Erste Group investor presentation
Q1 17 results (unaudited)
5 May 2017
Excellent credit risk environment across CEE and lower banking taxes in Austria
provide strong foundation for another 10%+ ROTE year
Andreas Treichl, CEO Erste Group
Gernot Mittendorfer, CFO Erste Group
Willibald Cernko, CRO Erste Group
Page
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 THIS
INFORMATION OR OPINIONS CONTAINED HEREIN.
• CERTAIN STATEMENTS CONTAINED IN THIS DOCUMENT MAY 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 RISKS
AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS, PERFORMANCE OR EVENTS TO
DIFFER MATERIALLY FROM THOSE EXPRESSED OR IMPLIED IN SUCH STATEMENTS.
• NONE OF ERSTE GROUP 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.
Page
2
Presentation topics
•
•
•
•
•
•
Executive summary
Business environment
Business performance
Assets and liabilities
Outlook
Additional information
Page
3
Executive summary –
Group income statement performance
QoQ net profit reconciliation (EUR m)
YoY net profit reconciliation (EUR m)
86
275
50
262
12
9
10
313
9
38
29
262
86
67
114
47
Q4 16 Operating Operating Risk costs
income expenses
Other
result
Taxes on Minorities
income
Q1 17
• Erste Group Q1 17 net profit amounted to EUR 262.2m; qoq rise
primarily due to improved other result (one-offs in Q4 16 related to
AT, SK and RO), better risk provisions and lower costs
• Revenues declined on lower NII (positive one-off in Q4 16,
sovereign bond maturities), trading and rental income
• Operating expenses improved on lower personnel costs and lower
depreciation
1-3 16 Operating Operating Risk costs
income expenses
Other
result
Taxes on Minorities
income
1-3 17
• 4.6% yoy decline in net profit primarily driven by lower operating
result and higher minority charge
• Other result improved on the back of lower banking levies (mainly
in AT) that off-set higher contributions into recovery and resolution
funds
• Negative yoy impact from minority line reflects the improved result
of the savings banks
Page
4
Executive summary –
Key income statement data
Net interest income & margin
Operating result & cost/income ratio
in EUR m
in EUR m
2.51%
2.33%
1,092
1,051
2.52%
1,107
Cost of risk
61.5%
2.33%
in EUR m
63.0%
+16.7%
66
1,051
56
-3.4%
620
599
666
0.39%
0.19%
599
132
66
1-3 16
1-3 17
Q4 16
Q1 17
1-3 16
Banking levies
1-3 17
Q4 16
Q1 17
Reported EPS & ROE
237
9.8%
1-3 16
0.64
1-3 17
Q1 17
Q1 17
8.7%
8.7%
11.3%
9.8%
0.61
0.61
36
Q4 16
Q4 16
Return on tangible equity
2.8%
36
1-3 17
in EUR
in EUR m
63
1-3 16
9.8%
3.2%
0.20
1-3 16
1-3 17
Q4 16
Q1 17
1-3 16
1-3 17
Q4 16
Q1 17
Page
5
Executive summary –
Group balance sheet performance
YTD total asset reconciliation (EUR m)
2,338
12
330
YTD equity & total liability reconciliation (EUR m)
222,798
65
206
292
222,798
6,694
6,978
6,378
8,304
1,441
208,227
208,227
31/12/16
Cash
Trading, Loans to Net loans Intangibles Other
financial
banks
assets
assets
31/03/17
• Balance sheet total rose by 7.0% in Q1 17, driven by temporary
increase in interbank loans (primarily in CZ) and higher cash
position on the back of continued deposit inflows
• Net customer loans advanced by 1.8% in Q1 17, supported by
increased money market business, primarily in CZ; underlying loan
growth mainly in retail segments of CZ, SK and HU
• Decline in financial assets driven by AfS sales
448
31/12/16 Trading
Bank Customer Debt
Other
liabilities deposits deposits securities liabilities
Equity
31/03/17
• Bank deposits increased by 56.8% on temporarily expanded
interbank business, primarily in the holding company and CZ
• Deposit growth accelerated to 4.9% in Q1 17, pushing the
loan/deposit ratio down to 91.9%; main drivers: continued
customer deposit inflows across most geographies and increased
money market business
Page
6
Executive summary –
Key balance sheet data
Loan/deposit & loan/TA ratio
31/12/16
31/03/17
Net loans & credit RWA
NPL coverage ratio & NPL ratio
in EUR bn
+1.8%
94.7% 91.9%
69.1%
62.7% 59.7%
130.7 133.0
83.1
67.6%
83.2
4.9%
Loan/deposit ratio
Loans/total assets
B3FL capital ratios
Net loans
Credit RWA
B3FL capital & tangible equity*
NPL coverage
4.9%
NPL ratio
Liquidity coverage & leverage ratio**
in EUR bn
18.2% 18.1%
13.3
152.6%
13.2
10.6
12.8% 12.5%
10.8
142.6%
6.2%
Total capital
CET 1
CET 1
Tangible equity
* Based on shareholders’ equity, not total equity
LCR
5.8%
LR (B3FL)
** Pursuant to Delegated Act
Page
7
Presentation topics
•
•
•
•
•
•
Executive summary
Business environment
Business performance
Assets and liabilities
Outlook
Additional information
Page
8
2017
Business environment –
Continued solid CEE GDP growth expectations for 2017
Real GDP growth (in %)
Dom. demand contribution* (in %)
2018
Net export contribution* (in %)
Consumer price inflation (ave, in %)
5.9
3.1
2.7 2.9
3.7
4.3
4.1
2.8
3.4
2.8
3.2 2.9
1.5 1.6
3.4
3.6
3.4 3.1
2.5
2.4 2.4 2.2 2.4
2.7
0.9
0.2 0.4 0.3 0.5
1.4
1.4 1.2
AT
CZ
SK
RO
HU
HR
AT
1.9 1.8
0.1
2.7 2.5
1.0
-0.1 -0.2 -0.2
-1.6 -1.3
CZ
SK
RO
HU
HR
AT
CZ
SK
RO
HU
HR
2.0
1.9
AT
CZ
SK
1.5
1.4
RO
HU
1.9
HR
• Erste Group’s core CEE markets expected to grow by about 3-4% in 2017
•
•
Domestic demand is expected to be main driver of economic growth in 2017
Consumption is supported by improving labour markets, wage increases and very low inflation rates across the region
Unemployment rate (eop, in %)
8.7
Current account balance (% of GDP)
10.6
9.4
1.6 1.6 1.2
7.8
6.2 6.1
4.1 3.8
3.2
1.9
1.4
2.4
1.5
4.3 4.1
-0.6 -0.6
-1.2 -0.9
-1.2
-1.5
CZ
74 73
82 79
52 51
-1.6 -1.6
39 41
36 36
-2.7 -2.5
-3.3 -3.8
AT
Public debt (% of GDP)
8179
5.9 5.8
3.6 3.6
Gen gov balance (% of GDP)
SK
RO
HU
HR
AT
CZ
SK
RO
-3.5 -3.6
HU
HR
AT
CZ
SK
RO
HU
HR
AT
CZ
SK
RO
HU
HR
• Solid public finances across Erste Group‘s core CEE markets: almost all countries fulfill Maastricht criteria
• Sustainable current account balances, supported by competitive economies with decreasing unemployment rates
* Contribution to real GDP growth. Domestic demand contribution includes inventory change. Source: Erste Group Research
Page
9
Business environment –
Slight interest rate increases on the long end in Q1 17
Austria
3M Interbank
10YR GOV
Czech Republic
Romania
3.42%
0.57%
3.29%
0.57%
0.41%
-0.19%
1-3 16
0.57%
-0.33%
-0.31%
-0.33%
1-3 17
Q4 16
Q1 17
• ECB cut discount rate to zero in March 15
• Maintains expansionary monetary policy
stance
0.45%
