Investor presentation Zagreb, October 9th, 2018 Agenda Erste Bank - - PowerPoint PPT Presentation

Zagreb, October 9th, 2018

ERSTE & STEIERMÄRKISCHE BANK d.d. Investor presentation

2

1. Erste Bank – About us 2. Macroeconomic Update 3. Business Overview 4. Indicative Terms of Bonds 5. Appendix

Agenda

Direct presence Indirect presence # possition on the market based on asset size

Czech Republik Austria Slovakia Hungary Romania Serbia Croatia Customers: 0.9m

Hungary # 3

Employees: 3,047 Branches: 115 Customers: 3.4m

Romania # 1

Employees: 7,265 Branches: 508 Customers: 0.4m

Serbia # 10

Employees: 1,069 Branches: 85 Customers: 1,2m

Croatia # 3

Employees: 3,452 Branches: 153

Customers: 4.7m

Czech Republic # 1

Employees: 10,171 Branches: 510

Customers: 2.2m

Slovakia # 1

Employees: 4,250 Branches: 270 Customers: 3.7m

Austria # 1

Employees: 16,283 Branches: 905

Erste Group at a Glance

Erste Group Footprint

Total assets EUR 230bn Net profit EUR 774mn NPL coverage 72,0% NPL ratio 3,6% CET 1 ratio* 12,5% Total capital ratio* 17,3% Loan/deposit ratio 92,3% Leverage ratio 6,4% Credit rating** A (positive) / A2 (positive) / A- (stable)

branches

London New York Hong Kong Germany

* Basel 3, fully-loaded ** S&P / Moody‘s / Fitch

Key financials 1H 2018

3

ERSTE&STEIERMÄRKISCHE BANK d.d. - Introduction

4

• Member of Erste Group – one of the leading FIs in eastern

part of EU

• Primary focus on retail clients and SMEs
• 3rd Bank in Croatia in terms of assets (14.53% of market

share as of June 2018)

• More than 870.000 clients
• 132 branches
• 13 commercial, 8 entrepreneurial and 9 profit centres
• More than 2.500 employees (The whole Group in Croatia

more than 3.500)

AWARDS

• #2 Employer Partner for 2018
• EBRD – Award for the best Bank in Croatia for TFP programme for 2017
• The Banker and PWM – the best private banking services in Croatia for 2017
• The winner of the Gold Kuna for the most successful Bank in 2005, 2006, 2008,

2010, 2011 and 2012

Key events since formation

5 2000 Formation of ERSTE & STEIERMARKISCHE BANK d.d. through merger of Bjelovarska, Trgovačka and Čakovečka banks 2003 Acquisition of Riječka banka d.d. 2009 Acquisition of 100% equity stake in Opportunity bank AD Podgorica (now Erste bank AD Podgorica) 2011 Acquisition of shares in Erste Card Club d.d. 2018 Integration of Erste Factoring into the Bank

40.98%

Ownership structure and group members

6

Erste Group Bank AG Steiermärkische Bank und Sparkassen AG

ERSTE & STEIERMARKISCHE BANK Erste nekretnine d.o.o. Erste bank AD Podgorica Erste Card Club d.o.o. Erste factoring d.o.o. Erste&Steiermärkische S-leasing d.o.o. Izbor nekretnina d.o.o. Erste Group IT HR d.o.o. 100% 100% 100% 75% 50% 100% 80% 59.02%

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1. Erste Bank – About us 2. Macroeconomic Update 3. Business Overview 4. Indicative Terms of Bonds 5. Appendix

Agenda

8

Macroeconomic developments

Stable mid-term growth prospects, with focus on domestic demand

• As far as the outlook goes, we see the headline figure remaining

supported by sound domestic demand profile going into 2H18, on both private consumption and investments side

• Net exports contribution is seen, despite positive 2Q18 performance,

remaining on FY18 scale overall in modest red amid normalization of growth rates in tourism and more pronounced domestic-demand driven imports pressures.

