 mn mainly due to seasonality effects with lower turnover in Q1; FX business primarily declined in Poland, Romania, Russia and RBI AG; payment transfer business mainly reduced in Romania, Russia and Ukraine partly offset by increase of loan and guarantee business 2.67% 2.49% 2.35% Q1/2016 Q4/2016 Q1/ Q1/2016 Q4/2016 Q1/2017 Payment transfers Loan & guarantee Foreign currency Other Net trading income down EUR 15 mn mainly from currency-based business triggered by valuation losses from FX derivatives Recurring other net operating income up mostly resulting from higher net income from nonbanking activities and lower allocations to other provisions (legal case provision in Q4/2016 in Slovakia) 16

17 Expense Base Breakdown Development of General Administrative Expenses (in EUR mn) Split of General Administrative Expenses General Administrative Expenses Depreciation Other administrative expenses Q1/2016 Q2/2016 Q3/2016 Q4/2016 Q1/2017 Staff expenses Other administrative expenses Depreciation Staff expenses Other Administrative Expenses Regulatory expenses Other expenses 9% 28% 15% IT expenses 43% 48% Deposit insurance fees 8% Resolution fund 20% Communication expenses 5% 20% Office space expenses 17% Legal, advisory and consulting expenses 7% Advertising, PR and promotional expenses 7% Development (q-o-q) General administrative expenses down EUR 33 mn (despite negative FX effects of EUR 28 mn) mainly due to EUR 16 mn impairment of investment property in previous quarter and seasonality effect Staff expenses down EUR 15 mn due to lower expenses for severance payments and deferred bonus payments Other administrative expenses up EUR 26 mn mainly due to resolution fund fees (full year amounts of EUR 70 mn booked upfront in Q1), partly offset by decreases due to seasonal peak in Q4: legal and consulting expenses (down EUR 21 mn) and advertising expenses (down EUR 19 mn) Depreciation of tangible and intangible assets down EUR 43 mn due to Q4 impairments of investment property (EUR 16 mn) and lower real estate depreciation in Slovakia and Russia in Q1 Total 1-3/2017: EUR 815 mn Total 1-3/2017: EUR 350 mn 17

18 Balance Sheet Overview 18% 17% RBI Balance Sheet (Mar 2017) EUR 138 bn 10% 6% 6% In EUR mn Mar 2017 Mar 2016 y-o-y Mar 2017 Dec 2016 q-o-q Total assets 138, , % 138, , % 55% 9% Assets 59% 19% Liabilities Loans and adv to banks 12,877 16,719 (23.0)% 12,877 10, % Loans and adv to customers 81,655 80, % 81,655 79, % Deposits from banks 26,952 28,731 (6.2)% 26,952 24, % Loans and advances to banks (net) Loans and advances to customers (net) Securities (including trading assets and investments in associates) Other assets Deposits from banks Deposits from customers Debt securities issued Other liabilities Equity and subordinated liabilities Deposits from customers 81,381 77, % 81,381 80, % Equity 10,067 9, % 10,067 9, % Assets Increase in loans to banks due to repo business (up EUR 1.7 bn q-o-q driven by increased volume at RBI AG) Loansand advances to customers: corporate loans up EUR 1.2 bn q-o-q mainly in RBI AG also due to repo business; retail loans up EUR 0.7 bn q-o-q, increases mainly in Russia (whereby mostly FX driven) Liabilities Increase in deposits from banks driven by short-term business in RBI AG, Russia and Czech Republic Deposits from customers: corporate deposits up EUR 0.5 bn q-o-q mostly in Russia (mostly FX driven); retail deposits up EUR 0.2 bn q-o-q mostly in Slovakia; sovereign deposits up EUR 0.4 bn q-o-q mainly in Czech Republic and Croatia 18

19 Regulatory Capital Overview Regulatory Capital Structure In EUR mn Mar 2017 Dec 2016 Common equity tier 1 (before deductions) 9,359 9,293 Deduction items Common equity tier 1 (after deductions) 8,685 8,604 Additional tier Tier 1 (after deductions) 8,685 8,604 Tier 2 (after deductions) 3,194 3,200 Total capital 11,880 11,804 Risk-weighted assets (total RWA) 69,864 67,911 Changes in Regulatory Capital (YTD) Common equity tier 1 ratio (fully loaded) of 12.2% (down 0.2PP) and transitional of 12.4% (down 0.3PP) due to RWA increase; Q1 interim results inclusion would lead to a 0.4PP positive effect Common equity tier 1 capital up EUR 81 mn to EUR 8,685 mn; increase mainly resulting from RUB and PLN appreciation, partly offset by 2017 phase-in rules RWA increased by EUR 1,953 mn primarily driven by credit risk, up EUR 1,019 mn (FX, rating migration, retail exposure increase mainly in Russia); market risk up EUR 768 mn (FX volatility in the internal model, bond portfolio in Russia); operational risk up EUR 166 mn (new capital requirements for AMA) Leverage ratio (fully loaded) of 5.6% (transitional: 5.7%) Common equity tier 1 ratio (fully loaded) 12.2% 12.4% Common equity tier 1 ratio (transitional) 12.4% 12.7% Tier 1 ratio (fully loaded) 12.3% 12.4% Tier 1 ratio (transitional) 12.4% 12.7% Total capital ratio (fully loaded) 16.8% 17.1% 12.4% Development of CET1 ratio (fully loaded) in Q % 0.4% 12.6% 12.2% (0.3)% (0.1)% Total capital ratio (transitional) 17.0% 17.4% Leverage ratio (fully loaded) 5.6% 5.5% Leverage exposure (total) 153, ,781 31/12/2016 FX effect incl. hedging RWA increase Other 31/03/2017 (regulatory) Q1 results 31/03/2017 (incl. Q1 results) 19

