Balance sheet press conference
Erste Bank Group 95% of Erste Bank 15.9m customers are citizens of the EU Customers: 5.3m; #1 Retail deposits: 33% Retail loans: 32% Branches: 637 Customers: 0.6m; # 2 Retail deposits (incl. SBs): 21% Retail loans (incl. SBs): 19% Branches: - Owned branches : 142 - Savings bank subsidiary branches: 134 Customers: 2.2m Branches: 708 Customers: 2.5m; #1 Retail deposits: 32% Retail loans: 25% Branches: 271 Customers: 0.9m; #2 Retail deposits: 6% Retail loans: 9% Branches: 182 Bank Prestige Founded December Customers: 3.5m; #1 Retail deposits: 32% Retail loans: 28% Branches: 473 Customers: 0.6m; #3 Retail deposits: 11% Retail loans: 12% Branches: 112 Customers: 0.2m; ~#9 Retail deposits: 2% Retail loans: 2% Branches: 60 2
Strong lending growth (by region) Growth in Central Europe +68.2% Rising demand for personal and residential loans leads to strong loan growth in Central Europe Moderate growth in Austria based on retail and residential volume increases Customer loans by regions (in EUR billions) Customer loans in Central Europe (in EUR billions) 80.4 18,967 61,452 +20.8% 97.1 31,910 65,197 18.9 127 2,606 3,901 2,559 + 68.2% 31.9 7,748 146 3,091 5,190 3,761 9,773 11,974 Österreich Austria and undother übrige countries Länder Zentral- Central & and Osteuropa Eastern*) Europe *) CS SLSP EBH EBC EBS BCR *) Based on local figures 3
Strong growth in deposits (by region) Growth in Central Europe +48.3% Strong growth in deposits in Central Europe Customer deposits by region (in EUR billions) Customer deposits in Central Europe (in EUR billions) 72.8 26,476 +24.8% 90.9 39,251 26.5 82 2,302 2,799 4,687 + 48.3% 39.3 7,268 129 3,002 3,197 6,099 46,317 51,598 16,605 19,556 2.005 Österreich Austria and other und übrige countries Länder Zentral- Central and & Osteuropa Eastern Europe *) *) CS SLSP EBH EBC EBS BCR *) Based on local figures 4
Financial highlights» Net profit up 30.1% to EUR 932.2 million (: EUR 716.7 million)» Rise of 20.2% to EUR 904.5 million excl. BCR» Total assets up by 19.0% to EUR 181.7 billion» Increase of 8.4% excl. BCR» Core capital ratio: 6.6%» Following closing of BCR in Oct.» Cash earnings per share reached EUR 3.14» Excl. EUR 18 million goodwill write-off BCR» Cash return on equity: 13.8% in EUR 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 Earningsper pershare share(cash) * (cash)* 3.14 2.98 3.10 2.18 1.83 1.45 2002 2003 2004 Cost/income ratio Cost/income ratio (cash)* Return on equity (cash) * Return on equity (cash)* 70% 65% 60% 67.9% 64.2% 64.1% 61.7% 59.5% 25% 20% 15% 10% 5% 15.3% 16.6% 17.0% 19.5% 13.8% 13.7% 55% 2002 2003 2004 0% 2002 2003 2004 *) The red bars designate EPS and ROE (earnings per share and return on equity). The decline in reported and cash ROE already reflects the capital increase in January. The calculation of earnings per share is based on the average number of shares for the period in question (excluding treasury shares and shares held by Sparkassen savings banks with shareholdings in EB). 5