• Bottom line, we confirm our FY18 forecast at 2.8% (with risks looking

broadly balanced), followed by similar growth performance in next year

• GDP growth shifted into higher gear in 2Q18 and landed at 2.9% y/y vs.

2.5% seen in 1Q18

• Detailed structure revealed supportive domestic demand, where both

private consumption and investment (3.6% y/y and 3.1% y/y, as follows) kept similar growth pattern as seen in 1Q18. On the other hand, positive surprise came from the external demand side, where stronger exports performance (5.6% y/y) outpaced imports increase (4.7% y/y), thus resulting in marginally positive net exports contribution to the 2Q18 GDP

Real GDP growth Components of GDP

• 0,1%

2,3% 3,5% 2,9% 2,8% 2,7%

• 1%

2014 2015 2016 2017 2018e 2019e

Source: Croatian Bureau of Statistics, Erste Group Research

• 1,6%

1,0% 3,4% 3,6% 3,6% 2,9%

• 2,8%

3,8% 6,5% 3,8% 4,9% 6,0%

• 4%
• 2%

2014 2015 2016 2017 2018e 2019e Private consumption growth Investments

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Macroeconomic developments

Fiscal position expected to remain balanced, with public debt further declining

• Labor

market continues to reflect positive economic trends as unemployment rate is anticipated to move into the single-digit region, while wage growth approached mid-single digit region

• Though inflation moved in a tight band at the beginning of the 2018,

recent months bought more pronounced acceleration as CPI moved above 2% mark, given stronger oil price dynamics – we see inflation remaining at close levels also in remainder of the year, with average FY18 seen at 1.7% mark, followed by similar CPI footprint also during 2019

• Following 2017 budget surplus of 0.8% of GDP and additional drop in the

public debt trajectory, fiscal developments should remain on encouraging track, with 2018 expect to bring balanced budget and continued reduction

• f public debt towards 75% of GDP. Short-term downside risks are

dominantly related to uncertainty

• ver

shipyard-related guarantees (negative one-off up to 1.5% of GDP)

• Improved outlook continued to positively reflect on the rating profile as

both Fitch and S&P upgraded the outlook to ‘positive’ in 2H18, hence increasing the likelihood that Croatia could receive an upgrade to IGR in 2019

Unemployment and inflation Public debt and general government deficit

17,3% 16,3% 13,1% 11,3% 9,6% 8,7%

• 0,2%
• 0,5%
• 1,1%

1,1% 1,7% 1,8%

• 4%

2014 2015 2016 2017 2018e 2019e Unemployment rate (%) Inflation (%) 84,0% 83,8% 80,6% 78,0% 74,4% 71,4%

• 5,1%
• 3,3%
• 0,9%

0,8% 0,0%

• 0,5%
• 20%

2014 2015 2016 2017 2018e 2019e Public debt (% of GDP) General government deficit (% of GDP)

Source: Croatian Bureau of Statistics, Erste Group Research

10

1. Erste Bank – About us 2. Macroeconomic Update 3. Business Overview 4. Indicative Terms of Bonds 5. Appendix

Agenda

11

Positive trends in economy affect loan activity

Source: audited non-consolidated financial reports for 2016 and 2017 and non-audited non-consolidated financial reports for 1H 2018 (GFI-KI)

Total assets Loans vs. deposits, L/D ratio

• In 2017 total assets increased by 1.9% y/y, compared to the previous
• year. The largest contributor to this assets growth in 2017 was the

increase of highly liquid assets of HRK 1bn. The excess liquidity is directed towards cash and deposits, which increased by 11.9% y/y and securities that grew by 8.1% y/y compared to 2016, while in the same period loans to financial institutions decreased by 15.4% y/y)

• In 2018 growth is based on loan activity – more details on slide 12
• Loans to customers increased by 0.4% y/y in 2017 based on the

increase of loans to corporate and retail segments. The increase in these segments more than compensated significant repayments of loans to the public sector

