Erste Group investor presentation
H1 2020 results
31 July 2020
Moving ahead of the curve -
Forward-looking provisioning, strong capital position, continued dividend accrual
Bernd Spalt, CEO Erste Group
Stefan Dörfler, CFO Erste Group
Alexandra Habeler-Drabek, CRO Erste Group
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
- Addressing the key questions in an uncertain environment
- CEE Covid-19 evolution update
- Macroeconomic update
- Business update
- Operating trends
- Asset quality and impairments
- Capital trends and dividends
- Key takeaways and outlook
- Q2 20 presentation
- Executive summary
- Business environment
- Business performance
- Assets and liabilities
-
Additional information
• Covid-19 measures update
Page 3
CEE Covid-19 evolution update -
In terms of virus spread CEE is still among the least affected regions
- Overall virus spread remains at low levels following highly effective policy responses
- Only RO and RS experience larger - but in a global context manageable - waves of infections than in spring
- All other countries see minor regional flare-ups, but remain well below spring levels
Previous peak active infections/1m pop | 6,356 | ||||||||||||||||||||||||||||||||||
Current active infections/1m pop | |||||||||||||||||||||||||||||||||||
4,555 | |||||||||||||||||||||||||||||||||||
3,553 | 3,504 | ||||||||||||||||||||||||||||||||||
2,282 | 1,657 | 1,065 | 1,789 | ||||||||||||||||||||||||||||||||
1,483 | |||||||||||||||||||||||||||||||||||
869 | 1,036 | 490 | 912 | 891 995 | 839 | ||||||||||||||||||||||||||||||
770 | 503 | 517 | |||||||||||||||||||||||||||||||||
211 | 167 | 193 205 | 187 98 | NA | NA | NA | 307 215 | 401 | 213 53 | 206 90 49 | |||||||||||||||||||||||||
34 | 78 | ||||||||||||||||||||||||||||||||||
25 | |||||||||||||||||||||||||||||||||||
LU | NO | CH | DE | AT | SG | CZ | AU | US | FI | SK | NE | UK | SE | HR | FR | RS | RO | HU | IT | JP | |||||||||||||||
13,033 | Total cases/1m pop | ||||||||||||||||||||||||||||||||||
Deaths/1m pop | |||||||||||||||||||||||||||||||||||
9,877 | |||||||||||||||||||||||||||||||||||
8,523 | 7,819 | ||||||||||||||||||||||||||||||||||
3,961 | 4,398 | 4,067 | |||||||||||||||||||||||||||||||||
3,077 | 2,765 | ||||||||||||||||||||||||||||||||||
2,462 | 2,257 | 2,663 | 2,272 | ||||||||||||||||||||||||||||||||
1,680 | 1,420 | 1,333 | 1,168 | 459 | |||||||||||||||||||||||||||||||
674 | |||||||||||||||||||||||||||||||||||
581 | |||||||||||||||||||||||||||||||||||
179 | 47 | 228 | 110 | 79 | 5 | 34 564 6 | 451 | 59 392 5 | 358 | 564 | 32 | 462 | 60 | 113 | 62 | 228 8 | |||||||||||||||||||
LU | NO | CH | DE | AT | SG | CZ | AU | US | FI | SK | NE | UK | SE | HR | FR | RS | RO | HU | IT | JP |
Source:https://www.worldometers.info/coronavirus/as downloaded on 26 July 2020.
Page 4
Macroeconomic update (1) -
CEE tackles Covid-19 challenge from a position of strength
Economy
Banking markets | Subsidiary banks | |
- Strong labour markets
- Unemployment rates at historic lows in most countries at the end of 2019
- Real wage growth
- Reduced external vulnerabilities
- Materially improved current account balances in all Erste CEE countries
- Deposit overhang & excess liquidity on system level in all key markets
- No excesses, rather sustainable asset growth over the past years
- Sustainable growth opportunities
- Fully self-funded business model as opposed to parent company dependency
- Focus on local currency lending
- Historically low NPL ratios
- Strong market shares
- High capital ratios
- Sound government finances
- Manageable public debt
- Low interest rates
Unemployment rates (in %) | Customer loans/GDP (in %) | Loan/deposit ratios (in %) | |||||||||||||||||||||||||
19 | 101 | 159 | |||||||||||||||||||||||||
92 | |||||||||||||||||||||||||||
111 | 125 | 124 | |||||||||||||||||||||||||
61 | 68 | 60 | 67 | 65 | 98 | 99 96 | 98 | ||||||||||||||||||||
11 | 10 | 92 | 100 | ||||||||||||||||||||||||
10 | 49 | ||||||||||||||||||||||||||
47 | 70 73 | 72 | |||||||||||||||||||||||||
45 | 66 | 69 | |||||||||||||||||||||||||
7 | |||||||||||||||||||||||||||
6 | 7 | 36 | 38 | ||||||||||||||||||||||||
5 | 5 | 6 | 32 | ||||||||||||||||||||||||
5 | 4 | 26 | |||||||||||||||||||||||||
3 | |||||||||||||||||||||||||||
2 | |||||||||||||||||||||||||||
AT CZ | SK RO | HU HR RS | AT | CZ SK RO | HU HR RS | Group CZ | SK | RO | HU HR | RS | |||||||||||||||||
2007 | 2019 | 2007 | 2019 | 2019 | |||||||||||||||||||||||
2007 | |||||||||||||||||||||||||||
Page 5
Macroeconomic update (2) -
Extended, wave-shaped economic recovery is most likely scenario
- Real GDP to decline 4%-9% in 2020 in Erste Group's core markets following severe lockdowns across CEE
- Q2 20 expected to be hit the hardest; recovery to start already in Q3 on the back of opening up of the economies
- Downward revision in Q2 20 was most apparent in AT, HR (due to weaker tourism assumptions) and SK (weaker industry)
- Short-timeemployment situation improved in recent weeks, even though unemployment rate is expected to rise into 2021, albeit from benign levels
- In 2021, economic recovery expected to continue at a higher intensity due to improved domestic and foreign demand compared to subdued 2020 levels
Most likely economic recovery scenario
Economic performance
Time
Evolution of real GDP forecasts | Evolution of short-time work schemes |
2020e | 2021e | 1,400 | ||||||||||||||
7.1 | ||||||||||||||||
4.6 | 5.8 5.4 | 1,200 | ||||||||||||||
4.2 | 4.5 | 4.5 | 4.1 | 4.7 | 4.7 | |||||||||||
3.9 3.9 | 1,000 | |||||||||||||||
3.1 | ||||||||||||||||
3.0 | ||||||||||||||||
800 | ||||||||||||||||
600 | ||||||||||||||||
-4.5 | -4.2 | -2.3-2.3 | as of 30 April | 400 | ||||||||||||
-5.0 | -4.7 | -4.6 | as of 31 July | 200 | ||||||||||||
-4.7 | ||||||||||||||||
-6.0 | ||||||||||||||||
-6.7-7.0 -7.5 | -7.5 | Source. Erste Group Research | 0 | |||||||||||||
-9.0 |
in thsd | AT |
CZ
SK
HU
RO
30.03 | 6.04 | 13.04 | 20.04 | 27.04 | 4.05 | 11.05 | 18.05 | 25.05 | 1.06 | 8.06 | 15.06 | 22.06 | 29.06 | 6.07 | 13.07 | 20.07 |
Page 6
Business update (1) -
Retail - what's happening on the ground?
- Diverging demand trends emerging in Q2 20
- Continued strong demand for housing loans
- Lower demand for consumer loans, but recovering as of late, even with tighter lending standards to adjust to COVID-19 world
- Asset management sales volumes suffered from a volatile market environment; strategic focus on long term savings plans
- Insurance sales declined during lockdowns but are in recovery mode
- Customer interaction has changed since Covid-19but it is still too early to draw long term conclusions
- Branch traffic has reached a low at the end of April amid severe lockdowns, but is since then in recovery mode; only CZ, SK and RO still >25% below pre-Covid-19 levels at end of June 20
- Intensified customer contacts through pro-active personalised information provision and advice via branches, call centers and George to approx. 3.4m retail clients since the start of the lockdowns
- All time high of digital activity and mobile transactions
- Digital sales peaked during lockdowns
- Cashless transactions on the rise
- The Covid-19 crisis proves again that Erste Group fulfils its role as critical infrastructure, but even more that advice and support both by Erste advisors and in George is highly relevant to our customers
Monthly new sales volumes
(2019 vs 2020, in EUR million) | |||||||||||||||||
Housing loans | Consumer loans | ||||||||||||||||
873 | 861 | 825 | 839 | 910 | 2019 | ||||||||||||
2020 | |||||||||||||||||
804 | |||||||||||||||||
716 | 716 | 730 | 731 | ||||||||||||||
589 | 573 | ||||||||||||||||
400 | 414 420 407 | 439 | |||||||||||||||
350 | 374 | 376 352 | |||||||||||||||
326 | 287 | ||||||||||||||||
194 | |||||||||||||||||
Jan Feb Mar Apr May Jun | Jan Feb Mar Apr May Jun |
Branch traffic development since Covid-19 (in %)
100 | ||||||
90 | ||||||
80 | ||||||
70 | ||||||
60 | ||||||
50 | ||||||
40 | ||||||
Pre-Covid-19 | April 20 | May 20 | June 20 | |||
AT | CZ | SK | RO | HU | HR | RS |
Page 7
Business update (2) -
Corporates - what's happening on the ground?
• Clients cope with the new realities | Corporate loan stock development |
- Loan demand is still intact, albeit slowing in Q2
- Volumes supported by guaranteed business as well as moratoria
- Clients are building liquidity buffers and war chests
- Most investment projects resumed after interruptions of various lengths
- Some clients are already gearing up for acquisitions to take advantage of emerging opportunities
- Well diversified loan demand across sectors
- Clients continue to tap capital markets
- 94 mandated transactions in H1 20 with a total issuance volume of EUR 54bn, mostly debt capital markets
(gross, business line view, in EUR bn)
+9.0% | +8.2% | +9.0% | +8.9% | +7.1% |
50.6 55.2 | 52.5 56.8 | 53.0 57.7 | 53.3 58.1 | 53.8 57.6 |
YE | YE | Mar Mar | Apr Apr | May May | Jun Jun | ||||
18 | 19 | 19 | 20 | 19 | 20 | 19 | 20 | 19 | 20 |
- Competition is intensifying again
- At start of crisis initially widening of margins, with TLTRO3 re- emergence of price competition
- State guaranteed loans come with interest rate caps, hence not supportive for maintaining margins
- Automotive industry is returning to business
- Slovakia: all car plants are in operation, most in 2-shift mode currently; production output -25-30% in H1 20 yoy
- Czechia: decrease in production output -
17% yoy, most manufacturers run a 2-shift production - Hungary: Large producer targets 3 shifts again from 1 August
- Western Europe: implementation of incentives to push car sales
Page 8
Understanding operating trends (1) -
Moratoria and guarantees supported volumes, real business growth declined
- Qoq net loan growth amounted to 1.6%, supported by:
- Limited use of state-guaranteed loans of approx. EUR 0.6bn
- Reduced redemptions on the back of obligatory moratoria and voluntary payment deferrals in the amount of EUR 0.6bn
- Real business growth declined somewhat, estimated at 0.9% qoq, as growth was not a key priority in the current quarter
- 2020e underlying net loan growth expected to be flattish
- Erste Group so far supported more than 1m customers following Covid-19 lockdowns
- Obligatory moratoria prevalent in CEE; in Serbia temporary obligatory moratorium expired at 30 June 2020, with limited impact so far
- Moratoria and payment deferrals dominate in Austria
- State guaranteed loans so far primarily booked in Austria
Composition of net loan growth in Q2 20
(in EUR bn) | 163.7 | |||
1.4 | ||||
0.6 | ||||
161.1 | 0.6 | |||
Q1 20 | Guarantees | Moratoria | Business | Q2 20 |
Volume-based moratoria participation | Volumes subject to key Covid-19 measures | ||||||||||||||||||||||||||||||||
(in %) | 8,331 | (in EUR m) | |||||||||||||||||||||||||||||||
Opt-out | |||||||||||||||||||||||||||||||||
488 | New state guaranteed loans | ||||||||||||||||||||||||||||||||
Retail | 72 | ||||||||||||||||||||||||||||||||
Other forbearance measure | |||||||||||||||||||||||||||||||||
Corpoarte | Opt-out | 63 | 2,828 | ||||||||||||||||||||||||||||||
Moratoria | |||||||||||||||||||||||||||||||||
45 | |||||||||||||||||||||||||||||||||
32 | 2,834 | 2,158 | |||||||||||||||||||||||||||||||
80 | |||||||||||||||||||||||||||||||||
20 | 21 | 5,014 | 826 | 1,881 | |||||||||||||||||||||||||||||
0 | 29 | ||||||||||||||||||||||||||||||||
0 | 0 | 1,178 | |||||||||||||||||||||||||||||||
12 | 12 | ||||||||||||||||||||||||||||||||
6 | 8 | 7 | 7 | 904 | 1,100 | 3 | 37 | ||||||||||||||||||||||||||
5 | 5 | 1,928 | 2,129 | 2 | 1,881 | ||||||||||||||||||||||||||||
72 | 1,086 | 10 | 1,141 | 0 | |||||||||||||||||||||||||||||
829 | |||||||||||||||||||||||||||||||||
Data source: EBA reporting
Page 9
Understanding operating trends (2) -
Core revenues held up well in Q2 20, while costs declined
- NII held up well in Q2 20, despite Covid-19 lockdowns
- NII continues to get accrued for moratoria loans, only PV- negative modification losses lead to negative impact on NII (approx. EUR 26m, mostly Covid19-related in Q2 20)
- Negative impact from rate cuts only partly mitigated by TLTRO3
- Expectation for weaker H2 20 on strong H2 19 comps
- Expectation is for slight decline in NII vs 2019
- Fees declined yoy and qoq on the back of lockdown- related lower economic activity, primarily driven by lower payment transfer fees
- Yoy decline mainly driven by payment services; effect compounded by negative SEPA fee impact (EUR 11m in H1 20), while securities and asset management business still grew
- Qoq softening across all lines
- Fees are expected to decline in mid-single digits in 2020
- Trading & FV result staged a full recovery from Q1 20 lows as market volatility subsided; moving into positive territory ytd
- Operating costs declined yoy and qoq, supported primarily by lower other administrative expenses
- Lower advertising/marketing expenses yoy and qoq
- Lower legal and consulting costs yoy and qoq
- Costs set to improve yoy
- Cost/income ratio at solid 55.5% in Q2 20, driven by strong revenue and cost performance
NII development
+2.9%
2,330 2,397
-0.1%
1,169 1,229 1,168
1-6 19 1-6 20Q2 19 Q1 20 Q2 20
Fee development
-8% | Q2 19 | |||||||||||||||
Q1 20 | ||||||||||||||||
504 | ||||||||||||||||
493 | Q2 20 | |||||||||||||||
452 | ||||||||||||||||
-13% | +3% | |||||||||||||||
243 | 219 | 213 | ||||||||||||||
211 | ||||||||||||||||
169 | 174 | |||||||||||||||
-27% | ||||||||||||||||
49 | 38 | 36 | ||||||||||||||
Total fees | Payment services | Securities & AM Lending business | ||||||||||||||
& brokerage fees |
Page 10
Credit risk -
Risk provisions: moving ahead of the curve
- Total risk provisions of EUR 613.7m or 148bps in Q2 20
- Update of forward-looking information (FLI) in relation to deteriorated macroeconomic forecasts resulting in a charge of EUR 300m
- Introduction of significant increase in credit risk (SICR) overlays in relation to most Covid-19-affected sectors (cyclical industries, transportation, hotels and leisure), resulting in an expected credit loss (ECL) increase of EUR 90m
- Ordinary course of business net provisions amounted to approx. EUR 224m
- Provisioning peak for 2020 likely in Q2 20, outlook for 2020 adjusted to 65-80bps
- Key IFRS 9 stage migration trends
- Stage 2 increased (driven by FLI update as well as SICR overlays described above) from 8.3% at YE19 to 16.1% as of Q2 20.
