Erste Group investor presentation FY 2021 preliminary results

28 February 2022

Erste Group closes FY 2021 with record net profit, ROTE of 12.7%

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.

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Presentation topics

  • Key developments and executive summary
  • Macroeconomic and business update
  • Operating trends
    • Volumes
    • Revenues and costs
    • Impairments and asset quality
  • Capital and wholesale funding
  • Key takeaways and outlook
  • Additional information

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Key developments (1) -

Hot topic: Ukraine

  • Erste Group has no direct subsidiaries in Russia, Ukraine or Belarus and has only immaterial credit exposure towards those countries. No meaningful additional risk provisions are currently anticipated in this context.
  • Market exposures (trading book and banking book securities accounted at fair value) are negligible too, resulting in no material economic risk to the bank.
  • Ongoing analysis of potential second round effects, including:
    • Screening potential new sanctions risk and associated impacts on credit portfolio
    • Screening large corporate portfolio for those customers most exposed to Russian, Ukrainian an/or Belarussian activities
    • Screening of financial institutions and banks portfolio for indirect exposures to the wider Russian region
    • Ad-hocscenario for market risk stress test to estimate direct P&L effects of possible market volatility on trading book exposures as well as banking book securities accounted for at fair value
    • Screening of cyber risks and review of preparedness of business continuity plans for blackout scenarios

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Key developments (2) -

Setting the frame for today's presentation

  • Encouraging business environment in 2021
    • Economic growth in CEE & Austria has outperformed expectations
    • Faster than expected rate hikes in Czech Republic, Hungary and Romania
  • Strong operating result in 2021: +17.1%
    • Accelerating NII growth accompanied by record fee result drives operating income up by 8.2%
    • Moderate cost inflation of 2.0%
  • Benign credit risk environment throughout 2021
    • Erste Group closes 2021 with risk costs of 9 bps, best NPL ratio since IPO at 2.4%
  • Robust guidance for 2022, but risks are rising rapidly
    • Continued strong GDP growth in CEE & Austria expected
    • At least mid-singledigit NII growth accompanied by mid-single digit loan growth
    • Fee growth expected in low to mid-singledigits assuming constructive capital markets environment
    • Positive jaws, as operating income expected to grow faster than operating expenses
    • 2024 CIR target of 55% likely to be achieved already in 2022
    • Risk costs to remain moderate (<20 bps)
    • Again targeting double-digit ROTE
  • Erste Group defines M&A-/share buyback buffer on top of base dividend
    • Erste Group to propose to AGM EUR 1.6 DPS for business year 2021
    • CET1 ratio portion > 13.5% = M&A-/share buyback buffer with preference for M&A (bolt-ons in existing markets)

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Erste Group Bank AG published this content on 28 February 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 28 February 2022 06:41:06 UTC.