• Deposits in 2017 grew by 4.3% y/y compared to 2016. with main

contributors being retail and corporate segments. The trend of growth in the volume of demand deposits vs. the decrease in the volume of term deposits is notable

• Loan growth is backed by appropriate growth of deposit base thereby

maintaining L/D ratio at adequate level 56,1 57,2 58,3

2016 2017 1H 2018 Total assets (HRK bn)

*uključuje depozite banaka

34,9 35,1 36,2 42,0 43,8 44,8 83% 80% 81%

2016 2017 1H 2018 Loans to customers (HRK bn) Deposits from customers (HRK bn)* L/D ratio (%)

*Bank deposits included

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Pronounced growth of loans volume in 1H 2018

• In the first half of 2018 the loan portfolio grew by HRK 1.15 bn. Although

the deleveraging of the public sector continued in 2018, the previously mentioned increase in loans to corporate and retail sectors more than compensated for this

• Highly liquid assets optimization continued in 2018, whereby the spill-over

from loans to financial institutions in favor of more profitable securities and loans to clients is notable

Change of assets structure in 1H 2018 (HRK mn) Change of funding structure in 1H 2018 (HRK mn)

• The deposits growth of HRK 1b was backed by deposits from corporate,

retail as well as public sector whereby demand deposits keep increasing further vis-a-vis term deposits that keep decreasing further

• The growth in equity of HRK 323 mn was based mainly on the profit

realized in 1H 2018

Source: audited non-consolidated financial reports for 2016 and 2017 and non-audited non-consolidated financial reports for 1H 2018 (GFI-KI)

58.259 579 1.154 143 17 806 57.206 31/12/17 Cash Loans to

• fin. inst.

Securities & deriv. Loans Other 30/06/18 1.014 323 95 7 23 160 57.206 58.258 31/12/17 Loans Deposits Securities issued Subord. Instr. Other Equity 30/06/18

12,38 13,91 15,00 14,62% 16,68% 17,64%

• 1

2016 2017 1H 2018 Corporate loans - ESB (HRK bn) Corporate loans - ESB market share (%) 15,6 16,17 16,87 13,33% 13,63% 13,89%

2016 2017 1H 2018 Retail loans - ESB (HRK bn) Retail loans - ESB market share (%) 13

Stable market position with continuous market share growth

Loans volume grows both on corporate and retail side

• The whole market of loans to corporate was in 2017 under pressure

due to the sale of non performing loan portfolios. Hence ,the gross loans to corporate decreased by 1.5% y/y compared to the year before, in the Croatian market. ESB recorded an increase of the corporate loan segment of 12.4%, while continuously increasing its market share

• In

1H 2018 positive macroeconomic developments particularly affected corporate loans growth. The whole market grew by 1.9% compared to the 2017YE figures, while ESB loans to corporate grew by 7.8% in the same period, strong enough to more than compensate public sector deleveraging (trend noticeable in whole banking sector)

Gross loans to corporate and market share Gross loans to retail and market share

• In 2016 the retail loan segment was characterized by subdued demand

for loans, CHF loans conversion and reduction of NPL portfolio

• In 2017 new loans growth was achieved mainly in mortgage loans

segment which has been partially encouraged by state subsidies („APN”)

• In 1H 2018 growth of employment and economic activity intensifiesd the

credit activity towards retail customers. In the first six month of 2018 the retail loans segment growth of 4.3% was larger than the growth in the entire 2017 (3.7%)

Source: Agregated non-consolidated statistic report of credit institutions wich CNB provides to credit institutions

Growth of demand deposits with increase of ESB mkt. share

Retail deposits stable, while growth slightly more pronounced on corporate side

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• The current low interest rate development could encourage clients to

direct excess funds into different types

• f

investments (e.g. investment funds). These trends are noticeable, but not to such an extent that it could result in significant deposit base drop, neither in retail nor in corporate clients segment