- Stage 1 declined almost by the same amount to 81.0% in Q2 20
Risk cost development in 2020e
(baseline scenario, in bps of average gross customer loans)
148
~65-80 | ~65-80 | ~65-80 |
15
Q1 20 | Q2 20 | Q3 20e | Q4 20e | 2020e |
Risk provisions by IFRS9 stages
• Stage 3 was stable at 2.3%, as reflected in the NPL ratio | CLA | Coverage | |||||
• For H2 20 slight increase in stage 3 expected, due to increased | in EUR million | Dec 19 | Mar 20 | Jun 20 | Jun 20 | Jun 20 | |
migrations to default after the end of the moratoria | |||||||
Stage 1 | 88.8% | 86.5% | 81.0% | 328 | 0.2% | ||
• Comfortable coverage ratios across the stage spectrum | |||||||
Stage 2 | 8.3% | 10.7% | 16.1% | 1,022 | 3.8% | ||
• Stage 1 and Stage 2 shares stable vs YE19, while Stage 3 | |||||||
increased to 57.7% in Q2 20 from 56.6% at YE19 | Stage 3 | 2.3% | 2.2% | 2.3% | 2,187 | 57.7% | |
• In H2 20 maintenance of strong coverage ratios expected | POCI | 0.3% | 0.2% | 0.2% | 125 | 33.4% | |
Subject to IFRS9 | 99.7% | 99.7% | 99.6% | 3,662 | 2.2% | ||
Not subject to IFRS 9 | 0.3% | 0.3% | 0.4% | 0 | 0.0% | ||
Gross customer loans | 163,417 | 164,268 | 167,369 | 3,662 | 2.2% | ||
Page 11
Credit risk -
Strong asset quality starting point
Development of NPL ratio
9.6 | in % | |||||
8.5 | 9.2 | |||||
7.6 | 8.5 | |||||
7.1 | ||||||
6.6 | ||||||
4.7 | 4.9 | |||||
4.0 | 3.2 | 2.5 | 2.4 |
2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 20 H1 |
- Continuously improving asset quality across all geographies and business lines since 2013
- Asset quality has significantly benefitted from strong macroeconomies in Austria and CEE
- NPL ratio at 2.4%, close to historical low in June 2020
- High NPL ratio in the past was mainly due to Romania, Hungary, Croatia and commercial real estate
- Significant amount of NPL sales in 2014-2016 driven mainly by Romania, Hungary and Croatia
Development of NPL coverage
in % | ||||||||||||
91 | ||||||||||||
69 | 69 | 69 | 73 | 77 | ||||||||
65 | ||||||||||||
63 | 60 | 61 | 63 | 63 | ||||||||
57 | ||||||||||||
2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 20 H1 |
- NPL coverage at a historical high of 91.1% in June 2020 excluding collateral
- NPL coverage ratio above 100% in CEE
- Significant increase in coverage ratio in Romania, Hungary and Croatia; Czech Republic and Slovakia traditionally high
- NPL coverage in Austria also increased; currently at 77%
- Significant increase in Q2 2020 driven by forward looking risk provisioning
Page 12
Credit risk -
Gross credit exposure overview
Gross credit exposure by NACE code
Transport & comms Tourism
Other | 3% | 2% | |
Construction | 4% | ||
4% | Households | ||
Services | 28% | ||
5% |
Trade 5%
EUR 289bn
Manufacturing 7% | Jun 20 |
11% | 16% |
Real estate | Financial inst. |
15% | |
Public admin |
Focus exposures (gross)
Industry / | as of | of which | ||
Savings | Comments | |||
Category | June 20 | |||
Banks | ||||
• Demand from construction industry | ||||
Metals | compensated partially for the lower capacities | |||
€ 3.9bn | € 0.9bn | in automotive | ||
• Focus on clients with well diversified product | ||||
and end market portfolios | ||||
Oil & gas | • More than half of exposure is with 6 major oil & | |||
€ 2.7bn | € 0.1bn | gas companies in the region; most of them | ||
entail large downstream operations | ||||
• Slow ramping up of production capacities | ||||
Automotive | € 3.5bn | € 0.9bn | expected in the next months, benefitting from | |
public support schemes | ||||
Cyclical | • Mixed picture, DIY and sports retail profited | |||
from while apparel & fashion is one of the | ||||
consumer | € 4.3bn | € 1.3bn | • | hardest hit |
products | Investments in stores and e-commerce weigh | |||
on margins | ||||
• Short-term work helps to bridge capacity | ||||
Machinery | reductions; order backlog satisfactory but low | |||
€ 4.5bn | € 1.6bn | new order intake | ||
• Impact varies significantly between sub-sectors | ||||
due to the high diversity of the industry | ||||
Passenger | • Segments with a strong link / dependency on | |||
€ 1.3bn | € 0.1bn | tourism industry are particularly hit, a | ||
transportation | prolonged period with no return to pre-crisis | |||
level in the mid-term to be expected | ||||
Hotels & | • Tourism improved after lock-down but 2020 | |||
€ 8.7bn | € 3.4bn | will be significantly below previous years | ||
leisure | • Governmental support of industry in our core | |||
regions AT and CRO |
Page 13
Credit risk -
Further details on selected exposures
Snapshot: real estate | Snapshot: consumer loans | ||||||||
RRE - Non-profit housing associations | Czechia | 3% | |||||||
RRE - Other RRE for rent & sale | Austria Savings banks | 7% | |||||||
19% | 19% | ||||||||
RRE - Development projects | Austria EBOe* | 25% | |||||||
Mixed portfolio | Slovakia | ||||||||
12% | |||||||||
CRE - Office | Croatia | ||||||||
CRE - Retail | 6% | Romania | |||||||
CRE - Other | EUR 34.9bn | Hungary | EUR 10.1bn | ||||||
12% | Serbia | ||||||||
Jun 20 | Jun 20 | ||||||||
6% | 14% | ||||||||
12% | 19% | ||||||||
26% | 17% | 4% | |||||||
- One asset class under particular monitoring: CRE - Retail (12% of our overall Real estate portfolio) as fully closed during lockdown but customer traffic back to 70-90% of pre-Covid-19 levels
- Benign outlook for residential portfolio (with non-profit-housing associations AT making up 2/3 of the portfolio)
- Strong focus (more than 80%) on income producing projects
- Low risk profile: RWA density 53%, LTVs ~60%, NPE ratio = 1.3%
- Exposure focused on capitals and regional centres in CEE markets showing a positive demographic development
- Consumer loan exposure represents 12% of the total retail portfolio exposure of Erste Group
- 30+DPD delinquency rate is at 1.33%, similar to YE19
- 90+ DPD delinquency rate is at 0.63%, similar to YE19 (w/o 180+DPD stock)
- Outlook: moderate deterioration expected that can be handled by strengthened collection capacities and early preparations, such as pre-delinquency communication before the end of the moratoria.
*) Business view distribution before risk transfer, includes exposure classified in various NACE categories. Mixed portfolio includes both residential and commercial assets whose rating is based on financial standing of client rather than asset type or value.
Page 14
Capital position -
Strong fully loaded CET1 ratio of 14.2% with additional cushion
0.55 | 0.17 | 0.27 | 0.12 | 0.07 | 14.22 |
0.40 | |||||
0.30 | |||||
13.72 | Mid term FL CET1 target: 13.5% | ||||
Reg. min CET1 10.2% (MDA | |||||
threshold; P2G excluded) |
YE 19 | ∆ RWA SME | ∆ RWA Other | OCI | Minorities | H1 20 profit H1 20 dividend CET1 - other | Q2 20 |
Supporting | inclusion FY 19 | accrual |
Factor
- Main H1 20 capital/risk-weighted asset trends
- RWA relief from early implementation of SME Supporting Factor in the amount of EUR 4.5bn
- RWA Other: increase in credit RWA from business growth and market risk (-25bps) balanced with decreases in operational risk and other risks (+9bps)
- OCI positions worsening mainly due to decrease in foreign currency translation (-34bps) and the FV changes of debt and equity instruments (-6bps)
- 2019 minority interest profit and H1 20 eligible profit (ex minorities) included
- Accrual of 2020 dividend based on 45% pay-out ratio, approx. EUR 0.32 per share in H1 20 (-12bps)
- CET1 cushion amounts to approx. 90bps at 30 June 2020
- Accrued but unpaid dividends for FY 2019 and H1 20 in the aggregate amount of EUR 782m or 68bps
- Exclusion of H1 20 minorities profit and deduction of minorities risk costs in the aggregate amount of EUR 217m or 19bps
Page 15
Capital position -
Erste Group applies regulatory quick fixes conservatively
Quick Fix | Applied by | From | Phased-in/ | Estimated impact | Comment |
Erste Group | Fully loaded | on CET1 ratio* | |||
SME Supporting | Q2 20 | Fully loaded | +55 bps | Regulator pulled forward permanent | |
Factor | introduction from 2021 to Q2 20 | ||||
Sovereigns in EU | |||||
currency (STD | Q2 20 | Phased-in | +12 bps | ||
approach) | |||||
Sovereigns in EU | |||||
currency (IRB | H2 20 | Phased-in | +14 bps | ||
approach) | |||||
Software | Q1 21 | Fully loaded | +10-15 bps** | ||
Retail loans backed by | H1 21 | Fully-loaded | No impact | ||
pensions | |||||
Leverage ratio and | +62 bps on leverage | Erste Group boasts strong leverage ratio | |||
exclusion of central | Q2 20 | Phased-in | |||
ratio | (>6%), hence no need for application | ||||
banks | |||||
FVTOCI debt securities | Q2 20 | Phased-in | + 1 bp | Immaterial impact, hence no application | |
IFRS9 provisions for | Impact calculation not | Erste Group adopted fully loaded IFRS9 | |||
expected credit losses | Q2 20 | Phased-in | |||
yet available | approach right from inception in 2019 | ||||
(ECL) | |||||
* Impact calculation based on Q2 20 RWA, ** Final regulatory technical standard not yet available | |||||
Page 16
Conclusion -
Key takeaways and outlook for 2020
Operating
environment
Business
performance
Credit risk
Capital position
Profitability
Risk factors to
guidance
Q2 20 key takeaways
- From mid-March COVID-19 lockdowns caused standstill in social and economic life
- Reopening of economies from May/June
- Finetuning of health & economic protection measures
- NII held up yoy, while fees suffered from lower economic activity during lockdowns
- Full recovery of trading/FV result
- Cost reduction due to reduced other admin expenses
- Erste Group addressed Covid-19 risk provisioning challenge head on by providing 148bps in Q2 20, based on macro and vulnerable industries overlay, minor portfolio deterioration
- Fully loaded CET 1 ratio at record 14.2%, despite continued dividend accrual for 2020
- SME supporting factor contributed to strong capital performance
- Profitability declined due to forward-looking provisioning and weaker core topline
2020 outlook
- COVID-19lockdowns redefine macro outlook
- Real GDP decline of between 4-9%expected in 2020, followed by recovery in 2021
- CEE-wideconcerted fiscal mitigation efforts
- Challenged revenue outlook amid economic downturn, rate cuts, expenses to improve
- Lower organic growth, protected growth (guarantees) and freezing of good portfolio through moratoria
- 2020e risk costs at approx. 65-80bps (of average gross customer loans)
- Aim to frontload as much as is justifiable in 2020
- CET1 ratio is expected to remain strong with significant cushion in case of worse than expected economic performance
- Medium-termCET1 target of 13.5% unchanged
- Net result expected meaningfully lower than in 2019
- Management intends to pay dividend both for 2019 and 2020, subject to business conditions and to regulatory approval
- Longer than expected duration of COVID-19 crisis
- Political or regulatory measures against banks
- Geopolitical, global economic and global health risks
- Economic downturn may put goodwill at risk
Page 17
Presentation topics
- Addressing the key questions in an uncertain environment
- CEE Covid-19 evolution update
- Macroeconomic update
- Business update
- Operating trends
- Asset quality and impairments
- Capital trends and dividends
- Key takeaways and outlook
- Q2 20 presentation
- Executive summary
- Business environment
- Business performance
- Assets and liabilities
-
Additional information
• Covid-19 measures update
Page 18
Executive summary -
Group income statement performance
QoQ net profit reconciliation (EUR m) | YoY net profit reconciliation (EUR m) | |
-75.1% |
108 |
146 |
235 |
552 |
86 |
Q1 20 Operating Operating Risk costs | Other |
income expenses | result |
66 30 58
Taxes on Minorities Q2 20 income
-59.9% | |
732 | |
121 | 31 |
718 | |
168 |
1-619 Operating Operating Risk costs | Other |
income expenses | result |
294
129
72
Taxes on Minorities 1-620 income
- Q2 20 net result declined to EUR 58.5m on higher risk costs due to Covid-19 induced update of risk parameters
- Improvement in operating income driven by rebound of trading/FV result after negative valuation effects occurred in Q1 20; more than offsets lower NII and fees
- Other result improves on non-recurrence of resolution fund contributions as well as HU banking levy
- Yoy net profit mainly down on substantial rise in risk costs driven by parameter updates
- Operating income declined mainly on trading/FV result following an exceptional performance in H1 19; improving NII (+2.9%) offsets weaker fees (-2.4%), while operating expenses improve slightly