0.74%
0.45%
0.29%
0.28%
0.62%
0.62%
1-3 16
1-3 17
Q4 16
Q1 17
1-3 16
1-3 17
• National bank maintains ultra-low interest
rates since November 2012 at 0.05%
3.20%
0.57%
0.62%
Q4 16
Q1 17
• Central bank cut policy rate to historic low
of 1.75% in May 2015
Hungary
3.46%
3.66%
0.58%
0.28%
3.28%
1.07%
0.58%
0.29%
Slovakia
0.53%
3.66%
Croatia
3.46%
1.07%
-0.19%
-0.33%
-0.31%
-0.33%
1-3 16
1-3 17
Q4 16
Q1 17
• As part of euro zone ECB rates are
applicable in SK
0.64%
1.33%
0.25%
1-3 16
1-3 17
Q4 16
0.25%
Q1 17
• National bank cut the benchmark interest
rate to record low of 0.9% in May 16
0.67%
0.41%
1-3 16
1-3 17
0.62%
0.41%
Q4 16
Q1 17
• Central bank maintains discount rate at
3.0% since 2015
Source: Bloomberg
Page 10
Business environment –
Limited currency volatility in CEE
EUR/CZK
-0.1%
EUR/RON
0.0%
+0.1%
+0.7%
+0.3%
+0.4%
27.0
27.0
27.0
27.0
27.0
27.0
4.49
4.52
4.51
4.52
4.54
4.55
1-3 16
1-3 17
Q4 16
Q1 17
31/12/16
31/03/17
1-3 16
1-3 17
Q4 16
Q1 17
31/12/16
31/03/17
• Czech National Bank ended its currency peg in April 2017;
discount rate stable at 0.05% in Q1 17
• RON movements marked by limited volatility, despite decreasing
interest rates: policy rate cut to 1.75% in Q2 15
EUR/HUF
EUR/HRK
-0.1%
-0.9%
-0.2%
-2.0%
-0.8%
-1.4%
312.0
309.1
309.4
309.1
309.4
308.8
7.62
7.47
7.52
7.47
7.56
7.45
1-3 16
1-3 17
Q4 16
Q1 17
31/12/16
31/03/17
1-3 16
1-3 17
Q4 16
Q1 17
31/12/16
31/03/17
• Stable currency development, despite expansionary monetary
stance of the national bank
• Strong grip of national bank on HRK is reflected in lack of volatility
Source: Bloomberg
Page 11
31/03/16
Business environment –
Market shares: mostly stable or increasing shares across the region
Gross retail loans
Gross corporate loans
19.5%
19.7%
AT
22.8%
23.0%
23.0%
CZ
27.7%
27.5%
27.6%
SK
AT
19.1%
19.9%
AT
CZ
19.2%
19.7%
19.8%
CZ
13.8%
11.9%
12.4%
HU
HR
13.7%
13.4%
13.3%
HR
4.3%
4.4%
4.4%
• CZ and SK: stable qoq market
shares in growing markets
• RO: slightly lower market share
mainly due to more restrictive
lending standards
• HU: market shares driven by
NPL sales & Citi transaction
15.5%
13.5%
13.0%
RO
HU
RS
11.3%
11.2%
11.3%
SK
17.1%
16.6%
16.5%
RO
Retail deposits
RS
5.6%
6.2%
6.0%
HU
14.0%
14.6%
14.7%
4.6%
5.3%
5.3%
• RO: continued pressure on
gross loan based market share
• HU: increasing yoy market
share driven mainly by SME
segment, while qoq decline is
driven by CRE repayments
26.5%
27.1%
27.2%
16.4%
16.2%
16.2%
6.4%
7.0%
9.0%
13.3%
13.6%
13.7%
HR
RS
3.2%
3.4%
3.4%
18.9%
19.0%
AT
25.2%
25.3%
25.2%
RO
31/03/17
Corporate deposits
18.5%
18.9%
SK
31/12/16
CZ
11.9%
12.2%
12.0%
SK
11.6%
12.3%
12.3%
13.6%
15.1%
15.7%
RO
HU
6.0%
6.7%
6.5%
10.7%
13.0%
12.8%
HR
RS
4.5%
4.5%
4.8%
• Continued inflows in all markets • Changes mainly due to normal
despite low interest rate
quarterly volatility in corporate
environment, with broadly
business
stable market shares
AT market shares for 31/03/2017 not yet available
Page 12
Presentation topics
•
•
•
•
•
•
Executive summary
Business environment
Business performance
Assets and liabilities
Outlook
Additional information
Page 13
Business performance: performing loan stock & growth –
Performing loan volume increases by 1.7% qoq
123.8
128.6
130.8
Group
29.4
30.3
29.9
AT/EBOe
AT/OA
SK
HU
HR
3.5%
0.3%
0.7%
1.0%
19.9
21.2
22.9
CZ
RO
1.8%
-1.2%
11.9
11.8
12.0
13.2%
3.3%
2.8
3.1
3.3
17.7%
5.8%
5.6
5.6
5.5
Other
0.1
0.1
0.2
31/12/16
31/03/17
• Year-on-year segment trends:
3.8%
1.3%
9.2
10.1
10.4
RS
QoQ
15.3%
7.8%
6.8
7.0
7.1
0.7
0.8
0.8
31/03/16
• Rising performing loan volume trend continues in Q1 17
across most geographies, supported by increased money
market business, primarily in CZ; underlying loan growth
mainly in retail segments of CZ, SK and HU
• Yoy growth primarily driven by Retail, with good contributions
from Corporates, Savings Banks & Group Markets segments
• Qoq growth mainly attributable to Group Markets on
temporarily increased money market business in CZ, good
contributions from Retail and Corporates
5.7%
1.7%
37.5
38.6
38.8
AT/SB
YoY
-1.5%
-0.7%
• Quarter-on-quarter segment trends:
18.2%
1.5%
in EUR bn
• RS: continued strong growth in Retail and Corporates segments
• HU: growth primarily in the Corporates segment, Retail growth
benefited from CITI integration
• CZ: strong growth in Retail and Corporates segment, temporary
EUR 1.1bn Group Markets volume expansion
• SK: increase mainly driven by Retail segment
• CZ: growth primarily driven by increased money market
business in Group Markets segment (EUR 1.1bn); in addition
growth in Retail and Corporates segment
• HU: increase supported by CITI integration
Not meaningful
Page 14
Business performance: customer deposit stock & growth –
Deposit growth accelerates to 4.9% qoq, 12.5% yoy
128.6
138.0
144.7
Group
6.6%
2.3%
7.5%
1.4%
4.0
4.1
4.5
AT/OA
12.7%
11.5%
26.9
29.2
33.5
CZ
RO
9.3
10.6
10.6
SK
10.7
11.4
11.7
HU
3.9
4.6
4.9
HR
5.4
5.7
5.7
24.7%
14.7%
13.7%
0.0%
9.6%
2.9%
27.2%
7.3%
-0.4
0.0
0.0
QoQ
31/12/16
31/03/17
4.2%
• Year-on-year segment trends:
• CZ: growth attributable to Corporates (particularly strong in
Public Sector) and Group Markets (temporary money market
expansion), minor contribution from Retail segment
• RO: strong inflow in Corporates (in particular Group Large
Corporates and Public Sector), to a lesser extent in Retail
• HU: increase driven primarily in Retail and CITI integration,
supported by inflows in Corporates (mainly in SMEs and Group
Large Corporates)
• RS: stronger growth in Corporates than in Retail
-0.9%
0.6
0.7
0.7
RS
Other
4.9%
37.7
39.9
40.5
AT/SB
31/03/16
• Exceptional deposit growth across all geographies, despite
zero interest rate environment as retail and corporate clients
parked cash in overnight accounts
• Yoy growth in absolute terms driven by Retail segment
(+EUR 5.1bn) and Savings Banks (+EUR 2.8bn), with strong
contribution from Corporate segment (+EUR 3.8bn)
• Qoq increase across the board, except RO & HR, main driver
CZ on expanded money market business
12.5%
30.5
31.8
32.5
AT/EBOe
YoY
20.5%
6.7%
in EUR bn
Not meaningful
• Quarter-on-quarter segment trends:
• CZ: mainly due to temporarily expanded money market volumes
• HU: mainly benefited from CITI integration
Page 15
Business performance: NII and NIM –
NII decline mainly due to lower income from government bond portfolio
1,092
1,107
1,051
Group
232
243
238
AT/SB
97
108
93
