> Erste Bank - A Financial Franchise in Central Europe > > > Andreas Treichl, CEO
> Presentation topics 1. Erste Bank Where we are now 2. Why did we move eastwards? 3. Outlook and targets 4. Appendix 2
> Erste Bank model a concentrated region and a leading retail franchise with 11.8 million customers Clients: 5.4m Branches: 647 CZ Customers: # 1 Retail deposits: 26% SK Clients: 2.5m Branches: 333 Clients: 0.8m Branches: - Own :144 : - Subsidiaries: 145 A Customers: # 1 Retail deposits: 34% Customers: # 2 Retail deposits: 20% HU Customers: # 2 Retail deposits: 8% Clients: 1.6m Branches: 733 Branches of: SL CR Customers: # 3 Retail deposits: 9.5% Clients: 0.9m Branches: 142 Clients: 0.6m Branches: 120 3
> A group which has developed rapidly since 1997 The original DIE ERSTE savings bank vs the Erste Bank Group today 11.8 139 545 1,495 20 48 163 0.6 Assets (EUR bn) Net profit (EUR m) Operating profit (EUR m) Clients (m) +595% +1,035% +953% +1.867% 35,862 2,264 18.0% 74.5% 63.4% 4,929 316 6.1% Employees Branches Return on Equity Cost/Income Ratio +628% +617% 1996 4
> Achieving record results in Erste Bank Group FY Financial highlights» Net Profit + 54.1% to EUR 544.5m» Total Assets + 8.6% to EUR 139.7bn Cash EPS 2.28» Tier 1 Ratio at 6.7%» Cost/Income Ratio 63.4%» ROE 18.0% 0.82 1.01 1.23 1.31 1.45 1.83» Proposed dividend for the year : EUR 0.5 per share (+33.3%) 1998 1999 2000 2001 2002 Cost-Income Ratio Cash ROE 71.8% 70.1% 67.9% 67.1% 67.9% 11.2% 13.0% 14.3% 14.5% 15.3% 16.6% 18.0% 64.2% 63.4% 1998 1999 2000 2001 2002 5 1998 1999 2000 2001 2002
> Supported by a strong performance in Central Europe Preliminary Results (IFRS) as reported by local entities EB stake 97.97% 100.00% 99.90% 61.95% +/-% +/-% +/-% +/-% Net Profit (EUR m) 270.8 238.4 14% 80.9 68.1 19% 27.3 19.3 42% 38.6 30.4 27% ROE (%) 23.8 23.7 20.1 19.2 11.7 8.2 17.6 14.7 Cost / Income ratio (%) 58.0 60.1 56.6 51.9 62.9 78.6 53.4 62.4 Employees 11,639 12,420-6% 5,083 5,283-4% 2,435 3,145-23% 1,441 1,463-2% Balance Sheet Total (EURm) 19,052 18,187 5% 6,126 5,377 14% 4,760 4,066 17% 3,360 2,545 32% CE subsidiaries contributed 59.3% to Group net profit at YE (up from 53.7% in ) NB: To eliminate the currency effects, FY exchange rates have been used for all P&L and Balance Sheet data conversions 6
> CE contribution continues to grow Double digit loan growth leads shift of RWA to higher yielding CE» Distribution of RWA 2002 - EUR m YE 2002 YE Growth 02-03 YE Growth 03-04 Austria & Int.Business 51,354.3 51,725.8 0.7% 53,151.7 2.8% Central Europe 9,157.6 10,162.1 11.0% 13,318.7 31.1% Total 60,511.9 61,888.0 2.3% 66,470.4 7.4% 70,000 EUR m 60,000 50,000 40,000 30,000 15% 85% 16% 84% 20% 80% CE Subsidiaries Austria, International and Corp. Centre 20,000 10,000 0 FY 2002 FY FY 7
> Presentation topics 1. Erste Bank Where we are now 2. Why did we move eastwards? 3. Outlook and targets 4. Appendix 8
