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Erste Group –Accelerating operating performance provides a platform for growth
H1 201122
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.
H1 20113
Presentation topics
−Erste Group at a glance
−Operating environment
−H1 2011 financial key topics
− Funding
−Pfandbrief
−Contacts
H1 20114
- Erste Group went public in 1997 with a strategy to expand its retail business model into CEE
- Erste Group’s customer base grew from 600,000 in 1997 to 16.9 million in 2011
Erste Group at a glance –Austria’s first savings bank: Founded in 1819
- Erste Group now runs market leading retail banking operations in new EU member states, which remain underpenetrated compared to their Western European markets
Česká spo řitelna, a.s. Stake: 97.99% 2000
2001
2005
2006
2007
1997
2004
2003
New holding structure improving Group governance
2008
Slovenská sporite ľňa, a.s.Stake: 100%
Erste & Steiermärkische Bank d.d.(Erste Bank Croatia), Stake: 69.25%
Erste Bank Hungary Zrt.Stake: 99.94%
Erste Bank a.d. Novi SadStake: 80.49%
Banca Comercial ă Român ă S.A.Stake: 69.17%
Erste Bank UkraineStake: 100%
H1 201155
Erste Group at a glance –Clear focus on the eastern part of the EU
Clients: 0.9m
Hungary
Retail loans: 14.3%
Retail dep.: 7.4%
Branches: 184
Clients: 0.2m
Ukraine
Retail loans: 1.6%
Retail dep .: 0.3%
Branches: 133
Clients: 3.7m
Romania
Retail loans: 18.2%
Retail dep.: 23.2%
Branches: 667
Clients: 0.3m
Serbia
Retail loans: 3.1%
Retail dep.: 2.4%
Branches: 65
Clients: 0.9m
Croatia
Retail loans: 13.7%
Retail dep.: 12.8%
Branches: 144
Clients: 5.2m
Czech Republic
Retail loans: 25.2%
Retail dep.: 28.7%
Branches: 653
Clients: 2.4m
Slovakia
Retail loans: 25.9%
Retail dep.: 26.6%
Branches: 291
Clients: 3.2m
Austria
Retail loans: 19.3%
Retail dep.: 18.8%
Branches: 1,043
EU or EU candidate
Non-EU or non-EU-candidate
Indirect presence
− Leading retail bank with 16.9 m customers in 8 geographically connected countries
− 50,425 employees (32% in Austria)
− Long term relationships with retail, SME and corporate customers
− Favourable mix of mature & emerging markets with low penetration rates
− Potential for cross selling and organic growth in CEE
H1 20116
Erste Group –Key factors are trending positive
Macroeconomy� All CEE economies expected to grow in 2011
� CEE macroeconomic convergence expected to resume
Banking markets
Erste Group’s operating performance
Erste Group’s asset quality
� Still comparably low banking penetration
� Expected increase in demand for banking products
� Strong “through the cycle”-performance
� Continuing cost discipline
� H1 2011 cost/income ratio at 49.5%, down from 57.2% in FY 2008
� Credit quality improving significantly in Austria, the Czech Republic & Slovakia
� NPL formation driven by Romania and Hungary
� Declining risk costs yoy, resilient margins
Erste Group’s funding
� Comfortable liquidity position – loan/deposit ratio at 111.0%
� Short-term funding needs well covered / limited lon g-term funding required
� Covered Bonds: Austrian framework & Erste Group’s c over pool
Erste Group’s capital position
� Solid capital position and strong internal capital generation
� Core Tier 1 ratio at 9.5% (excluding participation capital 8.0%)
� Supports organic growth in CEE
H1 20117
Presentation topics
−Erste Group at a glance
−Operating environment
−H1 2011 financial key topics
− Funding
−Pfandbrief
−Contacts
H1 20118
Business environment: Economy –Austria is outperforming the eurozone
− Austria performed well throughout the economic down turn− Lowest unemployment rate in EU− Strong position in terms of price competitiveness − No bubble in the housing market− High savings ratio and 3rd richest country in the EU
− Strong credit fundamentals remain intact
− Only minor fiscal adjustments in comparison to othe r European countries
Sources: Austrian Federal Financing Agency, Statistik Austria, European Commission Spring 2011 Economic Forecast.