Overview of key figures Net interest income + 14.1% to EUR 3,189.3 million Net commission income + 15.0% to EUR 1,445.9 million Operating income + 14.3% to EUR 4,948.9 million General and administrative expenses + 10.3% to EUR 2,945.3 million Operating result + 20.7% to EUR 2,003.6 million Pre-tax profit + 24.6% to EUR 1,522.2 million 6
Overview of key figures Net profit after tax + 30.1% to EUR 932.2 million Total assets + 19.0 % to EUR 181.7 billion Core capital ratio 6.6 % Dec. : 6.8 % 7
Operating result segmental level detail in EUR million Chg. Austria 984.0 922.6 6.6% Joint liability scheme 406.0 394.7 2.9% Retail & residential 279.9 254.3 10.1% Own branches 106.0 95.0 11.6% SMEs 27.4 26.3 4.1% Own Savings Bank 69.9 61.7 13.3% Residential 39.8 32.0 24.2% Major customers 154.0 134.5 14.5% Trading & Investment Banking 144.2 139.2 3.6% Central and Eastern Europe 959.1 703.7 36.3% Czech Republic 486.8 377.6 28.9% Rumania 87.7 -- -- Slovakia 158.1 127.4 24.1% Hungary 168.0 132.6 26.7% Croatia 76.1 70.3 8.2% Serbia - 17.7-4.1 >100.0% International business 147.8 143.1 3.3% Corporate Center - 87.2-110.0-20.7% Total EB Group 2,003.7 1,659.4 20.7% 8
Development in Central Europe Local net earnings (IFRS) *) 97.99% 69.15% 100.00% in EUR million Chg. Chg. Chg. Consolidated net profit 366.7 322.5 13.7% 214.5 **) 184.3 16.4% 103.9 96.1 8.1% Return on equity 23.0% 22.3% 18.8% 17.6% 20.3% 19.3% Cost/income ratio 53.7% 56.9% 55.3% 57.2% 54.1% 55.4% Dec 06 Dec 05 Chg. Dec 06 Dec 05 Chg. Dec 06 Dec 05 Chg. Total assets 26,501 23.797 11.4% 14,020 10,117 38.6% 8.651 7,521 15.0% Employees 10,856 10.755 0.9% 13,492 13,573-0.6% 4,797 4,836-0.8% *) exchange rates were used in both the income statement and the balance sheet to eliminate currency exchange effects. Proportional consolidation of BCR and Erste Bank Serbia commenced on October 12, and August 1, respectively. **) Result following restructuring costs 9
Development in Central Europe Local net earnings (IFRS) 99.94% 64.94% 99.99% in EUR million Chg. Chg. Chg. Consolidated net profit 88.4 71.5 23.6% 56.0 47.5 17.9% -28.3-7.5 >100.0% Return on equity 25.2% 26.2% 18.7% 20.2% -- -- Cost/income ratio 54.8% 57.4% 50.7% 50.1% 231.3% 85.6% Dec 06 Dec 05 Chg. Dec 06 Dec 05 Chg. Dec 06 Dec 05 Chg. Total assets 7,069 5,770 22.5% 4,854 4,125 17.7% 288 153 88.2% Employees 2,881 2,551 12.9% 1,759 1,604 9.7% 871 915-4.8% 10
Erste Bank Group Balance sheet and income statement
Balance sheet in EUR million ASSETS 31.12. 31.12. Change in % Loans and advances to credit institutions 16,616 16,858-1.4 Loans and advances to customers 97,107 80,419 20.8 Risk provisions for loans and advances -3,133-2,817 11.2 Trading and financial assets 42,497 39,455 7.7 Other assets 28,616 18,765 52.5 Total assets 181,703 152,681 19.0 12
Balance sheet (assets) in EUR million 200,000 180,000 160,000 140,000 120,000 100,000 9,788 4,290 27,217 9,807 4,989 32,873 10,089 6,125 35,071 8,883 7,066 39,455 18,154 7,329 42,497 9,664 7,280 42,091 80,000 60,000 40,000 64,435 67,766 72,843 80,419 97,107 89,479 20,000 0 15,492 13,140 15,684 16,858 2002 2003 2004 adapted 16,616 incl. BCR 17,001 excl. BCR Loans and advances to credit ins titutions Financial as s ets (FV,AfS,HtM,T) Other ass ets Loans and advances to cus tom ers Inves tm ents of ins urance com panies 13
