> Erste Bank Leading the way in Central Europe€¦ · > Erste Bank Leading the way in Central Europe > UBS Global Banking Conference > New York, 9-11 May 2005 > Andreas Treichl,

> Erste BankLeading the way in Central Europe

> UBS Global Banking Conference

> New York, 9-11 May 2005

> Andreas Treichl, CEO

2

UBS Global Banking ConferenceNew York, 9-11 May, 2005

> Disclaimer

THE INFORMATION CONTAINED IN THIS DOCUMENT HAS NOT BEEN INDEPENDENTLY VERIFIED AND NOREPRESENTATION OR WARRANTY EXPRESSED OR IMPLIED IS MADE AS TO, AND NO RELIANCE SHOULDBE PLACED ON, THE FAIRNESS, ACCURACY, COMPLETENESS OR CORRECTNESS OF THS INFORMATIONOR OPINIONS CONTAINED HEREIN

CERTAIN OF THE STATEMENTS CONTAINED IN THIS DOCUMENT MAY BE STATEMENTS OF FUTUREEXPECTATIONS AND OTHER FORWARD-LOOKING STATEMENTS THAT ARE BASED ON MANAGEMENT’SCURRENT VIEWS AND ASSUMPTIONS AND INVOLVE KNOWN AND UNKNOWN RSIKS AND UNCERTAINTIESTHAT COULD CAUSE ACTUAL RESULTS, PERFORMANCE OR EVENTS TO DIFFER MATERIALLY FROM THOSEEXPRESSED OR IMPLIED IN SUCH STATEMENTS.

NONE OF ERSTE BANK OR ANY OF ITS AFFILIATES, ADVISORS OR REPRESENTATIVES SHALL HAVE ANYLIABILITY WHATSOEVER (IN NEGLIGENCE OR OTHERWISE) FOR ANY LOSS HOWSOEVER ARISING FROMANY USE OF THIS DOCUMENT OR ITS CONTENT OR OTHERWISE ARISING IN CONNECTION WITH THISDOCUMENT

THIS DOCUMENT DOES NOT CONSTITUTE AN OFFER OR INVITATION TO PURCHASE OR SUBSCRIBE FORANY SHARES AND NEITHER IT NOR ANY PART OF IT SHALL FORM THE BASIS OF OR BE RELIED UPON INCONNECTION WITH ANY CONTRACT OR COMMITMENT WHATSOEVER

Cautionary note regarding forward-looking statements

NB From 1 January 2005 the revised IASB standards IAS 32 (Financial Instruments: Disclosure and Presentation) andIAS 39 (Financial Instruments: Recognition and Measurement) are binding. These principally affect how the securitiesbusiness is presented and how loans are valued. In accordance with the transitional provisions, the values published forthe previous year have been restated. It is these restated 2004 figures that are used throughout this presentation.Details of the changeover to the revised IFRS standards were explained in a news release dated 3 May 2005, whichcan be downloaded from the Erste Bank website at www.erstebank.com

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> Presentation topics

1. Where we are now

2. Growth drivers

3. Outlook and targets

4. Appendix

4


> 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 deposits: 20%Branches:

- „Own“ :144 :- Subsidiaries: 145 A

CZ

SL

SK

HU

CR

D PL

IT

BH

CH

UA

BY

RO

SRBG

5


> The changing face of Erste Bank

Since 1997 our group has followed a sustainable growth path

Assets (EUR bn)

20

139

Net profit (EUR m)

48

545

Clients (m)

0.6

11.8

Operating profit (EUR m)

163

1,495

+595% +1,035% +1,867%+953%

Employees

4,929

35,862

Branches

316

2,264

Return on Equity

6.1%

18.0%

Cost/Income Ratio

74.5%63.4%

+628% +617%

20041996

6


> Continuing to successfully execute our strategy

» 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%

» Proposed 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

7


8.3365.9396.2Operating result

12.918.0ROE (%)63.762.4Cost / Income Ratio (%)

2.5(643.1)(658.9)Operating expenses4.61,009.01,055.1Operating income

71.193.7160.3Net profit after minority interests(15.7)(75.7)(63.8)Minority interests(19.7)(85.7)(68.8)Taxes on income

14.8255.1292.9Pre-tax profit23.1(2.6)(2.0)Other operating result

(33.3)8.45.6Result from insurance business2.5(643.1)(658.9)General administrative expenses

(8.3)62.457.2Net trading result10.9280.5311.1Net commission income(6.4)(108.2)(101.3)Risk provisions for loans and advances

3.6657.7681.2Net interest income% ChangeQ1 2004Q1 2005EUR m

> Q1 05 Group Income Statement (IFRS)

Strong improvement in Austrian retail and growing CE contribution

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> Q1 2005 Divisional Figures - Overview

(40.2)(38.1)(6.5)(5.6)0.00.0(15.6)(16.2)(18.1)(16.3)Thereof funding costs

12.9%18.0%n.a.n.a.18.1%16.7%38.7%39.0%14.3%13.1%ROE on net profit after min.