> CEE is Europe s fastest growing region GDP Growth Industrial Production Growth (%) 2002 2005e 2006e (%) 2002 2005e 2006e Austria 1.3 0.7 1.9 2.3 2.3 Austria 0.7 2.0 4.2 3.8 2.8 Czech Republic 1.5 3.7 3.5 4.2 4.4 Czech Republic 4.9 5.9 9.5 8.3 7.4 Slovakia 4.6 4.5 5.5 5.2 6.4 Slovakia 6.7 5.5 4.0 8.0 5.5 Hungary 3.5 3.0 4.0 3.8 3.8 Hungary 2.8 6.2 8.3 7.0 7.5 Croatia 5.2 4.3 3.7 3.7 4.2 Croatia 5.7 3.6 2.7 3.0 5.0 Romania 5.0 4.9 7.5 5.3 5.1 Romania 6.0 1.0 4.5 6.0 5.2 Serbia 4.0 2.2 6.5 5.0 5.0 Serbia n.a. n.a. n.a. n.a. n.a. 3 month Interest Rates Consumer Price Index (%) 2002 2005e 2006e (%) 2002 2005e 2006e Austria 2.9 2.3 2.1 2.6 3.0 Austria 1.8 1.2 2.4 2.0 2.0 Czech Republic 3.4 2.3 2.3 2.4 2.8 Czech Republic 0.6 1.0 2.8 2.2 2.7 Slovakia 7.5 6.2 4.7 3.0 3.4 Slovakia 3.4 9.3 5.9 3.1 2.8 Hungary 7.9 11.8 9.3 6.5 5.9 Hungary 4.8 5.7 5.5 3.8 3.4 Croatia 1.8 3.3 5.6 4.9 4.6 Croatia 1.9 1.7 2.1 2.6 2.7 Romania 18.4 20.2 15.5 15.3 13.1 Romania 17.9 14.1 9.3 7.5 6.4 Serbia 32.2 27.1 29.0 30.0 30.0 Serbia 14.2 7.6 11.8 9.5 7.5 Source: Erste Bank Research / EIU data 9
> Financial intermediation in CEE still very low Loans to GDP () Deposits to GDP () 120 120 100 100 80 80 60 60 40 40 20 20 0 EU15 Czech Slovakia Hungary Croatia Romania Serbia 0 EU15 Czech Slovakia Hungary Croatia Romania Serbia Erste Bank Market Shares (%) Mortgages Retail Loans Deposits CS 30.1 33.7 CS 26.4 26.9 CS 27.5 26.1 SLSP 24.5 21.8 SLSP 23.0 23.1 SLSP 36.2 34.1 EB Hungary 7.8 8.2 EB Hungary 5.0 7.0 EB Hungary 4.0 8.0 EB Croatia 4.6 7.9 EB Croatia 9.0 10.0 EB Croatia 8.8 9.5 Source: Erste Bank Research 10
> Asset Management and Insurance offer long term growth 55 54.3 Asset Management Market Share (%) Per capita Inv. Funds: 348 Insurance: 123 GDP: 7,770 Per capita Inv. Funds: 293 Insurance: 76 GDP: 5,370 45 35 28.9 31.8 FY FY Per capita Inv. Funds: 15,267 Insurance: 706 GDP: 27,858 Per capita GDP: 12,330 Per capita Inv. Funds: 131 Insurance: 41 GDP: 5,750 A SL CZ CR SK HU Per capita Inv. Funds: 428 Insurance: 88 GDP: 7,320 15 10 5 25 15 5 17.3 Austria 14.3 CE Markets Total 7.4 Czech Republic 5.3 9.5 8.2 Slovakia Hungary Croatia Insurance Market Share (%) 1.2 6.6 in EUR as of YE / Investment funds as of YE 0 Austria Czech Republic Slovakia* Hungary Croatia** 11 * In operation since 5/ ** Cooperation with Kvarner Wiener Städtische
> Presentation topics 1. Erste Bank Where we are now 2. Why move eastwards? 3. Outlook and targets 4. Appendix 12
> Extending the home market? Moving from CE to CEE Priorities» Look at possible smaller acquisitions in Hungary» Grow organically in Croatia» Look for opportunities in Romania and Serbia Criteria» Broadening the regional scope» Aiming to achieve growth in the CEE region in markets that fit with existing network» in areas which offer real added value to existing client base 13
> Group outlook and targets Outlook 2005» Current expectation for 2005 is for net profit of at least EUR 600m» More detailed outlook for the year will be presented with Q1 2005 results Target 2006» Erste Bank is confident of reaching EUR 750m net profit in 2006» Resulting in a ROE of at least 18%» Based on a CIR no higher than 61%. 14
> Presentation topics 1. Erste Bank Where we are now 2. Why did we move eastwards? 3. Outlook and targets 4. Appendix 15
> YE 04 Group Income Statement (IFRS) Core business growth underpins strong P&L EUR m YE 1 YE 2 % Change Net interest income Risk provisions for loans and advances Net commission income Net trading result General administrative expenses Result from insurance business Other operating result Pre-tax profit 2,695.5 (406.2) 1,141.1 216.5 (2,592.9) 34.8 (27.7) 1,061.1 2,586.8 (406.4) 996.6 214.6 (2,460.7) 32.9 (202.1) 761.6 4.2 (0.1) 14.5 0.9 5.4 5.7 (86.3) 39.3 Taxes on income Minority interests (273.8) (242.8) (224.2) (184.1) 22.1 31.9 Net profit after minority interests 544.5 353.3 54.1 Operating income Operating expenses Operating result 4,087.9 (2,592.9) 1,495.0 3,830.9 (2,460.7) 1,370.1 6.7 5.4 9.1 Cost / Income Ratio (%) 63.4 64.2 ROE (%) 2 18.0 13.7 2 1 Postabank included since 1 January 2 Net profit and ROE as reported in (includes goodwill amortisation) 16