in % 2010 2011 2012 2010 2011 2012
Real GDP growth 2.1 3.0 1.8 1.8 1.6 1.8
Inflation (HICP) 1.9 3.2 2.6 1.6 2.6 1.8
Unemployment 4.4 4.2 4.2 10.1 10.0 9.7
Current Account Balance 2.7 3.2 3.5 -0.4 -0.2 -0.1
Budget Surplus/Deficit -4.6 -3.9 -3.3 -6.0 -4.3 -3.5
Debt to GDP 72.2 73.6 75.0 85.4 87.7 88.5
Euro-ZoneAustria
H1 20119
Domestic demand growth in CEE
-30
-20
-10
0
10
20
30
Q108
Q208
Q308
Q408
Q109
Q209
Q309
Q409
Q110
Q210
Q310
Q410
Q111
in %
AT CZ RO SK HU
Export growth in CEE
-30
-20
-10
0
10
20
30
Q108
Q208
Q308
Q408
Q109
Q209
Q309
Q409
Q110
Q210
Q310
Q410
Q111
in %
AT CZ RO SK HU
Real GDP growth in CEE
2.1
2.2
-1.3
4.0
1.23.
0
2.3
2.0
4.0
2.6
-4.0
-3.9
-6.7-4
.8
-7.1
-10-8-6-4-202468
AT CZ RO SK HU
in %
2009 2010 2011e
Operating environment: macro outlook –CEE to grow much ahead of euro zone average
− CEE to experience different growth patterns in line with levels of export dependency and country-specific issues− AT: to build on solid 2010 performance− CZ, SK: industry to further benefit from German recovery − RO: long-awaited upswing has finally arrived, driven
mainly by investments and exports; however, consumption has not yet fully recovered
− HU: to remain driven by external demand while domestic demand weighs on recovery
− CEE (3.2%) to outgrow euro zone (2.0%) in 2011
Sources: Erste Group Research, Eurostat
2011e:AT: 1.8%CZ: 6.2%RO: 8.0%SK: 12.0%HU: 14.1%
2011e:AT: 0.9%CZ: 1.0%RO: 3.0%SK: 1.8%HU: 3.1%
2011 euro zone avg.
H1 201110
Presentation topics
−Erste Group at a glance
−Operating environment
−H1 2011 financial key topics
− Funding
−Pfandbrief
−Contacts
H1 201111
H1 2011 executive summary –Solid net profit despite challenging banking environment
− Accelerating operating performance in Q2 11− Q2 11 operating result benefited from record NII and stable qoq costs− H1 2011 operating income up to EUR 3,893.4m on solid performance of all line items− H1 2011 operating expenses rose by 1.5% yoy to EUR 1,926.3m – increase well below inflation rate− H1 2011 operating result declined by 1.2% to EUR 1,967.1m− Cost/income ratio at 49.5% (H1 2010: 48.8%)
− Risk costs declined from EUR 1,084.2m to EUR 940.0m or by 13.3% yoy in H1 2011− NPL ratio based on customer loans rose to 7.9% (YE 2010: 7.6%), driven mainly by deterioration in HU and RO− NPL coverage increased to 60.6% from 60.0% at YE 2010− New NPL formation in H1 2011 of EUR 565m, down from EUR 1,002m in H1 2010
− Net profit rose despite banking taxes and negative result from financial assets− Net profit rose by 5.2% yoy to EUR 496.3m in H1 2011− Banking tax in Austria and Hungary amounted to EUR 95.6m (pre-tax) in H1 2011, adversely affecting the other
operating result− Result from financial assets deteriorated in H1 2011 on weak Q2 11 performance
− Excellent liquidity position – loan/deposit ratio im proved to 111.0%− Customer deposits continued to provide stable funding base − Successful long-term debt-funding in H1 11 with healthy mix of secured and unsecured public and private placements− Short-term interbank funding more than fully covered by central bank eligible collateral
− Further improvement in capital position− Tier 1 (total risk) up to 10.5% (YE 2010: 10.2%); core tier 1 ratio (exc. hybrid capital) up to 9.5% (YE 2010: 9.2%)− Total RWAs remained flat at EUR 119.7bn
H1 20111212
