Erste Bank : Group Consolidated Financial Statements 2021 (IFRS)

Group Consolidated Financial Statements 2021 (IFRS)

Consolidated statement of income .................................................................................................................. 130

Consolidated statement of comprehensive income ....................................................................................... 131

Consolidated balance sheet .............................................................................................................................. 132

Consolidated statement of changes in equity ................................................................................................. 133

Consolidated statement of cash flows ............................................................................................................. 135

Notes to the group financial statements of Erste Group ............................................................................... 136

General information ........................................................................................................................................... 136

Significant accounting policies ........................................................................................................................ 136

a) Basis of preparation ...................................................................................................................................................................... 136

b) Covid-19 disclosures ..................................................................................................................................................................... 136

c) Accounting and measurement methods ........................................................................................................................................ 137

d) Significant accounting judgements, assumptions and estimates ................................................................................................. 138

e) Application of amended and new IFRS/IAS .................................................................................................................................. 139

PERFORMANCE / RETURN ............................................................................................................................... 140

• 1. Segment reporting ........................................................................................................................................................................ 140

• 2. Net interest income ...................................................................................................................................................................... 148

• 3. Net fee and commission income .................................................................................................................................................. 149

• 4. Dividend income ........................................................................................................................................................................... 150

• 5. Net trading result .......................................................................................................................................................................... 150

• 6. Gains/losses from financial instruments measured at fair value through profit or loss ............................................................... 150

• 7. Rental income from investment properties & other operating leases .......................................................................................... 150

• 8. General administrative expenses ................................................................................................................................................. 151

• 9. Gains/losses from derecognition of financial assets measured at amortised cost ...................................................................... 152

10.Other gains/losses from derecognition of financial instruments not measured at fair value through profit or loss ..................... 152

11.Impairment result from financial instruments ............................................................................................................................... 152

12.Other operating result .................................................................................................................................................................. 153

13.Taxes on income .......................................................................................................................................................................... 153

14.Appropriation of profit ................................................................................................................................................................... 156

Financial instruments - Significant accounting policies ............................................................................... 157

Financial instruments held at amortised cost ................................................................................................. 162

15.Cash and cash balances .............................................................................................................................................................. 162

16.Financial assets at amortised cost ............................................................................................................................................... 162

17.Debt instruments subject to contractual modifications ................................................................................................................ 166

18.Trade and other receivables ........................................................................................................................................................ 167

19.Financial liabilities at amortised costs .......................................................................................................................................... 167

Financial instruments at fair value ................................................................................................................... 170

20.Derivative financial instruments ................................................................................................................................................... 170

21.Other financial assets held for trading ......................................................................................................................................... 172

22.Non-trading financial assets at fair value through profit or loss ................................................................................................... 172

23.Other financial liabilities held for trading ...................................................................................................................................... 172

24.Financial liabilities at fair value through profit or loss .................................................................................................................. 172

25.Financial assets at fair value through other comprehensive income ........................................................................................... 174

Financial instruments - other disclosure matters .......................................................................................... 176

26.Fair value of financial instruments ............................................................................................................................................... 176

27.Hedge accounting ........................................................................................................................................................................ 185

28.Offsetting of financial instruments ................................................................................................................................................ 190

29.Transfers of financial assets - repurchase transactions and securities lending ......................................................................... 191

30.Collaterals .................................................................................................................................................................................... 192

31.Securities ..................................................................................................................................................................................... 192

Risk and capital management ........................................................................................................................... 193

32.Risk management ........................................................................................................................................................................ 193

33.Own funds and capital requirements ........................................................................................................................................... 201

34.Credit risk ..................................................................................................................................................................................... 205

35.Market risk .................................................................................................................................................................................... 236

36.Liquidity risk ................................................................................................................................................................................. 239

37.Operational risk ............................................................................................................................................................................ 243

Non-current assets and other investments ..................................................................................................... 244

38.Property, equipment and investment properties .......................................................................................................................... 244

39.Intangible assets .......................................................................................................................................................................... 247

40.Other assets ................................................................................................................................................................................. 251

Leases ................................................................................................................................................................. 252

Accruals, provisions, contingent liabilities and legal proceedings .............................................................. 256 41.Other liabilities .............................................................................................................................................................................. 256

42.Provisions .................................................................................................................................................................................... 256 43. Contingent liabilities ..................................................................................................................................................................... 262

Capital instruments, equity and reserves ........................................................................................................ 264

44. Total equity ................................................................................................................................................................................... 264 45.Non controlling interest ................................................................................................................................................................ 266