> YE 04 EB Group Balance Sheet (IFRS) Assets - loans and advances show strong increase group-wide EUR m 31.12. 31.12. % Change Cash and balances with central banks 2,723 2,549 6.8 Loans and advances to credit institutions 15,513 13,140 18.1 Loans and advances to customers 72,722 67,766 7.3 Risk provisions for loans and advances (2,749) (2,772) (0.8) Trading assets 4,628 5,259 (12.0) Investments available for sale 9,141 7,379 23.9 Financial investments 28,867 26,454 9.1 Intangible assets 1,823 1,868 (2.4) Tangible assets 1,723 1,814 (5.0) Other assets 5,291 5,118 3.4 Total assets 139,682 128,575 8.6 17
> YE 04 EB Group Balance Sheet (IFRS) Liabilities tier 1 ratio strengthens to 6.7% EUR m 31.12. 31.12. % Change Amounts owed to credit institutions 28,551 25,704 11.1 Amounts owed to customers 68,213 64,839 5.2 Debts evidenced by certificates 19,887 16,944 17.4 Provisions 7,328 6,366 15.1 Other liabilities 6,179 5,514 12.0 Subordinated capital 3,048 3,538 (13.8) Minority interests 3,129 2,879 8.7 Equity 3,347 2,791 19.9 Total Liabilities 139,682 128,575 8.6 Tier 1 ratio (%) 6.7 6.3 Solvency ratio (%) 10.7 10.7 18
> Current shareholder structure Total numbers of shares: 241,442,892 By Investor Type Austria Verein 6.0% Cont. Europe 5.8% By Region Others 0.9% 32.5% UK & Ireland 17.4% Employees 1.9% Institutional investors 45.6% Free float 61.5% Private investors 7.0% Savings banks 7.0% North America 17.7% Austria 58.2% 19
> Disclaimer Cautionary note regarding forward-looking statements THE INFORMATION CONTAINED IN THIS DOCUMENT HAS NOT BEEN INDEPENDENTLY VERIFIED AND NO REPRESENTATION OR WARRANTY EXPRESSED OR IMPLIED IS MADE AS TO, AND NO RELIANCE SHOULD BE PLACED ON, THE FAIRNESS, ACCURACY, COMPLETENESS OR CORRECTNESS OF THS INFORMATION OR OPINIONS CONTAINED HEREIN CERTAIN OF THE STATEMENTS CONTAINED IN THIS DOCUMENT MY BE STATEMENTS OF FUTURE EXPECTATIONS AND OTHER FORWARD-LOOKING STATEMENTS THAT ARE BASED ON MANAGEMENT S CURRENT VIEWS AND ASSUMPTIONS AND INVOLVE KNOWN AND UNKNOWN RSIKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS, PERFORMANCE OR ENVENTS TO DIFFER MATERIALLY FROM THOSE EXPRESSED OR IMPLIED IN SUCH STATEMENTS. NONE OF ERSTE BANK OR ANY OF ITS AFFILIATES, ADVISORS OR REPRESENTATIVES SHALL HAVE ANY LIABILITY WHATSOEVER (IN NEGLIGENCE OR OTHERWISE) FOR ANY LOSS HOWSOEVER ARISING FROM ANY USE OF THIS DOCUMENT OR ITS CONTENT OR OTHERWISE ARISING IN CONNECTION WITH THIS DOCUMENT THIS DOCUMENT DOES NOT CONSTITUTE AN OFFER OR INVITATION TO PURCHASE OR SUBSCRIBE FOR ANY SHARES AND NEITHER IT NOR ANY PART OF IT SHALL FORM THE BASIS OF OR BE RELIED UPON IN CONNECTION WITH ANY CONTRACT OR COMMITMENT WHATSOEVER 20
> Investor relations contacts Erste Bank, Graben 21, 1010 Vienna Fax +43 (0)5 0100-13112 E-mail: investor.relations@erstebank.at Internet: www.erstebank.com Reuters: ERST.VI Bloomberg: EBS AV Datastream: O:ERS Securities ID: 065201 Investor relations Gabriele Werzer Tel: +43 (0)5 0100-11286 Monika Peraus Tel: +43 (0)5 0100-11282 Isabella Sykora Tel: +43 (0)5 0100-13036 E-Mail: gabriele.werzer@erstebank.at E-Mail: monika.peraus@erstebank.at E-Mail: isabella.sykora@erstebank.at 21