1) Operating result = Operating income (NII + net fee & commission income + net trading result) minus general administrative expenses
H1 2011 financial highlights –Accelerating operating performance in Q2 11
Operating income per quarter
1,361 1,391 1,337 1,296 1,394
493 476 495 481 474
144 140 1091,953 2,010 1,905 1,917 1,977
99 72
(100)
400
900
1,400
1,900
2,400
Q2 10 Q3 10 Q4 10 Q1 11 Q2 11
in E
UR
mill
ion
Net interest income Net fee and commission income Net trading result
Operating expenses per quarter
545 567 606 576 566
303 312 237 292 303
95 102 95 94945 973 945 963 963
97
0
200
400
600
800
1,000
1,200
Q2 10 Q3 10 Q4 10 Q1 11 Q2 11
in E
UR
mill
ion
Personnel expenses Other administrative expenses Depreciation and amortisation
− Operating income up 3.1% qoq, flat yoy in H1 2011− Net interest income flat yoy in H1 2011, qoq increase of 7.6% broadly based across all segments except Romania− Net commission income declined by 1.0% to EUR 954.9m in H1 2011 due to lower contribution from securities
business on reduced client transaction volume, qoq decline due to securities business− Net trading result of EUR 248.7m, up 3.6% yoy, down seasonally in Q2 11
− Operating expenses flat qoq, up by only 1.5% yoy in H1 2011− Personnel expenses increased by 4.7% (+4.0% FX-adjusted) yoy in H1 2011 on severance payments in Czech
Republic and full consolidation of an IT subsidiary in H2 10− Other administrative expenses decreased by 3.4% due to the consolidation of the IT subsidiary− VAT increases in several countries mitigated by cost cutting projects
H1 20111313
Erste Group‘s operating performance –Strong and improving through the cycle
Operating resultby segments
1.3 1.9 2.2 2.3
0.7
0.8 0.8
0.9
0.4
0.5
0.6 0.6
0.3
0.2
2.5
3.0
3.8 4.0
0.3 0.5
(0.2)
0.8
1.8
2.8
3.8
4.8
2007 2008 2009 2010in
EU
R b
illio
n
Retail & SME: CEE Retail & SME: ATGCIB Group MarketsCorporate Center
Operating income by segments
3.0 3.8 3.9 4.1
2.2
2.3 2.4 2.4 0.5
0.6 0.7 0.7
0.5
0.4 6.2
7.0 7.6 7.8
0.6 0.7
(1.0)
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
10.0
2007 2008 2009 2010
in E
UR
bill
ion
Retail & SME: CEE Retail & SME: AustriaGCIB Group MarketsCorporate Center
H1 201114
Erste Group’s asset quality & margins –Risk costs declining yoy, resilient margins
Risk cost development
0.6% 0.7% 0.7%
1.5%1.2%
1.6% 1.7% 1.9% 1.6% 1.7% 1.5% 1.3% 1.4% 1.4%0.5%
2.5%
0%
1%
2%
3%
4%
Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11
Group Austria CEE
Net interest margin development
2.77% 2.71% 2.86% 3.04% 2.86% 2.99% 3.09% 3.20% 3.03% 3.05% 3.14% 3.03% 2.88% 3.05%
4.33%
2.13%
1%
2%
3%
4%
5%
6%
Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11
Group Austria CEE
14
H1 201115
Customer deposit review –Deposit growth continued to outpace loan growth
Customer deposit trends by subsegments(Retail & SME detail: CEE)
25.0 25.1 24.6 26.6 25.9
7.0 7.2 7.8 7.7 7.7 6.9 7.0 7.1 7.1 7.1 3.9 3.7 3.9 4.0 4.2 4.1 4.1 4.1 4.0 3.9
47.4 47.7 48.1 50.1 49.5
0
10
20
30
40
50
60
Q2 10 Q3 10 Q4 10 Q1 11 Q2 11
in E
UR
bill
ion
Czech Republic Romania Slovakia Hungary Croatia Other CEE
Customer deposit trends by subsegments(Retail & SME detail: Austria)
32.5 32.3 33.1 32.6 32.7
27.9 27.7 27.8 28.1 28.8
60.4 60.0 60.9 60.7 61.5
0
15
30
45
60
75
Q2 10 Q3 10 Q4 10 Q1 11 Q2 11
in E
UR
bill
ion
Savings banks EB Oesterreich