AT/OA
CZ
HU
Other
3.45%
3.30%
3.07%
46
44
47
3.24%
2.97%
3.02%
67
66
68
HR
RS
3.42%
3.07%
3.10%
113
113
108
SK
3.38%
3.34%
3.51%
11
12
12
44
19
16
Q1 17
• Year-on-year segment trends:
3.00%
2.83%
2.53%
97
89
91
RO
1.80%
1.87%
1.79%
1.37%
1.72%
1.34%
227
228
223
Q4 16
• Yoy decline on lower interest income from government bonds
as well as lower unwinding impact; main segment impact in
Other (Holding ALM) and erosion in most other segments
• Qoq decrease mainly due to one-off effects in previous
quarter in AT/OA related to Czech CRE project and AT/EBOe
(change in accrual policy at building society)
1.80%
2.00%
1.59%
159
185
155
AT/EBOe
2.51%
2.52%
2.33%
Q1 16
• Positive NII development in AT/SB, HU, HR and RS more than
offset by erosion in other segments, primarily the Other
segment, due to lower NII from government bonds
• Quarter-on-quarter segment trends:
• AT/EBOe: decline in Q1 17 due to benefits from positive one-off
at Austrian building society in previous quarter
• AT/OA: decrease mainly driven by CRE-related one-off in the
Czech Republic in Q4 16
• HU: improvement supported by CITI integration
5.36%
4.96%
4.84%
in EUR m
Not meaningful
Page 16
Business performance: operating income –
Operating income slightly lower yoy, down qoq on one-offs in Q4 16
1,629
1,732
1,618
Group
246
299
263
AT/EBOe
5.4%
10.6%
-6.0%
0.1%
-4.4%
RO
159
146
148
-6.7%
SK
151
148
140
-6.8%
-5.2%
HU
83
89
93
HR
101
97
102
Other
1.8%
-21
Q4 16
Q1 17
• Year-on-year segment trends:
• AT/EBOe: rise attributable to better trading and fair value result
due to valuation effects of financial assets and higher fee
income
• AT/OA: increase mainly driven by trading result in Group
Markets (Holding), while stronger fee income offsets lower NII
resulting from interest income from government bonds
• HU: higher NII, fee income and trading and fair value result
supported by CITI integration
• Other: lower NII in Holding ALM and weaker trading and fair
value result on valuation effects
12.1%
3.9%
1.0%
5.8%
15
16
16
RS
QoQ
-3.9%
340
355
340
CZ
-6.6%
7.1%
155
183
172
AT/OA
Q1 16
• Yoy development primarily due to lower NII, while other
components of operating income improved (most pronounced
in fee income)
• Qoq decline mainly driven by positive one-offs in NII in
previous quarter, lower net trading and fair value result in Q1
17 and seasonally higher fees in Q4
-0.7%
-11.9%
345
378
364
AT/SB
YoY
7.7%
-0.7%
35
21
in EUR m
Not meaningful
• Quarter-on-quarter segment trends:
• AT/EBOe: decline attributable to one-off at building society (NII)
and first time consolidation of subsidiary (rental income) in
Q4 16
• AT/OA: decrease due to CRE-related one-off in CZ (NII) in
previous quarter
• CZ: decline resulting from pressure on NII in Retail, lower
trading and fair value result on valuation effects and seasonality
in fee income in Q4 16
Page 17
Business performance: operating expenses –
Operating costs declined qoq despite deposit insurance contribution
1,009
1,065
1,018
Group
HU
50
56
57
HR
46
50
50
5.7%
-6.1%
-13.5%
-22.6%
1.0%
-2.0%
13.7%
1.5%
7.6%
0.4%
10
10
10
69
39
56
Q1 17
• Year-on-year segment trends:
• CZ: increase on higher personnel costs and higher deposit
insurance contribution
• HU: higher personnel costs and depreciation following CITI
migration
• RO: lower personnel costs and significantly lower deposit
insurance contribution
• AT/SB: driven up primarily by higher IT expenses
-14.3%
68
70
68
SK
Q4 16
4.3%
-0.1%
90
101
78
RO
QoQ
-2.9%
162
182
171
CZ
Other
1.9%
-4.0%
84
98
84
AT/OA
RS
-4.4%
258
277
269
AT/SB
Q1 16
• Yoy cost increase driven by higher IT and personnel costs
• Qoq improvement driven by lower marketing and personnel
costs and non-recurrence of Q4 16 one-off (first time
consolidation of subsidiaries); full-year deposit insurance
contribution (except HR, RS) weighed on Q1 17 costs
0.9%
173
184
176
AT/EBOe
YoY
2.9%
-4.6%
-18.7%
in EUR m
44.9%
• Quarter-on-quarter segment trends:
• RO: higher consultancy, marketing, personnel and IT
expenses in Q4 16
• AT/OA: higher regulatory-induced IT costs in Q4 16
• AT/EBOe: first time consolidation of subsidiary in Q4 16,
higher IT and marketing costs
• CZ: down on restructuring expenses in previous quarter
• Other: higher costs in service entities
Page 18
Business performance: operating result and CIR –
Operating result almost unchanged qoq and yoy
Operating result
620
666
599
Group
AT/SB
AT/OA
SK
HU
HR
RS
-34
-18
-77
23.2%
-5.0%
-2.6%
68
45
70
83
78
72
33
33
36
55
47
53
5
6
6
RO
8.7%
3.6%
178
174
169
CZ
19.3%
-24.4%
-6.5%
2.4%
57.0%
-13.1%
-8.0%
9.7%
7.9%
-4.6%
11.4%
16.9%
6.7%
in EUR m
Q1 16
QoQ
Q4 16
Q1 17
Cost/income ratio
61.9%
61.5%
63.0%
-3.4%
-10.1%
73
115
87
87
102
95
72
85
88
AT/EBOe
Other
YoY & QoQ change
YoY
Not meaningful
70.3%
61.4%
66.9%
74.7%
73.1%
73.9%
54.0%
53.4%
48.7%
47.6%
51.1%
50.2%
56.9%
69.3%
52.7%
44.9%
47.0%
48.6%
60.4%
62.7%
61.2%
45.7%
51.3%
48.7%
65.5%
65.2%
62.6%
Not meaningful
Page 19
Business performance: risk costs (abs/rel*) –
Risk costs remain at historically low levels in Q1 17
56
Group
AT/EBOe
66
9
-11
AT/SB
-5
CZ
RO
4
17
31
-1.39%
-0.58%
11
18
9
11
20
0.12%
1.24%
0.04%
0
1
1
-0.19%
23
4
61
in EUR m
• AT/EBOe: net releases in Retail and Corporates portfolio (SME
business), partially offset by higher provisions for contingent
credit risk liabilities
• AT/SB: net releases across most savings banks
• AT/OA: increase in risk costs in Holding due to corporate
restructuring in Croatia
• RO: lower level of releases than in previous quarters
• HR: increase driven by Corporates (Group Large Corporates)
• Quarter-on-quarter segment trends:
0.64%
1.27%
2.38%
37
Other
• Year-on-year segment trends:
-1.60%
-2.32%
-2.48%
HR
RS
0.24%
0.17%
0.01%
0.47%
0.68%
0.35%
-14
-21
-22
Q1 17
0.12%
0.27%
0.33%
0.57%
0.12%
1
SK
HU
-0.16%
40
7
-29
-12
-0.15%
24
18
2
AT/OA
21
Q4 16
• Yoy risk performance characterised by continuation of
historically low risk costs
• Qoq improvement mainly attributable to higher CEE real
estate impairments in Q4 16
0.17%
0.39%
0.19%
132
Q1 16
0.63%
0.66%
• AT/OA and AT/EBOe: see above
• CZ: low default rates, higher recoveries and net releases of
provisions in Q1 17
• Other: improvement primarily attributable to higher CEE real
estate impairments in Q4 16
Not meaningful
* Relative risk costs are defined as annualised quarterly risk costs over average gross customer loans.
