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> Erste BankConsolidating the opportunity in CEE
> Goldman Sachs European Financials Conference 2005
> Puerto Banus, June 8 – 10, 2005
> Andreas Treichl, CEO
2Goldman Sachs European Financials Conference 2005Puerto Banus, 8-10 June, 2005
> Disclaimer
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CERTAIN OF THE STATEMENTS CONTAINED IN THIS DOCUMENT MY BE STATEMENTS OF FUTUREEXPECTATIONS AND OTHER FORWARD-LOOKING STATEMENTS THAT ARE BASED ONMANAGEMENT’S CURRENT VIEWS AND ASSUMPTIONS AND INVOLVE KNOWN AND UNKNOWNRSIKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS, PERFORMANCE OR ENVENTSTO DIFFER MATERIALLY FROM THOSE EXPRESSED OR IMPLIED IN SUCH STATEMENTS.
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Cautionary note regarding forward-looking statements
3Goldman Sachs European Financials Conference 2005Puerto Banus, 8-10 June, 2005
> Presentation topics
1. The opportunity
2. Focused growth strategy
3. Growing contribution
4. Financial highlights
4Goldman Sachs European Financials Conference 2005Puerto Banus, 8-10 June, 2005
> CEE retail banking model – geographic view
InfancyInfancy GrowthGrowth MaturityMaturity
WIN/WINWIN/WIN WIN/LOSEWIN/LOSE
Romania,Romania,Bulgaria,Bulgaria,Serbia,Serbia,UkraineUkraine
New EU members:New EU members:HU, CZ, SL, SKHU, CZ, SL, SK……
Volatile growthVolatile growthEarly-stage, strategic
positioning
EUEU--15, Austria15, Austria
Stable growthStable growthConsolidating position
for growth
55 –– 10y10y 1515 –– 20y20y
GD
P/ca
pita
(dis
posa
ble
inco
me)
Time
5Goldman Sachs European Financials Conference 2005Puerto Banus, 8-10 June, 2005
> CEE retail banking model – product view
Wave 1: Savings, payment transfers
Wave 2: Current accounts, debit cards, mortgages
Wave 3: Credit cards, consumer finance
Wave 4: Wealth management – asset management, pensions, insurance
GD
P/ca
pita
(dis
posa
ble
inco
me)
Time
€2k
€5k
€7k
€10k
Early market positioning tobenefit from initial growth and
consolidate later
Wave 1
Wave 2
Wave 3
Wave 4
6Goldman Sachs European Financials Conference 2005Puerto Banus, 8-10 June, 2005
> CEE growth hotspot – asset management
EB asset management market share
17.3
28.9
54.3
31.8
9.5 8.2
0
10
20
30
40
50
60
Austria CEE Total Czech Rep Slovakia Hungary Croatia
in %
2003 2004
• AM offers long-term growth» in Central Europe, AND» in Austria
• Strong CEE growth from verylow base; still room for more
» CZ, HU, SL, SK most developed» Romania (EUR 2 per capita) and Serbia
still in the very early stages
• Austria benefits from shift ininvestment attitude
» Young generation with appetite for risk» Savings requirements for old age
• EB is already well positioned» Strong positions in CEE» Retail market leader in Austria
Funds under management/capita
350425
296
133
15,470
10,365
0
200
400
600
6,000
8,000
10,000
12,000
14,000
16,000
Czech Rep Hungary Slovakia Croatia Romania Austria Germany
EUR
1998 2001 2004
6y-CAGR:40.7%
6y-CAGR:16.0%
6y-CAGR:237%
6y-CAGR:115.3%
6y-CAGR:22.7%
6y-CAGR:6.8%
2
7Goldman Sachs European Financials Conference 2005Puerto Banus, 8-10 June, 2005
> CEE growth hotspot – life insurance
• CEE has developed strongly, buthas a long way to go
» Czech Republic most developed, both inabsolute and relative terms
» Hungary not far behind» Market driven by growth in disposable
incomes and private pensions growth
• Romania and Serbia are nascentmarkets
» Large potential, but long-term viewrequired, still marginal volumes
• Even Austria is a growth market» Slower growth than in CEE, but …» … penetration still lower than in Portugal,
similar to Spain
• EB well positioned in all markets
Life insurance density (life premiums/capita)Source: Swiss Re, sigma database
139.499.1
59.91.4 8.4
811.0
488.6
611.4
0.0
100.0
200.0
300.0
400.0
500.0
600.0
700.0
800.0
900.0
CzechRep
Hungary Poland Serbia Romania Austria Spain Portugal
USD
m
1993 1998 2003
10y-CAGR:21.7%
10y-CAGR:19.4%
10y-CAGR:10.7%
10y-CAGR:6.3%
10y-CAGR:41.9%; very
low base10y-CAGR:
NA
10y-CAGR:16.7%
10y-CAGR:18.3%
World Top 3 (2003):1. Switzerland - $3431.82. Japan - $3002.93. United Kingdom - $2617.1..20. Austria - $811.0
EB life insurance market share in CE & Austria (2004)
7.4
1.2
5.36.6
14.3
0
2
4
6
8
10
12
14
16