− Customer deposits grew by 3.2% in H1 11 (+1.4% qoq)− In Q2, visible inflows especially in EBOe and in HU
− Retail & SME deposits increased by 1.9% ytd− Austria grew by 1.0% ytd, supported by EBOe
(+3.5% ytd)− CEE enjoyed growth of 3.0% ytd: supported by the
Czech Republic (+5.5%) and Hungary (+9.1% on the back of corporate deposit inflows); other core markets reported stable or slightly declining volumes
− Loan/deposit ratio improved to 111.0% in H1 2011 (Y E 2010: 113.4%)
Customer deposit trends by main segments
60.4 60.0 60.9 60.7 61.5
47.4 47.7 48.1 50.1 49.5
5.7 6.1 6.3 5.4116.6 115.3 117.0 119.2 120.8
5.8
0
25
50
75
100
125
Q2 10 Q3 10 Q4 10 Q1 11 Q2 11
in E
UR
bill
ion
Retail & SME - Austria Retail & SME - CEE GCIB Group Markets
H1 201116
Customer loans by currency
63.5% 63.5% 63.9%
18.9% 19.7% 18.9% 19.7% 19.6%
12.9% 12.6% 13.1% 12.4% 12.9%2.9% 2.4% 2.3% 2.1% 2.0%
64.2% 63.8%
0%
20%
40%
60%
80%
100%
Jun 10 Sep 10 Dec 10 Mar 11 Jun 11
EUR CEE-LCY CHF USD Other
Loan book review –Loan demand still to recover across segments
Customer loans by main segments *
63.6 63.9 64.7 64.1 65.2
47.9 48.7 48.6 49.2 49.7
18.4 18.7 18.9 18.7
131.0 131.5 132.7 132.8 134.1
19.0
0
30
60
90
120
150
Q2 10 Q3 10 Q4 10 Q1 11 Q2 11
in E
UR
bill
ion
Retail & SME - Austria Retail & SME - CEE GCIB
Quarterly loan book trends(Retail & SME detail: CEE)
17.1 17.9 17.5 18.0 18.1
11.2 11.2 11.2 11.3 11.1
5.6 5.7 5.7 5.8 5.9 7.6 7.6 7.8 7.6 7.9 5.4 5.3 5.5 5.6 5.8
47.9 48.7 48.6 49.2 49.7
0
10
20
30
40
50
60
Q2 10 Q3 10 Q4 10 Q1 11 Q2 11
in E
UR
bill
ion
Czech Republic Romania Slovakia Hungary Croatia Other CEE
*) Segments do not exactly add up to total due to consolidation effects
− Customer loans increased by 1.0% ytd; up 0.9% qoq− Retail & SME segment growth mainly driven by currency
movements (EUR/CZK, EUR/CHF, CHF/HUF)− Private individual portfolios in Austria and Slovakia slightly
growing− In GCIB portfolio International business decreasing while Large
Corporate business gaining momentum
− Customer distribution remained broadly unchanged− Retail: new production was mostly focused on secured business
in Austria, Czech Republic and Slovakia− Public sector and private individual share increasing ytd− Currency distribution unchanged− Despite new business being mainly in local currencies and
EUR, CHF share of portfolio increased ytd on CHF appreciation
H1 201117
Asset quality review –Group trends: NPL formation down yoy
Erste Group: NPL ratio vs NPL coverage
7.3% 7.6% 7.6% 7.7% 7.9%
59.7%60.9%
60.0%61.4% 60.6%
0%
5%
10%
15%
20%
25%
30%
Jun 10 Sep 10 Dec 10 Mar 11 Jun 11
50%
55%
60%
65%
NPL ratio NPL coverage (exc collateral)
Quarterly NPL growth (absolute/relative)
531 505
5
242 323
5.9% 5.3%
0.0%
2.4%
3.1%
0
400
800
1,200
1,600
Jun 10 Sep 10 Dec 10 Mar 11 Jun 11
in E
UR
mill
ion
-4%
0%
4%
8%
NPL growth (absolute) NPL growth (relative)
Customer loans by risk class
70.2% 70.1% 70.7% 71.4% 70.6%
17.7% 17.5% 17.1% 16.5% 17.6%
4.9% 4.8% 4.6% 4.4% 3.9%7.3% 7.6% 7.6% 7.7% 7.9%
0%
20%
40%
60%
80%
100%
Jun 10 Sep 10 Dec 10 Mar 11 Jun 11
Low risk Management attn Substandard Non-performing
− NPL growth driven by Romania and Hungary− Increase of new NPL formation amounted to EUR
323 m in Q2 11 due to lower NPL sales of EUR 126m and new defaults in SME/real estate business
− NPL ratio based on customer loans increased to 7.9% (YE 2010: 7.6%) on flat loan book