20 Capital ratios well above requirements Minimum requirements (excl. countercyclical capital buffer) Further details Including Q1 results 12.8% Including Q1 results 12.8% Including Q1 results 17.4% RBI 17.0% 2017 SREP P2R of 2.25%and P2G of 1.0% Combined buffer requirement of 1.75% as of 1/1/2017: 1.25% capital conservation buffer 0.5% systemic risk buffer / O-SII buffer Variable countercyclical capital buffer not included 8.5% RBI 12.4% 10.0% AT1 RBI 12.4% 1.5% 12.0% Tier2 2.0% (0.05% as of 1/1/2017) Capital conservation buffer to increase to 2.50% and systemic risk buffer / O-SII buffer to 2.00% beginning of 2019 CBR 1.75% Maximum distributable amount (MDA) trigger at 10.05% as AT1 requirement of 1.5% covered by CET1 P2R Pillar1 2.25% 4.5% CET1 8.5% Tier1 10.0% Including Q1 interim results, the buffer to MDA trigger would be 2.75% Available distributable items (ADI) of EUR 855 mn as of 31/03/2017 (including Q1 interim results before 2017 IPS contribution payable at end of year) CET1 Tier 1 Total capital Note: Capital ratios on transitional basis at 31/03/2017 and minimum requirements at 1/1/2017 Note: P2R = Pillar 2 requirement, P2G = Pillar 2 guidance, CBR = Combined buffer requirement, O-SII = Other systemically important institutions 20

21 Funding Overview Funding Structure (Mar 2017) NSFR 1 and Loan/deposit ratio 2 Medium- and long-term refinancing 12% Short-term refinancing 17% Subordinated liabilities 4% Customer deposits 67% 111% 110% 111% 95% 94% 92% 112% 111% 91% 92% Q1/2016 Q2/2016 Q3/2016 Q4/2016 Q1/2017 Total: EUR 121 bn Loan/deposit ratio NSFR Overview Q1/2017 Funding Plan Funding mix dominated by 67% share of customer deposits (down 1.2PP q-o-q) Loan/deposit ratio up by 0.4PP q-o-q to 91.7% Retail deposit inflow is expected to remain strong in 2017, high stickiness despite low interest rates Wholesale funding demand for 2017 approximately EUR 3 bn Diversification of funding continues, including unsecured and covered bonds, international and local markets 1) LCR and NSFR (based on the current regulatory definition) data is for RZB group level until (and including) December ) Loan to deposit ratio is pro-forma combined bank until (and including) December 2016 LCR Development 1 140% 137% 136% 32% 29% 68% 71% 29% 71% 77% 149% 155% 23% 35% 65% Q1/2016 Q2/2016 Q3/2016 Q4/2016 Q1/2017 Highly liquid and other securities Cash and cash equivalents LCR 21