- Other result improves on neg. one-off in RO in H1 19
Page 19
Executive summary -
Key income statement data
Net interest income & margin | Operating result & cost/income ratio | |||||||||||||||||||||||||||||
in EUR m | -6.2% | in EUR m | ||||||||||||||||||||||||||||
2,330 | 2,397 | |||||||||||||||||||||||||||||
2.18% | 1,447 | 1,357 | 66.8% | |||||||||||||||||||||||||||
2.18% | 2.04% | |||||||||||||||||||||||||||||
2.10% | ||||||||||||||||||||||||||||||
55.5% | ||||||||||||||||||||||||||||||
805 | ||||||||||||||||||||||||||||||
1,229 | 1,168 | 552 | ||||||||||||||||||||||||||||
1-6 19 1-6 20 Q1 20 Q2 20 1-6 19 1-6 20 Q1 20 Q2 20
Banking levies | Reported EPS & ROE | |
in EUR m | in EUR |
Cost of risk | |||
in EUR m | |||
614 | |||
675 | 1.48% | ||
0.15% | |||
62 | |||
-43 | |||
1-6 19 | 1-6 20 | Q1 20 | Q2 20 |
Return on tangible equity
83 | 10.2% | |||||||||||||||||||||||||||||||||
6.6% | ||||||||||||||||||||||||||||||||||
65 | 3.4% | |||||||||||||||||||||||||||||||||
11.5% | ||||||||||||||||||||||||||||||||||
50 | 33 | 1.63 | 0.57 | 0.55 | 0.2% | 3.8% | 7.3% | 0.2% | ||||||||||||||||||||||||||
0.02 | ||||||||||||||||||||||||||||||||||
1-6 19 | 1-6 20 | Q1 20 | Q2 20 | 1-6 19 | 1-6 20 | Q1 20 | Q2 20 | 1-6 19 | 1-6 20 | Q1 20 | Q2 20 | |||||||||||||||||||||||
Page 20
Executive summary -
Group balance sheet performance
YTD total asset reconciliation (EUR m)
+7.7% | ||
37 | 264,692 | |
3,467 | 94 | |
4,363 | ||
3,373 | ||
7,740 | ||
245,693 |
31/12/19 Cash | Trading, | Loans to | Net loans Intangibles Miscella- 30/06/20 |
financial | banks | neous | |
assets | assets |
YTD equity & total liability reconciliation (EUR m)
+7.7% | ||
264,692 | ||
940 | 723 | |
1,232 | ||
8,824 | ||
8,844 | ||
245,693 | 316 | |
31/12/19 Trading | Bank | Customer Debt Miscellaneous Equity 30/06/20 |
liabilities | deposits | deposits * securities liabilities |
- Total assets up by 7.7%, mainly driven by a substantial increase in cash (+72.4%), while net loans to customers increased by 2.2%
- Increase in cash attributable to AT (liquidity placed at central banks) and to CZ (rise in cash position mirrors development in interbank and customer deposits)
- Total liability growth driven by a continuation of rising customer deposits (+5.1%) and bank deposits (+67.3%)
- Growing customer deposits result in a loan/deposit ratio of 89.6% (YE19: 92.2%)
- Increase in equity mainly attributable to the issuance of AT1 instruments (+EUR 497m) in Q1 20
- excl. lease liabilities as of 2020
Page 21
Executive summary -
Key balance sheet data
Loan/deposit & loan/TA ratio
92.2% 89.6%
65.2% 61.9%
Loan/deposit ratio | Loans/total assets |
Net loans & credit RWA
in EUR bn
+2.2%
160.3 163.7
100.4 97.0
Net loans | Credit RWA |
31/12/19 30/06/20
NPL coverage ratio & NPL ratio
91.1%
77.1%
2.5% 2.4%
NPL coverage | NPL ratio |
B3FL capital ratios
18.5% 19.1%
13.7% 14.2%
Total capital | CET 1 |
B3FL capital & tangible equity1
in EUR bn
16.3 16.4
12.8 13.0
CET 1 | Tangible equity |
- Based on shareholders' equity, not total equity
Liquidity coverage & leverage ratio2
161.7%
148.0%
6.8% 6.6%
LCR | LR (B3FL) |
2) Pursuant to Delegated Act
Page 22
Presentation topics
- Addressing the key questions in an uncertain environment
- CEE Covid-19 evolution update
- Macroeconomic update
- Business update
- Operating trends
- Asset quality and impairments
- Capital trends and dividends
- Key takeaways and outlook
- Q2 20 presentation
- Executive summary
- Business environment
- Business performance
- Assets and liabilities
-
Additional information
• Covid-19 measures update
Page 23
Business environment -
Recession in 2020 due to Coronavirus; rebound expected in 2021
2020 2021
Real GDP growth (in %) | Dom. demand contribution* (in %) | Net export contribution* (in %) | Consumer price inflation (avg, in %) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7.1 | 5.4 | 6.4 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
4.2 | 4.5 | 3.9 | 4.1 | 4.2 | 5.0 | 3.3 | 4.2 | 4.7 | 3.0 | 2.8 | 3.4 | 3.1 | 2.9 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
0.7 | 0.9 | 0.6 1.2 | 0.6 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
1.4 | 1.8 2.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
-0.1 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
-0.5 | 1.0 | 0.9 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
-4.7 | -4.6 | -2.5 | -2.2 | -1.3 | 0.8 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
-6.0 | -1.9 | -2.4 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
-7.0 | -4.2 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
-7.5 | -4.7 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
-9.0 | -5.6 | -5.9 | -4.5 | -4.3 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
AT | CZ | SK RO | HU HR | AT CZ SK | RO HU HR | AT | CZ SK RO | HU HR | -0.2 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• Erste Group's markets to decline by 4-9% in 2020; significant rebound expected in 2021 | AT CZ | SK RO HU HR | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• Both exports and consumption will suffer in 2020; hardest hit industries expected to be tourism, services, transport, and retail trade
• Inflation to moderate due to economic shock in 2020; expected CPIs still below pre COVID-19 levels
Unemployment rate (avg, in %) | Current account balance (% of GDP) | Gen gov balance (% of GDP) | Public debt (% of GDP) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
13.2 | 2.0 | 88 | 85 | 89 | 87 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
10.4 | 1.0 | 0.3 | 73 70 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
0.2 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
8.3 8.5 | 8.5 | 60 60 | 60 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
6.2 | 5.8 | 5.9 | 41 44 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
5.1 4.9 | -0.9 | -2.8 | -3.2 | -3.0 | 39 41 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
4.5 4.8 | -4.3 | -4.3 | -3.8 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
-1.5 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
-5.2 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
-2.1 | -5.9 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
-2.7 | -2.6 | -3.1 | -8.1 | -7.3 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
-8.5 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
-3.5 | -3.5 | -9.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
AT CZ SK | RO HU HR | AT | CZ SK RO | HU HR | AT | CZ | SK | RO HU | HR | AT | CZ | SK RO HU HR |
- Unemployment rates will increase across the region in 2020
- Lower tax revenues and higher social payments will lead to rising fiscal deficits
* Contribution to real GDP growth. Domestic demand contribution includes inventory change. Source: Erste Group Research, EU Commission
Page 24
Business environment -
Policy rate cuts in across CEE
Austria | Czech Republic | |
3M Interbank 10YR GOV
Romania
0.30% | |||
-0.11% | -0.15% | -0.08% | |
-0.31% | -0.35% | -0.41% | -0.30% |
1-6 19 | 1-6 20 | Q1 20 | Q2 20 |
- ECB has kept its discount rate at zero & significantly increased quantitative easing as response to Coronavirus
1.82% | 2.15% | ||
1.37% | |||
2.07% | |||
0.58% | |||
1.45% | |||
1.22% | 1.00% | ||
1-6 19 | 1-6 20 | Q1 20 | Q2 20 |
- National bank has cut the base rate in three steps by 200bps to 0.25% in March & May 2020
4.80% | 4.37% | 4.34% | 4.41% |
3.04% | 2.56% | 2.87% | 2.24% |
1-6 19 | 1-6 20 | Q1 20 | Q2 20 |
- Central bank cut the key policy rate in two steps by 75bps to 1.75% in March & May 2020
Slovakia | Hungary | Croatia | ||
0.65% | 0.43% | |||||||
0.26% | 0.09% | 2.94% | 2.22% | 2.23% | ||||
2.22% | ||||||||
0.97% | ||||||||
-0.31% | -0.35% | -0.41% | -0.30% | 0.16% | 0.69% | 0.41% | ||
1-6 19 | 1-6 20 | |||||||
1-6 19 | 1-6 20 | Q1 20 | Q2 20 | Q1 20 | Q2 20 | |||
• As part of the euro zone ECB rates and | • National bank cut the key policy rate in two | |||||||
actions are applicable in SK | steps by 30bps to 0.60% in June & July | |||||||
2020 |
Source: Bloomberg, Reuters for SK 10Y. Annual and quarterly averages.
1.95% | 0.95% |
0.66% | |
0.80% |
1-6 19 | 1-6 20 | Q1 20 | Q2 20 |
- Croatia joined ERM II in July 2020
- Central bank cut its 1w repo from 0.3% to 0.05% in March 2020
Page 25
Business environment -
CEE currencies have weakened versus the euro since COVID-19 outbreak
EUR/CZK
+2.6% | +5.5% | +4.8% | |||
25.7 | 26.4 | 25.7 | 27.1 | 25.4 | 26.7 |
1-6 19 | 1-6 20 | Q1 20 | Q2 20 | 31/12/19 30/06/20 |
- CZK reached its weakest level in March 2020 since 2014; benchmark rate cut in three steps from 2.25% to 0.25% in March & May 2020
EUR/RON
+1.6% | +0.8% | +1.0% | |||
4.74 | 4.82 | 4.80 | 4.84 | 4.79 | 4.84 |
1-6 19 | 1-6 20 | Q1 20 | Q2 20 | 31/12/19 30/06/20 |
- RON depreciated significantly and remained close to its all time low in H1 2020; policy rate cut by 75bps to 1.75% in March & May 2020
EUR/HUF
+7.8% | +3.6% | +7.0% | |||
320.5 | 345.4 | 339.2 | 351.6 | 331.2 | 354.3 |
1-6 19 | 1-6 20 | Q1 20 | Q2 20 | 31/12/19 30/06/20 |
- HUF reached all time low versus the euro in early April but stabilised since then; key policy rate was cut by 30bps to 0.60% in
June & July 2020
Source: Bloomberg
EUR/HRK
+1.6% | +1.2% | +1.7% | |||
7.42 | 7.54 | 7.49 | 7.58 | 7.44 | 7.57 |
1-6 19 | 1-6 20 | Q1 20 | Q2 20 | 31/12/19 30/06/20 |
- HRK depreciated to its weakest level in April 2020 since 2016; 1w repo was cut to 0.05% in March 2020
Page 26
Business environment -
Stable market shares across the region
Gross retail loans | Gross corporate loans | |||||||||||||||||||||||
20.7% | 21.7% | |||||||||||||||||||||||
AT | 20.5% | AT | 21.9% | |||||||||||||||||||||
23.5% | 21.5% | |||||||||||||||||||||||
CZ | 23.8% | CZ | 21.0% | |||||||||||||||||||||
23.8% | 21.1% | |||||||||||||||||||||||
26.3% | 14.8% | |||||||||||||||||||||||
SK | 26.0% | SK | 15.8% | |||||||||||||||||||||
26.0% | 16.3% | |||||||||||||||||||||||
16.8% | 11.3% | |||||||||||||||||||||||
RO | 16.7% | RO | 12.2% | |||||||||||||||||||||
16.9% | 12.8% | |||||||||||||||||||||||
11.5% | 7.2% | |||||||||||||||||||||||
HU | 11.8% | HU | 7.9% | |||||||||||||||||||||
11.9% | 7.8% | |||||||||||||||||||||||
13.9% | 19.0% | |||||||||||||||||||||||
HR | 13.9% | HR | 20.7% | |||||||||||||||||||||
13.8% | 20.6% | |||||||||||||||||||||||
7.0% | 6.1% | |||||||||||||||||||||||
RS | 7.4% | RS | 6.5% | |||||||||||||||||||||
7.3% | 6.8% | |||||||||||||||||||||||
30/06/19 | |||||||||||||||||||||
31/03/20 | |||||||||||||||||||||
30/06/20 | |||||||||||||||||||||
Retail deposits | Corporate deposits | ||||||||||||||||||||
20.3% | 21.8% | ||||||||||||||||||||
AT | 20.8% | AT | 23.9% | ||||||||||||||||||
25.6% | 12.3% | ||||||||||||||||||||
CZ | 25.4% | CZ | 12.3% | ||||||||||||||||||
25.4% | 12.7% | ||||||||||||||||||||
28.1% | 15.0% | ||||||||||||||||||||
SK | 28.3% | SK | 12.3% | ||||||||||||||||||
28.4% | 12.5% | ||||||||||||||||||||
15.2% | 14.8% | ||||||||||||||||||||
RO | 14.6% | RO | 14.7% | ||||||||||||||||||
14.7% | 13.6% | ||||||||||||||||||||
9.6% | 5.8% | ||||||||||||||||||||
HU | 10.3% | HU | 6.5% | ||||||||||||||||||
10.4% | 6.5% | ||||||||||||||||||||
14.3% | 14.8% | ||||||||||||||||||||
HR | 14.8% | HR | 16.1% | ||||||||||||||||||
14.5% | 15.1% | ||||||||||||||||||||
4.1% | 6.6% | ||||||||||||||||||||
RS | 4.5% | RS | 7.2% | ||||||||||||||||||
4.5% | 6.9% | ||||||||||||||||||||
- CZ: increasing yoy market share in a growing market
- RO: increasing market shares driven mainly by mortgages
- SK: declining yoy market share caused by aggressive pricing by some of the smaller competitors
- SK: increasing market shares in both Large Corporate and SME segments
- RO: increasing market share mainly in SME segment
- HR: increasing yoy market share driven by strong SME business
• | Continued inflows in all markets | • | Changes mainly due to normal |
despite low interest rate | quarterly volatility in corporate | ||
environment | business | ||
• | Stable qoq market shares | • | SK: yoy market share decline |
across the region | mainly in the large corporate |
segment due to pricing
* 30/06/2020 market share data for Austria not yet available
Page 27
Presentation topics
- Addressing the key questions in an uncertain environment
- CEE Covid-19 evolution update
- Macroeconomic update
- Business update
- Operating trends
- Asset quality and impairments
- Capital trends and dividends
- Key takeaways and outlook
- Q2 20 presentation