− Migration trend shows stabilisation− Low risk share remains above 70%− Substandard share falling since Q1 2010
H1 201118
Credit RWA as percentage of customer loans
77.4%
Total RWA as percentageof total assets
55.9%
Core tier 1 ratio(total risk)
8.3%
9.2%9.5%
Dec 09 Dec 10 Jun 11
Erste Group’s capital position –Strong capital position and conservative asset mix
Core tier 1 ratio (total risk) = tier 1 capital excl. hybrid and after regulatory deductions divided by total RWA - including credit risk, market and operational risk.
Core tier 1 ratio excl. part capital(total risk)
6.9%
7.7%8.0%
Dec 09 Dec 10 Jun 11
Total assets: EUR 214.2 billionTotal RWA: EUR 119.7 billion
Customer Loans: EUR 134.1 billionCredit RWA: EUR 103.8 billion
H1 201119
Outlook
−CEE economies set to continue economic recovery in H2 2011− All of Erste Group’s CEE markets are expected to post GDP growth in 2011− Austria, Czech Republic and Slovakia to perform well, banking markets to grow− Romania and Hungary also growing 2011, but banking markets still sluggish
−Operating performance to be sustained in 2011 based on:− Resilient margins, accelerating loan growth and solid performance of net commission
income− Continued strict cost management, with increase below inflation rate
−Risk costs to decline from H1 2011 level in H2 2011− Risk costs to remain elevated in Romania and to rise in Hungary in 2011
−Core tier 1 ratio (Basel II) of 9.5% translates int o a common equity tier ratio pursuant to Basel III of comfortably above 7%− Ability to generate retained earnings to remain strong− Participation capital to be repaid following regulatory approval
H1 201120
Presentation topics
−Erste Group at a glance
−Operating environment
−H1 2011 financial key topics
− Funding
−Pfandbrief
−Contacts
H1 201121
Shareholder structure –Total number of shares: 378,176,721
By investor By region
Updated June 2011
Free float: 64.6%
Other3.1%
Continental Europe20.5%
UK & Ireland8.0%
North America20.9%
Austria47.5%
Caixa Bank10.1%
Institutional investors
51.8%
Retail investors6.6%
Savings banks4.2%
Employees2.0%
25.3%
H1 201122
AAA
F1
A(stable)
AaaAAARepublic of AustriaLong-Term Credit
Rating
P-1A-1Erste Group
Short-Term Credit Rating
A1(stable)
A(stable)
Erste GroupLong-Term Credit
Rating
Erste Group –Stable ratings
H1 20112323
Erste Group’s funding profile –Excellent liquidity position
− Customer deposits remained the primary source of fu nding
− Providing a stable funding base in all local currencies− Reflected in loan/deposit ratio improvement to 111.0%
Evolution of Erste Group's funding mix
54.6% 57.0% 58.9% 61.1% 60.4%
17.0% 15.9% 15.6% 16.3% 16.3%
19.2% 18.1% 13.8% 10.5% 11.7%6.2% 5.8% 8.5% 9.0% 8.8%3.0% 3.2% 3.2% 3.0% 2.9%
0%
20%
40%
60%
80%
100%
Dec 07 Dec 08 Dec 09 Dec 10 Jun 11Customer deposits Issued bonds & CDs Deposits by banksEquity Subordinated capital
H1 20112424
Erste Group’s funding profile –Limited long-term funding required
− Total funding needs for 2011 of EUR 5 billion, of w hich EUR 4.1 billion has already been raised− Successful issuance of a 10 year jumbo Pfandbrief an d of a 5 year senior unsecured
benchmark, proof of access to the capital markets− Continued focus on extension of maturity profile
Funding Mix YTD
Pfandbrief BM 29%
Pfandbrief PP 20%
Senior BM 18%
Senior PP 25%
Capital (LT2) 7%
Funding Mix Total Outstanding Volume