Balance sheet in EUR million LIABILITIES AND SHAREHOLDERS' EQUITY 31.12. 31.12. Change in % Amounts owed to credit institutions 37,688 33,911 11.1 Amounts owed to customers 90,849 72,793 24.8 Debts evidenced by certificates 21,814 21,291 2.5 Other liabilities 15,238 14,016 8.7 Subordinated capital 5,210 4,290 21.4 Total equity 10,904 6,379 70.9 Shareholders' equity 7,979 4,065 96.3 Minority interests 2,925 2,314 26.4 Total liabilities and equity 181,703 152,681 19.0 14
Balance sheet (liabilities and shareholders' equity) in EUR million 200,000 180,000 160,000 140,000 120,000 100,000 80,000 60,000 15,912 17,577 61,308 17,550 20,482 64,839 19,632 23,416 68,213 20,375 25,581 72,793 26,142 27,024 90,863 24,727 25,780 83,595 40,000 20,000 0 26,425 25,704 28,551 33,911 2002 2003 2004 adapted Shareholders' equity and other as s ets Debts evidenced by certificates and s ubordinated capital Am ounts owed to custom ers Am ounts owed to credit ins titutions 37,688 incl. BCR 31,427 excl. BCR 15
income statement according to IFRS in EUR million 1.-12. 1.-12. Change in % I. Net interest income 3,189.3 2,794.2 14.1 Risk provisions for loans and advances -439.1-421,6 4.2 Net commission income 1,445.9 1,256.8 15.0 Net trading result 277.9 241.7 15.0 General and administrative expenses -2,945.3-2,670.0 10.3 Income from insurance business 35.8 36.7-2.2 Other operating result -144.0-73.2 96.8 II. Pre-tax profit 1,522.2 1,221.7 24.6 Taxes on income -339.8-301.7 12.6 III. Net profit before minority interests 1,182.4 914.8 28.5 Minority interests -250.2-203.2 23.1 IV. Net profit after minorities 932.2 716.7 30.1 16
Operating result & consolidated net profit in EUR million 2,500.0 2,000.0 1,659 1,913 1,500.0 1,370 1,454 1,151 1,000.0 717 932 905 500.0 255 353 521 0.0 2002 2003 2004 adapted incl. BCR excl. BCR Operating result Consolidated net profit 17
Divisional results core segments Result increased in all core segments CEE share of consolidated net profit 60.5% (: 61.0%) Cost/income ratio reduced in almost all segments Operating revenues (in EUR million) General admin. expense (in EUR million) Net profit after tax and minorities (in EUR million) 4.329 179 1,693 +14.3% 4.949 182 2,187 13 2670 36 989 +10.3% 2945 38 34 1,228 717 111 443 +30.1% 932 118 564 2,555 2,629-49 -98 1,633 1,645 268 346-105 -96 Austria CEE subsids. Int. business Corp. Center 18
Retail & residential - details Retail and residential - improved results in all divisions Operating earnings (in EUR million) Net profit (in EUR million) 106.0 95.0 48.7 26.3 27.4 69.9 61.7 39.8 32.0 39.7 37.4 35 15.5 27.3 31.8 25.6 23.6 13.5 4.4 2.7 Filialen KMU Eigene Own Branches SMEs Savings Sparkassen Bank Mortgage Wohnbau Subsidiaries Sonstige Beteiligungen Filialen KMU Eigene Branches SMEs Own Savings Sparkassen Bank Mortgage Wohnbau Subsidiaries Sonstige Beteiligungen ROE: 15.9% 4.2% 9.8% 14.3% 58.6% 19
