Q3 2023 results presentation

Vienna, 30 October 2023

Continued strong operating and risk performance

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

Operating and risk performance drive net profit

QoQ net profit development

YTD net profit development

in EUR m

in EUR m

-8.5%

896

29

28

165

820

42

51

22

Q2 23 Operating

Operating Risk costs

Other

Taxes on Minorities Q3 23

income

expenses

result

income

+40.2%

293

31

14

235

1,582

408

2,310

1,647

1-922 Operating

Operating Risk costs

Other

Taxes on Minorities 1-923

income

expenses

result

income

Strong operating performance continues in Q3 23

  • NII and fees set new quarterly records

Parameter updates contribute to increase in risk costs

  • Quarterly risk costs primarily booked in Austrian entities

Slightly weaker net result due to risk releases in Q2 23

NII remained key revenue driver in 1-9 23, up 23.7%

  • Net fee income also made a strong positive contribution as did trading and FV result supported by improved valuations

Cost inflation in line with expectations Continued strong credit risk performance

Page 4

EXECUTIVE SUMMARY: P&L DASHBOARD

On track to deliver upgraded 2023 guidance

Net interest margin

Cost/income ratio

in %

in %

2.50

2.45

2.50

G23: <50%

2.24

2.25

51.6

51.9

49.7

46.2

44.7

Q3 22

Q4 22

Q1 23

Q2 23

Q3 23

Q3 22

Q4 22

Q1 23

Q2 23

Q3 23

Banking levies

Earnings per share

Risk cost ratio

in bps

G23: <10 bps

37

2830

-4-2

Q3 22 Q4 22 Q1 23 Q2 23 Q3 23

Return on tangible equity

54

22

in EUR m

in EUR

99

1.98 1.90

1.19

1.39

1.10

22 27

in %

20.2

19.1

13.614.6

12.2

G23: >15%

Q3 22

Q4 22

Q1 23

Q2 23

Q3 23

Q3 22

Q4 22

Q1 23

Q2 23

Q3 23

Q3 22

Q4 22

Q1 23

Q2 23

Q3 23

Page 5

EXECUTIVE SUMMARY: BALANCE SHEET PERFORMANCE

Encouraging loan trends, stable core customer deposits

YTD total asset development

in EUR bn

+4.1%

0.0

0.3

337.2

4.0

9.7

323.9

3.8

3.7

31/12/22

Cash

Trading,

Loans to

Net loans Intangibles

Miscella-

30/09/23

financial

banks

neous

assets

assets

YTD equity & total liability development

in EUR bn

337.2

2.4

5.2

0.4

323.9

0.8

11.8

5.6

31/12/22 Trading

Bank

Customer

Debt Miscellaneous Equity 30/09/23

liabilities

deposits

deposits

securities liabilities

Underlying loan growth accelerates in Q3 23

  • Driven by EBOe (corporate), Slovakia and Croatia (retail & corporate)
  • Czech performance understated due to qoq currency depreciation

Rise in interbank lending due to higher deposit inflows

Stable retail and SME deposits

  • Quarterly volatility driven exclusively by large corporates and financial institutions business
  • Core deposits (Retail, SME, Savings Banks) broadly stable ytd despite continued inflation pressures

Senior unsecured and covered bonds issuance drive increase in debt securities

Page 6

EXECUTIVE SUMMARY: BALANCE SHEET DASHBOARD

Balance sheet metrics strong across the board

Loan/deposit ratio

Loan & deposit growth

Asset quality

in %

yoy, in %

in %

13.0

12.1

96.8

94.6

96.7

96.7

G23: ~5%

94.3

9.4

12.0

90.2

7.0

85.5

85.1

87.4

7.1

6.9

3.7

G23: ~ 2%

85.0

6.4

2.0

2.0

2.1

2.0

2.0

1.4

Q3 22

Q4 22

Q1 23

Q2 23

Q3 23

Q3 22

Q4 22

Q1 23

Q2 23

Q3 23

Q3 22

Q4 22

Q1 23

Q2 23

Q3 23

Loan growth

Deposit growth

NPL coverage ratio

NPL ratio

Capital ratios (final)

Liquidity ratios

Leverage ratio

in %

in %

in %

19.0 18.7

17.9 18.2 18.0

14.2

14.0

14.9

14.5

13.8

Total capital ratio

CET 1 ratio

Q3 22

Q4 22

Q1 23

Q2 23

Q3 23

1) Q3 23 pro forma CET1 at 15.0%.