GGB 9%
Senior 53%
Capital (LT2,UT2)
12%
Pfandbrief 26%
H1 20112525
Erste Group’s funding profile –Maximum annual redemption EUR 5.3bn
Redemption profile of Erste GroupH1 2011
2.2
5.34.8
5.1
3.13.3
2.2
0.40.9 0.9
2.0
0.8
2.0
0.0
1.0
2.0
3.0
4.0
5.0
6.0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2022+
in E
UR
bill
ion
Senior unsecured Covered bonds Subordinated debt Debt CEE subsidiaries
H1 201126
Presentation topics
−Erste Group at a glance
−Operating environment
−H1 2011 financial key topics
− Funding
−Pfandbrief
−Contacts
H1 201127
Austrian Covered Bonds
Pfandbriefe (Mortgage Banking Act)Fundierte
Schuldverschreibungen
Hypothekenbankgesetz(Mortgage Banking Act 1899)
Pfandbriefgesetz(Pfandbrief Law 1938)
Law from 1905
Erste Group Bank
Bank Austria UniCredit
Landeshypothekenbanken
Pfandbriefstelle
BAWAG
Kommunalkredit
Legal framework in Austria –Mortgage and Public Sector Pfandbrief
H1 201128
Pfandbriefe –Legislation comparison
����XX��������3NPV matching
��������������������Pfandbriefe remain outstanding in case of issuer´s bankruptcy
��������������������Special proceedings in case of insolvency
����X������������Cover Pool monitoring (Trustee)
X����������������Legally required minimum over-collateralization
X����XX����Collateral assets limited to Europe
��������X��������Cover register
X2����X��������Mortgage and public sector collateral assets in separate pools
��������������������Pfandbrief law in place
NorwaySpainFranceGermanyAustria (Pfandbriefe) 1
Criteria of Pfandbrief law
1) Hypothekenpfandbriefgesetz
2) Several single cover pools possible 3) If included in the articles of association of the respective credit institution which is the case for EGB
H1 201129
Overview of Public Sector Cover Pool –Key characteristics
− Aaa Rating from Moody’s
− Strong and long existing legal framework for Austri an Pfandbriefe
− 98% of the Cover Pool assets are originated in Aust ria, 2% are in Germany
− Public sector loans represent 97% of the Cover Pool
− Average exposure per entity is less than € 2m
− Average seasoning is 4.5 years
− Quarterly updates on our homepage− www.erstegroup.com – Investor Relations – Debt Investors
H1 201130
Pfandbrief
Cover Pool
Overview of Erste Group –Public Sector Cover Pool
Structure as of 30/06/2011
Cover Pool in EUR
Total value of cover pool in EUR equivalent: 3,518,1 85,014
thereof loans in EUR: 3,314,636,969
thereof loans in CHF: 110,748,046
thereof bonds in EUR equivalent: 92,800,000
thereof Swaps in the Cover Pool in EUR equivalent:
Issues in EUR
Total outstanding issues in EUR equivalent: 2,826,602,922
thereof issues in EUR: 2,370,965,444
thereof issues in CHF: 455,637,478
Nominal over-collaterisation in %: 24.5%
Present value over-collaterisation in %: 23.9%
H1 201131
Overview of Erste Group –Public Sector Cover Pool
Regional distribution as of 30/06/2011
Distribution by type of borrower / guarantor as of 30/0 6/2011
Regional distribution Europe (in %)
Austria98%
Germany2%
Regional distribution Austria
Vienna20%
Lower Austria
20%Upper
Austria7%
Salzburg15%
Tirol6%Styria
16%
Carinthia6%
Burgenland1%
Vorarlberg2%
Republic Austria
7%
Government1%
Province22%
Municipalities36%
Guaranteed by
Government6%
Guaranteed by Province
17%Guaranteed
by Municipalities
14%
Other4%
H1 201132
Real house price development in euro zone –Changes in %, 1999-2009