Page 20
Business performance: non-performing loans and NPL ratio –
NPL ratio remains unchanged at 4.9% in Q1 17
Group
6,678
6,698
836
781
711
AT/EBOe
3.9%
3.2%
2.6%
1,651
928
902
RO
SK
536
475
484
HU
570
339
286
19.6%
11.8%
11.3%
5.5%
4.5%
4.4%
16.8%
9.7%
7.9%
15.1%
11.2%
12.2%
1,002
704
773
HR
RS
68
56
50
Other
39
33
60
• Retail: EUR 58.2m (Q4 16: EUR 311.0m)
• Corporate: EUR 62.9m (Q4 16: EUR 70.0m)
• Q1 17 NPL sales mainly at Holding level (EUR 48.2m) and in
Slovakia (EUR 47.5m) and minor sales in HU, CZ, RO and RS
9.1%
5.5%
6.5%
816
695
600
31/03/17
• NPL sales of EUR 121.1m in Q4 16 (Q4 16: EUR 381.1m)
5.4%
4.9%
4.9%
1,196
686
836
AT/OA
31/12/16
• NPL volume relatively unchanged at EUR 6.7bn in Q1 17 as
NPL inflows in AT/OA (Holding) and HR offset continuation of
declining inflows in most segments
6.7%
4.9%
4.9%
2.8%
2.5%
2.3%
2,142
1,980
1,996
AT/SB
CZ
8,856
31/03/16
9.3%
6.8%
6.0%
in EUR m
26.7%
31.3%
24.1%
Page 21
Business performance: allowances for loans and NPL coverage –
NPL provision coverage at comfortable 67.6%
Group
4,613
4,526
5,891
531
463
423
AT/EBOe
63.5%
59.3%
59.5%
1,270
1,150
1,131
AT/SB
59.3%
58.1%
56.7%
705
438
462
AT/OA
58.9%
63.9%
55.2%
596
575
503
CZ
73.1%
82.8%
83.9%
1,294
792
789
RO
66.5%
69.1%
67.6%
78.4%
85.3%
87.5%
SK
358
343
364
66.8%
72.1%
75.2%
HU
355
254
212
62.2%
75.0%
74.3%
682
510
544
HR
31/03/16
31/12/16
31/03/17
• NPL provision coverage at 67.6% due to minor uptick in nonperforming loans in Q1 17
• Year-on-year segment trends:
• AT/OA: decline due to corporate restructuring in Croatia
• SK: coverage ratio steadily increases following temporary
decline at year-end 2015 (due to adoption of EBA default
definition)
• HU: strong improvement following mortgage NPL sales in Q4 16
• Strong coverage levels in all other segments
• Quarter-on-quarter segment trends:
• AT/OA: decline due to corporate restructuring in Croatia
• HR: slight decline due to corporate restructuring in Croatia
68.1%
72.4%
70.4%
RS
59
56
52
87.3%
99.1%
104.2%
Other
40
32
45
103.1%
96.7%
75.5%
in EUR m
Page 22
Business performance: other result –
Other result improves substantially in Q1 17
Group
-412
-99
-6
-33
-9
AT/SB
-10
-35
-6
AT/OA
-4
CZ
-15
-3
-5
-87
RO
7
• Year-on-year segment trends:
• HU: improvement mainly driven by lower off-balance provisions,
to a lesser extent by the reduced banking levy
• CZ: higher gains from AfS portfolio
• AT/EBOe and AT/SB: lower banking levy in Q1 17
-18
-21
• Quarter-on-quarter segment trends:
-44
-28
-28
HU
HR
-3
-8
-7
RS
0
0
• Other: Q4 16 burdened by one-offs (Austrian banking tax
payment of EUR 138.3m, partial Slovak goodwill write-down of
EUR 61.3m)
• RO: improvement mainly due to provision (EUR 62.3m) for risks
related to Romanian consumer protection claims in Q4 16
• AT/EBOe and AT/SB: Q4 16 impacted by extraordinary banking
tax payment
• AT/OA: improvement due to higher provisions for commitments
and guarantees in Q4 16
0
-35
Other
-210
-19
Q1 17
5
-12
-4
-9
SK
Q4 16
• Yoy improvement mainly as a result of sale of AfS securities
in Q1 17 and lower banking levy in Austria; main contributors
in Q1 17: banking levy incl. FTT of EUR 35.8m and recovery
and resolution fund contribution of EUR 77.5m;
• Qoq substantially improved due to one-offs in previous
quarter, mainly extraordinary Austrian banking tax payment of
EUR 200.9m, EUR 62.3m provision for risks related to
Romanian consumer protection claims, and partial Slovak
goodwill write-down of EUR 61.3m
-137
AT/EBOe
Q1 16
in EUR m
Page 23
Business performance: net result –
Q1 17 net result significantly up qoq following one-offs in Q4 16
Group
86
• AT/EBOe: profitability up on higher operating result and net
releases of risk provisions
• AT/OA: net result impacted by higher risk provisions in
corporate business in the Holding and CRE business
• RO: decline in net result due to net releases of risk provisions in
Q1 16
• HU: net result driven by improved other result and higher net
releases of risk provisions
• HR: decline on higher risk costs
116
125
125
CZ
62
-26
RO
Q1 17
• Year-on-year segment trends:
54
61
38
AT/OA
37
• Quarter-on-quarter segment trends:
45
43
41
SK
0
HU
24
28
HR
23
7
5
RS
3
3
5
Other
262
7
4
14
AT/SB
Q4 16
• Yoy profitability declined on lower operating result
• Qoq increase attributable to improvements in other result
275
42
29
63
AT/EBOe
Q1 16
-183
• AT/EBOe: higher net result on net releases of risk provisions
and improved other result
• RO: increase due to one-off consumer protection provisions in
previous quarter
• Other: improvement driven by one-off banking tax in Austria in
Q4 16
-77
-92
in EUR m
• Return on equity at 8.7% in Q1 17, following 2.8% in Q4 16,
and 9.8% in Q1 16
• Cash return on equity at 8.7% in Q1 17, following 4.9% in
Q4 16, and 9.9% in Q1 16
Page 24
Presentation topics
•
•
•
•
•
•
Executive summary
Business environment
Business performance
Assets and liabilities
Outlook
Additional information
Page 25
Assets and liabilities: YTD overview –
Loan/deposit ratio down to 91.9% at Mar 17 (Dec 16: 94.7%)
Assets (EUR bn)
Assets (in %)
24.7
100%
8.8%
11.1%
18.4
208.2
4.3
22.9
7.0%
138.0
144.7
66.3%
64.9%
27.2
13.1%
12.2%
16.6
27.1
6.8
16.9
3.4%
8.0%
7.6%
31/12/16
31/03/17
31/12/16
31/03/17
14.6
47.6
3.5
46.1
22.9%
20.7%
10.4
1.7%
4.7%
133.0
130.7
62.7%
4.8
6.8
31/12/16
7.1 1.4
3.3%
31/03/17
31/12/16
2.3%
100%
1.9%
10.3%
59.7%
7.0
1.4
Liabilities & equity (in %)
222.8
222.8
208.2
Liabilities & equity (EUR bn)
0.7%
3.2%
31/03/17
0.6%
Cash
Trading liabilities
Trading, financial assets
Bank deposits