22 Table of Contents Executive Summary Financials Risk Management Appendix

23 Credit Portfolio Distribution and RWA In EUR mn Total Exposure and RWA Overview by Country Total Exposure 31/03/2017 Retail 31/03/2017 Non-Retail 31/03/2017 Note: Non-Core is allocated to respective new segments for YTD comparison Total Exposure Change (YTD) RWA Change RWA 31/03/2017 (YTD) Czech Republic 19,124 6,313 12, % 6, % Hungary 7, , % 3, % Poland 13,965 5,675 8,290 (0.3)% 6, % Slovakia 13,957 5,375 8,582 (2.2)% 5, % Slovenia (12.8)% % Central Europe 54,459 18,280 36, % 21, % Albania 1, ,598 (6.9)% 1,527 (3.6)% Bosnia & Herzegovina 2, , % 1, % Bulgaria 4,011 1,190 2, % 1, % Croatia 5,568 1,702 3,865 (0.8)% 2,797 (2.6)% Kosovo % % Romania 9,261 3,357 5,904 (1.4)% 4,311 (1.1)% Serbia 2, , % 1, % Southeastern Europe 26,651 8,187 18,464 (0.8)% 14,210 (0.1)% Belarus 1, ,358 (3.6)% 1, % Russia 15,462 3,837 11, % 9, % Ukraine 3, ,355 (3.4)% 1, % Eastern Europe 20,142 4,803 15, % 12, % GC&M 72,055 5,297 66, % 19, % Corporate Center& Reconciliation (21.2)% 1,725 (4.0)% Total RBI Group 173,325 36, , % 69, % Comments (YTD) Credit risk RWA: increase of EUR 1,019 mn Non-retail RWA up EUR 769 mn due to appreciation of RUB and PLN, rating migration, business increase Retail RWA up EUR 250 mn mainly based on currency appreciation and business increase in Russia Retail portfolio increased by 2%, non-retail portfolio increased by 3% The increasein Central Europe is mainly driven by higher central bank exposure in Czech Republic and Hungary. Financial institution bonds also increased in Hungary The increasein Russia stems from RUB appreciation, financial institutions (bonds) and retail Market risk RWA: up EUR 768 mn primarily from increased USD position in the internal model, and increased bond positions in Russia in the standardized approach Operational risk RWA: up EUR 166 mn due to new capital requirements for AMA and updated gross income figures for standardized approach units 23

24 NPL and Provisioning Ratio Development NPLs as % of Customer Loans and NPL Coverage Ratio 75.2% 74.0% 70.4% 72.0% 72.0% 10.7% 9.8% 9.6% 8.7% 8.3% Q1/2016 Q2/2016 Q3/2016 Q4/2016 Q1/2017 NPL Ratio Coverage Ratio Development of Provisioning Ratio (q-o-q) Comments Ongoing favourable development in risk costs and NPL, notably in Eastern Europe NPL ratio down by 0.3PP to 8.3% YTD; largest decrease in Eastern Europe with 2.3PP NPL coverage ratio down by 1.1PP YTD to 74.0% driven by Poland, Croatia and Serbia; increase in Group Corporates & Markets (up by 2.4PP) Loan loss provisioning decreased by 24% or EUR 25 mn to EUR 80 mn due to improved risk environment across most markets Main developments: lower individual loan loss provisioning (down EUR 43 mn to EUR 74 mn ); portfolio-based loan loss provisioning of EUR 7 mn compared to releases of EUR 11 mn in Q Development of Provisioning Ratio (y-o-y) 0.41% % % % % % 1, % 1, % 1, % 1, % 758 Q1/2016 Q2/2016 Q3/2016 Q4/2016 Q1/2017 Net provisioning for impairment losses FY/2012 FY/2013 FY/2014 FY/2015 FY/2016 Provisioning Ratio (avg. loans and advances to customers 1) Data is for RZB group 24

25 NPL Distribution by Country In EURmn NPL 31/03/2017 NPL Ratio and Coverage Ratio NPL Ratio 31/03/2017 NPL Ratio 31/12/2016 NPL Coverage Ratio 31/03/2017 NPL Coverage Ratio 31/12/2016 Czech Republic % 4.0% 74.5% 70.1% Hungary % 14.1% 73.4% 73.8% Poland % 8.3% 56.9% 58.1% Slovakia % 3.5% 70.8% 69.2% Slovenia % 24.0% 14.5% 46.6% Central Europe 1, % 6.2% 65.7% 66.2% Albania % 22.9% 79.3% 78.1% Bosnia & Herzegovina % 8.6% 76.7% 75.9% Bulgaria % 7.1% 96.7% 85.0% Comments (YTD) NPLs of EUR 6,809 mn down by EUR 101 mn YTD, including NPL sales of EUR 142 mn NPL allocation (YTD net of FX effects) mainly in Croatia, Group Corporates & Markets, Poland and Slovenia (Leasing) NPL release (YTD net of FX effects) in Ukraine and Bulgaria NPL ratio down by 0.3PP to 8.3% YTD; largest decrease in Eastern Europe with 2.3PP Croatia % 15.7% 79.3% 83.9% Kosovo % 5.8% 62.2% 61.0% Romania % 8.1% 74.9% 74.2% Serbia % 9.7% 80.0% 86.6% Southeastern Europe 1, % 10.5% 79.1% 79.7% NPL Breakdown by Segment (31 Mar 2017) 79.1% 85.3% 65.7% 71.8% Belarus % 9.7% 72.0% 65.3% Russia % 6.3% 76.1% 74.8% 6.2% 10.5% 12.4% 7.5% Ukraine % 52.1% 92.0% 93.0% Eastern Europe 1, % 14.7% 85.3% 85.7% GC&M 2, % 8.3% 71.8% 69.5% Corporate Center Total RBI Group 6, % 8.7% 74.0% 75.2% Note: Non-Core is allocated to respective new segments for 2016 data for comparison purposes Central Europe Southeastern Europe NPLs as % of customer loans Eastern Europe Coverage ratio Group Corporates & Markets 25

