Q1 2024 preliminary results presentation

Vienna, 30 April 2024

Profit momentum continues

Willi Cernko, 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

EXECUTIVE SUMMARY

MACROECONOMIC AND BUSINESS UPDATE

OPERATING TRENDS

WHOLESALE FUNDING AND CAPITAL

FINANCIAL OUTLOOK

APPENDIX

Page 3

EXECUTIVE SUMMARY: P&L PERFORMANCE

Robust top line and moderate costs drive net profit growth

QoQ net profit development

YTD net profit development

in EUR m

+13.8%

52

62

152

62

783

95

688

89

Q4 23 Operating

Operating Risk costs

Other

Taxes on Minorities Q1 24

income

expenses

result

income

in EUR m

+32.0%

40

71

783

148

20

115

289

594

1-323 Operating

Operating Risk costs

Other

Taxes on Minorities 1-324

income

expenses

result

income

Operating income grows qoq

  • NII consolidation near record levels, reassuring fee growth

Operating expenses decline qoq

  • Seasonally lower expenses, despite (lower) upfront booking of deposit insurance contributions in all geographies

Net result also benefits from improved other result

Balanced operating income growth yoy

  • NII, fees and net trading & FV result all contribute to growth

Costs benefit from lower deposit insurance contributions Risk costs remain moderate

Other result improves on lower resolution fund expenses

Page 4

EXECUTIVE SUMMARY: P&L DASHBOARD

Fully on track to deliver 2024 guidance

Net interest margin

Cost/income ratio

Risk cost ratio

in %

in %

in bps

2.50

2.45

2.50

2.47

2.49

G24: ~50%

G24: <25 bps

30

18

49.7

49.8

-4

-2

0

46.2

46.0

44.7

Q1 23

Q2 23

Q3 23

Q4 23

Q1 24

Q1 23

Q2 23

Q3 23

Q4 23

Q1 24

Q1 23

Q2 23

Q3 23

Q4 23

Q1 24

Banking levies

Earnings per share

Return on tangible equity

99

22 27

in EUR m

86

36

1.98 1.90

1.39

1.54

in EUR

in %

20.2 19.1

17.2

14.614.7

1.87

G24: ~15%

Q1 23

Q2 23

Q3 23

Q4 23

Q1 24

Q1 23

Q2 23

Q3 23

Q4 23

Q1 24

Q1 23

Q2 23

Q3 23

Q4 23

Q1 24

Page 5

EXECUTIVE SUMMARY: BALANCE SHEET PERFORMANCE

Moderate volume growth, as expected

YTD total asset development

in EUR bn

+1.6%

0.3

0.0

0.2

342.7

337.2

9.4

7.3

2.9

31/12/23

Cash

Trading,

Loans to

Net loans Intangibles

Miscella-

31/03/24

financial

banks

neous

assets

assets

YTD equity & total liability development

in EUR bn

342.7

0.8

1.1

337.2

4.8

0.5

3.2

2.5

31/12/23 Trading

Bank

Customer

Debt Miscellaneous Equity 31/03/24

liabilities

deposits

deposits

securities liabilities

Customer loans flat ytd in euro terms

  • Marginal increase in Retail offset by marginal decrease in Corporate segments
  • Slow start to the year at minority-owned savings banks

Seasonally higher interbank lending volumes

Customer deposits increase by 1.1% in Q1 24

  • Core deposits (Retail, SME, Savings Banks) broadly stable
  • Large Corporate business stable

Debt securities driven by start-of-year issuance activity

  • Primarily covered bond issuance and increased CD business as well as selected local MREL issuance (CZ, HR)

Page 6

EXECUTIVE SUMMARY: BALANCE SHEET DASHBOARD

Balance sheet metrics remain strong

Loan/deposit ratio

Loan & deposit growth

Asset quality

in %

yoy, in %

in %

G24: ~5%

94.3

96.7

96.7

9.4

85.1

83.7

7.0

89.3

87.4

88.4

3.7

85.1

7.1

6.9

2.8

2.7

85.0

2.3

2.3

3.9

2.1

2.0

2.0

1.4

-1.2

Q1 23

Q2 23

Q3 23

Q4 23

Q1 24

Q1 23

Q2 23

Q3 23

Q4 23

Q1 24

Q1 23

Q2 23

Q3 23

Q4 23

Q1 24

Loan growth

Deposit growth

NPL coverage ratio

NPL ratio

Capital ratios (final)