Loans to banks
Customer deposits
Net loans
Debt securities
Intangibles
Other liabilities
Other assets
Equity
3.1%
Page 26
Assets and liabilities: customer loans by country of risk –
Net customer loans up 5.0% yoy, NPLs down 24.4%
Net customer loans (EUR bn)
Performing loans (EUR bn)
+5.0%
+5.7%
126.7
3.3
6.1
0.8
6.3
3.8
7.9
10.0
20.7
130.6
3.3
6.4
0.9
6.1
3.9
7.6
10.8
21.7
133.0
3.3
6.6
0.8
6.0
4.1
7.9
11.1
23.2
-24.4%
130.8
128.6
123.8
3.4
3.3
5.8 0.8
6.0
3.5
7.5
9.8
5.8
6.2
3.3
0.9
3.8
7.5
10.6
6.3
5.7
8.9
0.8
4.0
7.7
11.0
0.4
0.6
0.2
1.1
0.7
23.0
21.5
20.3
Non-performing loans (EUR bn)
1.8
6.7
6.7
0.2
0.4
0.1
0.8
0.4
0.2
0.5
0.1
1.0
0.3
1.0
1.0
0.7
0.6
0.9
0.6
0.8
2.6
2.2
2.2
31/03/16
31/12/16
31/03/17
1.0
67.8
31/03/16
69.9
31/12/16
70.0
31/03/17
Other
31/03/16
Other EU
69.0
68.9
66.8
31/12/16
RS
HR
31/03/17
HU
RO
SK
CZ
AT
• Performing loan growth driven by Czech Republic (money market impact), Slovakia, but also Romania and Hungary
•
•
Main contributing business lines: Retail, Corporates and Group Markets
Significant contribution from increased money market activities in Q1 17
• 24.4% yoy decline in NPL stock mainly driven by NPL sales and positive migration trends across most geographies
Page 27
Assets and liabilities: allowances for customer loans –
As asset quality improves lower interest income from NPLs weighs on NII
Quarterly development (EUR m)
Highlights
• Development of interest income from NPLs:
•
•
•
•
571
5,891
803
• P&L unwinding impact = interest income
from impaired loans = EUR 16m in Q1 17
(Q4 16: EUR 26m, Q1 16: EUR 35m)
Unwinding impact explained
237
538
451
9 26
5,086
25
578
358
19
450
30/06/16
587
418
30/09/16
•
•
212
4,948
26 19
31/03/16
2013: EUR 270m
2014: EUR 202m
2015: EUR 162m
2016: EUR 106m
4,613
31/12/16
458
12
16
4,526
•
31/03/17
•
Allocations
Interest income from impaired loans
Use
Exchange-rate and other changes (+/-)
Erste Group does not accrue interest on NPLs
When a loan turns NPL Erste Group estimates
the recoverable amount and the time frame of
recovery
The recoverable amount is discounted to
present (at the effective interest rate of the
underlying contract) and a provision reflecting
the time value of money is created, ie a higher
provision than without discounting
The time value is released through NII until
recovery realisation
Releases
Page 28
Assets and liabilities: financial and trading assets * –
LCR at excellent 152.6%
By geography
By debtor type
in EUR bn
-1.5%
42.8
42.7
Liquidity buffer
in EUR bn
42.0
9.3
9.9
1.3
2.0
4.8
1.0
2.4
4.8
5.6
5.4
8.3
8.5
7.9
11.4
10.8
9.9
31/03/16
31/12/16
31/03/17
9.8
3.0
9.8%
7.8%
8.9%
7.3%
9.4%
7.3%
100%
24.8%
24.9%
0.9
26.7%
51.2
5.0
45.4
46.1
31/12/14
31/12/15
26.2%
54.0
5.5
82.4%
83.8%
83.3%
31/03/16
31/12/16
31/03/17
31/12/16
31/03/17
Other
SK
Other
Liquidity buffer
DE
CZ
Banks
Liquidity buffer as % of total liabilities
HU
AT
Sovereign
RO
• Liquidity buffer is defined as unencumbered
collateral plus cash
• Total liabilities are defined as total on
balance sheet liabilities excluding total equity
* Excludes derivatives held for trading.
Page 29
Assets and liabilities: customer deposit funding –
Customer deposits grow by 4.9% qoq, up 12.5% yoy
By customer type
By product type
in EUR bn
Highlights
in EUR bn
+12.5%
144.7
128.6
0.1 6.1
8.2
22.0
92.2
138.0
8.3
6.4 0.1
25.4
7.5 0.1
11.4
128.6
0.4
0.2
0.1
2.5 0.1
0.1
26.2
52.1
52.0
53.2
97.8
99.5
75.0
31/03/16
144.7
138.0
31/12/16
31/03/17
31/03/16
85.7
90.1
31/12/16
31/03/17
FV deposits
FV deposits
General governments
Repurchase agreements
Other financial corporations
Term deposits
Non-financial corporations
Overnight deposits
• Continued deposit inflows driven by Retail
segment with highest demand for overnight
deposits amid low interest rate environment
• Solid growth also in corporate and public
sector deposits
• Increased money market activities in holding
and CZ also contributed strongly to deposit
growth in Q1 17
• Increasing share of overnight deposits with
significantly longer behavioural maturity
provides a cost effective funding source
Households
Page 30
Assets and liabilities: debt vs interbank funding –
Declining wholesale funding reliance, as customer deposits grow strongly
Debt securities issued
Interbank deposits
in EUR bn
30.1
27.2
0.4
6.1
6.4
0.0
0.0
Overnight deposits
Hybrid issues
Senior unsec. bonds
5.4
17.3
Certificates of deposit
Other CDs, name cert’s
11.9
5.3
Term deposits
Repurchase agreements
14.6
3.6
Mortgage CBs
9.6
10.5
22.9
Sub debt
27.1
6.1
in EUR bn
+32.3%
-9.8%
10.5
Public sector CBs
1.0
0.1
0.9
8.7
1.5
0.4
31/03/16
1.5
Other
10.8
9.5
8.3
7.7
0.3
0.9
0.1
0.1
31/12/16
1.4
7.0
0.4
31/03/17
• Overall reduction in wholesale funding reliance led by decline in
outstanding senior unsecured debt, which was only partly offset by
increased subordinated debt
1.2
1.5
31/03/16
31/12/16
31/03/17
• Increased money market activities in Holding and CZ in Q1 17
Page 31
Assets and liabilities: LT funding –
Limited LT funding needs
Maturity profile of debt
3.0
2.8
2.7
in EUR bn
2.8
2.3
1.9
1.9
1.3
1.2
0.7
0.7
0.6
0.2
2017
2018
2019
2020
2021
Debt CEE
2022
2023
Capital exc Tier 1
2024
Covered bonds
2025
2026
2027
2028
2029+
Senior unsec. bonds
• In January 2017 Erste Group opened the covered bond market for Austrian issuers with a EUR 750m 10y mortgage covered bond
• Erste Group’s second CRD IV/CRR compliant additional tier 1 benchmark transaction was issued at the beginning of the 2nd quarter of 2017
(EUR 500m, perpNC7). The issue attracted more than 250 accounts and had orders above EUR 3.75bn. The already comfortable capital