- Executive summary
- Business environment
- Business performance
- Assets and liabilities
-
Additional information
• Covid-19 measures update
Page 28
Business performance: performing loan stock & growth -
Performing loans continued to grow, supported by state guarantees
YoY 30/06/19
QoQ 31/03/20
30/06/20
154.2 | 5.9% | ||
Group | 160.3 | ||
1.9% | |||
163.3 | |||
33.2 | 3.7% | ||
AT/EBOe | 34.4 | ||
0.3% | |||
34.5 | |||
44.5 | 6.8% | ||
AT/SB | 46.9 | ||
1.5% | |||
47.6 | |||
14.2 | 14.9% | ||
AT/OA | 15.3 | ||
6.8% | |||
16.4 | |||
28.8 | -0.6% | ||
CZ | 28.2 | ||
1.7% | |||
28.6 | |||
8.0 | 5.5% | ||
RO | 8.5 | ||
-0.6% | |||
8.4 | |||
13.4 | 8.6% | ||
SK | 14.2 | ||
2.2% | |||
14.5 | |||
4.2 | 12.1% | ||
HU | 4.6 | ||
1.5% | |||
4.7 | |||
6.4 | 7.4% | ||
HR | 6.7 | ||
2.9% | |||
6.8 | |||
1.3 | 23.5% | ||
RS | 1.5 | ||
6.8% | |||
1.7 | |||
0.0 | |||
Other | 0.1 | Not meaningful | |
0.1 | in EUR bn |
- Yoy development more pronounced in Corporates (+7.9%) than in Retail (+3.3%); solid contribution from Savings Banks
- Qoq growth balanced between Retail and Corporates (+1.7% each)
- Year-on-yearsegment trends:
- AT/OA: solid contributions both from Large Corporates and Commercial Real Estate
- HU: strong growth both in Retail (+14.9%) and in Corporates (+8.6%)
- CZ: growth in Retail could not offset decline in Corporates business
- RS: continuation of dynamic growth
- Quarter-on-quartersegment trends:
- Growth momentum decelerated amid COVID-19 induced economic downturn
- AT/OA: Continuation of growth in Commercial Real Estate and Large Corporates business
- RO: Retail business expands slightly while Corporates decline
Page 29
Business performance: customer deposit stock* & growth -
Deposit build-up continues in Q2 20
YoY 30/06/19
QoQ 31/03/20
30/06/20
169.7 | ||
Group | 181.7 | |
182.7 | ||
36.5 | ||
AT/EBOe | 38.3 | |
39.8 | ||
47.8 | ||
AT/SB | 51.0 | |
53.0 | ||
5.8 | ||
AT/OA | 8.2 | |
5.2 | ||
41.2 | ||
CZ | 43.6 | |
42.8 | ||
11.8 | ||
RO | 12.2 | |
12.3 | ||
13.9 | ||
SK | 14.0 | |
14.4 | ||
6.2 | ||
HU | 6.3 | |
6.7 | ||
6.7 | ||
HR | 7.3 | |
7.5 | ||
1.1 | ||
RS | 1.3 | |
1.4 | ||
-1.2 | ||
Other | -0.4 | |
-0.4 | in EUR bn |
* Excludes lease liabilities as of 2020
7.7% |
0.5% |
9.1% |
3.9% |
11.1% |
4.1% |
-10.8% |
-36.3% |
4.1% |
-1.7% |
4.6% |
0.8% |
3.1% |
2.6% |
7.9% |
6.2% |
11.8% |
2.5% |
26.4% |
7.4% |
Not meaningful |
- Continuation of exceptional deposit growth across most geographies despite zero/low interest rate environment as retail and corporate clients park cash in overnight accounts
- Yoy growth in absolute terms mainly driven by Retail segment (+EUR 5.6bn) and Corporates (+EUR 3.7bn); solid contribution from Savings Banks (+EUR 5.3bn)
- Qoq increase across most geographies
- Year-on-yearsegment trends:
- AT/OA: decrease in Group Markets business
- AT/SB: increase across all savings banks
- AT/EBOe: solid growth in Retail (+6.5%) combined with strong development in Corporates (+17.3%; partially due to shift from Retail to Corporates of approx. EUR 500m)
- RS: exceptional growth both in Corporates (+48.7%) and in Retail (+25.1%)
- Quarter-on-quartersegment trends:
- AT/OA: temporary increase in foreign branches (in particular in New York) in Q1 20
- CZ: growth in Retail (+5.9%) and Corporates (+13.5%) did not offset decline in Group Markets (money market deposits)
- HU: growth in Retail (+7.4%) more pronounced than in Corporates (+4.4%)
Page 30
Business performance: NII and NIM -
NII flat yoy, down qoq mainly on rate cuts and FX effect in CZ
Q2 19
Q1 20 Q2 20
1,169 | 2.18% | ||
Group | 1,229 | 2.18% | |
1,168 | 2.04% | ||
156 | 1.56% | ||
AT/EBOe | 161 | 1.51% | |
160 | 1.56% | ||
260 | 1.76% | ||
AT/SB | 267 | 1.72% | |
265 | 1.69% | ||
90 | 0.97% | ||
AT/OA | 112 | 1.13% | |
114 | 1.10% | ||
278 | 2.04% | ||
CZ | 292 | 2.14% | |
242 | 1.70% | ||
107 | 3.44% | ||
RO | 112 | 3.38% | |
109 | 3.35% | ||
109 | 2.59% | ||
SK | 111 | 2.51% | |
109 | 2.42% | ||
52 | 2.73% | ||
HU | 55 | 2.71% | |
49 | 2.22% | ||
69 | 3.13% | ||
HR | 69 | 3.06% | |
66 | 2.89% | ||
14 | 3.44% | ||
RS | 15 | 3.24% | |
15 | 3.06% | ||
34 | |||
Other | 35 | Not meaningful | |
39 | in EUR m |
- Yoy NII development shows decline in CZ due to rate cuts and CZK depreciation; offset by improvements in AT, RO and
RS - Qoq decline mainly due to lower NII in CZ (see above); weaker development across geographies due to Covid-19 induced crisis and neg. impact from modification losses due to deferred loan repayments
- Year-on-yearsegment trends:
- CZ: decline in NII mainly driven by lower interest rate environment (3 rate cuts in March and May 2020); FX impact EUR -15.4m
- AT/OA: Group Markets business benefits from higher money markets trading, and improvements in the corporate business of the Holding driven by higher customer loan volumes
- Quarter-on-quartersegment trends:
- CZ: NII declines mainly driven by rate cuts and lower volume of repo operations; FX impact EUR -16.7m
- Other geographies: negative impact from Covid-19 induced crisis
Page 31
Business performance: operating income -
Rebounding trading and FV result in Q2 20
YoY Q2 19
QoQ Q1 20
Q2 20
1,821 | -0.7% | ||||
Group | 1,663 | 8.8% | |||
1,809 | |||||
AT/EBOe | 286 | -1.3% | |||
281 | 0.2% | ||||
282 | |||||
405 | 6.1% | ||||
AT/SB | 353 | ||||
21.8% | |||||
430 | |||||
164 | 45.1% | ||||
AT/OA | 86 | ||||
177.6% | |||||
238 | |||||
406 | -15.4% | ||||
CZ | 391 | ||||
-12.2% | |||||
343 | |||||
RO | 175 | -7.2% | |||
165 | |||||
-1.1% | |||||
163 | |||||
SK | 154 | -1.6% | |||
142 | 6.3% | ||||
151 | |||||
110 | -12.5% | ||||
HU | 108 | ||||
-11.1% | |||||
96 | |||||
108 | -10.2% | ||||
HR | 98 | ||||
-0.2% | |||||
97 | |||||
19 | 5.8% | ||||
RS | 20 | ||||
0.1% | |||||
20 | |||||
-6 | 19 | ||||
Other | Not meaningful | ||||
-12 | in EUR m |
- Yoy development relatively stable as improvements in trading and FV result almost offset weaker fee income
- Qoq improvement almost solely due to rebound of trading and FV result, offsetting decline in NII (-5.0%) and fees (-10.3%); fee development hit by Covid-19 induced crisis (Lockdown) resulting in lower payments as well as securities and insurance related fees
- Year-on-yearsegment trends:
- AT/SB: operating income improves mainly on trading/FV result due to valuation effects, minor increase in NII and fees
- AT/OA: better NII and trading/FV result (due to weaker trading performance in Q2 19) as fees decline on lower securities fees related income
- CZ: development mainly driven by lower NII due to lower repo business and rate cuts as well as weaker fee income and FX impact
- Quarter-on-quartersegment trends:
- AT/SB: strong improvement due to trading and FV result, offsetting decline in fee income (mainly securities and insurance fees)
- AT/OA: recovery in Group Markets business after significant trading and FV losses in Q1 20, offsetting lower fee income, mainly from security related fees
- CZ: see above; improvement in trading and FV result
Page 32
Business performance: operating expenses -
Cost discipline results in improved cost performance
YoY Q2 19
QoQ Q1 20
Q2 20
1,030 | -2.6% | ||||
Group | 1,111 | -9.7% | |||
1,003 | |||||
AT/EBOe | 166 | -1.4% | |||
189 | |||||
-13.1% | |||||
164 | |||||
264 | -0.4% | ||||
AT/SB | 293 | ||||
-10.5% | |||||
263 | |||||
95 | -8.8% | ||||
AT/OA | 90 | ||||
-4.3% | |||||
86 | |||||
183 | -3.6% | ||||
CZ | 195 | ||||
-9.6% | |||||
177 | |||||
RO | 84 | -3.1% | |||
86 | |||||
-5.3% | |||||
81 | |||||
68 | 6.0% | ||||
SK | 73 | ||||
-2.0% | |||||
72 | |||||
51 | 2.2% | ||||
HU | 59 | ||||
-11.9% | |||||
52 | |||||
57 | -4.8% | ||||
HR | 57 | ||||
-4.0% | |||||
54 | |||||
15 | -0.9% | ||||
RS | 13 | ||||
14.5% | |||||
15 | |||||
48 | |||||
Other | 56 | Not meaningful | |||
40 | in EUR m |
- Yoy costs down despite wage inflation
- Qoq improvement mainly on booking of deposit insurance contributions in Q1 20 (EUR 88.3m); decline in IT, consulting and marketing expenses offsets slightly higher personnel expenses
- Year-on-yearsegment trends:
- AT/OA: improvement driven by lower IT costs in the Holding business
- CZ: declining operating expenses due to CZK depreciation; personnel expenses increase on higher salaries, while marketing expenses decrease in local currency
- Quarter-on-quartersegment trends:
- AT/EBOe: improvement in cost performance reflect non- recurrence of deposit insurance contributions; reduction of marketing expenses while personnel expenses increase slightly
- AT/SB: operating expenses decline on bookings of deposit insurance contributions in Q1 20; lower expenses for office space, consultancy and personnel offset higher IT expenses
- CZ: non-recurrence of deposit insurance contribution more than offsets increase in personnel and office space expenses; pos. FX impact of EUR 10.7m
Page 33
Business performance: operating result and CIR -
CIR at 55.5% in Q2 20
YoY Q2 19
QoQ Q1 20
Q2 20
Operating result
791 | |||||||||||
Group | 552 | ||||||||||
805 | |||||||||||
AT/EBOe | 119 | ||||||||||
93 | |||||||||||
118 | |||||||||||
142 | |||||||||||
AT/SB | 60 | ||||||||||
167 | |||||||||||
AT/OA | -5 | 69 | |||||||||
151 | |||||||||||
CZ | 223 | ||||||||||
195 | |||||||||||
167 | |||||||||||
RO | 92 | ||||||||||
79 | |||||||||||
82 | |||||||||||
86 | |||||||||||
YoY & QoQ change
1.8% 46.0%
-1.1%
27.5%
18.2%
181.0%
119.2%
-3,341.6%
-25.2%-14.8%
-10.9%
3.4%
Cost/income ratio
56.6%
66.8%
55.5%
58.2%
67.1%
58.1%
65.1%
83.1%
61.1% 57.9%
36.3%
45.1%
50.0%
51.5%
47.8%
52.1%
49.9%
44.0%
SK | 69 | |||
80 | ||||
HU | 59 | |||
50 | ||||
45 | ||||
HR | 51 | |||
41 |
-7.5%
-24.9%-10.3%
-16.2%
15.1%
51.4%
47.3%
46.0%
54.2%
53.7%
52.8%
58.1%
43 |
4 |
4.9%
55.9%
78.3%
RS | 7 | ||||
Other | -54 | 5 | |||
-37 | in EUR m | ||||
-52 | |||||
-25.5%
30.1%
Not meaningful
64.1%
73.3%
Not meaningful
Page 34
Business performance: risk costs (abs/rel*) -
Risk cost development in line with guidance
Q2 19
Q1 20 Q2 20
Group | -7 | 62 | -0.02% | 0.15% | |||||||||||||||||||||||||||||||||||||||||
-5 | 614 | -0.06% | 1.48% | ||||||||||||||||||||||||||||||||||||||||||
AT/EBOe | 22 | 60 | 0.25% | ||||||||||||||||||||||||||||||||||||||||||
-0.08% | 0.68% | ||||||||||||||||||||||||||||||||||||||||||||
AT/SB | -9 | 15 | 0.12% | ||||||||||||||||||||||||||||||||||||||||||
126 | 1.02% | ||||||||||||||||||||||||||||||||||||||||||||
6 | 0.15% | ||||||||||||||||||||||||||||||||||||||||||||
AT/OA | 27 | 0.69% | |||||||||||||||||||||||||||||||||||||||||||
84 | 2.06% | ||||||||||||||||||||||||||||||||||||||||||||
3 | 0.04% | ||||||||||||||||||||||||||||||||||||||||||||
CZ | 24 | 112 | 0.34% | ||||||||||||||||||||||||||||||||||||||||||
-10 | 1.54% | ||||||||||||||||||||||||||||||||||||||||||||
-0.48% | |||||||||||||||||||||||||||||||||||||||||||||
RO | -44 | 80 | -2.01% | 3.60% | |||||||||||||||||||||||||||||||||||||||||
16 | 0.47% | ||||||||||||||||||||||||||||||||||||||||||||
SK | 11 | 52 | 0.31% | ||||||||||||||||||||||||||||||||||||||||||
1.41% | |||||||||||||||||||||||||||||||||||||||||||||
-10 | -0.93% | ||||||||||||||||||||||||||||||||||||||||||||
HU | -4 | 54 | -0.35% | 4.89% | |||||||||||||||||||||||||||||||||||||||||
4 | 0.21% | ||||||||||||||||||||||||||||||||||||||||||||
HR | 12 | 0.68% | |||||||||||||||||||||||||||||||||||||||||||
41 | 2.25% | ||||||||||||||||||||||||||||||||||||||||||||
1 | 0.36% | ||||||||||||||||||||||||||||||||||||||||||||
RS | 2 | 0.46% | |||||||||||||||||||||||||||||||||||||||||||
6 | 1.45% | ||||||||||||||||||||||||||||||||||||||||||||
Other | -2 | ||||||||||||||||||||||||||||||||||||||||||||
-3 | 0 | in EUR m | Not meaningful | ||||||||||||||||||||||||||||||||||||||||||
- Yoy and qoq risk cost development driven by update of risk parameters to reflect deteriorated macro outlook following Covid-19 induced crisis
- Risk costs for half-year 2020 at 82bps
- Year-on-yearsegment trends:
- AT/EBOe: higher risk costs in Corporates than in Retail
- AT/SB: risk costs increase across all savings banks
- CZ: increase in risk costs more pronounced in Retail than in Corporates
- Quarter-on-quartersegment trends:
- see above (Covid-19 significant increase in credit risk overlay and forward-looking information due to new macro assumptions)
*) A positive (absolute) figure denotes risk costs, a negative figure denotes net releases. Relative risk costs are calculated as annualised quarterly impairment result of financial instruments over average gross customer loans.