Segmental reporting Austria CEE Int. business Corp. Center Total in EUR million Net interest income 1,592.9 1,583.9 1,444.3 1,104.6 149.0 149.6 3.2-43.9 3,189.4 2,794.2 Risk provisions -312.7-351.3-126.9-80.2 2.1 10.2-1.5-0.2-439.1-421.6 Net commission income 891.4 825.7 575.1 459.4 33.3 29.4-53.8-57.7 1,445.9 1,256.8 General admin. expense -1,645.1-1,632.5-1,227.5-989.1-34.3-35.8-38.3-12.5-2,945.3-2,670.0 Consolidated net profit 345.9 268.1 563.7 443.3 118.2 110.8-95.6-105.4 932.2 716.7 Return on equity 18.3% 15.1% 36.0% 39.8% 23.5% 26.0% -6.7% -58.1% 13.7% 19.5% 20
Segmental reporting - Austria Joint liability scheme Retail & residential Major customers Trading & IB Austria in EUR million Net interest income 839.7 841.2 537.3 524.6 147.6 140.2 68.3 78.0 1.592.9 1.583.9 Risk provisions -171.3-215.8-88.1-105.1-53.3-30.5 0.0 0.0-312.7-351.3 Net commission income 365.0 358.1 335.1 314.5 101.0 82.2 90.3 70.9 891.4 825.7 General administrative expense -824.2-825.2-621.0-623.8-97.6-89.4-102.3-94.1-1.645.1-1.632.5 Consolidated net profit 15.8 8.8 123.4 103.7 83.0 53.4 123.7 102.3 345.9 268.1 Return on equity 6.0% 3.6% 14.1% 12.6% 16.4% 12.3% 51.2% 36.5% 18.3% 15.1% 21
Segmental reporting - Central and Eastern Europe Czech Republic Rumania Slovakia Hungary Croatia Serbia in EUR million Net interest income 705.6 583.5 127.8 0.0 239.5 197.3 251.2 219.0 111.1 101.9 9.2 3.0 Risk provisions -52.5-33.7-8.2 0.0-16.5-11.1-34.2-17.1-12.3-14.4-3.3-3.9 Net commission income 324.9 287.0 45.0 0.0 82.8 82.5 88.4 64.8 29.7 23.3 4.3 1.9 General administrative expense -613.2-550.1-107.6 0.0-185.0-167.3-206.9-185.8-84.5-75.3-30.3-10.7 Consolidated net profit 324.4 256.8 34.6 0.0 107.7 89.1 85.2 78.1 32.9 26.8-21.2-7.5 Return on equity 40.7% 40.0% 34.6% 0.0% 44.8% 50.3% 31.0% 40.4% 24.1% 28.5% nm nm 22
Share price development: Erste Bank DJ Euro Stoxx Bank and ATX (indexed) Share price developm ent: Erste Bank, DJ Euro Stoxx Bank Index and ATX (indexed) 130 Erste Bank share 120 110 DJ Euro Stoxx Banks Index 100 Austrian Traded Index (ATX) 90 80 Jan 06 Feb 06 Mar 06 Apr 06 May 06 Jun 06 Jul 06 Aug 06 Sep 06 Oct 06 Nov 06 Dec 06 23
Market capitalisation of Erste Bank Market capitalisation rises in to EUR 18.3 billion in EUR billions 20 18 18.3 16 14 12 11.44 10 9.49 8 6 4 2 2.03 2.02 1.95 2.42 3.01 3.84 5.87 0 1997 1998 1999 2000 2001 2002 2003 2004 24
Erste Bank Group outlook and objectives Consolidated net profit (1) On average exceeding 20% p.a. for -2009 Cost/income ratio 2009: below 55 % Return on equity (2) 2009: 18-20% 1) Profit after taxes and minority interests 2) Based on a core capital ratio of at least 7% 25
Shareholder structure By investor groups By regions Austria Insurance Capital Association Research and 4.9% Mgmt. 5.0% DIE ERSTE österreichische Spar- Casse Privatstiftung 30.6% Continental Europe 14.4% Other 2.5% UK & Ireland 14.0% Institutionals 41.8% Private 7.8% Em ployees 3.0% Sparkassen 6.9% North America 16.0% Free float: 64.5% Total number of shares: 315,296,185 26
8 countries 15.9 million customers one banking group Croatia Hungary Serbia Ukraine Austria Czech Republic Slovakia Rumania 27