position of Erste Group was further strengthened and the issue contributes to the transition towards an optimal CRR-compliant capital
structure
• During the latest TLTRO Erste Group participated with EUR 1.17bn which brings the total utilisation up to approximately EUR 3.5bn
Page 32
Assets and liabilities: capital position –
B3FL CET1 ratio remains solid at 12.5%, impacted mainly by RWA inflation
Risk-weighted assets (phased-in)
in EUR bn
0.0
12.2
0.1
0.0
0.0
0.2
13.4
13.3
13.6
13.4
31/03/16 30/06/16 30/09/16 31/12/16 31/03/17
Tier 2
AT1
103.6
3.9
16.6
84.9
83.4
83.1
83.2
31/03/16 30/06/16 30/09/16 31/12/16 31/03/17
CET1
• B3FL CET1 capital stood at EUR 13.2bn,
almost stable qoq despite non-inclusion of
interim profit and deduction of risk costs in
Q1 17
83.0
Market risk
Op risk
Credit RWA
18.4%
5.4
101.8
3.6
15.1
13.0%
13.2%
5.2
100.7
2.8
3.4 2.7
12.7
14.2
15.0
18.5%
5.3
101.0
13.4%
13.4%
5.4
100.5
18.4%
19.0
13.2%
13.2%
18.8
18.7%
18.5
13.3%
13.4%
5.5
18.9
in EUR bn
17.6%
17.7
Basel 3 capital ratios (phased-in)
12.1%
12.1%
Basel 3 capital (phased-in)
31/03/16 30/06/16 30/09/16 31/12/16 31/03/17
CET1
Tier 1
Total capital
• B3FL RWA up by EUR 1.7bn to EUR
• B3FL CET1 ratio at 12.5% at 31 March 2017
105.3bn in Q1 17, driven almost exclusively
(YE 2016: 12.8%)
by operational and market risk:
• B3FL total capital ratio broadly stable at
• +9.4% ytd increase in operational RWA due
18.1% (YE16: 18.2%)
to inclusion of minor operational risk events
•
•
+6.8% increase in market risk RWA
Limited credit RWA growth due to mortgage
growth, partially offset by improved portfolio
quality
Page 33
Presentation topics
•
•
•
•
•
•
Executive summary
Business environment
Business performance
Assets and liabilities
Outlook
Additional information
Page 34
Conclusion –
Outlook 2017
Macro outlook
2017
• Real GDP growth of between 1.5-4.5% expected in 2017 in CEE and Austria
• Real GDP growth to be driven by solid domestic demand, as real wage growth and
declining unemployment support economic activity in CEE
• Solid public finances across CEE
Business outlook
2017
• ROTE for 2017 targeted at 10%+ (based on average tangible equity in 2017)
• Assumptions for 2017: at best flat revenues (assuming 5%+ net loan growth); cost
inflation of 1-2% due to regulatory projects and digitalisation; increase in risk costs,
remaining at historically low levels; positive swing in other operating result due to
lower Austrian banking tax
Risk factors for
guidance
•
•
•
•
Impact from expansionary monetary central bank policies, inc negative interest rates
Political risks, eg various elections in key EU economies
Geopolitical risks and global economic risks
Consumer protection initiatives
Page 35
Presentation topics
•
•
•
•
•
•
Executive summary
Business environment
Business performance
Assets and liabilities
Outlook
Additional information
Page 36
Additional information: new segmentation –
Business line and geographic view
Erste Group – Business segments
•
•
•
•
•
ALM &
Local CC
(ALM&LCC)
Group
Markets
Corporates
Retail
SME
Local Large Corporate
Group Large Corporate
Commercial Real Estate
Public Sector
•
•
Group
Corporate
Center
Savings
Banks
•
•
•
•
Asset/Liability Management
Local Corporate Center
Intragroup
Elimination
Other Subsidiaries
Group bookings
Holding Corporate Center
Free Capital
Erste Group – Geographical segmentation
Austria
EBOe &
Subsidiaries
(AT/EBOe)
Savings
Banks
(AT/SB)
•
•
•
Central and Eastern Europe
Other
Austria
(AT/OA)
Czech
Republic
(CZ)
Holding Business
Erste Group Immorent
Erste Asset Management
Romania
(RO)
Slovakia
(SK)
Hungary
(HU)
Other
Croatia
(HR)
Serbia
(RS)
•
•
•
•
•
Holding ALM
Holding CC
Other Subsidiaries
Group bookings and
IC elimination
Free Capital
Page 37
Additional information: income statement –
Year-to-date and quarterly view
in EUR million
Net interest income
Net fee and commission income
Dividend income
Net trading result
Result from financial assets and liabilities designated at fair value
through profit or loss
Net result from equity method investments
Rental income from investment properties & other operating leases
Personnel expenses
Other administrative expenses
Depreciation and amortisation
Gains/losses from financial assets and liabilities not measured at fair
value through profit or loss, net
Net impairment loss on financial assets
Other operating result
Levies on banking activities
Pre-tax result from continuing operations
Taxes on income
Net result for the period
Net result attributable to non-controlling interests
Net result attributable to owners of the parent
Operating income
Operating expenses
Operating result
Year-to-date view
1-3 16
1-3 17
YOY-Δ
1,092.2
1,051.3
-3.7%
443.1
457.7
3.3%
2.6
3.7
41.5%
51.2
48.6
-5.1%
Q1 16
1,092.2
443.1
2.6
51.2
Quarterly view
Q4 16
Q1 17
YOY-Δ
-3.7%
1,107.0
1,051.3
463.2
457.7
3.3%
9.0
3.7
41.5%
-5.1%
65.1
48.6
QOQ-Δ
-5.0%
-1.2%
-58.4%
-25.4%
-7.7
1.9
45.9
-565.4
-333.5
-109.8
3.0
3.2
50.1
-571.7
-332.4
-114.2
n/a
64.0%
9.2%
1.1%
-0.3%
4.0%
-7.7
1.9
45.9
-565.4
-333.5
-109.8
15.6
3.1
68.6
-614.6
-325.8
-124.7
3.0
3.2
50.1
-571.7
-332.4
-114.2
n/a
64.0%
9.2%
1.1%
-0.3%
4.0%
-80.9%
2.6%
-27.0%
-7.0%
2.0%
-8.4%
2.4
-56.4
-139.5
-62.8
427.0
-104.5
322.6
47.8
274.7
28.3
-65.8
-127.1
-35.8
434.7
-95.6
339.0
76.8
262.2
>100.0%
16.7%
-8.9%
-42.9%
1.8%
-8.4%
5.1%
60.6%
-4.6%
2.4
-56.4
-139.5
-62.8
427.0
-104.5
322.6
47.8
274.7
0.3
-132.5
-412.5
-237.1
121.7
-9.7
112.0
26.4
85.6
28.3
-65.8
-127.1
-35.8
434.7
-95.6
339.0
76.8
262.2
>100.0%
16.7%