26 Table of Contents Executive Summary Financials Risk Management Appendix

27 Geographic Footprint Czech Republic, #5 Loans: EUR 9.7 bn Branches: 132 Hungary, #5 Loans: EUR 3.1 bn Branches: 72 Austria, #3 Loans: EUR 29.0 bn Branches: 18 Central Europe (CE) Southeastern Europe (SEE) Eastern Europe (EE) Russia, #11 Loans: EUR 8.7 bn Branches: 182 Leading regional player with CEE presence of over 30 years servicing approx. 17 million customers Poland, #10 Loans: EUR 8.3 bn Branches: 299 Slovakia, #3 Loans: EUR 8.9 bn Branches: 194 Albania, #2 Loans: EUR 0.8 bn Branches: 81 Bosnia & Herzeg., #2 Bulgaria, #6 Croatia, #5 Kosovo, #1 Ukraine, #5 Loans: EUR 1.8 bn Branches: 498 Belarus, #7 Loans: EUR 1.0 bn Branches: 90 Serbia, #5 Loans: EUR 1.2 bn Branches: 87 Romania, #5 Covering 15 markets (incl. Austria), thereof eight are EU members and Serbia and Albania have candidate status Top 5 market position in 11 countries Strong market position with Austrian corporates focusing on CEE Loans: EUR 1.2 bn Loans: EUR 2.2 bn Loans: EUR 2.8 bn Loans: EUR 0.5 bn Loans: EUR 4.7 bn Branches: 98 Branches: 136 Branches: 78 Branches: 48 Branches: 480 Note: Position based on loans and advances to customers as of 31/12/2016. Additionally, RBI operates leasing units in Slovenia, Moldova and Kazakhstan. 27

28 Country and Segment Overview 1-3/2017 Total Assets (EUR mn) Share of Total Assets 1 Loan/deposit Ratio Net Interest Margin Provisioning Ratio NPL Ratio NPL Coverage Ratio Czech Republic 15, % 83.5% 1.89% 0.25% 3.9% 74.5% Hungary 6, % 59.3% 2.22% (1.88)% 13.9% 73.4% Poland 11, % 97.0% 2.12% 0.62% 8.6% 56.9% Slovakia 11, % 94.9% 2.45% 0.24% 3.4% 70.8% Central Europe 45, % 86.7% 2.34% 0.14% 6.2% 65.7% Albania 1, % 40.9% 2.96% 0.44% 22.7% 79.3% Bosnia and Herzegovina 2, % 67.3% 3.37% 0.57% 8.7% 76.7% Bulgaria 3, % 84.6% 3.13% (1.30)% 5.6% 96.7% Croatia 4, % 73.4% 2.96% 0.97% 16.8% 79.3% Kosovo % 70.4% 4.16% 0.15% 5.8% 62.2% Romania 7, % 76.0% 3.40% 2.69% 8.1% 74.9% Serbia 2, % 68.3% 3.93% (0.16)% 10.1% 80.0% Southeastern Europe 22, % 71.6% 3.32% 1.01% 10.5% 79.1% Belarus 1, % 101.4% 8.80% (0.06)% 8.8% 72.0% Russia 13, % 89.8% 5.66% 0.19% 5.6% 76.1% Ukraine 2, % 64.3% 9.88% (4.99)% 47.4% 92.0% Eastern Europe 2 16, % 87.3% 6.49% (0.67)% 12.4% 85.3% Group Corporates& Markets 44, % 114.4% 1.43% 0.84% 7.5% 71.8% Corporate Center 40, % Total RBI Group 138, % 91.7% 2.49% 0.40% 8.3% 74.0% 1) Excludes reconciliation of EUR 31.4 bn 2) Includes Kazakhstan 28

