Erste Group · 2017. 9. 18. · ERSTE GROUP March 2010 Inaugural Public Sector Covered Bond 4...

ERSTE GROUP

Erste Group -Inaugural Public Sector Covered Bond

March 2010

ERSTE GROUP

March 2010 Inaugural Public Sector Covered Bond2

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.

ERSTE GROUP


Presentation topics

−Erste Group’s strengths & strategy

− Funding

ERSTE GROUP


Percentage numbers refer to market shares and are as of Dec 2009

4

Erste Group in the region –Overview of key facts

Indirect presence

Clients: 0.1m

Ukraine

Retail loans: 1.7%

Retail dep .: 0.3%

Branches: 134

Clients: 4.7m

Romania

Retail loans: 20.0%

Retail dep.: 23.8%

Branches: 661

Clients: 0.2m

Serbia

Retail loans: 3.2%

Retail dep.: 2.7%

Branches: 73

Clients: 3.1m

Austria

Retail loans: 19.0%

Retail dep.: 19.4%

Branches: 1,056

Clients: 0.7m

Croatia

Retail loans: 13.1%

Retail dep.: 12.6%

Branches: 138

Clients: 5.3m

Czech Republic

Retail loans: 27.7%

Retail dep.: 29.5%

Branches: 660

Clients: 2.5m

Slovakia

Retail loans: 25.9%

Retail dep.: 28.1%

Branches: 279

Clients: 0.9m

Hungary

Retail loans: 12.3%

Retail dep.: 6.9%

Branches: 204Total population: 120m

Bankable population: 92m

Erste Group customers: 17.5m

Key market stats

EU resident customers: 16.4m

Non-EU or non-EU candidate country

EU or-EU candidate country

ERSTE GROUP


Clientbase: 1.14 Mio

Upper Austria

Market share (client)


Salzburg

Market Share (client)


Lower Austria


Sparkassen: 34 %

Sparkassen: 20 %

Sparkassen: 28%

Erste Bank: 8 %Clientbase: 1.40 Mio

Vienna


Sparkassen: 2 %

Erste Bank: 22 %

Clientbase: 0,24 Mio

Burgenland


Sparkassen: 5 %

Erste Bank: 12 %Clientbase: 1.01 Mio

Styria


Sparkassen: 31 %


Carinthia


Sparkassen: 21 %


Tyrol


Sparkassen: 33 %


Vorarlberg


Sparkassen: 28 %

Kundenbasis: “bankable People“ = Personen über 15 JahreQuelle: FMDS 2007

The Cross Guarantee System

ERSTE GROUP


Erste Group in the region –Attractive fiscal environment in CEE

− Erste Group’s markets characterised by lower levels of public debt− Of these Hungary has the highest public debt to GDP

ratio (80%), yet is still below the Eurozone average− Only Hungary and Austria are expected to be above

the Maastricht threshold of 60% by end-2010− Other countries to remain significantly below the 60%

threshold

− CEE countries have already started to tackle fiscal deficits− Erste Group’s core markets are at the lower end of

the range

− Deficits will be below the Eurozone average (6.9% of GDP) in all countries

122

117

101

85

83

83

80

80

76

74

66

66

55

47

45

43

40

35

35

35

26

15

8.7

5.3

5.9

8.0

11.6

8.3

12.0

4.1

5.0

5.5

10.1

6.2

6.2

4.6

3.5

7.0

6.0

4.0

4.0

4.0

6.3

1.2

0 20 40 60 80 100 120 140

Greece

Italy

Belgium

Portugal

Ireland

France

United Kingdom

Hungary

Germany

Austria

Spain

Netherlands

Poland

Finland

Croatia

Slovenia

Slovakia

Serbia

Ukraine

Czech Republic

Romania

Bulgaria

Debt 2010Deficit 2010

Euro Areaaverage (2010E)

Maastrichtlimit

Public debt/fiscal deficit in % of GDP

Source: European Commission, Erste Group Research

Eurozoneaverage (2010e)

ERSTE GROUP


FY 2009 financial highlights –Cost/income ratio reached record low in 2009

*) Red bars denote reported EPS and ROE respectively. Cash EPS and EPS calculated on average number of shares: 322.2m (ex treasury shares and shares owned by savings banks with EB participations: 4.60m), adjusted for non cash items amounting to EUR 67.2m in FY 09 (linear depreciation of customer relationship value after tax and minorities) and dividend on the participation capital (EUR 141.1m).