-8.9%
-42.9%
1.8%
-8.4%
5.1%
60.6%
-4.6%
>100.0%
-50.3%
-69.2%
-84.9%
>100.0%
>100.0%
>100.0%
>100.0%
>100.0%
1,629.3
-1,008.8
620.5
1,617.5
-1,018.3
599.2
-0.7%
0.9%
-3.4%
1,629.3
-1,008.8
620.5
1,731.5
-1,065.1
666.4
1,617.5
-1,018.3
599.2
-0.7%
0.9%
-3.4%
-6.6%
-4.4%
-10.1%
Page 38
Additional information: group balance sheet –
Assets
in EUR million
Cash and cash balances
Financial assets - held for trading
Derivatives
Other trading assets
Financial assets - at fair value through profit or loss
Financial assets - available for sale
Financial assets - held to maturity
Loans and receivables to credit institutions
Loans and receivables to customers
Derivatives - hedge accounting
Changes in fair value of portfolio hedged items
Property and equipment
Investment properties
Intangible assets
Investments in associates and joint ventures
Current tax assets
Deferred tax assets
Assets held for sale
Other assets
Total assets
Mar 16
14,641
9,960
5,668
4,292
404
20,743
17,573
6,680
126,740
2,347
0
2,370
744
1,447
169
142
308
456
1,646
206,369
Quarterly data
Jun 16
Sep 16
Dec 16
12,982
14,743
18,353
10,373
9,731
7,950
5,610
5,297
4,475
4,763
4,433
3,476
433
477
480
20,822
20,406
19,886
17,823
18,451
19,270
5,626
5,191
3,469
127,407
128,985
130,654
2,253
2,208
1,424
0
0
0
2,334
2,335
2,477
753
658
1,023
1,437
1,443
1,390
190
185
193
132
130
124
253
245
234
294
372
279
1,391
1,254
1,020
204,505
206,811
208,227
Mar 17
24,731
7,827
4,101
3,726
518
17,887
19,912
10,448
132,992
1,297
0
2,441
1,025
1,378
200
117
238
262
1,525
222,798
YOY-Δ
68.9%
-21.4%
-27.6%
-13.2%
28.3%
-13.8%
13.3%
56.4%
4.9%
-44.8%
n/a
3.0%
37.8%
-4.7%
18.4%
-17.4%
-22.7%
-42.6%
-7.3%
8.0%
Change
YTD-Δ
34.8%
-1.5%
-8.3%
7.2%
8.1%
-10.1%
3.3%
>100.0%
1.8%
-9.0%
n/a
-1.4%
0.2%
-0.9%
3.4%
-5.4%
1.8%
-6.4%
49.5%
7.0%
QOQ-Δ
34.8%
-1.5%
-8.3%
7.2%
8.1%
-10.1%
3.3%
>100.0%
1.8%
-9.0%
n/a
-1.4%
0.2%
-0.9%
3.4%
-5.4%
1.8%
-6.4%
49.5%
7.0%
Page 39
Additional information: group balance sheet –
Liabilities and equity
in EUR million
Financial liabilities - held for trading
Derivatives
Other trading liabilities
Financial liabilities - at fair value through profit or loss
Deposits from banks
Deposits from customers
Debt securities issued
Other financial liabilities
Financial liabilities measured at amortised cost
Deposits from banks
Deposits from customers
Debt securities issued
Other financial liabilities
Derivatives - hedge accounting
Changes in fair value of portfolio hedged items
Provisions
Current tax liabilities
Deferred tax liabilities
Liabilities associated with assets held for sale
Other liabilities
Total equity
Equity attributable to non-controlling interests
Equity attributable to owners of the parent
Total liabilities and equity
Mar 16
6,612
5,782
830
1,918
0
122
1,796
0
175,026
17,330
128,518
28,263
914
650
1,089
1,801
101
119
451
3,383
15,218
3,889
11,329
206,369
Quarterly data
Jun 16
Sep 16
6,146
6,272
5,341
4,933
805
1,339
1,765
1,737
0
0
113
79
1,652
1,658
0
0
173,943
175,780
16,367
15,228
130,304
133,944
26,362
25,642
911
966
666
642
1,148
1,128
1,715
1,758
98
62
133
174
0
3
2,913
2,727
15,977
16,529
3,948
4,063
12,029
12,466
204,505
206,811
Dec 16
4,762
4,185
577
1,763
0
74
1,689
0
178,909
14,631
137,939
25,503
836
473
942
1,702
66
68
5
2,936
16,602
4,142
12,460
208,227
Mar 17
4,314
3,855
459
1,906
0
64
1,842
0
193,523
22,935
144,643
25,285
660
439
863
1,812
61
77
5
2,905
16,894
4,209
12,685
222,798
YOY-Δ
-34.8%
-33.3%
-44.7%
-0.7%
n/a
-47.8%
2.5%
n/a
10.6%
32.3%
12.5%
-10.5%
-27.8%
-32.5%
-20.8%
0.6%
-39.2%
-35.6%
-99.0%
-14.1%
11.0%
8.2%
12.0%
8.0%
Change
YTD-Δ
-9.4%
-7.9%
-20.5%
8.1%
n/a
-13.8%
9.0%
n/a
8.2%
56.8%
4.9%
-0.9%
-21.1%
-7.1%
-8.4%
6.4%
-7.2%
13.8%
-1.3%
-1.0%
1.8%
1.6%
1.8%
7.0%
QOQ-Δ
-9.4%
-7.9%
-20.5%
8.1%
n/a
-13.8%
9.0%
n/a
8.2%
56.8%
4.9%
-0.9%
-21.1%
-7.1%
-8.4%
6.4%
-7.2%
13.8%
-1.3%
-1.0%
1.8%
1.6%
1.8%
7.0%
Page 40
Additional information: regulatory capital position –
Capital requirements (SREP) for 2017; Erste target of 12.75%+ unchanged
• Almost unchanged capital requirements in 2017, excluding P2G significant decline vs 2016
2016
Pillar 1 CET1 requirement
Combined buffer requirement
Capital conservation buffer
Countercyclical capital buffer
OSII/Systemic risk buffer
Pillar 2 CET1 requirement
Pillar 2 CET1 guidance
4.50%
0.88%
0.63%
0.25%
4.38%
1
Erste Group Consolidated
Phased-in
2017
2018e
4.50%
4.50%
1.90%
3.03%
1.25%
1.88%
0.15%
0.15%
0.50%
1.00%
1.75%
1.75%
Fully loaded
2019e
4.50%
4.65%
2.50%
0.15%
2.00%
1.75%
Erste Group Unconsolidated
Phased-in
Fully loaded
2017
2019e
4.50%
4.50%
1.35%
2.60%
1.25%
2.50%
0.10%
0.10%
0.00%
0.00%
1.75%
1.75%
1.66%
1.66%>P2G>0%
1.66%>P2G>0%
1.00%
1%>P2G>0%
Regulatory minimum ratios excluding P2G
CET1 requirement
1.50% AT1
Tier 1 requirement
2.00% T2
Own funds requirement
9.75%
NM
NM
8.15%
9.65%
11.65%
9.28%
10.78%
12.78%
10.90%
12.40%
14.40%
7.60%
9.10%
11.10%
8.85%
10.35%
12.35%
Regulatory minimum ratios including P2G
CET1 requirement
Tier 1 requirement
1.50% AT1
2.00% T2
Own funds requirement
9.75%
NM
NM
9.81%
9.65%
11.65%
NA
NA
NA
NA
NA
NA
8.60%
9.10%
11.10%
NA
NA
NA
Reported CET1 ratio as of March 2017
2
12.97%
12.54%
18.76%
3
NA
• Buffer to MDA restriction as of 31 Mar 17: 352bps (Q1 16: 239bps)
• Available distributable items (ADI) as of 31 Mar 17: EUR 1.32bn (after 2016 dividend deduction)
1) P2G is expected to be positive in the future.
2) Consolidated capital ratios pursuant to IFRS. Unconsolidated capital ratios pursuant to Austrian Commercial Code (UGB) and on phased-in basis. ADIs pursuant to UGB.