29 Country Financials (CE) Czech Republic In EUR mn Q1/2017 Q4/2016 Change Q3/2016 Q2/2016 Q1/ / /2015 Change Net interest income % % Net fee and commission income % % Net trading income % 2 3 (1) 8 12 (35.2)% Recurring other net operating income 0 1 (89.0)% % Operating income % % General administrative expenses (70) (65) 7.8% (57) (54) (61) (236) (194) 21.8% Operating result % (14.5)% Net provisioning for impairment losses (6) (1) 346.8% (4) (21) (6) (32) (41) (21.2)% Other results 6 (1) (1) (1) Profit/loss before tax % % Profit/loss after tax % % Return on equity before tax % 13.1% 0.6PP 14.3% 18.8% 13.5% 14.8% 15.0% (0.2)PP Return on equity after tax % 10.4% 0.4PP 11.2% 14.9% 11.3% 11.9% 12.0% (0.1)PP Net interest margin % 2.19% (0.3)PP 2.29% 2.48% 2.52% 2.36% 2.80% (0.4)PP Cost/income ratio 64.9% 67.3% (2.4)PP 60.9% 54.2% 66.6% 62.1% 53.5% 8.6PP Loan/deposit ratio 83.5% 93.1% (9.5)PP 95.8% 94.9% 97.5% 93.1% 100.7% (7.6)PP Provisioning ratio % 0.07% 0.2PP 0.19% 1.13% 0.26% 0.42% 0.60% (0.2)PP NPL ratio 3.9% 4.2% (0.4)PP 4.6% 5.3% 5.5% 4.2% 4.7% (0.5)PP NPL coverage ratio 74.5% 69.1% 5.3PP 64.0% 59.4% 59.0% 69.1% 71.5% (2.4)PP Total assets 15,734 11, % 11,550 10,652 10,080 11,966 9, % RWA 6,017 4, % 4,901 4,716 4,757 4,942 4, % Equity 1, % % Loans and advances to customers 9,677 8, % 7,902 7,602 7,413 8,075 7, % - Hereof corporate % % 43.7% (6.8)PP 43.8% 43.3% 43.6% 43.7% 44.7% (0.9)PP - Hereof retail % % 55.8% 6.8PP 55.7% 56.1% 55.8% 55.8% 54.7% 1.1PP - Hereof FCY % 15.3% 17.1% (1.8)PP 15.7% 13.5% 13.4% 17.1% 14.8% 2.3PP Deposits from customers 11,237 8, % 7,995 7,750 7,355 8,415 6, % Business outlets (7.0)% % Number of employees 3,362 3, % 3,176 3,172 3,129 3,158 2, % Number of customers 1,183, , % 607, , , , , % Note: Periods prior to Q1/2017 are not adjusted to reflect the merger of RBI and RZB; All data, except P/L, are dated to the end of the period 1) Annualized 2) Sovereign as remaining share 29

30 Country Financials (CE) Hungary In EUR mn Q1/2017 Q4/2016 Change Q3/2016 Q2/2016 Q1/ / /2015 Change Net interest income % (11.8)% Net fee and commission income (6.1)% (1.7)% Net trading income % % Recurring other net operating income (8) (11) (28.9)% (10) (6) (6) (33) (38) (14.0)% Operating income % (4.6)% General administrative expenses (38) (43) (10.2)% (36) (37) (35) (151) (195) (22.5)% Operating result % % Net provisioning for impairment losses 14 (1) 9 (8) 6 7 (56) Other results (19) (7) 187.9% 6 5 (17) (13) 49 Profit/loss before tax % % Profit/loss after tax % % Return on equity before tax % 3.1% 10.6PP 15.9% 14.9% 7.8% 10.3% 4.4% 5.9PP Return on equity after tax % 3.3% 9.0PP 15.9% 14.9% 7.8% 10.3% 4.3% 6.0PP Net interest margin % 1.94% 0.3PP 1.14% 1.99% 2.09% 1.78% 2.01% (0.2)PP Cost/income ratio 60.3% 79.1% (18.7)PP 78.1% 61.1% 63.0% 72.0% 88.5% (16.5)PP Loan/deposit ratio 59.3% 61.6% (2.3)PP 66.0% 66.0% 73.4% 61.6% 69.5% (7.9)PP Provisioning ratio 1 (1.88)% 0.07% (2.0)PP (1.10)% 0.91% (0.56)% (0.21)% 1.34% (1.6)PP NPL ratio 13.9% 14.1% (0.2)PP 19.1% 19.7% 20.2% 14.1% 19.7% (5.7)PP NPL coverage ratio 73.4% 73.8% (0.5)PP 74.9% 75.6% 73.1% 73.8% 77.3% (3.5)PP Total assets 6,795 6, % 6,552 6,406 6,347 6,606 6, % RWA 3,625 3, % 3,464 3,006 3,094 3,597 2, % Equity % % Loans and advances to customers 3,052 3,107 (1.8)% 3,416 3,349 3,553 3,107 3,481 (10.7)% - Hereof corporate % % 67.3% (0.5)PP 70.5% 70.1% 68.0% 67.3% 66.3% 1.0PP - Hereof retail % % 30.9% 0.3PP 27.9% 28.3% 27.7% 30.9% 29.1% 1.8PP - Hereof FCY % 44.7% 43.1% 1.6PP 41.6% 42.4% 38.7% 43.1% 37.5% 5.6PP Deposits from customers 4,604 4, % 4,418 4,299 4,119 4,474 4, % Business outlets % % Number of employees 2,006 1, % 1,988 2,012 2,016 1,983 2,016 (1.6)% Number of customers 542, , % 542, , , , , % Note: All data, except P/L, are dated to the end of the period 1) Annualized 2) Sovereign as remaining share 30