Page 35
Business performance: non-performing loans and NPL ratio -
NPL ratio stable at 2.4%
30/06/19
31/03/20 30/06/20
4,476 | 2.8% | ||
Group | 3,944 | 2.4% | |
4,043 | 2.4% | ||
500 | 1.5% | ||
AT/EBOe | 479 | 1.4% | |
453 | 1.3% | ||
1,454 | 3.2% | ||
AT/SB | 1,301 | 2.7% | |
1,280 | 2.6% | ||
397 | 2.7% | ||
AT/OA | 321 | 2.1% | |
328 | 2.0% | ||
505 | 1.7% | ||
CZ | 499 | 1.7% | |
532 | 1.8% | ||
469 | 5.5% | ||
RO | 321 | 3.7% | |
400 | 4.5% | ||
445 | 3.2% | ||
SK | 411 | 2.8% | |
406 | 2.7% | ||
131 | 3.0% | ||
HU | 105 | 2.2% | |
99 | 2.1% | ||
541 | 7.8% | ||
HR | 469 | 6.6% | |
508 | 6.9% | ||
20 | 1.5% | ||
RS | 20 | 1.3% | |
19 | 1.2% | ||
13 | |||
Other | 17 | in EUR m | Not meaningful |
17 |
- NPL volume at EUR 4.0bn in Q2 20. NPL volume development driven by:
- Decelerating level of recoveries and upgrades partially offsets gross new inflows
- NPL sales of EUR 10.6m in Q2 20 (Q1 20: EUR 36.2m)
- Retail: EUR 2.3m (Q1 20: EUR 29.0m)
- Corporates: EUR 8.3m (Q4 19: EUR 7.2m)
- Q2 20 NPL sales mainly in Romania, the Czech Republic and on Holding level
Page 36
Business performance: allowances for loans and NPL coverage -
NPL coverage rises to 91.1%
30/06/19
31/03/20 30/06/20
3,362 | 75.4% | ||
Group | 3,171 | 80.9% | |
3,662 | 91.1% | ||
308 | 61.7% | ||
AT/EBOe | 299 | 62.5% | |
333 | 73.6% | ||
914 | 62.9% | ||
AT/SB | 866 | 66.7% | |
948 | 74.2% | ||
243 | 62.5% | ||
AT/OA | 222 | 73.2% | |
296 | 95.3% | ||
495 | 98.1% | ||
CZ | 496 | 99.3% | |
598 | 112.4% | ||
483 | 103.2% | ||
RO | 405 | 126.1% | |
469 | 117.4% | ||
346 | 77.7% | ||
SK | 338 | 82.1% | |
389 | 95.8% | ||
115 | 88.1% | ||
HU | 106 | 102.0% | |
148 | 151.2% | ||
424 | 78.3% | ||
HR | 392 | 83.5% | |
427 | 84.1% | ||
27 | 134.8% | ||
RS | 31 | 152.0% | |
36 | 187.0% | ||
8 | |||
Other | 16 | Not meaningful | |
16 | in EUR m |
- NPL coverage increases yoy and qoq due to rising allowances
- Year-on-yearsegment trends:
- Allocations of allowances in performing portfolio resulted in higher NPL coverage across all segments
- Quarter-on-quartersegment trends:
- AT/EBOe, AT/SB, SK, HU: coverage improvement driven by slight decrease in NPLs paired with higher loan loss allowances (mostly triggered by the transfer to stage 2 as a result of Covid- 19 significant increase in credit risk overlay and forward-looking information due to new macro assumptions)
- CZ, HR: Increase of loan loss allowances at a faster pace than increase in NPLs resulted in higher NPL coverage; development of allowances mainly driven by additional bookings for performing portfolios (Covid-19 significant increase in credit risk overlay and forward-looking information due to new macro assumptions), but also by allocations for new defaults
Page 37
Business performance: other result -
Other result improves qoq
Q2 19
Q1 20 Q2 20
Group | -210 | |||||||||||||||||||||
-129 | ||||||||||||||||||||||
-43 | ||||||||||||||||||||||
-6 | ||||||||||||||||||||||
AT/EBOe | -17 | 9 | ||||||||||||||||||||
AT/SB | -12 | 4 | ||||||||||||||||||||
2 | ||||||||||||||||||||||
AT/OA | -2 | 2 | ||||||||||||||||||||
7 | ||||||||||||||||||||||
CZ | -28 | 1 | ||||||||||||||||||||
-2 | ||||||||||||||||||||||
RO | -156 | |||||||||||||||||||||
-13 | 1 | |||||||||||||||||||||
-9 | ||||||||||||||||||||||
SK | -23 | |||||||||||||||||||||
-17 | ||||||||||||||||||||||
-15 | ||||||||||||||||||||||
HU | -41 | 2 | ||||||||||||||||||||
HR | -1 | |||||||||||||||||||||
-6 | ||||||||||||||||||||||
-4 | ||||||||||||||||||||||
0 | ||||||||||||||||||||||
RS | 0 | |||||||||||||||||||||
0 | ||||||||||||||||||||||
Other | -29 | 14 | ||||||||||||||||||||
-41 | ||||||||||||||||||||||
in EUR m | ||||||||||||||||||||||
- Yoy other operating result improves mainly on non-recurrence of legal provisions due to RO high court decision in Q2 19
- Qoq improvement due to resolution fund contributions and full-year HU banking tax booked in Q1 20
- Year-on-yearsegment trends:
- RO: improvement driven by booking of legal provisions due to RO high court decision in Q2 19 (EUR 150.8m)
- AT/EBOe: other operating result benefits from real estate selling gains
- Quarter-on-quartersegment trends:
- HU: bookings of resolution fund contribution and full-year banking levy in Q1 20 result in improved other operating result
- Other geographies (except HR, RS): improvements mainly due to bookings of resolution fund contributions in Q1 20
Page 38
Business performance: net result -
Net profit declines on Covid-19 induced rise in risk costs
Q2 19
Q1 20 Q2 20
Group | 355 | |||||||||||||||||||||||||
235 | ||||||||||||||||||||||||||
58 | ||||||||||||||||||||||||||
AT/EBOe | 87 | |||||||||||||||||||||||||
36 | ||||||||||||||||||||||||||
36 | ||||||||||||||||||||||||||
AT/SB | 19 | |||||||||||||||||||||||||
6 | ||||||||||||||||||||||||||
11 | ||||||||||||||||||||||||||
AT/OA | -23 | 49 | ||||||||||||||||||||||||
54 | 178 | |||||||||||||||||||||||||
CZ | ||||||||||||||||||||||||||
114 | ||||||||||||||||||||||||||
41 | ||||||||||||||||||||||||||
-71 | ||||||||||||||||||||||||||
RO | 78 | |||||||||||||||||||||||||
3 | ||||||||||||||||||||||||||
SK | 50 | |||||||||||||||||||||||||
28 | ||||||||||||||||||||||||||
7 | ||||||||||||||||||||||||||
HU | 48 | |||||||||||||||||||||||||
9 | ||||||||||||||||||||||||||
-14 | 26 | |||||||||||||||||||||||||
HR | 12 | |||||||||||||||||||||||||
6 | ||||||||||||||||||||||||||
2 | ||||||||||||||||||||||||||
RS | -1 | 4 | ||||||||||||||||||||||||
-34 | ||||||||||||||||||||||||||
Other | -30 | |||||||||||||||||||||||||
-85 | in EUR m | |||||||||||||||||||||||||
- Yoy profitability hit by rising risk costs due to Covid-19 induced risk cost development following updates on risk parameters, offsetting improved other operating result
- Qoq performance declines on risk costs, offsetting substantial improvements in operating performance after temporary decline in Q1 20
- Year-on-yearsegment trends:
- CZ: higher risk costs and lower operating performance (esp. due to lower NII following rate cuts and neg. FX effect) weigh on profitability
- RO: non-recurrence of legal provisions more than offsets substantial increase in risk costs
- HU: significant rise in risk costs as well as weaker operating performance result in net loss
- Quarter-on-quartersegment trends:
- AT/OA: net result improves on swing in net trading and FV result after temporary valuation losses in Q1 20; more than offsetts significant increase in risk costs
- RO: profitability mirrors risk cost development
- Return on equity at 0.2%, following 6.6% in Q1 20, and 9.3% in Q2 19
- Cash return on equity at 0.3%, following 6.7% in Q1 20, and 9.4% in Q2 19
Page 39
Presentation topics
- Addressing the key questions in an uncertain environment
- CEE Covid-19 evolution update
- Macroeconomic update
- Business update
- Operating trends
- Asset quality and impairments
- Capital trends and dividends
- Key takeaways and outlook
- Q2 20 presentation
- Executive summary
- Business environment
- Business performance
- Assets and liabilities
-
Additional information
• Covid-19 measures update
Page 40
Assets and liabilities: YTD overview -
Loan/deposit ratio at 89.6% (Dec 19: 92.2%)
Assets (EUR bn)
264.7
Assets (in %) | Liabilities & equity (EUR bn) | Liabilities & equity (in %) |
264.7
245.718.4
4.4%
7.0% | 100% | 245.7 | 2.7 | 5.3% | 1.0% | 100% | |
22.0 | 8.3% | 1.0% | |||||
10.7
44.3
47.7
18.0%
13.1 | 2.4 |
18.0% |
23.127.4
160.3163.7
6.0 | 1.4 | 6.1 | 1.3 |
31/12/19 30/06/20
Cash
Trading, financial assets
Loans to banks
Net loans
Intangibles Miscellaneous assets
9.4%
65.2%
2.4% 0.6%
31/12/19
10.4% | ||||||||||||||||||||||||||||
173.8 | 182.7 | 70.8% | 69.0% | |||||||||||||||||||||||||
61.9% | ||||||||||||||||||||||||||||
12.4% | ||||||||||||||||||||||||||||
30.4 | 29.4 | 11.1% | ||||||||||||||||||||||||||
0.5% | 5.4 | 6.7 | 2.2% | 2.5% | ||||||||||||||||||||||||
20.5 | 21.2 | 8.3% | 8.0% | |||||||||||||||||||||||||
2.3% | ||||||||||||||||||||||||||||
31/12/19 | 30/06/20 | 31/12/19 | 30/06/20 | |||||||||||||||||||||||||
30/06/20 | ||||||||||||||||||||||||||||
Trading liabilities | Equity | |||||||||||||||||||||||||||
Bank deposits | ||||||||||||||||||||||||||||
Customer deposits
Debt securities
Miscellaneous liabilities
Page 41
Assets and liabilities: customer loans by country of risk -
Net customer loans up 2.2%, NPLs down 2.4% ytd
Net customer loans (EUR bn) | Performing loans (EUR bn) | Non-performing loans (EUR bn) | ||
+2.2% | +2.5% | ||||||||||
160.2 | 161.1 | 163.7 | 159.3 | 160.3 | |||||||
5.2 | 5.4 | 8.8 | 5.9 | 5.2 | 5.4 | ||||||
8.5 | 9.3 | 2.1 | 8.4 | 9.3 | |||||||
1.9 | 2.0 | 1.9 | 2.0 | ||||||||
6.8 | 7.3 | ||||||||||
6.9 | 6.7 | 6.8 | |||||||||
9.3 | 5.4 | 9.2 | 5.4 | 9.2 | 5.3 | 9.4 | 5.4 | 9.3 | 5.3 | ||
14.8 | 15.0 | 15.4 | 14.7 | 14.9 | |||||||
28.1 | 27.1 | 28.0 | 28.0 | 27.0 |
80.3 | 80.8 | 81.7 | 79.7 | 80.3 |
163.3
-2.4% | ||||||||||||||||
5.9 | ||||||||||||||||
8.8 | 4.1 | |||||||||||||||
2.1 | 4.0 | |||||||||||||||
7.1 | 3.9 | |||||||||||||||
5.4 | 0.1 | |||||||||||||||
0.2 | ||||||||||||||||
9.3 | 0.2 | 0.1 | ||||||||||||||
0.0 | 0.2 | 0.2 | ||||||||||||||
0.0 | ||||||||||||||||
15.4 | 0.0 | |||||||||||||||
0.6 | ||||||||||||||||
0.6 | ||||||||||||||||
0.6 | ||||||||||||||||
0.1 | ||||||||||||||||
0.1 | ||||||||||||||||
28.1 | 0.1 | |||||||||||||||
0.4 | ||||||||||||||||
0.4 | ||||||||||||||||
0.3 | ||||||||||||||||
0.4 | ||||||||||||||||
0.4 | 0.4 | |||||||||||||||
0.6 | ||||||||||||||||
0.6 | 0.6 | |||||||||||||||
81.2 | ||||||||||||||||
1.6 | 1.5 | 1.5 | ||||||||||||||
31/12/19 | 31/03/20 | 30/06/20 | 31/12/19 | 31/03/20 | 30/06/20 | 31/12/19 | 31/03/20 | 30/06/20 |
AT CZ SK RO HU HR RS Other EU Other
- Performing loans enjoy solid growth across all geographies
- Corporates performed better than Retail
- Ytd decline in NPL stock across most geographies
Page 42
Assets and liabilities: financial and trading assets* -
LCR at excellent 161.7%
By geography
+7.1%in EUR bn
41.4 | 42.5 | 44.3 | ||||||||||
10.0 | 10.5 | 10.7 | ||||||||||
0.7 | ||||||||||||
0.6 | 0.7 | 3.6 | ||||||||||
3.4 | ||||||||||||
3.6 | ||||||||||||
5.6 | ||||||||||||
5.8 | ||||||||||||
5.7 | ||||||||||||
6.2 | ||||||||||||
5.3 | ||||||||||||
5.2 | ||||||||||||
10.2 | ||||||||||||
9.4 | ||||||||||||
8.7 | ||||||||||||
7.6 | 7.4 | 7.4 | ||||||||||
31/12/19 | 31/03/20 | 30/06/20 | ||||||||||
Other | SK | |||||||||||
DE | CZ | |||||||||||
HU | AT | |||||||||||
RO | ||||||||||||
* Excludes derivatives held for trading
By debtor type | Liquidity buffer | |
in EUR bn
100% | 27.0% | |||||||||||||
9.9% | 9.2% | 8.7% | ||||||||||||
24.6% | ||||||||||||||
10.4% | 9.6% | 8.4% | 65.3 | 23.0% | ||||||||||
55.5 | 55.9 | |||||||||||||
79.7% | 81.2% | 83.0% | ||||||||||||
31/12/19 | 31/03/20 | 30/06/20 | 31/12/19 | 31/03/20 | 30/06/20 | |||
Other | Liquidity buffer | |||||||
Banks | Liquidity buffer as % of total liabilities | |||||||
Sovereign | ||||||||
• Liquidity buffer is defined as unencumbered collateral plus cash
• Total liabilities are defined as total on balance sheet liabilities excluding total equity
Page 43
Assets and liabilities: customer deposit funding -
Customer deposits* up 5.1% ytd, driven by households
By customer type | By product type | Highlights | ||
in EUR bn | in EUR bn |
+5.1% |
173.8 | 181.7 | 182.7 | 173.8 | 181.7 | 182.7 | |||||||||||||||||||
0.3 | ||||||||||||||||||||||||
3.7 | 4.2 | |||||||||||||||||||||||
14.0 | 0.3 | 12.4 | 0.3 | 0.3 | ||||||||||||||||||||
0.8 | 8.7 | 1.5 | 0.8 | |||||||||||||||||||||
10.0 | ||||||||||||||||||||||||
11.0 | 13.2 | 49.9 | 50.3 | 45.9 | ||||||||||||||||||||
36.7 | ||||||||||||||||||||||||
34.3 | 35.6 | |||||||||||||||||||||||
119.2 | 118.6 | 123.2 | 121.7 | 127.5 | 132.3 |
- Continued deposit inflows driven by Retail segment with strong contribution from Corporate segment (esp. public sector) with highest demand for overnight deposits amid low interest rate environment
- Increasing share of overnight deposits with significantly longer behavioural maturity provides a cost effective funding source
31/12/19 | 31/03/20 | 30/06/20 | 31/12/19 | 31/03/20 | 30/06/20 | ||
FV deposits & Lease liabilities | FV deposits & Lease liabilities | ||||||
General governments | Repurchase agreements | ||||||
Other financial corporations | Term deposits | ||||||
Non-financial corporations | Overnight deposits | ||||||
Households | |||||||
* excludes lease liabilities as of 2020
Page 44
Assets and liabilities: debt vs interbank funding -
Reduced wholesale funding reliance, as customer deposits grow strongly
Debt securities issued | Interbank deposits | |||||||||||||||||||||||||||||||||||||
-3.1% | in EUR bn | +67.3% | in EUR bn | |||||||||||||||||||||||||||||||||||
30.4 | 29.4 | 29.4 | Sub debt | 20.7 | 22.0 | Overnight deposits | ||||||||||||||||||||||||||||||||
6.0 | 5.6 | 5.1 | Senior non-preferred bonds | 2.9 | ||||||||||||||||||||||||||||||||||
4.7 | Term deposits | |||||||||||||||||||||||||||||||||||||
Senior unsec. bonds | ||||||||||||||||||||||||||||||||||||||
0.5 | 0.7 | |||||||||||||||||||||||||||||||||||||
0.7 | Certificates of deposit | Repurchase agreements | ||||||||||||||||||||||||||||||||||||
8.3 | 7.6 | 8.2 | Other CDs, name cert's | 13.1 | ||||||||||||||||||||||||||||||||||
0.1 | 0.2 | 0.0 | Mortgage CBs | 2.0 | ||||||||||||||||||||||||||||||||||
1.1 | 1.1 | 1.1 | Public sector CBs | 13.2 | 17.4 | |||||||||||||||||||||||||||||||||
Other | ||||||||||||||||||||||||||||||||||||||
12.8 | 13.4 | 13.5 | 9.6 | |||||||||||||||||||||||||||||||||||
0.3 | 0.2 | 0.2 | 2.8 | |||||||||||||||||||||||||||||||||||
1.6 | 1.7 | |||||||||||||||||||||||||||||||||||||
1.4 | 0.6 | 0.6 | ||||||||||||||||||||||||||||||||||||
31/12/19 | 31/03/20 | 30/06/20 | ||||||||||||||||||||||||||||||||||||
31/12/19 | 31/03/20 | 30/06/20 | ||||||||||||||||||||||||||||||||||||
- Overall, relative stable development while volumes of mortgage covered bonds have risen
- Seasonal decline in interbank deposits mainly in overnight and term deposits in Q4
Page 45
Assets and liabilities: LT funding -
Stable LT funding needs in 2020
Maturity profile of debt
in EUR bn
3.5 | ||||||||||||||||||||||||||||
3.0 | ||||||||||||||||||||||||||||
1.8 | 2.1 | 2.4 | 2.1 | 2.7 | 2.2 | 1.4 | 0.9 | 1.1 | 0.1 | 0.7 | ||||||||||||||||||
2020 | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | 2032+ |
Senior unsec. bonds Senior non-preferred bonds Covered bonds Capital exc Tier 1 Debt CEE
- Erste Group started the year with a EUR 750m covered bond issuance in January 2020; pricing at MS+3pbs
- Furthermore a EUR 500m perpNC7.2 AT1 was issued with a 3.375% annual coupon in the second half of January representing the second lowest coupon for a EUR AT1 ever printed
- In Q2 2020, Erste Group continued its MREL-strategy by issuing a EUR 750m 7y senior preferred note at MS+115bp
- The early-terminated LTRO II funding (termination in 12/2019) was rolled into the more attractive TLTRO III in the same amount in March 2020 and was further increased due to the favourable conditions for the reporting season 06/2020-06/2021 to a total volume of EUR 9.9bn as of June 2020
Page 46
Assets and liabilities: LT funding -
Targeting MPE approach
Resolution strategy
- Direct presence in 7 geographically connected countries
- Erste Group's setup suggests a multiple point of entry (MPE) resolution strategy
- When determined, MREL needs are likely to be met with a mix of own funds, senior non-preferred and senior preferred instruments
CZ
SK
AT
HU
RO
HR
RS
Majority ownership
Minority ownership
Austrian resolution group
- Major entities within the Austrian resolution group*:
- Erste Group Bank AG
- Erste Bank Oesterreich and its subsidiaries
- All other savings banks of the Haftungsverbund
- Subordination requirement does not seem to be a limiting factor
- Binding MREL targets for the Austrian, Slovak, Romanian, Hungarian and Czech resolution groups have been received; for Croatia the first binding target is expected in 2021
- All CEE resolution groups with a binding decision received in 2020 will receive a transition period until year-end 2023 enabling them to reach their MREL targets gradually
*) Subject to joint decision of resolution authority
Page 47
Assets and liabilities: LT funding -
Expected total MREL-related issuance volume unchanged
MREL resolution groups (2019)
Preliminary 5-year issuance plan (avg. p.a.)