Scope of consolidation ...................................................................................................................................... 267

46.Subsidiaries ................................................................................................................................................................................. 267

47.Investments in associates and joint ventures .............................................................................................................................. 269

48.Unconsolidated structured entities .............................................................................................................................................. 270

Other disclosure matters ................................................................................................................................... 273

49. Related-party transactions ........................................................................................................................................................... 273

50.Share-based payments ................................................................................................................................................................ 275

51.Fees of the Auditors ..................................................................................................................................................................... 276

52.Assets held for sale and liabilities associated with assets held for sale ...................................................................................... 276

53.Assets and liabilities denominated in foreign currencies and outside Austria and return on assets ........................................... 277

54.Analysis of remaining maturities .................................................................................................................................................. 278

55.Events after the balance sheet date ............................................................................................................................................ 278

56.Country by country reporting ....................................................................................................................................................... 279

57.Interest Rate Benchmark Reform ................................................................................................................................................ 279

58.Government grants ...................................................................................................................................................................... 281

59.Details of the companies wholly or partly owned by Erste Group as of 31 December 2021 ...................................................... 282

Additional information ....................................................................................................................................... 294

STATEMENT OF ALL MEMBERS OF THE MANAGEMENT BOARD .............................................................. 299

Consolidated statement of income

in EUR million	Notes	1-12 20	1-12 21
Net interest income	2	4,774.8	4,975.7
Interest income	2	5,107.9	5,108.9
Other similar income	2	1,461.7	1,476.5
Interest expenses	2	-621.2	-483.8
Other similar expenses	2	-1,173.6	-1,125.9
Net fee and commission income	3	1,976.8	2,303.7
Fee and commission income	3	2,354.5	2,722.1
Fee and commission expenses	3	-377.7	-418.5
Dividend income	4	19.9	33.2
Net trading result	5	137.6	58.6
Gains/losses from financial instruments measured at fair value through profit or loss	6	62.0	173.2
Net result from equity method investments	10.4	15.4
Rental income from investment properties & other operating leases	7	173.6	182.3
Personnel expenses	8	-2,520.7	-2,578.1
Other administrative expenses	8	-1,158.9	-1,180.3
Depreciation and amortisation	8	-540.9	-548.0
Gains/losses from derecognition of financial assets measured at amortised cost	9	6.8	-7.6
Other gains/losses from derecognition of financial instruments not measured at fair value through profit or loss	10	-0.4	-25.2
Impairment result from financial instruments	11	-1,294.8	-158.8
Other operating result	12	-278.3	-310.5
Levies on banking activities	12	-117.7	-73.5
Pre-tax result from continuing operations	1,368.0	2,933.4
Taxes on income	13	-342.5	-525.2
Net result for the period	1,025.5	2,408.1
Net result attributable to non-controlling interests	242.3	484.8
Net result attributable to owners of the parent	783.1	1,923.4

Earnings per share

Earnings per share constitute net profit/loss for the year attributable to owners of the parent divided by the average number of ordinary shares outstanding. Diluted earnings per share represent the maximum potential dilution (through an increase in the average number of shares) that would occur if all subscription and conversion rights granted were exercised (also see Note 44 Total equity). As in the previous year no subscription and conversion rights were outstanding during the financial year. Diluted earnings per share were equal to the undiluted.

1-12 20	1-12 21
Net result attributable to owners of the parent	in EUR thousand	783,129	1,923,380
Dividend on AT1 capital	in EUR thousand	-114,580	-147,807
Net result for the period attributable to owners of the parent after deduction of AT1 capital dividend	in EUR thousand	668,549	1,775,573
Weighted average number of outstanding shares	426,324,725	426,246,662
Earnings per share	in EUR	1.57	4.17
Weighted average diluted number of outstanding shares	426,324,725	426,246,662
Diluted earnings per share	in EUR	1.57	4.17