Czech Rep Hungary Slovakia Croatia Austria
in %
8Goldman Sachs European Financials Conference 2005Puerto Banus, 8-10 June, 2005
> Presentation topics
1. The opportunity
2. Focused growth strategy
3. Growing contribution
4. Financial highlights
9Goldman Sachs European Financials Conference 2005Puerto Banus, 8-10 June, 2005
> The Erste Bank model – strength in depth
A leading retail franchise with 11.8 million customers
Clients: 5.4m; #1Retail deposits: 26%Branches: 647 Clients: 2.5m; #1
Retail deposits: 34%Branches: 333
Clients: 0.9m; #2Retail deposits: 8%Branches: 142
Clients: 0.6m; #3Retail deposits: 9.5%Branches: 120
Branches of:
Clients: 1.6mBranches: 733
Clients: 0.8m; # 2Retail depositsBranches:
- „Own“ :144 :- Subsidiaries: 145 A
CZ
SL
SK
HU
CR
D PL
IT
BH
CH
UA
BY
RO
SRBG
10Goldman Sachs European Financials Conference 2005Puerto Banus, 8-10 June, 2005
> Extending the home market
Moving from CE to CEE
Priorities» Evaluate bolt-on acquisitions in Hungary» Grow organically in Croatia» Target privatisation projects in Romania» Close Novosadska Banka deal in Serbia
Criteria» Broaden the regional scope» Follow the money: clients and trade flows» Achieve growth in the CEE region in
markets that fit with existing network
11Goldman Sachs European Financials Conference 2005Puerto Banus, 8-10 June, 2005
> Presentation topics
1. The opportunity
2. Focused growth strategy
3. Growing contribution
4. Financial highlights
12Goldman Sachs European Financials Conference 2005Puerto Banus, 8-10 June, 2005
> CE drives overall profit growth
CE contribution to cash earnings
0
100
200
300
400
500
600
700
2002 2003 2004*
EUR
m
CE Subsidiaries
* Restated according revised IASB standards 32 and 39
313.6
434.5
520.8
40.8%
59.2%
56.2%
58.5%
43.8%41.5%
CE contribution68% in Q1 2005
Austria, Internationaland Corp. Centre
13Goldman Sachs European Financials Conference 2005Puerto Banus, 8-10 June, 2005
> CE carves out ever higher share of assets
Double digit loan growth leads shift to higher yielding CE RWAs» Distribution of RWA 2002 – 2005 Q1
Austria, Internationaland Corp. Centre
CE Subsidiaries
85% 84%80%
66,812.4
14,845.8
51,966.7
Q1 2005
66,470.4
13,318.7
53,151.7
YE 2004
0.5%61,888.060,511.9Total
11.5%10,162.19,157.6Central Europe
-2.2%51,725.851,354.3Austria, Int‘l andCorp. Centre
Growth YE04 to Q105YE 2003YE 2002EUR m
84.9% 83.6% 80.0% 77.8%
15.1% 16.4%20.0% 22.2%
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
2002 2003 2004 2005 Q1
EUR
m
14Goldman Sachs European Financials Conference 2005Puerto Banus, 8-10 June, 2005
> Presentation topics
1. The opportunity
2. Focused growth strategy
3. Growing contribution
4. Financial highlights
15Goldman Sachs European Financials Conference 2005Puerto Banus, 8-10 June, 2005
> The changing face of Erste Bank
Since 1997 Erste Bank group has achieved strong, sustainable growth
Assets (EUR bn)
20
139
Net profit (EUR m)
48
521
Clients (m)
0.6
11.8
Operating profit (EUR m)
163
1,493
+595% +1,035% +1,867%+953%
Employees
4,929
35,862
Branches
316
2,264
Return on Equity
6.1%
17.0%
Cost/Income Ratio
74.5%63.5%
+628% +617%
2004*1996* Restated according revised IASB standards 32 and 39
16Goldman Sachs European Financials Conference 2005Puerto Banus, 8-10 June, 2005
> Erste Bank continues to deliver
» Net Profit + 71.1% to EUR 160.3m
» Total Assets + 6.0% to EUR 148.2bn
» Tier 1 Ratio at 6.8%
» Cost/Income Ratio 62.4%
» ROE 18.0%
» Dividend for the year 2004:EUR 0.5 per share (+33.3%)
Cash EPS
Cost/Income Ratio Cash ROE
71.8%70.1%
67.9%67.1%
67.9%
64.2%63.5%
1998 1999 2000 2001 2002 2003 2004
11.2%13.0%
14.3% 14.5% 15.3%16.6%
17.0%
1998 1999 2000 2001 2002 2003 2004
Erste Bank Group Q1 2005 financial highlights
0.28 0.33 0.38 0.40 0.39
0.67
1.23 1.311.45
1.83
2.18
Q1 vsFY00
Q1 vsFY01
Q1 vsFY02
Q1 vsFY03
Q1 vsFY04
Q1 05
62.4%
Q1 2005
18.0%
Q1 2005
17Goldman Sachs European Financials Conference 2005Puerto Banus, 8-10 June, 2005
Fax +43 (0)5 0100-13112E-mail: [email protected]: www.erstebank.com
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Gabriele WerzerTel: +43 (0)5 0100-11286 E-Mail: [email protected]
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Monika PerausTel: +43 (0)5 0100-11282 E-Mail: [email protected]
> Investor relations contacts
Investor relations
Erste Bank, Graben 21, 1010 Vienna