• The total amount of corporate deposits of the banking sector were

HRK 63.08 bn in 2017, which is an increase by 8.5% y/y compared to the year before. EBS had outperformed the market with its corporate deposits growth reaching 16.4% in 2017, which resulted with ESB’s market share growth

Corporate deposits and market share Retail deposits and market share

• In the period shown, the market is characterized by continuous deposit

base growth both on retail and corporate sides. As previously mentioned there is a trend of deposit base transformation from term deposits to demand deposits due to continuous drop in interest rates

• ESB market share in respect to retail deposits is on a mild upward

swing, given the fact that the Croatian market of retail deposits is growing slower than that

• f

the corporate deposits market. Nevertheless, in this category, ESB has also slightly outperformed the total market

Source: Agregated non-consolidated statistic report of credit institutions wich CNB provides to credit institutions

7,32 8,52 8,84 12,59% 13,50% 14,33%

2016 2017 1H 2018 Corporate deposits - ESB (HRK bn) Corporate deposits - ESB market share (%) 25,7 26,1 26,36 13,67% 13,71% 13,79%

2016 2017 1H 2018 Retail deposits - ESB (HRK bn) Retail deposits - ESB market share (%)

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NPL share below market average

NPL share (Bank vs. Sector) NPL coverage (Bank vs. Sector)

• ESB is outperforming the market average in terms of loan portfolio quality

and NPL coverage

• The downward path of NPL share in ESB started earlier than in the

banking sector in Croatia due to earlier initiated activities towards NPL

• reduction. At the same time NPL coverage is gradually and consistently

growing to satisfactory levels

• During 2017 the NPL share did not significantly change compared to

2016 since the one-off effect of developments linked to Agrokor and its related suppliers was balanced with better collection of NPLs as well as slower pace of other loans inflow into NPL status. In parallel, the sector recognizes pronounced decrease of NPL share, primarily due to activities linked to sale of NPL portfolio, whereby the market is lagging behind ESB

• During 1H 2018 the trend of improved credit portfolio that was initiated

in 2017 continues

Source: Statistical reports of CNB (Credit quality per sectors, Credit quality per currencies) and internal data of ESB

14,88% 10,38% 9,96% 8,75% 16,65% 13,80% 11,35% 11,19%

2015 2016 2017 1H 2018 Share of NPL - ESB Share of NPL - SECTOR 58,20% 61,60% 64,60% 65,30% 56,90% 63,70% 61,50% 59,70%

2015 2016 2017 1H 2018 NPL coverage ratio - ESB NPL coverage ratio - SECTOR

0,63 0,65 0,51 9,7% 9,4% 13,8%

2016 2017 1H 2018 Net profit (HRK bn) ROE (%) 2,28 2,33 1,18 1 1,06 0,53 44% 46% 45%

2016 2017 1H 2018 Operating income (HRK mn) Operating expenses (HRK mn) Cost/income ratio (%) 16

Positive operating result trend highlighted in 1H 2018

Net profit and ROE Operative P&L, Cost Income ratio

• With stable operating result, ROE is growing in 1H2018 due to lower

impairments and provisions for losses

• Impairments and provisions for losses decreased in the first half of 2018

by HRK 191 mn vs. HRK 196 mn on June 30 of the previous year and amount to HRK 5 mn on June 30, 2018

• Operating revenues are growing backed by intensified lending activities

and interest cost optimization, despite the constant decreasing of interest rates on loans to customers.

• In 2017 net interest income increased by 4.7% y/y compared to the year
• before. The positive trends continued in 2018 as well. In the first half, net

interest income grew by 3.9% compared to the first half of 2017.

• Net fees and commission income increased as well. In 2017 they grew

by 8.5% y/y compared to 2017 and in 1H 2018 1% compared to the 1H of 2017.

• Cost / Income ratio is demonstrating stability in the period observed

Source: audited non-consolidated financial reports for 2016 and 2017 and non-audited non-consolidated financial reports for 1H 2018 (GFI-KI)

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Stable net interest margin throughout the period.

