> >4 th Capital Markets Day > Bucharest, > Regina Ovesny-Straka, CEO, Slovenská sporiteľňa
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> Agenda* Good operating environment» Continued economic outperformance» Economic policy a mixed bag» Banking market grows at brisk pace Outgrowing the market» Key trends beneficial shift in asset mix» Growth drivers customer loans» Competitive position improved Outlook set for growth *) All financial and market data are shown in EUR. Local currency data have been translated at the respective historic rates; the Q3/06 eop rate was applied to forecasts. Growth rates and ratios are based on local currency data. 3
> Economic outperformance continues Among EU growth leaders GDP growth continues to accelerate» Export-led growth driven by car industry» Domestic demand slows slightly» Maintenance of 6%+ growth expected Households are major beneficiaries» Solid disposable income growth in EUR thousand 10 8 6 4 2 0 4.2% 5.4 5.4% 6.3 6.1% 7.1 6.6% 7.9 6.8% 8.5 8% 6% 4% 2%» Real wage growth of 6% in 2005 2003 2004 2005 2006e 2007e» Estimated real wage growth of 3.5% in 2006 GDP/capita GDP growth (real) Unemployment on downward track» Hitting 8-year low in 2006» Healthy domestic job creation Increased inflationary pressures» Inflation rose since end of 2005» Fuelled by rising fuel and energy prices» Central bank has tightened monetary policy Unemployment finally declines 2 17.5% 18.1% 16.2% 15% 14.2% 13.4% 1 8.4% 7.5% 5% 2.8% 4.4% 3.1% 2003 2004 2005 2006e 2007e Consumer inflation (HICP, ave) Unemployment rate Source for charts: Eurostat, Slovenská spořitelna 4
> Economic policy a mixed bag Change in government in June 2006» More restrictive privatisation policy» More expansionary fiscal approach» Continued review of tax policy» Amendment to Banking Act approved (Basel II, subsidised youth mortgages) Still on course for 2009 Euro entry» New government reiterated commitment» SLSP assessment: feasible, but some inflation (energy prices) and fiscal risks Gradual currency appreciation» Should help alleviate inflationary pressure» SLSP estimate for end-06: SKK/EUR = 37.0» SLSP estimate for end-07: SKK/EUR = 36.4 Rising interest rate trend» 175bps rise to 475bps since start of 2006» SLSP expectation for start of 2007: 500bps» Reason: rise in inflation -1% -2% -3% -4% -5% -6% Public finances are under control -3.7% -3.1% -2.9% -2.1% -1.9% 2003 2004 2005 2006e 2007e Budget deficit (excl pension reform costs) SKK/EUR - consistent appreciation 43 42 41 40 39 38 37 36 35 34 01/03 07/03 01/04 07/04 01/05 07/05 01/06 07/06 Source for charts: Slovenská spořitelna, Reuters 5
> Banking market grows at a brisk pace Loan growth drives market growth Asset base of the banking market» Retail loans recorded 4 annual growth in last two years, but penetrations ratios are still below CEE peers» Corporate loans also turn for growth Rate hikes might dampen demand» So far no signs of slowdown» Mortgage subsidies might act as cushion» Opportunities on liability side in EUR billion 40 35 30 25 20 15 10 5 0 81.3% 85.8% 95.5% 89.6% 37.2 37.9 30.0 23.9 2003 2004 2005 H1 06 Total assets Total assets/gdp 10 8 6 4 2 BRIBOR vs EURIBOR Retail loans drive growth 7% 6% 5% 4% 3% 2% 1% 5.9% 3.8% 3. 2.1% 2.1% 2.4% 4.9% 3.3% in EUR billion 6.0 5.0 4.0 3.0 2.0 1.0 0.0 7.7% 2.3 9.4% 3.3 12.3% 4.8 12.8% 5.4 14% 12% 1 8% 6% 4% 2% 2003 2004 2005 2006e 2003 2004 2005 H1 06 EURIBOR (1m offer rate, eop) BRIBOR (1m offer rate, eop) Retail loans Retail loans/gdp Source for charts: Slovak National Bank, European Central Bank 6
> Agenda Good operating environment» Economic outperformance continues» Economic policy a mixed bag» Banking market grows at brisk pace Outgrowing the market» Key trends beneficial shift in asset mix» Growth drivers customer loans» Competitive position improved Outlook set for growth 7