152
in EUR bn
in EUR m
3,500-5,000
76
57 | |||||||||
21 | 19 | 8 | 16 | 7 | 10 | 7 | 9 | 6 | |
AT | CZ | SK | RO | HR | HU |
Total assets Total RWA
- Under MREL there are 6 resolution groups covered by the Single Resolution Board
- The Austrian resolution group (parent company, EBOe and savings banks) is not considered a legal entity or reporting unit, hence there is neither a statutory reporting nor a capital requirement for the Austrian resolution group
~400-500 ~200-300~100-300~100-300~100-150
Holding CZ SK RO HR HU
- CEE issuances will mainly be placed in domestic market
- First NPS issuances by Erste Group Bank AG (in EUR) and BCR (in RON) in 2019 and Slovenská sporiteľňa in Feb 2020
Page 48
Assets and liabilities: capital position -
CET1 ratio rises to a strong 14.2%, phased-in to 14.3%
Basel 3 capital | Risk-weighted assets | Basel 3 capital ratios | |||
in EUR bn | in EUR bn |
21.8 | 21.5 | 22.0 | 21.3 | 22.0 | 118.8 | 121.4 | 118.6 | 120.5 | 115.3 | |||||||||||||||||||||||||||
3.2 | ||||||||||||||||||||||||||||||||||||
2.9 | 2.8 | 3.4 | 3.3 | |||||||||||||||||||||||||||||||||
4.2 | 3.6 | 14.3 | 14.7 | |||||||||||||||||||||||||||||||||
4.2 | 4.1 | 3.5 | 14.2 | 14.9 | 14.5 | |||||||||||||||||||||||||||||||
1.5 | 1.5 | 1.5 | 2.0 | 2.0 | ||||||||||||||||||||||||||||||||
103.9 | 102.4 | |||||||||||||||||||||||||||||||||||
16.1 | 15.9 | 16.3 | 15.8 | 16.4 | 101.7 | 100.8 | 97.5 | |||||||||||||||||||||||||||||
14.8% | 18.3% | 14.3% | 17.7% | 15.0% | 18.5% | 14.8% | 17.7% | 14.2% | 15.9% | 19.1% | ||||||||||
13.5% | 13.1% | 13.7% | 13.1% | |||||||||||||||||
30/06/19 | 30/09/19 | 31/12/19 | 31/03/20 | 30/06/20 | 30/06/19 | 30/09/19 | 31/12/19 | 31/03/20 | 30/06/20 | 30/06/19 | 30/09/19 | 31/12/19 | 31/03/20 | 30/06/20 | ||||||||||||||||||
Tier 2 | AT1 | CET1 | Market risk | Op risk | Credit RWA | CET1 | Tier 1 | Total capital | ||||||||||||||||||||||||
• CET1 capital improves by EUR 146m ytd • | YTD credit RWA development mainly on: • | CET1 ratio benefits from SME support | ||||||||||||||||||||||||||||||
mainly on: | • SME support factor: ca. -EUR 4.5bn | factor: +55bps | ||||||||||||||||||||||||||||||
• Inclusion of H1 20 interim profit: EUR 157m | • Business growth: ca. + EUR 3.5bn | • | FX impact: -25bps | |||||||||||||||||||||||||||||
• | Minority interest: +EUR 352m | • FX depreciation: ca. -EUR 0.9bn | • | Dividend for 2019 (and accrued for 2020) | ||||||||||||||||||||||||||||
• | OCI and prudential filter impact (mainly on FX • | Rise in market risk driven by increased | ||||||||||||||||||||||||||||||
included in capital ratios | ||||||||||||||||||||||||||||||||
impact): -EUR 468m | volatility | • | Medium-term target remains unchanged | |||||||||||||||||||||||||||||
• AT1 issuance in Q1 20: +EUR 497m | ||||||||||||||||||||||||||||||||
at 13.5% | ||||||||||||||||||||||||||||||||
Page 49
Presentation topics
- Addressing the key questions in an uncertain environment
- CEE Covid-19 evolution update
- Macroeconomic update
- Business update
- Operating trends
- Asset quality and impairments
- Capital trends and dividends
- Key takeaways and outlook
- Q2 20 presentation
- Executive summary
- Business environment
- Business performance
- Assets and liabilities
-
Additional information
• Covid-19 measures update
Page 50
Additional information: segment structure -
Business line and geographic view
Erste Group - Business segments
Group | ALM & | Savings | Group | Intragroup | ||||||||||||
Retail | Corporates | Local CC | Corporate | |||||||||||||
Markets | Banks | Elimination | ||||||||||||||
(ALM&LCC) | Center | |||||||||||||||
• | SME | • | Other Subsidiaries | |||||||||||||
• | Large Corporate | • | Asset/Liability Management | • | Group bookings | |||||||||||
• | Commercial Real Estate | • | Local Corporate Center | • | Holding Corporate Center | |||||||||||
• | Public Sector | • | Free Capital | |||||||||||||
Erste Group - Geographical segmentation
Austria | Central and Eastern Europe | Other | |||
EBOe & | Savings | Other | Czech | Slovakia | Romania | Hungary | Croatia | Serbia | |||||||||||||
Subsidiaries | Banks | Austria | Republic | ||||||||||||||||||
(SK) | (RO | (HU) | (HR) | (RS) | |||||||||||||||||
(AT/EBOe) | (AT/SB) | (AT/OA) | (CZ) | ||||||||||||||||||
• | Holding Business | ||||||||||||||||||||
• | Erste Group Immorent | ||||||||||||||||||||
• | Erste Asset Management | ||||||||||||||||||||
• | Intermarket Bank AG | ||||||||||||||||||||
- Holding ALM
- Holding CC
- Other Subsidiaries
- Group bookings and IC elimination
- Free Capital
Page 51
Additional information: income statement -
Year-to-date and quarterly view
Year-to-date view | Quarterly view | |||||||
in EUR million | 1-6 19 | 1-6 20 | YOY- | Q2 19 | Q1 20 | Q2 20 | YOY- | QOQ- |
Net interest income | 2,329.7 | 2,396.9 | 2.9% | 1,168.8 | 1,229.0 | 1,167.9 | -0.1% | -5.0% |
Interest income | 2,742.0 | 2,645.2 | -3.5% | 1,385.5 | 1,391.7 | 1,253.5 | -9.5% | -9.9% |
Other similar income | 839.4 | 759.3 | -9.5% | 414.1 | 395.1 | 364.2 | -12.0% | -7.8% |
Interest expenses | -554.9 | -378.8 | -31.7% | -283.6 | -231.0 | -147.9 | -47.9% | -36.0% |
Other similar expenses | -696.9 | -628.8 | -9.8% | -347.2 | -326.8 | -302.0 | -13.0% | -7.6% |
Net fee and commission income | 980.4 | 956.7 | -2.4% | 492.7 | 504.2 | 452.5 | -8.2% | -10.3% |
Fee and commission income | 1,189.0 | 1,146.0 | -3.6% | 593.2 | 604.6 | 541.4 | -8.7% | -10.5% |
Fee and commission expenses | -208.6 | -189.3 | -9.2% | -100.5 | -100.4 | -88.9 | -11.5% | -11.4% |
Dividend income | 19.0 | 14.8 | -21.9% | 18.4 | 1.5 | 13.3 | -27.9% | >100.0% |
Net trading result | 310.1 | -19.2 | n/a | 156.8 | -157.4 | 138.2 | -11.9% | n/a |
Gains/losses from financial instruments measured at fair value through profit or loss | -140.1 | 28.5 | n/a | -63.0 | 37.5 | -8.9 | -85.8% | n/a |
Net result from equity method investments | 7.0 | 5.9 | -16.4% | 5.2 | 3.3 | 2.6 | -50.6% | -21.3% |
Rental income from investment properties & other operating leases | 86.9 | 88.3 | 1.5% | 42.4 | 44.8 | 43.5 | 2.6% | -2.9% |
Personnel expenses | -1,255.9 | -1,265.5 | 0.8% | -633.9 | -630.0 | -635.5 | 0.3% | 0.9% |
Other administrative expenses | -625.6 | -583.3 | -6.7% | -267.3 | -344.8 | -238.6 | -10.8% | -30.8% |
Depreciation and amortisation | -264.6 | -265.9 | 0.5% | -129.1 | -136.5 | -129.4 | 0.2% | -5.2% |
Gains/losses from derecognition of financial assets measured at amortised cost | 0.9 | 0.3 | -65.5% | 0.6 | 0.4 | -0.1 | n/a | n/a |
Other gains/losses from derecognition of financial instruments not measured at fair value through profit or loss | 10.1 | -2.1 | n/a | 9.4 | -1.7 | -0.5 | n/a | -69.9% |
Impairment result from financial instruments | 42.8 | -675.4 | n/a | 7.1 | -61.7 | -613.7 | n/a | >100.0% |
Other operating result | -351.0 | -169.9 | -51.6% | -219.9 | -127.6 | -42.3 | -80.8% | -66.8% |
Levies on banking activities | -64.7 | -83.0 | 28.2% | -25.9 | -49.9 | -33.1 | 27.8% | -33.7% |
Pre-tax result from continuing operations | 1,149.8 | 510.1 | -55.6% | 588.0 | 361.3 | 148.8 | -74.7% | -58.8% |
Taxes on income | -212.7 | -140.3 | -34.0% | -117.2 | -103.0 | -37.3 | -68.2% | -63.8% |
Net result for the period | 937.1 | 369.8 | -60.5% | 470.8 | 258.3 | 111.5 | -76.3% | -56.8% |
Net result attributable to non-controlling interests | 205.2 | 76.1 | -62.9% | 115.9 | 23.0 | 53.0 | -54.2% | >100.0% |
Net result attributable to owners of the parent | 731.9 | 293.8 | -59.9% | 354.9 | 235.3 | 58.5 | -83.5% | -75.1% |
Operating income | 3,592.9 | 3,471.9 | -3.4% | 1,821.2 | 1,663.0 | 1,808.9 | -0.7% | 8.8% |
Operating expenses | -2,146.0 | -2,114.7 | -1.5% | -1,030.4 | -1,111.2 | -1,003.5 | -2.6% | -9.7% |
Operating result | 1,446.9 | 1,357.2 | -6.2% | 790.9 | 551.7 | 805.4 | 1.8% | 46.0% |
Page 52
Additional information: group balance sheet -
Assets
Quarterly data | Change | ||||||||
in EUR million | Jun 19 | Sep 19 | Dec 19 | Mar 20 | Jun 20 | YOY- | YTD- | QOQ- | |
Cash and cash balances | 16,843 | 15,638 | 10,693 | 23,031 | 18,433 | 9.4% | 72.4% | -20.0% | |
Financial assets held for trading | 6,464 | 7,215 | 5,760 | 7,706 | 6,984 | 8.0% | 21.3% | -9.4% | |
Derivatives | 3,101 | 3,551 | 2,805 | 4,034 | 3,233 | 4.2% | 15.2% | -19.9% | |
Other financial assets held for trading | 3,363 | 3,664 | 2,954 | 3,672 | 3,752 | 11.6% | 27.0% | 2.2% | |
Non-trading financial assets at fair value through profit and loss | 3,377 | 3,350 | 3,208 | 3,130 | 3,122 | -7.6% | -2.7% | -0.3% | |
Equity instruments | 401 | 393 | 390 | 361 | 374 | -6.6% | -4.1% | 3.6% | |
Debt securities | 2,459 | 2,539 | 2,335 | 2,250 | 2,129 | -13.4% | -8.8% | -5.4% | |
Loans and advances to banks | 0 | 0 | 0 | 0 | 0 | n/a | n/a | n/a | |
Loans and advances to customers | 518 | 419 | 483 | 519 | 619 | 19.6% | 28.0% | 19.2% | |
Financial assets at fair value through other comprehensive income | 9,404 | 8,940 | 9,047 | 8,953 | 8,883 | -5.5% | -1.8% | -0.8% | |
Equity instruments | 285 | 312 | 210 | 139 | 132 | -53.7% | -37.1% | -4.7% | |
Debt securities | 9,119 | 8,629 | 8,836 | 8,815 | 8,750 | -4.0% | -1.0% | -0.7% | |
Financial assets at amortised cost | 199,411 | 204,079 | 204,162 | 207,133 | 214,464 | 7.5% | 5.0% | 3.5% | |
Debt securities | 26,892 | 26,808 | 26,764 | 27,700 | 29,298 | 8.9% | 9.5% | 5.8% | |
Loans and advances to banks | 23,035 | 25,241 | 23,055 | 24,264 | 27,418 | 19.0% | 18.9% | 13.0% | |
Loans and advances to customers | 149,484 | 152,030 | 154,344 | 155,168 | 157,749 | 5.5% | 2.2% | 1.7% | |
Finance lease receivables | 3,925 | 3,987 | 4,034 | 4,040 | 4,082 | 4.0% | 1.2% | 1.0% | |
Hedge accounting derivatives | 168 | 182 | 130 | 226 | 270 | 60.5% | >100.0% | 19.6% | |
Property and equipment | 2,580 | 2,509 | 2,629 | 2,558 | 2,526 | -2.1% | -3.9% | -1.2% | |
Investment properties | 1,228 | 1,226 | 1,266 | 1,254 | 1,257 | 2.3% | -0.7% | 0.2% | |
Intangible assets | 1,490 | 1,491 | 1,368 | 1,322 | 1,331 | -10.7% | -2.7% | 0.7% | |
Investments in associates and joint ventures | 204 | 202 | 163 | 163 | 166 | -18.5% | 2.0% | 1.9% | |
Current tax assets | 92 | 80 | 81 | 80 | 135 | 47.1% | 66.9% | 68.2% | |
Deferred tax assets | 417 | 436 | 477 | 453 | 467 | 11.9% | -2.1% | 3.2% | |
Assets held for sale | 214 | 242 | 269 | 265 | 260 | 21.6% | -3.2% | -1.9% | |
Trade and other receivables | 1,404 | 1,405 | 1,408 | 1,391 | 1,287 | -8.4% | -8.6% | -7.5% | |
Other assets | 1,039 | 1,119 | 1,001 | 1,191 | 1,019 | -1.9% | 1.8% | -14.5% | |
Total assets | 248,261 | 252,101 | 245,693 | 262,898 | 264,692 | 6.6% | 7.7% | 0.7% | |
Page 53
Additional information: group balance sheet -
Liabilities and equity
Quarterly data | Change | ||||||||
in EUR million | Jun 19 | Sep 19 | Dec 19 | Mar 20 | Jun 20 | YOY- | YTD- | QOQ- | |
Financial liabilities held for trading | 2,518 | 2,751 | 2,421 | 3,322 | 2,737 | 8.7% | 13.0% | -17.6% | |
Derivatives | 2,125 | 2,411 | 2,005 | 2,945 | 2,308 | 8.6% | 15.1% | -21.7% | |
Other financial liabilities held for trading | 393 | 341 | 416 | 377 | 429 | 9.2% | 3.3% | 14.0% | |
Financial liabilities at fair value through profit or loss | 14,605 | 14,550 | 13,494 | 12,591 | 12,607 | -13.7% | -6.6% | 0.1% | |
Deposits from customers | 255 | 277 | 265 | 252 | 295 | 15.8% | 11.4% | 17.1% | |
Debt securities issued | 13,914 | 13,754 | 13,011 | 12,128 | 12,136 | -12.8% | -6.7% | 0.1% | |
Other financial liabilities | 436 | 520 | 219 | 211 | 177 | -59.5% | -19.4% | -16.4% | |
Financial liabilities at amortised cost | 205,560 | 208,728 | 204,143 | 219,988 | 222,321 | 8.2% | 8.9% | 1.1% | |
Deposits from banks | 19,043 | 19,936 | 13,141 | 20,703 | 21,984 | 15.4% | 67.3% | 6.2% | |
Deposits from customers | 169,004 | 171,831 | 173,066 | 181,439 | 182,376 | 7.9% | 5.4% | 0.5% | |
Debt securities issued | 16,859 | 16,350 | 17,360 | 17,285 | 17,295 | 2.6% | -0.4% | 0.1% | |
Other financial liabilities | 653 | 611 | 576 | 560 | 666 | 2.0% | 15.6% | 19.0% | |
Lease liabilities | 409 | 403 | 515 | 520 | 521 | 27.4% | 1.1% | 0.2% | |
Hedge accounting derivatives | 276 | 291 | 269 | 207 | 209 | -24.3% | -22.5% | 0.7% | |