Net interest margin (%) Risk cost (impairment and provision for losses / avegare loans to customers)

1,4% 1,4% 0,0%

2016 2017 1H 2018

• The increase in net interest margin has been achieved by interest costs
• ptimization and growth in the volume of loans to clients, despite the

continuously downward pressures on active interest rates

• The increase of net interest margin is the result of the decrease of the

average interest rate on total deposits, that is achieved to a greater extent than the decrease of average interest rates on loans

• The decrease in risk cost in 1H2018 is the result of better loan portfolio

quality due to better payment discipline and decrease of NPL share in the portfolio 3,0% 3,1% 3,2%

2016 2017 1H 2018

Source: audited non-consolidated financial reports for 2016 and 2017 and non-audited non-consolidated financial reports for 1H 2018 (GFI-KI)

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Emphasis on maintenance of adequate capital level

CET 1 capital - ESB Regulatory capital - ESB CET 1 capital – ESB group Regulatory capital – ESB group

Source: internal data of ESB * HY 2018 profit not included in regulatory capital, while write-offs are included ** Pillar 1 regulatoy minimum includes combined protection level of capital, while it doesn’t include SREP add-on

6,72 7,14 7,35 15,6% 16,6% 15,3% 10%

YE 2016 YE 2017 HY 2018* CET1 (HRK bn) CET 1, % CET1 Pillar 1 regulatory minimum,% 6,11 6,54 6,81 18,0% 18,8% 17,0% 10%

YE 2016 YE 2017 HY 2018* CET1 (HRK bn) CET 1, % CET1 Pillar 1 regulatory minimum,% 7,35 7,77 7,95 21,6% 22,4% 19,9% 13,5%

YE 2016 YE 2017 HY 2018* Regulatory capital (HRK bn) Total capital ratio, % Pillar 1 regulatory minimum,% 7,94 8,36 8,49 15,6% 16,6% 17,7% 13,5%

YE 2016 YE 2017 HY 2018* Regulatory capital (HRK bn) Total capital ratio, % Pillar 1 regulatory minimum,%

19

1. Erste Bank – About us 2. Macroeconomic Update 3. Business Overview 4. Indicative Terms of Bonds 5. Appendix

Agenda

Indicative terms & conditions of planned transaction

20 Issuer ERSTE & STEIERMÄRKISCHE BANK d.d. Instrument Unsubordinated and unsecured bond, sixth level of higher priority in accordance to article 274 of Credit institutions law Principal repayment Bullet, after 5 years from issue date Nominal size and currency Up to HRK 500.000.000,00 Denomination 1.000.000,00 HRK Coupon Fixed, semi-annual payment Reference yield Bid yied of RHMF-O-23BA bond Margin [●] bps Listing Official Market of ZSE Settlement CCDC Law Law of Republic of Croatia Offer Exclusively to professional investors and eligible counterparties Expected timing October 2018. Subscription period 1 day

21

1. Erste Bank – About us 2. Macroeconomic Update 3. Business Overview 4. Indicative Terms of Bonds 5. Appendix

Agenda

22

Erste bank – non-consolidated P&L

ESB HRK mn 31.12.2016. 31.12.2017. 30.6.2017. 30.06.2018.

• 1. Interest income

2.314 2.112 1.065 1.009

• 2. Interest expense

733 456 252 164

• 3. Net interest income (048-049)

1.582 1.656 813 845

• 4. Fees and comissions income

561 610 277 287

• 5. Fees and comissions expense

150 165 68 77

• 6. Net fees and comissions income (051-052)

410 445 208 210

• 8. Gains/ losses from trading activities

92 36 17 14

• 10. Gains / losses from assets which are not traded, but are designated at

fair value through profit or loss 3

• 11. Gains / losses from activities related to assets available for sale

50 3 14

• 14. Gains from investment in subsidaries, associates and joint ventures
• 15. Income from other equity instruments