31 Country Financials (CE) Poland In EUR mn Q1/2017 Q4/2016 Change Q3/2016 Q2/2016 Q1/ / /2015 Change Net interest income % % Net fee and commission income (2.3)% (1.7)% Net trading income 1 (1) (52.7)% Recurring other net operating income (3) (9) (68.4)% (1) (4) (2) (17) 3 Operating income % (6.4)% General administrative expenses (74) (57) 29.3% (83) (72) (69) (281) (316) (11.0)% Operating result (29.2)% % Net provisioning for impairment losses (13) (10) 22.1% (11) (5) (7) (34) (37) (8.5)% Other results (8) (9) (17.6)% (15) >500.0% Profit/loss before tax (2) 7 (15) % Profit/loss after tax % (17) % Return on equity before tax 1 1.9% 6.9% 13.9% 4.7% 2.0% 2.7PP Return on equity after tax 1 1.0% 0.2% 0.8PP 4.5% 9.6% 2.4% 1.2% 1.2PP Net interest margin % 2.02% 0.1PP 2.04% 1.94% 1.77% 1.94% 1.81% 0.1PP Cost/income ratio 79.7% 68.3% 11.4PP 87.6% 77.6% 80.3% 78.7% 82.7% (4.0)PP Loan/deposit ratio 97.0% 92.7% 4.3PP 90.0% 93.5% 94.3% 92.7% 86.6% 6.1PP Provisioning ratio % 0.51% 0.1PP 0.54% 0.25% 0.35% 0.41% 0.42% (0.0)PP NPL ratio 8.6% 8.3% 0.3PP 8.1% 8.0% 8.2% 8.3% 7.9% 0.4PP NPL coverage ratio 56.9% 58.1% (1.2)PP 64.7% 64.4% 61.5% 58.1% 62.8% (4.7)PP Total assets 11,959 12,055 (0.8)% 12,468 12,157 12,374 12,055 13,152 (8.3)% RWA 6,421 6, % 6,459 6,392 6,650 6,332 7,088 (10.7)% Equity 1,485 1, % 1,453 1,434 1,490 1,423 1,445 (1.6)% Loans and advances to customers 8,310 8, % 8,253 8,156 8,359 8,070 8,315 (3.0)% - Hereof corporate % % 30.8% 1.2PP 32.0% 32.2% 33.1% 30.8% 32.7% (1.9)PP - Hereof retail % % 68.9% (1.3)PP 67.7% 67.8% 66.9% 68.9% 67.2% 1.7PP - Hereof FCY % 55.8% 58.4% (2.7)PP 57.5% 59.1% 60.3% 58.4% 63.0% (4.6)PP Deposits from customers 8,146 8,284 (1.7)% 8,683 8,271 8,418 8,284 9,116 (9.1)% Business outlets % (10.7)% Number of employees 4,157 4,242 (2.0)% 4,297 4,372 4,551 4,242 4,651 (8.8)% Number of customers 775, , % 744, , , , , % Note: All previous periods have been adjusted to exclude the contribution of Raiffeisen Leasing Poland making them directly comparable to current reporting period; All data, except P/L, are dated to the end of the period 1) Annualized 2) Sovereign as remaining share 31

32 Country Financials (CE) Slovakia In EUR mn Q1/2017 Q4/2016 Change Q3/2016 Q2/2016 Q1/ / /2015 Change Net interest income % (7.9)% Net fee and commission income (0.3)% (6.7)% Net trading income 2 2 (6.6)% % Recurring other net operating income 4 (9) (5) (0) >500.0% Operating income % (8.4)% General administrative expenses (70) (71) (2.3)% (58) (58) (69) (256) (247) 3.8% Operating result % (22.1)% Net provisioning for impairment losses (5) (5) (4.2)% (4) (0) (4) (13) (37) (63.8)% Other results (5) (7) (27.5)% (5) 25 (5) 9 (18) Profit/loss before tax % % Profit/loss after tax % % Return on equity before tax % 6.7% 4.6PP 18.5% 32.0% 13.9% 17.5% 17.4% 0.2PP Return on equity after tax 1 8.8% 5.7% 3.1PP 14.9% 24.3% 10.5% 13.6% 13.1% 0.5PP Net interest margin % 2.46% (0.0)PP 2.48% 2.53% 2.61% 2.52% 2.95% (0.4)PP Cost/income ratio 61.4% 72.0% (10.6)PP 53.9% 53.2% 62.2% 60.1% 53.1% 7.0PP Loan/deposit ratio 94.9% 93.2% 1.7PP 94.0% 94.5% 91.5% 93.2% 91.1% 2.1PP Provisioning ratio % 0.26% (0.0)PP 0.18% 0.02% 0.14% 0.16% 0.47% (0.3)PP NPL ratio 3.4% 3.5% (0.1)PP 3.6% 3.7% 3.9% 3.5% 3.8% (0.3)PP NPL coverage ratio 70.8% 69.2% 1.7PP 70.7% 68.3% 73.7% 69.2% 75.0% (5.8)PP Total assets 11,597 11, % 11,158 11,053 11,257 11,388 11, % RWA 5,100 5, % 5,363 5,519 5,837 5,024 5,493 (8.5)% Equity 1, % , % Loans and advances to customers 8,883 8, % 8,419 8,326 8,247 8,577 8, % - Hereof corporate % % 44.0% (0.3)PP 44.4% 45.2% 46.1% 44.0% 46.8% (2.8)PP - Hereof retail % % 55.9% 0.3PP 55.5% 54.7% 53.7% 55.9% 53.0% 2.9PP - Hereof FCY % 1.0% 0.8% 0.2PP 0.8% 0.8% 0.8% 0.8% 0.6% 0.3PP Deposits from customers 9,137 8, % 8,733 8,586 8,760 8,981 8, % Business outlets (1.0)% % Number of employees 4,049 3, % 3,938 3,929 3,872 3,910 3, % Number of customers 936, , % 846, , , , , % Note: Periods prior to Q1/2017 are not adjusted to reflect the merger of RBI and RZB; All data, except P/L, are dated to the end of the period 1) Annualized 2) Sovereign as remaining share 32

