Erste Bank : Presentation Teleconference Q1 2021

Erste Group investor presentation Q1 2021 results

30 April 2021

Erste Group starts well into 2021

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 -

Setting the frame for today's presentation

• CEE macro recovery fully intact, 2.8%-4.5% real GDP growth expected in 2021
• • Improving health situation in CEE region
  • Strong vaccination drive allowing for gradual opening up of economies
  • Good outlook for industrial production
• Fee performance continued to be strong
• • Successful conversion of deposits into asset management products with further deposit build- up creating additional growth opportunities
  • Supported by positive financial market backdrop
• For the time being credit risk deterioration not a significant feature of the Covid-19 crisis
• • Prudent risk guidance of max. 65bps maintained, but Q1 21 performance…
  • …opens up the way for beating consensus expectation (~60 bps) in 2021
  • Guidance review dependent on vaccination progress, magnitude of economic recovery and effectiveness of government support measures

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Executive summary -

Group income statement performance

QoQ net profit reconciliation (EUR m)		YoY net profit reconciliation (EUR m)

	+143.1%
	67
	46	20	355
	389
146
41	6

Q4 20 Operating Operating Risk costs	Other	Taxes on Minorities Q1 21
income expenses	result	income

	+50.9%
8	26	4	21
		63	355
166
235

1-320 Operating Operating Risk costs	Other	Taxes on Minorities 1-321
income expenses	result	income

• Q1 21 net result advanced to EUR 355.1m as expected Covid 19- related defaults did not yet materialise, resulting in low risk charge
• Operating income declined on weaker, albeit satisfactory net trading and FV result despite another record fee quarter
• Decline in other result exclusively due to seasonal bookings of annual resolution fund contributions of EUR 100.3m and the full- year amount of the HU banking levy of EUR 14.7m

• Yoy net profit growth primarily driven by reversal in net trading and FV result in Q1 21, and lower risk costs, offsetting higher tax charge and minorities
• Operating performance improved significantly on turnaround in net trading and FV result, strong fees, while NII was down
• Higher minorities charge due to improved profitability at savings banks

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