Liquidity ratios

Leverage ratio

19.9

in %

in %

in %

19.0

19.2

18.7

18.0

7.1

146.0

148.7

153.4

152.8

6.6

6.6

6.8

15.7

142.1

6.3

15.2 *)

14.9

14.0

14.5

144.6

141.8

142.4

141.6 *)

140.0

Total capital ratio

Liquidity coverage ratio

CET 1 ratio

Net stable funding ratio

Q1 23

Q2 23

Q3 23

Q4 23

Q1 24

Q1 23

Q2 23

Q3 23

Q4 23

Q1 24

Q1 23

Q2 23

Q3 23

Q4 23

Q1 24

*) Q1 24 pro forma CET1 at 15.5%.

*) NSFR as of 02/24.

Page 7

PRESENTATION TOPICS

EXECUTIVE SUMMARY

MACROECONOMIC AND BUSINESS UPDATE

OPERATING TRENDS

WHOLESALE FUNDING AND CAPITAL

FINANCIAL OUTLOOK

APPENDIX

Page 8

MACROECONOMIC AND BUSINESS UPDATE: ECONOMIC FORECASTS *

Moderate economic recovery projected for 2024

Real GDP growth

Consumer price inflation

Unemployment rate

2024

in %

avg, in %

avg, in %

2025

3.9

5.9

8.8 8.6

3.2

3.4 3.1

3.3 3.5

4.7

4.3

6.0

2.7

2.6

2.6

4.0

5.2 5.1

5.7 5.7 5.6 5.6

5.7

1.5

2.0

2.0

3.4

3.0 3.0

3.7

3.1

2.9

4.5

1.2

2.5

2.4

2.7

3.3 3.9

3.9

2.2

0.4

AT

CZ SK

RO

HU HR

RS

AT

CZ SK RO

HU

HR

RS

AT

CZ SK RO

HU HR RS

Economic growth expected to rebound on stronger household consumption

Disinflation to continue and approach central banks' targets in 2024

Current account balance

General government balance

Public debt

% of GDP

% of GDP

% of GDP

2.1 2.3 0.5 0.9

0.4 0.7 0.6 0.1

76 77

58 60

73 72

61 59

50 50

51 51

60

-1.2-0.4

-1.7-1.5

-3

45 46

-2.7-2.8

-2.4

-2.3

-3.9

-4.8

-4.2

-2.5

-2.8

-5.0

-5.0

-6.9-6.8

-6.0

-5.2

AT CZ SK

RO HU HR RS

-6.2

AT

CZ SK

RO HU

HR RS

AT

CZ SK

RO

HU HR RS

Labour markets expected to remain robust in 2024

Current account balances sustainable in most countries, high fiscal deficit countries set to improve in 2025

* Source: Erste Group Research.

Page 9

MACROECONOMIC AND BUSINESS UPDATE: RETAIL BUSINESS

Retail business on a good track

Slightly growing loan book in FX-adjusted terms

  • Housing loan volumes started to rebound in local currency (esp. in CZ and HU), first rate cuts support new sales; sustainable growth trend likely to be triggered by lower interest rates
  • New business volumes for consumer loans remain at high levels (particularly strong in RO and HR); online offers further strengthen sales
  • Risk profile of the retail loan portfolio remains very good

Broadly stable retail deposit base

  • NII growth mostly liability-driven on the back of euro zone interest rate hikes

Stock of securities savings plans increased further in Q1 24

  • Strategic focus on long-term savings plans pays off - increase across all markets
  • Constant inflow of new assets under management

Retail digital platform George continues to grow

  • 10 million users onboarded to George across 6 markets
  • Continued focus on driving digital adoption among our retail customers
  • Digital sales reach 51%, supported by assisted digital sales initiatives in CZ, HR, RO and SK

Fee income growth driven by securities, insurance brokerage and payment fees

Housing and consumer loans

in EUR bn

72.3 73.2 72.9 72.9 72.3

12.5 13.0 13.0 13.1 13.3

Q1 23

Q2 23

Q3 23

Q4 23

Q1 24

Housing loans

Consumer loans

Securities savings plans

in thds, eop

+23.9%

997 1,060 1,110 1,165 1,235

Q1 23

Q2 23

Q3 23

Q4 23

Q1 24

Page 10

Attachments

  • Original Link
  • Original Document
  • Permalink

Disclaimer

Erste Group Bank AG published this content on 30 April 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 April 2024 05:38:10 UTC.