Cash earnings per share *

2.98 3.14

3.92

2.892.57

2.74

2.37

0.0

1.0

2.0

3.0

4.0

5.0

2005 2006 2007 2008 2009

in E

UR

Cost/income ratio

62.2%59.9% 59.2%

57.2%

50.2%

40%

45%

50%

55%

60%

65%

2005 2006 2007 2008 2009

Cash return on equity *

19.5%

13.8% 14.6%

10.1% 9.7%

9.6% 9.1%

0%

4%

8%

12%

16%

20%

24%

2005 2006 2007 2008 2009

− Net profit improved by 5.1% to EUR 903.4m− Decline in EPS due to 60m new shares issued in November

capital raising

− NIM on interest bearing assets at highest ever leve l of 3.0% at FY 09 (FY 08: 2.8%)− Based on stable to improving margins both in CEE (up to 4.7%)

and Austria (up to 2.0%)

− Cash ROE reached 9.7% on substantially higher capital − Shareholders’ equity increased by EUR 4.6bn in 2009 (+57.3%),

including EUR 1.76bn of participation capital issued in H1 09 and EUR 1.7bn from new shares

− CIR improved to record low of 50.2%− Dividend of EUR 0.65 will be proposed at AGM

ERSTE GROUP


2008 2009

Tier 1 ratio (credit risk) 1

+358 bps 10.8%

2008 2009

Core tier 1 ratio (total risk) 3

+313 bps

2008 2009

Erste Group’s capital position –Substantially improved capital ratios

1) Tier 1 ratio (credit risk) = tier 1 capital incl. hybrid and after regulatory deductions divided by credit RWA.

2) Tier 1 ratio (total risk) = tier 1 capital incl. hybrid and after regulatory deductions divided by total RWA (which includes credit risk, market and operational risk).

3) Core tier 1 ratio (total risk) = tier 1 capital excl. hybrid and after regulatory deductions divided by total RWA (which includes credit risk, market and operational risk).

Tier 1 ratio (total risk) 2

+303 bps

7.2%

6.2%

9.2%

5.2%

8.3%

ERSTE GROUP


Presentation topics

−Erste Group’s strengths & strategy− Funding − Funding mix and strategy 2010− “Pfandbrief” Legislation in Austria− Overview of Erste Group’s Cover Pools

10March 2010

ERSTE GROUP

Inaugural Public Sector Covered Bond

AaaMortgage Covered Bond

AaaPublic Sector Covered Bond

F1P-1A-1Short-Term

Credit Rating

A

(stable)

Aa3

(negative)

A

(negative)

Long-Term Credit Rating

Erste Group’s ratings

AA+ Aa1 AA+

AA Aa2 AA+

AA- Aa3 AA-

A+ A1 Bank A Bank B A+

A Bank A Bank B A2 A Bank A Bank B Bank D

A- A3 A-

BBB+ Baa1 Bank C Bank D Bank E BBB+ Bank C

FitchS&P Moody`s

ERSTE GROUP


Erste Group’s funding profile –Retail funding providing stable support for future growth

− Customer deposits are the main source of funding− Providing a solid funding base in all local currencies− Translating into stable loan/deposit ratio of 115%− Increased share of customer deposits during crisis

− Short-term funding needs well covered− Declining share of short-term funding− Collateral capacity exceeds funding needs

− Limited long-term funding required− Total funding needs for 2010 will be between EUR 3-4bn− Funding will focus on covered bonds and retail placements− Further focus on extension of maturity profile

Evolution of Erste Group's funding mix

54.6% 57.0% 58.9%

17.0% 15.9% 15.6%

19.2% 18.1% 13.8%

6.2% 5.8% 8.5%3.0% 3.2% 3.2%

0%

20%

40%

60%

80%

100%

Dec 07 Dec 08 Dec 09Customer deposits Issued bonds & CDs Deposits by banksEquity Subordinated capital

Short-term funding vs collateral coverage

36.232.1

25.719.1

23.427.652.7%

72.9%

107.4%

0

10

20

30

40

50

60

Dec 07 Dec 08 Dec 09

in E

UR

bill

ion

0%

20%

40%

60%

80%

100%

120%

Short-term funding Collateral Collateral coverage

Redemption Profile of Erste Group

3.6

1.4

0.70.50.70.3

1.7

4.1 4.65

1.9 1.7

2.9

0.0

1.0

2.0

3.0

4.0

5.0

6.0

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022+

in E

UR

billi

on

Senior unsecured Covered Bonds Subordinated Debt Debt CEE Subsidiaries

Redemption profile of Erste Group

ERSTE GROUP


Outlook 2010: Focus on Pfandbrief issues

Expected Funding Structure 2010Funding Structure 2009

Pfandbrief 1.4bn

Capital (LT2,UT2)

0.2bn

Guaranteed issues4bn

Senior PP 2.7bn Pfandbrief

Capital (LT2,UT2)

; Senior PP

ERSTE GROUP


EGB inaugural Mortgage Pfandbrief in comparisonAbsolute spread performance last 6 months

0 5 10 15 20 25 30

KA 13

RZB 14

OKB 16

ERSTBK 14

ASFING 17

OBND 16

ERSTBK 16

Erste Group Pfandbrief vs. Austrian Agencies and GGB‘s

0 5 10 15 20 25 30

DB 16

LBBW 15

BHH 17

DHY 16

DGHYP 16

DPB 15

EURHYP 16

ERSTBK 16

Erste Group Pfandbrief vs. German Pfandbriefe Erste Group Pfandbrief vs. European Covered Bonds