> Shift in asset mix paves the way for growth Customer loans most significant» Weight of customer loans reaches 39.4% in H1 06 (H1 05: 26.8%) of balance sheet» Loan/deposit ratio rose 2-points over same year to 58% Very positive changes in NII» Strong growth in income from lending» Decline in income from fixed-rate bonds» Results in above-plan NII growth Margin recovery over the past year in EUR million Vastly improved interest income structure.. 50 40 30 20 10 0 Q2/04 Q3/04 Q4/04 Q1/05 Q2/05 Q3/05 Q4/05 Q1/06 Q2/06 II from loans to customers II from fixed income securities...leads to margin stabilisation» Thanks to strong retail loan growth» Also supported by rising interest rates Accounting changes affect fees» Amortisation of loan fees into NII as of January, denting fee income» Changes in overdraft pricing 6 5 4 3 2 1 55% 57% 58% 47% 33% 34% 34% 36% 36% 38% 4.3% 4.2% 3.9% 3.4% 3.3% 3. 3. 3.5% 3.4% 3.2% Q1/04 Q2/04 Q3/04 Q4/04 Q1/05 Q2/05 Q3/05 Q4/05 Q1/06 Q2/06 8% 6% 4% 2% Loan/deposit ratio Net interest margin (quarterly) Source for charts: Slovenská spořitelna 8
> Growth driver retail and SME loan products Double-digit growth in loans Credit portfolio structure (H1 06)» SLSP becomes market leader in both total customer and retail loans in 2005» Equally fast progress in SME loans» Solid double-digit growth rates also expected for 2006 and 2007 Retail mortgages 23% Municipalities 1% Large corporates 31% NPL ratio remains under control» Stands at 3.8% (H1 06) Consumer loans 23% SMEs 22% Customer loan growth Retail loan growth in EUR billion 3 2 1 0 1.9 1.5 1.6 1.7 33% 24% 11% 14% 2.1 39% 2.8 2.5 2.6 55% 54% 53% 8 6 4 2 in EUR billion 2 1 0 42% 39% 46% 0.6 0.7 0.8 56% 6 54% 47% 47% 1.3 1.1 1.2 1.0 0.9 8 6 4 2 Q3/04 Q4/04 Q1/05 Q2/05 Q3/05 Q4/05 Q1/06 Q2/06 Q3/04 Q4/04 Q1/05 Q2/05 Q3/05 Q4/05 Q1/06 Q2/06 Total customer loans Total customer loans (yoy growth) Retail loans Retail loans (yoy growth) Source for charts: Slovenská spořitelna 9
> Additional driver Euro transformation Key pillar of future success Become the Euro Bank in Slovakia Being the main source of advice during the transformation process for clients & non-clients Implementation of EBG target solution for IT- SYMBOLS Process optimisation on all levels Intensive communication & marketing policy towards Euro implementation Smooth Euro transition in all areas Main aim: Euro compatibility by 2009 10
> Competitive position improved No. 1 in all key areas» Total assets» Total & retail deposits» Total & retail loans leadership position attained in late 2005» Young people, opening first account Successful product portfolio» Structured investment products» In the wake of recent interest rate hikes, promotion of competitive deposit products» SME and retail loans 25% 2 15% 1 5% Top 5 by assets (H1 06) 19.5% 17.9% 13.6% 11.4% 6.2% SLSP VÚB Tatra banka ČSOB ING Bank Top 5 by total loans (H1 06) Market structure unchanged» Healthy, competitive environment 2 15% 17.9% 15.5% 14.4%» 18 banks, 15 of which are foreign owned 1 7.1% 6.3% 5% SLSP Tatra banka VÚB HVB Slovakia Prvá SS Source for charts: Slovak National Bank, local banks 11
> Agenda Good operating environment» Economic outperformance continues» Economic policy a mixed bag» Banking market grows at brisk pace Outgrowing the market» Key trends beneficial shift in asset mix» Growth drivers customer loans» Competitive position improved Outlook set for growth 12
> Outlook set for growth Economy on solid growth track» GDP growth in 5-7% medium-term range» Led by exports; growth of household consumption set to remain at 4-5%» Fall in inflation expected on the back of surging currency and lower hikes of regulated prices 06 outlook* 07 target* Net profit growth 4% > 15% Return on equity > 2 > 2 Cost/income ratio < 56% < 54% Favourable interest rate outlook» Rates remaining above Euro rates next year» Baseline scenario: Euro adopted from January 2009 (assessment of Maastricht criteria in Q2/2008) *) Please note: all targets relate to local, consolidated results. Profitability will remain high» Supported by continued strong loan growth» Loan/deposit ratio to rise to about 7 by end of 2007 from expected year-end 2006 range of 63-65%» Boosted by general business growth and change in asset-mix 13