The Austrian real house prices are stable since 1999
Source: ECB, European CommissionNote: Greece data cover the period 1999 to 2008, Luxembourg from 1999 to 2007. Nominal house price data are deflated by GDP deflator
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Overview of Mortgage Cover Pool –Key characteristics
− Aaa Rating from Moody’s
− Strong and long existing legal framework for Austri an Pfandbriefe− Highest LTV allowed by law is 60% => Erste Group’s LTV at 50.1%
− First-ranking mortgage loans of mostly Austrian pro perties − 93% Austria and 7% Germany
− Solid mortgage origination through own savings bank network
− Recourse to borrower in default
− No NPLs in the cover pool (NPL is 90 days overdue payment)
− Recalibration of assets done on a yearly basis− assets over €3m revaluation every 3 years− assets under €3m reassesment yearly using the real estate index publized yearly from the
Austrian National Bank
− Fix/Floating mix: 10.5% fix and 89.5% floating rate l oans
− Quarterly updates on our homepage− www.erstegroup.com – Investor Relations – Debt Investors
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Pfandbrief
Cover Pool
Overview of Erste Group –Mortgage Cover Pool
Structure as of 30/06/2011
Cover Pool in EUR
Total value of cover pool in EUR equivalent: 7,124,1 53,368
thereof loans in EUR: 5,335,303,548
thereof loans in CHF: 1,643,849,820
thereof substitute collateral in EUR equivalent: 145,000,000
thereof Swaps in EUR equivalent:
Issues in EUR
Total outstanding issues in EUR equivalent: 5,358,027,905
thereof issues in EUR: 4,285,208,752
thereof issues in CHF: 1,072,819,153
Nominal over-collaterisation in %: 33.0%
Present value over-collaterisation in %: 32.7%
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Regional distribution as of 30/06/2011
Distribution by property type as of 30/06/2011
Overview of Erste Group –Mortgage Cover Pool
Regional distribution Europe (in %)
Germany6.7%
Austria93.2%
Switzerland0.1%
Regional distribution Austria
Vienna32%
Lower Austria
18% Upper Austria
2%
Salzburg7%
Tirol11%Styria
16%Carinthia
5%
Burgenland2%
Vorarlberg5%
Republic Austria
2%
Residential assets
36%
Non-profit Housing
Assoc. (Multi-Family
assets)22%
Commercial housing
(Multi-Family assets)
16%
Commercial assets
26%
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Erste Group –Conclusion
Leading retail bank in CEE with over 50,000 employees
Stable ratings (A1/A/A)
Profitable through the cycle
Strong deposit base and access to the capital markets
16.9 million customers, 97% thereof in the EU
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Presentation topics
−Erste Group at a glance
−Operating environment
−H1 2011 financial key topics
− Funding
−Pfandbrief
−Contacts
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Contacts
− Erste Group Bank AG, Börsegasse 14, 1010 Vienna
E-mail: EMTN0369@erstegroup.com
Internet: http://www.erstegroup.com/en/Investors/Debt-Investo rs
− Investor Relations
Thomas Sommerauer Tel: +43 (0)5 0100-17326 e-mail: thomas.sommerauer@erstegroup.comSimone Pilz Tel: +43 (0)5 0100-13036 e-mail: simone.pilz@erstegroup.com
− Debt Capital Markets/ Long Term FundingChristian Reiss Tel: +43 (0)5 0100-84012 e-mail: christian.reiss@erstegroup.comRenée Bauer Tel: +43 (0)5 0100-84013 e-mail: renee.bauer@erstegroup.com