145.4

146.0

148.7

6.6

6.3

6.6

6.6

142.1

6.1

138.0

142.0

139.1

140.0

144.6

142.7

1)

Liquidity coverage ratio

Net stable funding ratio

Q3 22

Q4 22

Q1 23

Q2 23

Q3 23

Q3 22

Q4 22

Q1 23

Q2 23

Q3 23

1) NSFR as of 08/23.

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 *

Slower growth in 2023,moderate recovery in 2024

Real GDP growth

Consumer price inflation

Unemployment rate

2023

in %

avg, in %

avg, in %

2024

17.9

9.5 9.0

3.3

3.2

3.5

10.9

10.7

10.4

12.7

6.0 6.0

5.6

5.7

6.9

6.6

2.6

2.6

4.6 4.5

2.5

2.6

7.4

8.1

1.6

1.5

2.1

1.6

5.5

6.5

5.5

5.1

2.7

3.3

3.8 3.5

0.6

3.9

2.2

4.2

-0.1

-0.6

AT CZ

SK

RO

HU

HR

RS

AT CZ SK

RO HU HR RS

AT CZ

SK

RO

HU

HR RS

Lower household consumption to impact economic growth in 2023; rebound expected in 2024 Declining inflation expected toward year-end 2023, supported by lower energy prices

Current account balance

General government balance

Public debt

% of GDP

% of GDP

% of GDP

1.3

1.9 0.8

1.0

0.0

0.3

0.7

0.2

77 75

58 57

71 69

63 61

48

48

54

52

60

-0.5

-1.6

-0.8

45 46

-2.0

-2.1-2.4

-3

-2.0-2.5

-3.2

-2.8

-4.0

-4.3

-4.3

-3.8

-2.8

-6.9-6.5

-5.2

AT CZ SK

RO HU

HR RS

-5.5-5.5

AT CZ

SK

RO

HU HR

RS

AT

CZ SK

RO HU HR RS

Labour markets expected to remain strong across CEE & AT

Fiscal and current account balances set to improve on the back of lower energy prices

* Source: Erste Group Research.

Page 9

MACROECONOMIC AND BUSINESS UPDATE: RETAIL BUSINESS

Retail loans up year-to-date

Slightly growing loan book amid economic slowdown

  • Housing loan demand stabilisation continued at low levels; increasing demand in certain countries (CZ, RO) and for renovation loans to improve energy efficiency
  • New business volumes for consumer loans remain at high levels
  • Risk profile of the retail loan portfolio remains excellent

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 Q3 23

  • New sales of savings plans strengthened
  • Continued shift from investment funds to bonds due to higher yield environment

Retail digital platform George continues to grow

  • 9.5 million users onboarded to George across 6 markets
  • Continued focus on driving digital adoption among our retail customers
  • Digital sales reach 48%, supported by assisted digital sales initiatives in CZ, HR, RO and SK

Fee income supported by insurance brokerage and payment fees

Housing and consumer loans

in EUR bn

70.8 71.7 72.3 73.2 72.9

12.0 12.3 12.5 13.0 13.0

Q3 22

Q4 22

Q1 23

Q2 23

Q3 23

Housing loans

Consumer loans

Securities savings plans

in thds, eop

+20.8%

997 1,060 1,110

918 943

Q3 22

Q4 22

Q1 23

Q2 23

Q3 23

Page 10

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Erste Group Bank AG published this content on 30 October 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 October 2023 06:36:12 UTC.