Erste Group Bank AG ERSTE Investors Breakfast: Fixed Income CEE 2nd October 2014 HOTEL THE QUEEN OF MONTENEGRO, Budva, Montenegro
Erste Investors Breakfast Agenda 10:00-10:05 Opening Remarks by Aleksa Lukić, CEO, Erste Bank AD Podgorica 10:05-10:25 Montenegro & SEE Macroeconomic Overview' Alen Kovač, Head of Economic Research Department, Erste& Steiermärkische Bank d.d. Zagreb 10:25-10:50 'CEE Capital Markets and Fixed Income Trading Ideas' Zachary Carvell, Head of Institutional Solutions, Erste Group Bank AG 10:50-11:00 Debt Capital Markets trends & update ' Peter Bakos, Vice President - DCM, Erste Group Bank AG 11:00-11:10 Coffee Break 11:10-11:55 Round Table discussion: SEE fixed income market current situation & future challenges Moderator: Antun Burić, Deputy Head of South Eastern Europe Sales, Erste Group Bank AG Speakers: Lana Simonović, Senior Credit Trader, Erste Group Bank AG Hrvoje Šimić, Head of DCM, Erste & Steiermärkische Bank d.d. Neven Radaković, Head of Corporate Sales, Erste & Steiermärkische Bank d.d. Igor Savić, Treasury Department Director, Erste Bank AD Podgorica Davor Iljaš, CFA, Portfolio Manager, Erste Asset Management ltd. 11:55-12:00 Closing Remarks Jaromir Malak, Head of Institutional Sales CEE & International, Erste Group Bank AG 12:00-13:00 Refreshments 2
Erste Group at a glance Customer banking in the eastern part of the EU 46,000 employees serve 16.4 million customers with approx. 2,800 branches in 7 countries in the eastern part of the EU Market leadership in AUT, RO, SK and CZ No. 1 asset manager in CEE with EUR 49.2bn assets under management TOP position in debt capital markets in Austria and CEE with more than 11% market share London 3
Steiermärkische Sparkasse Group 7 markets, 6 100 employees, 2.4 MM customers, 14.3 BN assets Sparkasse Slovenija Assets: 1.091 MM Customers: 56.000 Employees: 208 Sparkasse B&H Assets : 491 MM Customers : 121.000 Employees : 462 Sparkasse Makedonija Assets : 248 MM Customers : 133.000 Employees : 305 Erste&Steiermärkische Bank Hrvatska Assets : 8.897 MM Customers : 1.000.000 Employees : 2174 Erste Srbija Assets : 849 MM Customers : 328.000 Employees : 976 Erste Bank AD Podgorica Assets : 350 MM Customers : 71.544 Employees : 253 4
EGB on Bloomberg 12<GO> Trading & Contacts 17<GO> Sign Up Electronic Trading Enablement 5
ERSTE FX trading platforms NET FX FX Bloomberg FX Streaming 6
Group Capital Markets web portal https://produkte.erstegroup.com Capital Markets Competence CEE Competence Research Center Markets & Trends Service & Contacts My Site 7
Group Capital Markets Sales Contacts - SEE Manfred Neuwirth Head Group Institutional Sales Tel: +43 501 00 84251 manfred.neuwirth@erstegroup.com Jaromir Malak Head of Institutional Sales - CEE & International Tel: +43 501 00 84254 jaromir.malak@erstegroup.com Antun Burić Deputy Head SEE Sales Head of Institutional Sales -Croatia Tel: +43 664 88756436 Tel: +385 99 237 2439 aburic@erstebank.com Natalija Zujić South Eastern Europe Sales Tel: +385 99 237 1638 npetljak@erstebank.com Željko Pavičić South Eastern Europe Sales Tel: +385 72 37 1494 zpavicic1@erstebank.com 8
Round table Discussion SEE fixed income market current situation & future challenges Lana Simonović Neven Radaković Hrvoje Šimić SEE fixed income market Igor Savić Davor Iljaš Antun Burić 9
SEE Macroeconomic figures (end of year 2013) Countries Population (mio) GDP (bn EUR) GDP YoY GDP 2014f Public debt (% of GDP) Public debt 2014f (% of GDP) Government budget balance Inflation (avg.) Unemployment Credit Rating (S&P/ Moody s) Croatia 4,28 42,3-1% -0,5% 67,4% 73% -4,9% 2,3% 17,1% BB / Ba1 Slovenia 2,05 35,3-1,1% 0,8% 71,7% 81,2% -14,7% 1,65% 10,2% A- / Ba1 Serbia 7,16 32 2,5% -0,5% 64,4% 71,4% -5% 2,2% 21% BB- / B1 Bosnia and Herzegovina 3,87 13,5 2,1% 2% 41,5% 42,4% -1,5% -0,1% 27,5% B / B3 Montenegro 0,63 3,3 3,5% 2,5% 56,9% 59,5% -3,9% 2,2% 19,5% BB- / Ba3 Macedonia 2,06 7,9 3,1% 3,2% 35,8% 36,3% -4,1% 2,8% 30% BB- / BB+ Kosovo 1,86 4,9 3% 3,9% 9,1% - -3% 1,8% 30% - Source: Central banks of countries, Erste research, International monetary fund 10
SEE Financial sector (end of year 2013) Countries Total Assets (bn of EUR) Banks Insurance Companies Pension Funds Leasing Companies Others* Croatia 71,7 72,8% 6,5% 11,1% 3,6% 6% Slovenia 64,6 71,34% 10,88% 2,57% 6,24% 8,97% Serbia 27 92,4% 4,8% 0,6% 2,1% 0,1% Bosnia and Herzegovina 13 87,13% 4,86% - 2,62% 5,39% Montenegro 3,5 88,5% 4,3% 7,1% - 0,1% Macedonia 6,83 88,5% 3,3% 5,35% 1,7% 1,15% Kosovo 4,2 72,3% 3,1% 21,7% - 2,9% Source: Central banks of countries * Others including investment funds, factoring companies etc. 11
Interest rate swap (IRS) plain vanilla float-fixed (5y, fully amortising) 3M EURIBOR Client 0,365% fix 3M EURIBOR + 300 bps 500 bp Fixed interest rate + margin = total loan cost Historically low euribor level 0,365% + 5,00% = 5,365% 2.10.2014. 12
Currency Interest Rate Swap (CIRS) fixed-fixed (5y, bullet) 6,00% Client 5,15% Coupon 6,00% Bond lower interest rate lower FX risk (ag EUR than ag USD) 2.10.2014. 13
Millions Erste Adriatic Bond and Erste Private Portfolios Investment Strategy: CEE /SEE fixed income UCITS fund Investment Universe : Govt and Corp Bonds Currency: EUR Continuous growth in AUM mostly due to the good performance and low MMKT rates Erste ADRATIC BOND Unit Price 108,31 EUR Performance - YTD 6,47% Performance Since Inception 8,31% Inception Date 28.6.2013 339 350 311 300 263 250 200 150 100 50 15 15 16 16 16 13 12 14 37 41 72 100 148 162 178 0 14
Q & A 15