33 Country Financials (SEE) Albania In EUR mn Q1/2017 Q4/2016 Change Q3/2016 Q2/2016 Q1/ / /2015 Change Net interest income % (20.4)% Net fee and commission income 4 4 (5.0)% % Net trading income 3 0 >500.0% (21.5)% Recurring other net operating income 1 (2) (0) (0) (0) (3) (6) (56.0)% Operating income % (13.9)% General administrative expenses (10) (13) (22.2)% (11) (12) (11) (47) (45) 3.7% Operating result 10 2 >500.0% (31.4)% Net provisioning for impairment losses (1) (18) (95.1)% (12) (5) (30) (65) (31) 108.6% Other results 1 (0) (0) % Profit/loss before tax 10 (17) (4) 5 (17) (32) 15 Profit/loss after tax 10 (17) (4) 5 (17) (33) 12 Return on equity before tax % 8.6% 7.1% Return on equity after tax % 8.4% 6.0% Net interest margin % 2.71% 0.2PP 2.93% 3.37% 3.11% 3.03% 3.83% (0.8)PP Cost/income ratio 50.0% 88.9% (38.8)PP 56.1% 57.6% 47.2% 60.1% 49.9% 10.2PP Loan/deposit ratio 40.9% 39.5% 1.4PP 40.7% 43.4% 40.5% 39.5% 40.8% (1.4)PP Provisioning ratio % 8.87% (8.4)PP 5.95% 2.38% 11.42% 7.88% 3.44% 4.4PP NPL ratio 22.7% 22.9% (0.3)PP 23.5% 20.7% 21.6% 22.9% 19.5% 3.5PP NPL coverage ratio 79.3% 78.1% 1.2PP 73.6% 69.4% 68.1% 78.1% 61.5% 16.7PP Total assets 1,952 2,002 (2.5)% 1,932 2,007 2,056 2,002 2,120 (5.6)% RWA 1,527 1,584 (3.6)% 1,500 1,618 1,664 1,584 1,725 (8.2)% Equity % (13.9)% Loans and advances to customers (1.7)% (2.4)% - Hereof corporate % % 61.1% (0.7)PP 61.8% 65.4% 65.7% 61.1% 66.1% (5.0)PP - Hereof retail % % 38.9% 0.7PP 38.2% 34.6% 34.3% 38.9% 33.9% 5.0PP - Hereof FCY % 57.2% 56.4% 0.7PP 56.8% 58.3% 60.0% 56.4% 60.2% (3.8)PP Deposits from customers 1,608 1,694 (5.1)% 1,626 1,676 1,731 1,694 1,799 (5.8)% Business outlets % (11.0)% Number of employees 1,252 1,291 (3.0)% 1,323 1,342 1,349 1,291 1,349 (4.3)% Number of customers 523, ,313 (30.3)% 749, , , , , % Note: All data, except P/L, are dated to the end of the period 1) Annualized 2) Sovereign as remaining share 33