Fair value changes of hedged items in portfolio hedge of interest rate risk | 0 | 0 | 0 | 0 | 0 | 96.6% | >100.0% | -5.5% | |
Provisions | 2,004 | 2,001 | 1,919 | 2,046 | 2,033 | 1.4% | 5.9% | -0.7% | |
Current tax liabilities | 75 | 89 | 61 | 94 | 62 | -17.8% | 2.1% | -34.4% | |
Deferred tax liabilities | 31 | 24 | 18 | 24 | 17 | -45.8% | -6.3% | -31.5% | |
Liabilities associated with assets held for sale | 7 | 7 | 6 | 7 | 7 | -1.9% | 19.2% | 6.8% | |
Other liabilities | 3,127 | 3,128 | 2,369 | 3,045 | 2,978 | -4.8% | 25.7% | -2.2% | |
Total equity | 19,649 | 20,130 | 20,477 | 21,053 | 21,200 | 7.9% | 3.5% | 0.7% | |
Equity attributable to non-controlling interests | 4,639 | 4,735 | 4,857 | 4,875 | 4,922 | 6.1% | 1.3% | 1.0% | |
Additional equity instruments | 1,490 | 1,490 | 1,490 | 1,987 | 1,987 | 33.4% | 33.4% | 0.0% | |
Equity attributable to owners of the parent | 13,520 | 13,904 | 14,129 | 14,190 | 14,291 | 5.7% | 1.1% | 0.7% | |
Subscribed capital | 860 | 860 | 860 | 860 | 860 | 0.0% | 0.0% | 0.0% | |
Additional paid-in capital | 1,477 | 1,477 | 1,478 | 1,478 | 1,478 | 0.1% | 0.0% | 0.0% | |
Retained earnings and other reserves | 11,183 | 11,568 | 11,792 | 11,853 | 11,953 | 6.9% | 1.4% | 0.8% | |
Total liabilities and equity | 248,261 | 252,101 | 245,693 | 262,898 | 264,692 | 6.6% | 7.7% | 0.7% | |
Page 54
Additional information: regulatory capital position/requirement (SREP) -
Capital requirements (SREP) for 2020; Erste Group target of 13.5% unchanged
- Combined impact of reduced countercyclical buffers results in expected 18 bps at year-end 2020
Erste Group Consolidated | Erste Group Unconsolidated | ||||||||||
ECB Capital Relief | |||||||||||
Phased-in | Fully loaded | Measures 1) | Fully loaded | Phased-in | Fully loaded | ||||||
2018 | 2019 | Q2 2020 | Q2 2020 | YE 2020 | 2018 | 2019 | Q2 2020 | YE 2020 | |||
Pillar 1 CET1 requirement | 4.50% | 4.50% | 4.50% | 4.50% | 4.50% | 4.50% | 4.50% | 4.50% | 4.50% | ||
Combined buffer requirement | 3.19% | 4.91% | 4.81% | 2.31% | 4.68% | 3.07% | 4.75% | 4.73% | 4.64% | ||
Capital conservation buffer | 1.88% | 2.50% | 2.50% | 0.00% | 2.50% | 1.88% | 2.50% | 2.50% | 2.50% | ||
Countercyclical capital buffer 2) | 0.31% | 0.41% | 0.31% | 0.31% | 0.18% | 0.20% | 0.25% | 0.23% | 0.14% | ||
OSII/Systemic risk buffer | 1.00% | 2.00% | 2.00% | 2.00% | 2.00% | 1.00% | 2.00% | 2.00% | 2.00% | ||
Pillar 2 CET1 requirement 3) | 1.75% | 1.75% | 0.98% | 0.98% | 0.98% | 1.75% | 1.75% | 0.98% | 0.98% | ||
Pillar 2 CET1 guidance | 1.05% | 1.00% | 1.00% | 0.00% | 1.00% | 0.00% | 0.00% | 0.00% | 0.00% | ||
Regulatory minimum ratios excluding P2G | |||||||||||
CET1 requirement | 9.44% | 11.16% | 10.29% | 7.79% | 10.16% | 9.32% | 11.00% | 10.22% | 10.12% | ||
1.50% | AT1 | Tier 1 requirement | 10.94% | 12.66% | 12.12% | 9.62% | 11.99% | 10.82% | 12.50% | 12.05% | 11.95% |
2.00% | T2 | Own funds requirement | 12.94% | 14.66% | 14.56% | 12.06% | 14.43% | 12.82% | 14.50% | 14.48% | 14.39% |
Regulatory minimum ratios including P2G | |||||||||||
CET1 requirement | 10.49% | 12.16% | 11.29% | n.a. | 11.16% | 9.32% | 11.00% | 10.22% | 10.12% | ||
1.50% | AT1 | Tier 1 requirement | 10.94% | 12.66% | 13.12% | n.a. | 12.99% | 10.82% | 12.50% | 12.05% | 11.95% |
2.00% | T2 | Own funds requirement | 12.94% | 14.66% | 15.56% | n.a. | 15.43% | 12.82% | 14.50% | 14.48% | 14.39% |
Reported CET1 ratio as of June 2020 | 14.28% | 4) | 21,59% 5) | ||||||||
- Buffer to MDA restriction as of 30 Jun: 389bps
- Available distributable items (ADI) as of 30 Jun 20: EUR 2.4bn (post 2019 dividend and AT1 coupon; based on CRR II, which allows additional own funds components to be included, ADIs are at EUR 4.9bn)
- Following ECB's announcement re. measures in reaction to COVID-19 on 12 March 2020. (MDA restrictions still apply in case of a combined buffer requirement breach).
- Planned values based on Q2 2020 exposure (Q2 20 countercyclical buffer of 0.31% for Erste Group consolidated)
- As of 12 March 2020 ECB brought forward measures for the use of the P2R re. capital stack (56.25% for CET1 capital and 75% for Tier 1 capital. The overall P2R remained at 1.75% for Erste Group
- Consolidated capital ratios pursuant to IFRS. Unconsolidated capital ratios pursuant to Austrian Commercial Code (UGB) and on phased-in basis. ADIs pursuant to UGB.
- Unconsolidated CET1 ratio based on Q1 20 figures
Page 55
Additional information: gross customer loans -
By risk category, by currency, by industry
Gross cust. loans by risk category (EUR bn) | Gross customer loans by currency (EUR bn) | ||||||||||||||||||||||||||||||||||||
158.7 | 161.1 | 163.4 | 164.3 | 167.4 | 158.7 | 161.1 | 163.4 | 164.3 | 167.4 | ||||||||||||||||||||||||||||
3.4 | |||||||||||||||||||||||||||||||||||||
4.5 | 4.3 | 4.1 | 3.9 | 5.3 | 5.7 | 4.0 | 2.3 | 2.5 | 2.6 | 3.5 | 2.5 | 2.5 | |||||||||||||||||||||||||
3.4 | 3.3 | 3.2 | |||||||||||||||||||||||||||||||||||
5.0 | 15.5 | 4.9 | 16.1 | 5.3 | 20.1 | 19.2 | 3.1 | 3.2 | 2.9 | 3.2 | 3.0 | ||||||||||||||||||||||||||
16.0 | 37.1 | 35.6 | 36.7 | ||||||||||||||||||||||||||||||||||
35.8 | 36.0 | ||||||||||||||||||||||||||||||||||||
133.2 | 136.4 | 137.9 | 134.9 | 138.4 | |||||||||||||||||||||||||||||||||
121.8 | |||||||||||||||||||||||||||||||||||||
119.4 | |||||||||||||||||||||||||||||||||||||
116.1 | 117.6 | ||||||||||||||||||||||||||||||||||||
114.1 | |||||||||||||||||||||||||||||||||||||
30/06/19 | 30/09/19 | 31/12/19 | 31/03/20 | 30/06/20 | 30/06/19 | 30/09/19 | 31/12/19 | 31/03/20 | 30/06/20 |
Gross customer loans by industry (EUR bn)
163.4 | 164.3 | 167.4 | |||||||||||||||||||||||||
158.7 | 161.1 | ||||||||||||||||||||||||||
9.7 | |||||||||||||||||||||||||||
9.7 | 9.5 | ||||||||||||||||||||||||||
9.5 | |||||||||||||||||||||||||||
9.3 | 4.7 | ||||||||||||||||||||||||||
4.7 | |||||||||||||||||||||||||||
4.7 | |||||||||||||||||||||||||||
4.5 | 4.4 | 4.6 | 4.3 | 4.4 | 4.5 | 9.6 | 4.7 | ||||||||||||||||||||
9.8 | 9.8 | ||||||||||||||||||||||||||
9.9 | |||||||||||||||||||||||||||
9.5 | 4.0 | 4.8 | 4.7 | ||||||||||||||||||||||||
4.5 | 4.1 | 6.4 | |||||||||||||||||||||||||
5.9 | 5.7 | ||||||||||||||||||||||||||
5.9 | |||||||||||||||||||||||||||
7.2 | |||||||||||||||||||||||||||
5.8 | |||||||||||||||||||||||||||
7.3 | 7.4 | ||||||||||||||||||||||||||
7.4 | |||||||||||||||||||||||||||
7.2 | 9.4 | ||||||||||||||||||||||||||
9.2 | 9.5 | ||||||||||||||||||||||||||
9.2 | |||||||||||||||||||||||||||
9.0 | |||||||||||||||||||||||||||
13.5 | |||||||||||||||||||||||||||
12.6 | 13.1 | ||||||||||||||||||||||||||
12.8 | |||||||||||||||||||||||||||
12.6 | |||||||||||||||||||||||||||
27.6 | |||||||||||||||||||||||||||
26.4 | 26.6 | ||||||||||||||||||||||||||
25.6 | |||||||||||||||||||||||||||
25.3 | |||||||||||||||||||||||||||
Gross customer loans by risk category (in %)
100%
2.8% 2.7% 2.5% 2.4% 2.4% 10.1% 3.1% 9.6% 3.0% 9.8% 3.3% 12.3% 3.2% 11.5%3.4%
84.0% | 84.7% | 84.4% | 82.1% | 82.7% | ||||||||||||||||
30/06/19 | 30/09/19 | 31/12/19 | 31/03/20 | 30/06/20 | ||
Non-performing | Management attention | |||||
Substandard | Low risk | |||||
Gross customer loans by currency (in %)
2.1% 1.5% 2.1% 1.5% 2.0% 1.6% 2.1% 1.5% 2.0% 1.5%
22.6%1.9% 22.3%2.0% 22.7%1.8% 21.7%1.9% 22.0%1.8%
72.7% | 72.8% | |||||||||||||||||||||||||||
71.9% | 72.1% | 72.0% | ||||||||||||||||||||||||||
30/06/19 | 30/09/19 | 31/12/19 | 31/03/20 | 30/06/20 | ||||||||||||||||||||||||
Other | USD | CHF | CEE-LCY | EUR | ||||||||||||||||||||||||
66.6 | 67.8 | 69.4 | 68.6 | 69.8 |
30/06/19 | 30/09/19 | 31/12/19 | 31/03/20 | 30/06/20 | |||
Other | Financial inst. | Manufacturing | |||||
Transport & comms | Public admin | Real estate | |||||
Tourism | Construction | Households | |||||
Services | Trade | ||||||
Page 56
Additional information: footprint -
Customer banking in Austria and the eastern part of the EU
Erste Group footprint
Highlights
CZ
AT
HR
Majority ownership
Minority ownership
Czech Republic | Slovakia | |
Customers: 4.5m | Customers: 2.2m | |
Employees: 9,946 | Employees: 4,010 | |
Branches: 456 | Branches: 222 | |
SK | Hungary | |
HU | Customers: 0.9m | |
Employees: 3,211 | ||
RO | Branches: 108 | |
RS | Romania | |
Customers: 2.9m | ||
Employees: 6,845 | ||
Branches: 429 | ||
Austria | Croatia | Serbia |
Customers: 3.8m | Customers : 1.3m | Customers: 0.5m |
Employees: 16,213 | Employees : 3,314 | Employees: 1,169 |
Branches: 869 | Branches: 144 | Branches: 90 |
- Leading retail and corporate bank in 7 geographically connected countries
- Favourable mix of mature & emerging markets with low penetration rates
- Potential for cross selling and organic growth in CEE
Employees: FTEs as of end of reporting period
(The presented FTE data exclude FTEs outside Erste Group's core markets in Austria and CEE as well as FTEs of specific services entities not located in Austria)
Page 57
Additional information: strategy -
A real customer need is the reason for all business
Customer banking in Central and Eastern Europe
Eastern part of EU | Focus on CEE, limited exposure to other Europe | |||||||
Retail | Corporate | Capital | Public | Interbank | ||||
banking | banking | markets | sector | business | ||||
Focus on local currency mortgage and consumer loans
funded by local deposits
FX loans (in EUR) only where funded by local FX deposits (Croatia and Serb ia)
Savings products, asset management and pension products
Expansion of digital banking offering
SME and local corporate banking
Advisory services, with focus on providing access to capital markets and corporate finance
Real estate business that goes beyond financing
Focus on customer business, incl. customer- based trading activities
In addition to core markets, presences in Poland, Germany, London, New York and Hongkong with institutional client focus and selected product mix
Building debt and equity capital markets in CEE
Financing sovereigns and municipalities with focus on infrastructure development in core markets
Any sovereign holdings are only held for market- making, liquidity or balance sheet management reasons
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
Page 58
Additional information: Ratings -
Composition of Erste Group Bank AG's issuer ratings
Macro Profile
Strong
+
Financial Profile
Asset Risk | baa2 | |
Capital | baa1 | |
Profitability | baa3 | |
Funding Structure | a3 | |
Liquid Resources | baa1 | |
+ | ||
Qualitative Factors | ||
Business Diversification | 0 | |
Opacity, Complexity | 0 | |
Corporate Behaviour | 0 | |
= | ||
BCA Baseline Credit Assessment | baa1 | |
+ | ||
Affiliate Support | 0 | |
= | ||
Adjusted BCA | baa1 | |
+ | ||
LGF Loss Given Failure | + 2 | |
Government Support | 0 | |
= |
Issuer Rating / Senior Unsecured
Long-Term Outlook / Short-Term
A2 Positive / P-1
SACP - Stand-Alone Credit Profile
a
▲
Anchor | bbb+ | |
Business Position | Strong | +1 |
Capital & Earnings | Adequate | 0 |
Risk Position | Adequate | 0 |
Funding | Above Average | +1 |
Liquidity | Strong | |
+ | ||
Support | 0 | |
▲ | ||
ALAC Support | 0 | |
GRE Support | 0 | |
Group Support | 0 | |
Sovereign Support | 0 | |
+ | ||
Additional Factors | 0 | |
=
Issuer Credit Rating
Long-Term Outlook / Short-Term
A Stable / A-1
VR - Viability Rating
(Individual Rating )
a-
SRF - Support Rating Floor
NF (No Floor)
IDR - Issuer Default Rating
Long-Term Outlook / Short-Term
A RWN* / F1
Status as of 29 April 2020
* Rating Watch Negative
Page 59
Additional information: ESG ratings, indices and alignment with UN SDGs
ESG Indices and Ratings | UN Sustainable Development Goals |
Erste Group has been included in the Vienna Stock Exchange's sustainability index since its launch in 2008
Included since 2016: The FTSE4Good Index Series measures the performance of companies with strong environmental, social and governance (ESG) practices
Since 2017 included in the Euronext Vigeo Index: Eurozone 120
Included since 2019 in the Bloomberg Gender-Equality Index. Erste Group is the only Austrian company represented in this index (as of 2020).