Consolidated statement of comprehensive income

in EUR million	1-12 20	1-12 21
Net result for the period	1,025.5	2,408.1
Other comprehensive income
Items that may not be reclassified to profit or loss	62.0	116.1
Remeasurement of defined benefit plans	-61.0	28.6
Fair value reserve of equity instruments	5.8	20.4
Own credit risk reserve	127.5	82.3
Deferred taxes relating to items that may not be reclassified	-10.2	-15.3
Items that may be reclassified to profit or loss	-223.4	-122.2
Fair value reserve of debt instruments	44.4	-188.3
Gains/losses during the period	34.7	-191.2
Reclassification adjustments	-1.2	4.8
Credit loss allowances	10.9	-1.9
Cash flow hedge reserve	99.2	-298.4
Gains/losses during the period	113.5	-295.3
Reclassification adjustments	-14.3	-3.1
Currency reserve	-338.4	271.0
Gains/losses during the period	-338.4	271.0
Income tax relating to items that may be reclassified	-28.6	93.5
Gains/losses during the period	-32.3	94.2
Reclassification adjustments	3.7	-0.6
Share of other comprehensive income of associates and joint ventures accounted for by the equity method	0.0	0.0
Total other comprehensive income	-161.4	-6.1
Total comprehensive income	864.1	2,402.0
Total comprehensive income attributable to non-controlling interests	215.0	475.9
Total comprehensive income attributable to owners of the parent	649.1	1,926.1

For a detailed split of income tax items within other comprehensive income please refer to Note 13 Taxes on income.

Consolidated balance sheet

in EUR million	Notes	Dec 20	Dec 21
Assets
Cash and cash balances	15	35,838.5	45,495.4
Financial assets held for trading	20, 21	6,356.0	6,473.0
Derivatives	20	2,954.4	2,263.4
Other financial assets held for trading	21	3,401.7	4,209.6
Pledged as collateral	29	68.0	372.7
Non-trading financial assets at fair value through profit or loss	22	3,082.8	3,124.4
Pledged as collateral	29	7.9	0.0
Equity instruments	22	347.3	331.9
Debt securities	22	2,048.5	1,974.7
Loans and advances to banks	0.0	9.9
Loans and advances to customers	22	687.0	808.0
Financial assets at fair value through other comprehensive income	25	8,518.8	8,881.2
Pledged as collateral	29	50.0	130.2
Equity instruments	25	129.8	132.4
Debt securities	25	8,389.0	8,748.8
Financial assets at amortised cost	16	210,940.4	229,641.2
Pledged as collateral	29	1,898.5	1,232.4
Debt securities	16	29,578.9	35,550.8
Loans and advances to banks	16	21,466.2	20,991.4
Loans and advances to customers	16	159,895.3	173,099.1
Finance lease receivables	Leases	4,127.1	4,208.5
Hedge accounting derivatives	27	205.2	78.6
Fair value changes of hedged items in portfolio hedge of interest rate risk	27	5.3	-3.9
Property and equipment	38	2,552.1	2,645.2
Investment properties	38	1,280.4	1,344.2
Intangible assets	39	1,358.9	1,362.3
Investments in associates and joint ventures	47	190.1	210.9
Current tax assets	13	174.7	135.1
Deferred tax assets	13	460.1	562.1
Assets held for sale	51	211.8	73.0
Trade and other receivables	18	1,341.0	2,152.5
Other assets	40	750.6	1,044.6
Total assets	277,393.7	307,428.2
in EUR million	Notes	Dec 20	Dec 21
Liabilities and equity
Financial liabilities held for trading	20, 23	2,625.0	2,473.7
Derivatives	20	2,037.5	1,623.8
Other financial liabilities held for trading	23	587.6	849.9
Financial liabilities at fair value through profit or loss	24	12,091.0	10,464.1
Deposits from customers	24	254.0	494.7
Debt securities issued	24	11,656.6	9,778.4
Other financial liabilities	24	180.4	190.9
Financial liabilities at amortised cost	19	235,125.3	265,415.5
Deposits from banks	19	24,771.3	31,885.6
Deposits from customers	19	190,816.4	210,028.7
Debt securities issued	19	19,019.8	22,351.7
Other financial liabilities	517.7	1,149.4
Lease liabilities	Leases	559.7	588.1
Hedge accounting derivatives	27	188.7	309.4
Fair value changes of hedged items in portfolio hedge of interest rate risk	27	0.1	0.0
Provisions	42	2,081.9	1,985.9
Current tax liabilities	13	58.5	143.6
Deferred tax liabilities	13	20.0	18.7
Liabilities associated with assets held for sale	51	1.4	0.0
Other liabilities	41	2,231.8	2,515.9
Total equity	44	22,410.3	23,513.4
Equity attributable to non-controlling interests	44	5,073.1	5,516.0
Additional equity instruments	44	2,733.0	2,236.2
Equity attributable to owners of the parent	44	14,604.2	15,761.2
Subscribed capital	44	859.6	859.6
Additional paid-in capital	44	1,477.7	1,477.7
Retained earnings and other reserves	44	12,266.9	13,423.9
Total liabilities and equity	277,393.7	307,428.2