31 25 14 10

• 16. Gains / losses from foreign exchange

120 166 79 90

• 17. Other income

211 185 85 62

• 18. Other expenses

173 139 103 85

• 19. General administrative expenses and amortization

994 1.065 505 534

• 20. Profit (loss) from operations before impairment and provisions for losses

(050+053 do 064-065-066) 1.329 1.311 608 627

• 21. Impairment and provisions for losses

499 500 196 5

• 22. PROFIT / LOSS BEFORE TAXES (067-068)

830 812 413 622

• 23. INCOME TAX EXPENSE

204 162 82 117

• 24. PROFIT / LOSS FOR THE PERIOD (069-070)

627 649 330 505

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Erste bank – non-consolidated assets

ESB Bank HRK mn 31.12.2016. 31.12.2017. 30.06.2018. ASSETS

• 1. Cash and deposits with CNB

6.418 7.210 7.193

• 2. Deposits with banking institutions

592 633 385

• 3. Ministry of Finance Treasury bills and CNB Treasury bills

800

• 4. Securities and other financial instruments held for trading

195 192

• 5. Securities and other financial instruments held for sale

7.167 7.392 7.278

• 6. Securities and other financial instruments held to maturity

1.115 1.364 1.244

• 8. Derivative financial assets

76 55 71

• 9. Loans to financial institutions

3.048 2.577 2.018

• 10. Loans to other customers

34.932 35.087 36.241

• 11. Investments in subsidiaries, associates and joint ventures

1.010 989 989

• 12. Foreclosed assets

497 453 457

• 13. Tangible assets(minus amortization)

584 603 639

• 14. Interest, fee and other assets

680 648 751 A) TOTAL ASSETS (001+004 do 016) 56.119 57.206 58.258

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Erste bank – non-consolidated liabilities

ESB Bank HRK mn 31.12.2016. 31.12.2017. 30.06.2018. LIABILITIES

• 1. Loans from financial institutions (019+020)

2.224 1.327 1.340

• 2. Deposits

41.992 43.780 44.794

• 3. Other loans

2.139 2.139 2.031

• 4. Derivate financial liabilities and other traded financial liabilities

76 52 60

• 5. Issued debt securities

300 376 369

• 6. Issued subordinated instruments

1.663 1.277 1.255

• 8. Interest, fee and other liabilities

997 1.113 944 B) TOTAL LIABILITIES (018+021+025+028+029+032+033+034) 49.390 50.064 50.793 EQUITY

• 1. Share capital

3.500 3.500 3.500

• 2. Profit (loss) for the current year

627 649 505

• 3. Retained earnings (loss)

2.285 2.693 3.154

• 4. Legal reserves

85 85 85

• 5. Statutory and other capital reserves

1 1 1

• 6. Unrealised gain (loss) fon value adjustment of available-for-sale financial

assets 231 213 220 C) TOTAL EQUITY (036 do 042) 6.729 7.142 7.465 D) TOTAL LIABILITIES AND EQUITY (035+043) 56.119 57.206 58.258

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Erste bank – consolidated P&L

ESB Group HRK mn 31.12.2016. 31.12.2017. 30.6.2017. 30.6.2018.

• 1. Interest income

2.911 2.624 1.332 1.258

• 2. Interest expense

851 553 303 203

• 3. Net interest income (048-049)

2.060 2.071 1.029 1.055

• 4. Fees and comissions income

865 937 429 453

• 5. Fees and comissions expense

202 222 98 111

• 6. Net fees and comissions income (051-052)

663 715 331 342

• 8. Gains/ losses from trading activities

91 37 17 11

• 10. Gains / losses from assets which are not traded, but are designated at

fair value through profit or loss 4

• 11. Gains / losses from activities related to assets available for sale

65 5 1 27

• 14. Gains from investment in subsidaries, associates and joint ventures
• 9
• 15. Income from other equity instruments