Erste Group was awarded prime status in ISS ESG ratings in October 2018.
In March 2020, imug Investment Research confirmed the rating for Erste Group at positive (B), mortgage covered bonds are currently rated positive (BB) and raised the public sector covered bonds rating to very positive (A).
Erste Group was upgraded to AA in July 2019 and is considered a leader among 212 companies in the banking industry.
In principle, Erste Group supports all SDGs. Given its regional footprint and business model, Erste Group is in fact able to make notable contributions to the achievement of the below-mentioned SDGs:
- Since its foundation 200 years ago, Erste Group's purpose has been to promote and secure prosperity. Erste Group values responsibility, respect and sustainability.
- Financial literacy is key to economic prosperity. Therefore, Erste Group offers a variety of financial literacy trainings.
- Erste Group respects and promotes work-life balance among its employees and also contributes to their good health.
- Diversity and equal opportunity are key elements of Erste
Group's human resource strategy. - For Erste Group social and/or ecological criteria are as important as economic criteria in its investment decision process.
- Erste Group has launched social banking initiatives aiming at the financial inclusion of those parts of the population that are often excluded.
- Erste Group contributes to the cultural and social development of society.
- Erste Group aims at protecting the environment by minimising its ecological footprint, in particular with its consumption of energy and paper.
- Erste Group cooperates with national and international organisations and it promotes corporate volunteering.
Page 60
Additional information: shareholder structure -
Total number of shares: 429,800,000
By investor | By region | |
Unidentified *
Identified Trading ** | 9.82% |
2.02% |
52.18%
Institutional
Erste Foundation 1
11.41% | Savings Banks & |
Savings Banks | |
Foundations 2 | |
6.83% | |
Other Syndicated 3 | |
3.08% |
9.92% Caixa
0.74%
4.00% Employees
Retail
Unidentified *
Identified Trading ** | 9.82% | |
Rest of world | 2.02% | |
3.17% |
Continental 24.53%
Europe
16.31%
UK & Ireland
Austria
27.77%
16.38%
North America
- Economic interest Erste Foundation, including Erste Employees Private Foundation
- Economic interest Savings Banks & Savings Banks Foundations
-
Other parties to the shareholder agreement of Erste Foundation, Savings Banks and CaixaBank * Unidentified institutional and retail investors
** Including Market Makers, Prime Brokerage, Proprietary Trading, Collateral and Stock Lending positions which are visible through custodian banklists
Status as of 30 June 2020
Page 61
The monetary policy reaction -
A combination of rate cuts and quantitative easing
Type of measures
- ECB (as part of the euro zone, actions applicable in AT & SK) cut its key rate to 0% in 2016; cut the deposit rate by 10 bps to -0.5% in 2019
- ECB lowered financing costs for banks (TLTRO 3, PELTRO)
- In addition to the EUR 20bn monthly purchases (+120bn by eoy), the ECB introduced the Pandemic Emergency Purchasing Programmme in the amount of EUR 1,350bn, providing flexibility for asset purchases over time, issuers and asset classes
- CNB cut its key rate in three steps by 200bps to 0.25% in H1 2020
- QE included in law, but has not yet been launched; only temporary measures expected
- MNB cut its key policy rate in two steps to 0.60% & raised the O/N and 1w collateralised lending rate from 0.9% to 1.85% and introduced 1-w deposit tender at 0.9%
- MNB confirmed that QE will be extended from the EUR 1.2bn programme
- NBR cut its key rate in two steps by 75bps to 1.75%; narrowed facility corridor to ±50bps (from ±100bps); further interest cuts possible
- NBR has purchased RON denominated Romanian government bonds in secondary market
- HNB lowered 1Y and 5Y repo rates to 0.05% and 0.25% respectively
- HNB has introduced QE with a direct bond purchases close to HRK 20bn - approx. 5% of GDP
- CNB secured swap line with ECB in the size of EUR 2bn
- Croatia joined the ERM II on July 10th - central parity set at 7.5345
- NBS cut the key rate from 2.25% to 1.25% (50bps in 1Q20 and another 50bps in 2Q20); deposit facility rate at 0.75%, lending at 2.75%
- NBS supported liquidity of the banking system through repo and FX swap auctions; typical QE has not been introduced
- NBS might accept corporate bonds as collateral in monetary operations, with possibility of purchases on the secondary market
- NBS offers remuneration of 10+50bps paid on obligatory reserve to lenders who cut lending rates by 50bps in government guarantee scheme
Page 62
The regulatory reaction -
Pragmatism paired with dividend restrictions
Type of measures
- OeNB recommends banks to postpone share buybacks and consider the distribution of dividends with particular care
- Potential recalibration of SRB and OSII buffers to prevent effective buffer requirements from increasing until the end of 2022
- Financial market Stability Board recommends to leave the countercyclical capital buffer at a rate of 0%
- Gradually reduced countercyclical capital buffer from 1.75% to 0.50%
- Restriction on dividend payment
- Relaxed limits on LTV; dropped limit on DSTI and DTI
- Loosened capital and liquidity requirements by ECB
- NBS reduced countercyclical capital buffer from 1.5% to 1.00% (as of August 2020)
- Recommendation to refrain from dividend payment
- Minimum reserve requirement eliminated
- Restriction on dividend payments until end of September
- Derogations from DTI & LTV limits and maximum tenor allowed for consumer loans amended under public moratorium
- Flexibility regarding temporary usage of liquidity and capital buffers; recommendation against dividend payment
- Loans amended under public and private moratoria will not be treated as forborne
- Reduced mandatory reserve requirement from 12% to 9%
- LCR requirement eased
- Restriction on dividend payments
- Restriction on dividend payments until YE 2020
- Countercyclical buffer kept unchanged at 0%
Page 63
The political/fiscal reaction -
Lockdowns followed by fiscal support measures across CEE
Loan moratoria/payment holidays
Loan guarantees, bridge loans
Labour market support
(eg short-time work schemes)
Tax incentives
(Cuts, holidays, deferrals)
Direct payments
✓ ✓ ✓ ✓ ✓ ✓ ✓
✓ ✓ ✓ ✓ ✓ ✓ ✓
✓ ✓ ✓ ✓ ✓ ✓ ✓
✓ ✓ ✓ ✓ ✓ ✓ ✓
✓ ✓ ✓ ✓
COVID-19 measures (% of GDP) | 13% | 14% | 7% | 18%* | 3% | 11% | 12% |
* Hungary: COVID-19 data as % of GDP includes Central Bank measures
Page 64
The political/fiscal reaction -
Details on moratoria
Main characteristics
- Statutory
- Interest charged during deferral period & paid after the moratoria
- Statutory
- Interest charged during deferral period
- Rate cap at 2w repo + 8pp
- Statutory
- Interest charged during deferral period & paid after the moratoria
- Statutory
- Interest cannot be charged on unpaid interest (monthly instalment cannot increase after moratoria & maturity will be extended)
- Statutory
- Interest capitalised & paid over the life of the contract (except mortgage for which interest will be accumulated & paid in 5 years)
- Not statutory; banks encouraged to participate in moratoria
- Interest capitalised & paid over the life of the contract
- Statutory
- Interest cannot be charged on unpaid interest
Opt-in /
out
Opt-in
Opt-in
Opt-in
Opt-out
Opt-in
Opt-in
Opt-out
Retail /
Corp
Retail
Micro
Retail
Corp.
Retail
Micro
SME
Retail
Corp.
Retail
Corp.
Retail
Corp.
Retail
Corp.
Period
Ext. to up to 7 months
3 to 6
months
Up to 9 months
Up to 9 months
Up to 9 months
Ext. to up to 6 months
Expired in June
Partici- pation*
Retail: 5%
Corp: 5%
Retail: 6%
Corp: 8%
Retail: 12%
Corp: 20%
Retail: 45%
Corp: 32%
Retail:7% Corp: 12%
Retail: 7%
Corp: 21%
Retail: 72%
Corp: 63%
Upfront
loss
None
None
None
EUR
17.6m (Q1
2020)
None
None
None
* Customer participation in moratoria at Erste Group subsidiaries as of June 30, 2020; moratoria participation in Austria includes deferrals
Page 65
The political/fiscal reaction -
Details on loan guarantees
Main characteristics
- EUR 9bn programme for loans and guarantees for enterprises, especially SMEs
- Bridging loans in case of liquidity shortages
- EUR 33bn (COVID I, II, III) subsidised & guaranteed loan programmes
- COVID Praha for SMEs in Prague
- EUR 2.2bn in two state guarantee schemes (micro & SME, large corporates)
- EUR 5.6bn guaranteed loans to enterprises
- EUR 3bn state guarantee scheme for micro & SME loans
- EUR 1.5bn guaranteed loans for companies
- EUR 0.8bn working capital loans
- EUR 2.2bn programme for state guaranteed loans for micro companies and SMEs
Guarantee
Up to 100%
80-90%
(30% cap at
portfolio level)
80-90%
80%
SME 80% Micro 90%
Up to 80%
80%
(30% cap at
portfolio level)
Interest
Subsidised (varies by products)
Subsidised with absolute cap
Absolute cap or subsidy of up to 4%
0-2.6%
Fully
subsidised
Zero for 50%
of the loan
- 4% LCY
- <3% EUR
Period
2-5 years
Up to 3 years
Up to 6 years
3-15 years
3-6 years
Up to 5 years
Up to 3 years
Page 66
Our response to Coronavirus -
Erste Group is there for its customers, communities and employees
Employees
70%-95% of HQ employees in home office in March-May
Retail customers | Corporate customers | Communities |
Branches remaining open & | Expanding client advisory & | Supporting health care workers, |
extending online services | transmitting state support | affected people, hospitals |
- Majority of HQ in home office
- Psychological support
- Health insurance benefit
- Majority of HQ in home office
- Protective equipment
- 24/7 online doctor
- Majority of HQ in home office
- Special benefits for pregnant, elderly people
- Majority of HQ in home office
- Transport allowance
- Psychological support
- Majority of HQ in home office
- High-riskemployees working exclusively from home office
- Majority of HQ in home office
- Psychological support
- Majority of HQ in home office
- Paid leave for high risk employees
- Branches remain open
- George available for moratorium applications
- Branches remain open
- Banker on phone/online
- Branches remain open
- Mobile ATMs available
- Special COVID-19 website
- Branches remain open
- More call centre staff
- Educational videos
- Branches remain open
- Repayment holiday
- Tripled call centre capacity
- Branches remain open
- Public notary cost relief
- Branches remain open
- Special authorisation for pension payment
- Extended credit facilities
- Online process for moratorium applications
- Extended phone service
- Free payment terminals
- Postponed repayments (beyond statutory)
- Extended credit lines
- Simplified processes
- Flexible lending and account administration
- Repayment holiday
- Extended revolving credit facilities
- Working capital loans
- EIF guarantees for SME - up to 80%
- Various fee reliefs, eased conditions offered for businesses
- Donation to Austrian Red Cross
- Donation to affected families
- TV campaign on masks
- Donation to emergency committee
- Educational webinars
- Loan programme and donations to health care workers
- Donation to health care system & education & NGOs
- Entrepreneurial education
- Donation to hospitals
- Special benefits to most vulnerable communities
- Healthcare donations
- Supporting disabled and elderly people
Page 67
Investor relations details
- Erste Group Bank AG, Am Belvedere 1, 1100 Vienna
E-mail:investor.relations@erstegroup.com
Internet: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: thomas.sommerauer@erstegroup.com
Peter Makray
Tel: +43 (0)5 0100 16878 e-mail: peter.makray@erstegroup.com
Simone Pilz
Tel: +43 (0)5 0100 13036 e-mail: simone.pilz@erstegroup.com
Gerald Krames
Tel: +43 (0)5 0100 12751 e-mail: gerald.krames@erstegroup.com
Page 68
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Erste Group Bank AG published this content on 31 July 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 31 July 2020 09:46:06 UTC