63.7%62.5%n.a.n.a.19.1%20.7%61.5%59.0%65.4%65.2%Cost/Income Ratio

2,897.93,553.731.826.4406.7470.2746.41,126.21,713.01,931.0Average attributed equity

63,470.666,812.4486.7347.46,218.36,197.811,413.714,845.845,352.045,421.5Average risk-weighted assets

93.7160.3(58.0)(32.3)18.419.772.2109.761.163.2Net profit after minority interests

(75.7)(63.8)(24.5)(13.6)0.00.0(12.0)(7.8)(39.2)(42.4)Minority interests

(85.7)(68.8)(17.6)9.3(3.8)(7.7)(26.6)(33.3)(37.9)(37.1)Taxes on income

255.1292.9(15.9)(28.0)22.227.4110.7150.9138.2142.7Pre-tax profit

(2.6)(2.0)2.0(9.5)(3.0)0.6(12.6)0.211.06.7Other operating results

8.45.60.00.00.00.02.11.86.33.7Income from insurance business

(643.1)(658.9)(11.6)(8.1)(7.8)(9.0)(212.8)(236.8)(410.8)(405.1)General admin. expenses

62.457.2(1.7)1.3(0.0)(0.0)26.725.437.430.4Net trading result

280.5311.1(2.3)(11.6)5.77.290.8112.7186.4202.8Net commission income

(108.2)(101.3)(0.0)0.4(8.1)(7.6)(9.8)(13.9)(90.4)(80.1)Risk provisions

657.7681.2(2.2)(0.5)35.336.1226.3261.3398.3384.2Net interest income

Q1 04Q1 05Q1 04Q1 05Q1 04Q1 05Q1 04Q1 05Q1 04Q1 05In EUR m

TOTAL EB GROUPCorp. CenterInt. BusinessCE SubsidiariesAustria

9


Assets –moderate seasonal growth in customer lending

> Q1 05 EB Group Balance Sheet (IFRS)

6.0139,812148,202Total assets3.25,2995,470Other assets

(1.0)1,7231,705Tangible assets1.61,8231,852Intangible assets6.221,92623,275Financial investments5.415,96716,834Investments available for sale

14.54,6285,298Trading assets2.2(2,804)(2,867)Risk provisions for loans and advances2.472,84374,585Loans and advances to customers

24.615,68419,545Loans and advances to credit institutions(8.0)2,7232,505Cash and balances with central banks

% Change31.12.200431.03.2005EUR m

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Liabilities – tier 1 ratio strengthens to 6.8%

> Q1 05 EB Group Balance Sheet (IFRS)

10.710.2Solvency ratio (%)6.76.8Tier 1 ratio (%)

6.0139,812148,202Total Liabilities5.93,4243,626Shareholders’ equity2.13,2413,308Minority interests

(0.3)2,9942,985Subordinated capital13.56,1797,016Other liabilities3.47,5007,758Provisions5.219,71020,744Debts evidenced by certificates2.168,21369,670Amounts owed to customers

15.928,55133,095Amounts owed to credit institutions% Change31.12.200431.03.2005EUR m

11



1. Where we are now

2. Growth drivers


4. Appendix

12


NB: To eliminate the currency effects, Q1 2005 exchange rates have been used for all P&L and Balance Sheet data conversions

1 CS Q1 04 net profit includes proceeds of sale of non-life insurance subsidiary2 EB increased its stake in SLSP to 100% in Jan 20053 Final realignment of ownership structure in EBCR in Jan 2005,

Q1 2005 Results (IFRS) as reported by local entities

EB stake 97.97% 100.00% 99.90% 61.95%

2

3,476

1,441

51.0

27.4

15.0

Q1 04

4,737

2,435

65.1

15.3

8.6

Q1 04

6,171

5,083

58.9

17.4

18.9

Q1 04

19,422

11,639

58.5

28.7

87.6

Q1 04

(6%)3,267(4.2%)4,53710.8%6,8356.0%20,586

Balance Sheet Total(EURm)

4%1,4962.3%2,491(0.2%)5,074(0.4%)11,590Employees

49.054.857.658.2Cost / Income ratio (%)

19.927.519.622.7ROE (%)

(24.2%)11.4>100%18.325.2%23.6(12.4%)76.7Net Profit (EUR m)