3) As of 31 Dec 2016
Page 41
Additional information: gross customer loans –
By risk category, by currency, by industry
Gross cust. loans by risk category (EUR bn)
132.6
8.9
2.1
15.0
106.7
31/03/16
133.9
7.3 1.7
15.1
132.5
7.7 1.9
14.6
30/06/16
112.3
109.9
108.2
135.3
6.7 1.6
14.7
30/09/16
31/12/16
137.5
6.7 1.7
14.6
31/03/16
81.7%
30/06/16
82.0%
30/09/16
83.0%
31/12/16
132.5
133.9
135.3
2.7
6.0
1.7
26.9
2.7
5.7
1.8
26.8
5.5 2.7
1.7
27.6
5.4 2.7
1.6
27.5
95.4
31/03/17
6.7%
5.8%
5.5%
4.9% 4.9% 1.3%
1.6%
11.0% 1.5% 11.3% 1.2% 10.9% 1.2%
11.3%
10.6%
80.4%
132.6
114.5
Gross customer loans by risk category (in %)
100%
Gross customer loans by currency (EUR bn)
83.3%
31/03/17
Non-performing
Management attention
Substandard
Low risk
31/03/16
95.5
30/06/16
96.4
30/09/16
98.1
31/12/16
137.5
5.1 2.5
29.2 1.7
99.0
Gross customer loans by industry (EUR bn)
132.6
132.5
133.9
135.3
8.7
8.6
3.7
8.6
8.6
3.6
5.8
5.3
6.2
6.4
3.5
3.7
6.1
5.0
6.0
6.2
3.6
6.0
6.3
3.7
7.0
3.8
6.0
6.2
3.7
7.2
3.5
137.5
8.5
3.6
3.6
7.1
4.7
5.9
6.4
3.6
7.8
7.9
7.9
8.0
7.9
9.4
9.7
10.1
10.2
9.6
21.3
21.2
21.5
21.8
22.3
54.3
54.8
55.9
56.4
57.2
31/03/16
30/06/16
30/09/16
31/12/16
31/03/17
31/03/17
Gross customer loans by currency (in %)
2.0% 4.0% 2.0% 3.7% 1.8%
4.5% 2.0% 4.3% 2.0%
20.3% 1.3% 20.2% 1.3% 20.6% 1.2% 20.4% 1.2% 21.2% 1.3%
4.1%
71.9%
31/03/16
USD
72.1%
30/06/16
Other
72.0%
30/09/16
CHF
72.5%
31/12/16
CEE-LCY
72.0%
31/03/17
EUR
Other
Financial inst.
Manufacturing
Transport & comms
Public admin
Real estate
Tourism
Construction
Households
Services
Trade
Page 42
Additional information: footprint –
Customer banking in Austria and the eastern part of the EU
Erste Group footprint
Czech Republic
CZ
Highlights
Slovakia
Customers: 4.7m
Customers: 2.3m
Employees: 10,213
Employees: 4,257
Branches: 546
Branches: 287
SK
Hungary
AT
Customers: 0.9m
HU
• Leading retail and corporate bank
in 7 geographically connected
countries
• Favourable mix of mature &
emerging markets with low
penetration rates
Employees: 3,257
RO
Branches: 126
HR
RS
Romania
• Potential for cross selling and
organic growth in CEE
Customers: 3.1m
Employees: 7,042
Branches: 513
Direct presence
Indirect presence
Austria
Croatia
Serbia
Customers: 3.6m
Customers : 1.2m
Customers: 0.4m
Employees: 16,042
Employees : 3,103
Employees: 1,010
Branches: 924
Branches: 159
Branches: 80
Employees: FTEs as of end of reporting period
Page 43
Additional information: strategy –
A real customer need is the reason for all business
Customer banking in Central and Eastern Europe
Eastern part of EU
Retail
banking
Focus on local currency
mortgage and consumer
loans
funded by local deposits
FX loans only in EUR for
clients with EUR income
(or equivalent) and where
funded by local FX
deposits (HR & RS)
Savings products, asset
management and pension
products
Focus on CEE, limited exposure to other Europe
Corporate
banking
Capital
markets
Public
sector
Large, local corporate and
SME banking
Focus on customer
business, incl. customerbased trading activities
Financing sovereigns and
municipalities with focus
on infrastructure
development in core
markets
Advisory services, with
focus on providing access
to capital markets and
corporate finance
Real estate business that
goes beyond financing
In addition to core
markets, presences in
Poland, Germany and
London with institutional
client focus and selected
product mix
Any sovereign holdings
are only held for marketmaking, liquidity or
balance sheet
management reasons
Interbank
business
Focus on banks that
operate in the core
markets
Any bank exposure is
only held for liquidity or
balance sheet
management reasons or
to support client
business
Building debt and equity
capital markets in CEE
Page 44
Additional information: Ratings –
Composition of Erste Group Bank AG’s issuer ratings
Macro Profile
Strong -
SACP - Stand-Alone Credit Profile
+
Financial Profile
a-
VR - Viability Rating
(Individual Rating )
▲
a-
Asset Risk
ba1
Anchor
Capital
baa2
Business Position
Strong
+1
Profitability
ba1
Capital & Earnings
Adequate
0
Funding Structure
baa1
Risk Position
Adequate
0
baa3
Funding
Above Average
Liquidity
Strong
Liquid Resources
+
bbb
Qualitative Factors
Business Diversification
0
Opacity, Complexity
Corporate Behaviour
0
0
=
BCA Baseline Credit Assessment
baa3
+
Affiliate Support
0
=
Adjusted BCA
+
+2
0
NF (No Floor)
+
Support
0
▲
ALAC Support
0
GRE Support
0
Group Support
0
Sovereign Support
0
IDR - Issuer Default Rating
Long-Term Outlook / Short-Term
A- Stable / F1
+
baa3
LGF Loss Given Failure
Government Support
+1
SRF - Support Rating Floor
Additional Factors
0
=
=
Issuer Credit Rating
Issuer Rating / Senior Unsecured
Long-Term Outlook / Short-Term
Long-Term Outlook / Short-Term
Baa1 (stable) / P-2
A- Positive / A-2
Status as of 15 March 2017
Page 45
Additional information: shareholder structure –
Total number of shares: 429,800,000
By investor
Unidentified *
13.7%
By region
Erste Foundation 1
Unidentified *
11.1%
13.7%
Savings Banks 2
Austria
Rest of world
4.7%
Other Syndicated
28.3%
2.9%
3
3.8%
9.9% Caixa
0.8%
Employees
Continental Europe
24.7%
5.0%
Retail
18.2%
51.0%
North America
Institutional
12.2%
UK & Ireland
1
Economic interest Erste Foundation
Economic interest Savings Banks
3 Other parties to the shareholder agreement of Erste Foundation, Savings Banks and CaixaBank
* Unidentified institutional and retail investors
2
Status as of 2 May 2017
Page 46
Investor relations details
•
Erste Group Bank AG, Am Belvedere 1, 1100 Vienna
E-mail:
Internet:
[email protected]
http://www.erstegroup.com/investorrelations
http://twitter.com/ErsteGroupIR http://www.slideshare.net/Erste_Group
Erste Group IR App for iPad, iPhone and Android http://www.erstegroup.com/de/Investoren/IR_App
Reuters:
ERST.VI Bloomberg:EBS AV
Datastream:
O:ERS
ISIN:
AT0000652011
•
Contacts
Thomas Sommerauer
Tel: +43 (0)5 0100 17326
e-mail: [email protected]
Peter Makray
Tel: +43 (0)5 0100 16878
e-mail: [email protected]
Simone Pilz
Tel: +43 (0)5 0100 13036
e-mail: [email protected]
Gerald Krames
Tel: +43 (0)5 0100 12751
e-mail: [email protected]
Page 47