34 Country Financials (SEE) Bosnia & Herzegovina In EUR mn Q1/2017 Q4/2016 Change Q3/2016 Q2/2016 Q1/ / /2015 Change Net interest income (0.4)% % Net fee and commission income % % Net trading income 0 0 (10.8)% % Recurring other net operating income 0 (1) 0 1 (0) 0 1 (91.9)% Operating income % % General administrative expenses (12) (18) (31.7)% (14) (13) (13) (58) (59) (2.8)% Operating result % % Net provisioning for impairment losses (2) (10) (82.7)% 0 (5) 1 (13) (8) 59.0% Other results (0) 1 (2) (0) 0 (1) 0 Profit/loss before tax 12 (1) (4.3)% Profit/loss after tax 10 (2) (9.4)% Return on equity before tax % 20.1% 16.7% 20.3% 13.8% 14.4% (0.7)PP Return on equity after tax % 16.1% 14.8% 18.1% 11.5% 12.8% (1.2)PP Net interest margin % 3.46% (0.1)PP 3.44% 3.78% 3.54% 3.55% 3.61% (0.1)PP Cost/income ratio 46.9% 70.0% (23.1)PP 51.6% 45.3% 51.5% 54.2% 57.1% (2.9)PP Loan/deposit ratio 67.3% 67.5% (0.1)PP 69.8% 70.6% 70.9% 67.5% 72.1% (4.6)PP Provisioning ratio % 3.33% (2.8)PP (0.14)% 1.77% (0.36)% 1.14% 0.72% 0.4PP NPL ratio 8.7% 8.6% 0.1PP 10.2% 9.8% 10.1% 8.6% 10.5% (1.9)PP NPL coverage ratio 76.7% 75.9% 0.8PP 63.5% 65.8% 63.3% 75.9% 63.4% 12.6PP Total assets 2,091 2, % 2,003 1,990 1,956 2,057 1, % RWA 1,572 1, % 1,549 1,588 1,554 1,559 1, % Equity % (1.8)% Loans and advances to customers 1,205 1, % 1,187 1,178 1,163 1,188 1, % - Hereof corporate % % 31.2% 0.4PP 32.0% 31.7% 30.7% 31.2% 31.4% (0.2)PP - Hereof retail % % 68.0% (0.4)PP 67.3% 67.7% 68.8% 68.0% 68.1% (0.0)PP - Hereof FCY % 59.1% 63.8% (4.7)PP 66.1% 67.6% 69.0% 63.8% 69.8% (6.0)PP Deposits from customers 1,670 1, % 1,591 1,560 1,536 1,646 1, % Business outlets % % Number of employees 1,271 1, % 1,294 1,298 1,307 1,268 1,311 (3.3)% Number of customers 433, ,454 (4.5)% 448, , , , ,192 (7.9)% Note: All data, except P/L, are dated to the end of the period 1) Annualized 2) Sovereign as remaining share 34

35 Country Financials (SEE) Bulgaria In EUR mn Q1/2017 Q4/2016 Change Q3/2016 Q2/2016 Q1/ / /2015 Change Net interest income (5.9)% (3.6)% Net fee and commission income (4.9)% % Net trading income % % Recurring other net operating income 1 (1) (0) (0) (39.6)% Operating income (0.3)% (1.2)% General administrative expenses (27) (23) 18.2% (19) (26) (18) (86) (90) (4.3)% Operating result (27.4)% % Net provisioning for impairment losses 7 (8) 6 (3) 6 1 (32) Other results 0 (1) (0) 7 (0) 7 (3) Profit/loss before tax % % Profit/loss after tax % % Return on equity before tax % 6.2% 8.9PP 23.9% 15.7% 21.4% 17.0% 7.3% 9.7PP Return on equity after tax % 5.7% 8.0PP 21.7% 14.2% 19.4% 15.4% 6.6% 8.8PP Net interest margin % 3.36% (0.2)PP 3.33% 3.64% 3.32% 3.41% 3.60% (0.2)PP Cost/income ratio 70.4% 59.4% 11.0PP 48.6% 64.4% 46.6% 54.9% 56.7% (1.8)PP Loan/deposit ratio 84.6% 83.9% 0.7PP 83.3% 82.0% 80.3% 83.9% 78.9% 5.0PP Provisioning ratio 1 (1.30)% 1.53% (2.8)PP (1.22)% 0.65% (0.88)% (0.03)% 1.51% (1.5)PP NPL ratio 5.6% 7.1% (1.5)PP 8.6% 9.5% 10.5% 7.1% 11.0% (3.9)PP NPL coverage ratio 96.7% 85.0% 11.7PP 71.1% 70.8% 68.7% 85.0% 67.3% 17.7PP Total assets 3,440 3, % 3,342 3,321 3,407 3,350 3,440 (2.6)% RWA 1,765 1, % 1,773 1,684 1,729 1,728 1,775 (2.6)% Equity (0.3)% (1.7)% Loans and advances to customers 2,199 2, % 2,130 2,062 2,069 2,166 2, % - Hereof corporate % % 42.1% (0.9)PP 41.4% 39.8% 41.2% 42.1% 41.4% 0.7PP - Hereof retail % % 57.5% 1.0PP 58.1% 59.7% 58.2% 57.5% 58.0% (0.6)PP - Hereof FCY % 46.3% 48.9% (2.6)PP 50.7% 51.9% 52.4% 48.9% 54.5% (5.6)PP Deposits from customers 2,458 2, % 2,401 2,347 2,390 2,426 2,444 (0.8)% Business outlets (1.4)% (7.4)% Number of employees 2,584 2, % 2,595 2,569 2,551 2,569 2, % Number of customers 647, , % 642, , , , ,879 (17.4)% Note: All data, except P/L, are dated to the end of the period 1) Annualized 2) Sovereign as remaining share 35