+/-%Q1 05+/-%Q1 05+/-%Q1 05+/-%Q1 05

31

> Supported by strong CE profit growth …

13


> … as well as a fast growing CE asset base

Double digit loan growth leads shift of RWA to higher yielding CE» Distribution of RWA 2002 – 2005 Q1

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.Business

Growth YE04 vs Q105YE 2003YE 2002EUR m

Austria, Internationaland Corp. Centre

CE Subsidiaries

85% 84%80%

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

2002 2003 2004 2005 Q1

EUR

m

» CE subsidiaries contributed 68.4% to Group net profit in Q1 2005

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> Successful focus on cost management» Target CIR < 80% in all branches by year-end

2005» Closure or sale of underperforming branches» New, performance-based salary system» Improvement in procurement efficiency» Streamlining of IT operations

Net Profit

Op. Profit

Q1 05Q1 0444.1

17.2

5.64.1

-3.5

5.32.4

11.4

1.4

6.1

2.5

55.1

19.2

22.4

8.76.2

0.0

5.9 4.6

14.5

3.06.1

3.0

-5

5

15

25

60

8.4

Total Branches SME Own SBs Mortgage Subsidiaries

> Exploiting key market opportunities» One of the richest EU countries

» GDP/capita: EUR 27.800» Large corporates – opportunistic approach

(parent/local AMs)» Asset management services

» Shift in investment attitude(demographic, societal factors)

» LT annual growth rates: ~ 10%» Mortgage-lending (underdeveloped

compared to EU)

> Improved efficiency in Austrian business

EUR

m

15


in EUR as of YE 2003 / Investment funds as of YE 2004

Per capitaInv. Funds: 348Insurance: 123GDP: 7,770

A

CZ

SL

SK

HU

CR

Per capitaInv. Funds: 293Insurance: 76GDP: 5,370

Per capitaInv. Funds: 428Insurance: 88GDP: 7,320Per capita

Inv. Funds: 131Insurance: 41GDP: 5,750

Per capitaInv. Funds: 15,267Insurance: 706GDP: 27,858

Per capitaGDP: 12,330

Local Asset Management Market Share (%)

* In operation since 5/2003** Cooperation with Kvarner Wiener Städtische

14.3

7.4

5.3

1.2

6.6

0

5

10

15

Austria CzechRepublic

Slovakia* Hungary Croatia**

2004 Insurance Market Share (%)

> Asset management and insurance offer long term growth

Q1 2004Q1 2005

17

26

47

31

72

17

28

55

32

10 11

0

10

20

30

40

50

60

Austria CE MarketsTotal

CzechRepublic

Slovakia Hungary Croatia

16



1. Where we are now

2. Growth drivers


4. Appendix

17


> Extending the home market

Moving from CE to CEE

Priorities» Evaluate smaller acquisitions in Hungary» Grow organically in Croatia» Target privatisation projects in Romania» Shortlisted in Novosadska banka sale in

Serbia

Criteria» Broaden the regional scope» Achieve growth in the CEE region in

markets that fit with existing network» in areas which offer real added value to

existing client base

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> Group outlook and targets

Guidance 2005» Erste Bank is targeting net profit for the Group of EUR 660m in 2005» Guidance breakdown

» Austria: ROE – min 15%» CS: ROE – min 20%» SLSP: ROE ~ 20%» EB Hungary: ROE min 20%» EB Croatia: ROE 18% - 20%

Target 2006» Erste Bank is confident of reaching EUR 750m net profit in 2006» Resulting in a ROE of at least 18%» Based on a CIR no higher than 61%

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1. Where we are now

2. Growth drivers


4. Appendix

20


Privateinvestors7.0%

> Current shareholder structure

Savings banks7.0%

32.5%

Employees1.9%

Institutional investors45.6%

Free float61.5%

By Investor TypeAustria Verein6.0%

Austria58.2%

Cont. Europe5.8%

UK & Ireland17.4%

North America17.7%

Others0.9%

By Region

Total numbers of shares: 241,442,892

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Fax +43 (0)5 0100-13112E-mail: [email protected]: www.erstebank.com

Reuters: ERST.VI Bloomberg: EBS AVDatastream: O:ERS Securities ID: 065201

Gabriele WerzerTel: +43 (0)5 0100-11286 E-Mail: [email protected]

Thomas SommerauerTel: +43 (0)5 0100-17326 E-Mail: [email protected]

Monika PerausTel: +43 (0)5 0100-11282 E-Mail: [email protected]

> Investor relations contacts

Investor relations

Erste Bank, Graben 21, 1010 Vienna

Documents

> Erste Bank Leading the way in Central Europe€¦ · > Erste Bank Leading the way in Central Europe > UBS Global Banking Conference > New York, 9-11 May 2005 > Andreas Treichl,