-15 -10 -5 0 5 10 15 20 25 30

BBVASM 16

SANTAN 16

BANEST 16

CAIXAC 17

UCGIM 16

DEXMA 16

ACACB 16

ERSTBK 16

Erste Group Pfandbrief vs. Indices

-20 -10 0 10 20 30

iBoxx ES

iBoxx CB

iBoxx Hypf

iBoxx GER

iBoxx FR

iBoxx AUT

ERSTBK 16

ERSTE GROUP


Presentation topics

−Erste Group’s strengths & strategy− Funding − Funding mix and strategy 2010− “Pfandbrief” Legislation in Austria− Overview of Erste Group’s Cover Pools

ERSTE GROUP


Legal Framework in AustriaMortgage and Public Sector Pfandbrief

Austrian Covered Bonds

Pfandbriefe (Mortgage Banking Act)Fundierte

Schuldverschreibungen

Hypothekenbankgesetz(Mortgage Banking Act 1899)

Pfandbriefgesetz(Pfandbrief Law 1938)

Law from 1905

Erste Group Bank

Bank Austria Creditanstalt

Landeshypothekenbanken

Pfandbriefstelle

BAWAG

Kommunalkredit

ERSTE GROUP


PfandbriefeLegislation comparison

��XX��***NPV matching

��Pfandbriefe remain outstanding in caseof issuer‘s bankruptcy

��Special proceedings in case of insolvency

��X��Cover Pool monitoring (Trustee)

X��X��Legally required minimum over-collateralization

X��XX��Collateral assets limited to Europe

��X��Cover register

X**��X��Mortgage and public sector collateralassets in seperate pools

��Pfandbrief law in place

NorwaySpainFranceGermanyAustria(Pfandbriefe)*

Criteria of Pfandbrief law

*Hypothekenpfandbriefgesetz **but several single cover pools possible

***if included in the articles of association of the resp ective credit institution wich is the case for EGB

ERSTE GROUP


Presentation topics

−Erste Group’s strengths & strategy− Funding − Funding mix and strategy 2010− “Pfandbrief” Legislation in Austria− Overview of Erste Group’s Public Sector Cover Pool

ERSTE GROUP


Overview of Erste Group Public Sector Cover Pool - Key characteristics

−Aaa Rating from Moody’s

−Strong and long existing legal framework for Austri an Pfandbriefe

− 94% of the Cover Pool assets are originated in Aust ria, 6% are in Europe

−Public Sector loans represent 94% of the Cover Pool

−Average exposure per entity is less than € 2mn

−Average seasoning is 4.8 years

ERSTE GROUP


Overview of Erste Group Public Sector Cover Pool

Cover Pool

Structure of Cover Pool per 31.01.2010 Rating: Aaa Moody´s

Pfandbrief Issues

Total volume € 2,876 mn

Number of loans 5,496

Number of borrowers 1,579

Average exposure per borrower € 1.8 mn

Avg. seasoning 4.7 yrs

Avg. remaining life 13.8 yrs

Volume of bonds issued € 2,358 mn

thereof ECB Collateral € 1,410 mn

Average remaining maturity 8.6 yrs

Over-collaterisation 203%

Number of covered bonds 65

Average size of issue € 36.3 mn

ERSTE GROUP


Overview of Erste Group Public Sector Cover Pool II

(Primary) Loans Cover Pool by Rating

Regional Distribution

Regional distribution Austrian regional distribution

Aaa-Rating95%

Aa-Rating3%

Investment grade

2%

Bonds6%

Loans94%

Other provinces

24%

Salzburg16%

Styria18%

Lower Austria

23%

Vienna (incl.

central govt)19%

Austria94%

EU6%

ERSTE GROUP


Contacts

− Erste Group Bank AG, Börsegasse 14, 1010 Vienna

E-mail: [email protected]: www.erstegroup.com / Investor Relations / Bond Investo rs

− Investor RelationsGabriele Werzer Tel: +43 (0)5 0100-11286 e-mail: [email protected]

Thomas Sommerauer Tel: +43 (0)5 0100-17326 e-mail: [email protected]

− Debt Capital Markets/ Long Term FundingChristian Reiss Tel: +43 (0)5 0100-84012 e-mail: [email protected]ée Bauer Tel: +43 (0)5 0100-84013 e-mail: [email protected]

ERSTE GROUP


Shareholder structure –Total number of shares: 377,925,086

By investor By region

Last update: November 2009

26.1%

Employees3.3%

Savings banks6.8%

Retail investors6.6%

Institutional investors

47.1%

Criteria CaixaCorp

10.1%

Austria50.1%

North America16.3%

UK & Ireland12.1%

Continental Europe20.6%

Other0.9%

Erste Group · 2017. 9. 18. · ERSTE GROUP March 2010 Inaugural Public Sector Covered Bond 4...

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Transcript of Erste Group · 2017. 9. 18. · ERSTE GROUP March 2010 Inaugural Public Sector Covered Bond 4...