10 11 6 15

• 16. Gains / losses from foreign exchange

131 162 89 112

• 17. Other income

519 490 220 184

• 18. Other expenses

278 290 161 151

• 19. General administrative expenses and amortization

1.532 1.596 767 785

• 20. Profit (loss) from operations before impairment and provisions for losses

(050+053 do 064-065-066) 1.729 1.605 764 804

• 21. Impairment and provisions for losses

516 966 716 58

• 22. PROFIT / LOSS BEFORE TAXES (067-068)

1.213 640 48 745

• 23. INCOME TAX EXPENSE

300 183 24 150

• 24. PROFIT / LOSS FOR THE PERIOD (069-070)

913 457 25 596

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Erste bank – consolidated assets

ESB Group HRK mn 31.12.2016. 31.12.2017. 30.6.2018. ASSETS

• 1. Cash and deposits with CNB

6.971 7.549 7.435

• 2. Deposits with banking institutions

691 858 751

• 3. Ministry of Finance Treasury bills and CNB Treasury bills

327 301 800

• 4. Securities and other financial instruments held for trading

195 192

• 5. Securities and other financial instruments held for sale

7.738 7.936 8.029

• 6. Securities and other financial instruments held to maturity

1.285 1.533 1.485

• 8. Derivative financial assets

73 52 70

• 9. Loans to financial institutions

2.490 2.236 1.801

• 10. Loans to other customers

42.819 41.986 43.150

• 11. Investments in subsidiaries, associates and joint ventures

59 62 67

• 12. Foreclosed assets

506 463 467

• 13. Tangible assets (minus amortization)

1.368 1.315 1.287

• 14. Interest, fee and other assets

1.277 1.439 1.526 A) TOTAL ASSETS (001+004 do 016) 65.604 65.925 67.060

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Erste bank – consolidated liabilities

ESB Group HRK mn 31.12.2016. 31.12.2017. 30.6.2018. LIABILITIES

• 1. Loans from financial institutions (019+020)

7.565 6.050 5.359

• 2. Deposits

43.891 45.649 46.737

• 3. Other loans

2.329 2.313 2.208

• 4. Derivative financial liabilities and other traded financial liabilities

77 52 60

• 5. Issued debt securities

300 376 369

• 6. Issued subordinated instruments

1.663 1.277 1.255

• 8. Interest, fee and other liabilities

1.792 2.001 2.465 B) TOTAL LIABILITIES (018+021+025+028+029+032+033+034) 57.616 57.719 58.453 EQUITY

• 1. Share capital

3.500 3.500 3.500

• 2. Profit (loss) for the current year

874 457 596

• 3. Retained earnings (loss)

3.266 3.920 4.187

• 4. Legal reserves

85 85 85

• 5. Statutory and other capital reserves
• 3
• 5
• 15
• 6. Unrealised gain (loss) on value adjustment of available-for-sale financial

assets 266 250 253 C) TOTAL EQUITY (036 do 042) 7.988 8.206 8.606 D) TOTAL LIABILITIES AND EQUITY (035+043) 65.604 65.925 67.060

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Formulas for calculation of alternative performance measures

CIR ratio, % Cost income ratio (Operating expenditures (bullet 19. of P&L) / Operating income (sum of bullets 3., 6., 8., 11., 14., 15., 16. in P&L)) ROE, % Return on equity (profit/loss for the period (bullet 24. of P&L) / average capital and reserves (average of bullet C of liabilities for the period observed and end of the year before) NIM, % Net interest margin (net interest income (bullet 3. of P&L) / average interest bearing assets (average of bullets 2., 3., 5., 6., 9. i 10. of assets for the period observed and end of the year before) Cost of risk, % L/D ratio, % Impairment and provisions for losses (bullet 21. of P&L) / weighted loans to other customers - net (average of bullet

• 10. of assets for the period observed and the period before)

Loan to deposit ratio (loans to other customers (bullet 10. of assets) / deposits (bullet 2. of liabilities)

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Disclaimer

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&STEIERMÄRKISCHE BANK, 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 OR DEBT SECURITIES 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.