#1ERSTE & STEIERMÄRKISCHE BANK d.d. Investor presentation Zagreb, October 9th, 2018 ERSTEŚ Bank#2Agenda 1. Erste Bank - About us 2. Macroeconomic Update 3. Business Overview 4. Indicative Terms of Bonds 5. Appendix ERSTEŚ Bank 2#3Erste Group at a Glance Erste Group Footprint branches London New York Hong Kong Germany ČESKÁŠ SPOŘITELNA ERSTEŚ Czech Republik Austria SLOVENSKÁ sporiteľňa Slovakia Customers: 4.7m Employees: 10,171 Branches: 510 ERSTEŚ Bank Key financials 1H 2018 Czech Republic # 1 Slovakia # 1 Customers: 2.2m Employees: 4,250 Branches: 270 Total assets EUR 230bn Net profit EUR 774mn Hungary #3 NPL coverage 72,0% Customers: 0.9m Employees: 3,047 Branches: 115 NPL ratio 3,6% Hungary Romania Croatia Serbia CET 1 ratio* 12,5% Romania # 1 Customers: 3.4m Total capital ratio* 17,3% BCR Ś Loan/deposit ratio 92,3% ERSTEŚ Employees: 7,265 Branches: 508 Bank Leverage ratio 6,4% ERSTEŚ Bank Austria # 1 Customers: 3.7m Employees: 16,283 Branches: 905 Croatia # 3 Customers: 1,2m Employees: 3,452 Branches: 153 Direct presence Indirect presence #possition on the market based on asset size ERSTEŚ Bank Serbia # 10 Customers: 0.4m Employees: 1,069 Branches: 85 Credit rating** * ** Basel 3, fully-loaded S&P/Moody's / Fitch A (positive) / A2 (positive) / A- (stable) 3#4ERSTE&STEIERMÄRKISCHE BANK d.d. - Introduction - Member of Erste Group - one of the leading Fls in eastern part of EU - Primary focus on retail clients and SMEs 3rd Bank in Croatia in terms of assets (14.53% of market ISTRA (PULA) - - - 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) RIJEKA ZAGREB SPLIT BJELOVAR DUBROVNIK 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 CEP CERTIFIKAT POSLODAVAC PARTNER PLUM The Banker GLOBAL PRIVATE BANKING AWARDS 2017 BEST PRIVATE BANK IN CROATIA ERSTEŚ Bank ZLATNA KUNA 4#5Key events since formation ERSTEŚ Bank 2003 2009 2011 2018 Integration of Erste Factoring into the Bank Acquisition of shares in Erste Card Club d.d. Acquisition of 100% equity stake in Opportunity bank AD Podgorica (now Erste bank AD Podgorica) Acquisition of Riječka banka d.d. 2000 Formation of ERSTE & STEIERMARKISCHE BANK d.d. through merger of Bjelovarska, Trgovačka and Čakovečka banks LO 5#6Ownership structure and group members 59.02% Erste Group Bank AG 100% Erste nekretnine d.o.o. 100% Erste bank AD Podgorica 100% Erste Card Club d.o.o. ERSTE & 75% Erste factoring d.o.o. STEIERMARKISCHE BANK Steiermärkische Bank 40.98% und Sparkassen AG 50% Erste&Steiermärkische S-leasing d.o.o. ERSTEŚ Bank 100% Izbor nekretnina d.o.o. 80% Erste Group IT HR d.o.o. CO 6#7Agenda 1. Erste Bank - About us 2. Macroeconomic Update 3. Business Overview 4. Indicative Terms of Bonds 5. Appendix ERSTEŚ Bank 7#8Macroeconomic developments Stable mid-term growth prospects, with focus on domestic demand Components of GDP Real GDP growth 3,5% 2,9% 2,8% 2,7% 2,3% 1,0% 6,5% 6,0% 4,9% 3,8% 3,4% 3,6% 3,8% 3,6% 2,9% -1,6% -0,1% -2,8% 2014 2015 2016 2017 2018e 2019e 2014 2015 2016 2017 2018e 2019e Private consumption growth ■Investments 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 • 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 ERSTEŚ Source: Croatian Bureau of Statistics, Erste Group Research Bank 8#9Macroeconomic developments Fiscal position expected to remain balanced, with public debt further declining Unemployment and inflation Public debt and general government deficit 17,3% 16,3% 13,1% 11,3% 9,6% 8,7% 1,1% 1,7% 1,8% 84,0% 83,8% 80,6% 78,0% 74,4% 71,4% 0,8% 0,0% -0,2% -0,5% -1,1% -5,1% -3,3% -0,9% -0,5% 2014 2015 2016 2017 2018e 2019e 2014 2015 2016 2017 2018e 2019e Unemployment rate (%) ■Inflation (%) as Labor market continues to reflect positive economic trends 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 Public debt (% of GDP) ■General government deficit (% of GDP) 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 of public debt towards 75% of GDP. Short-term downside risks are dominantly related to uncertainty over 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 ERSTEŚ Source: Croatian Bureau of Statistics, Erste Group Research Bank 9#10Agenda 1. Erste Bank - About us 2. Macroeconomic Update 3. Business Overview 4. Indicative Terms of Bonds 5. Appendix ERSTEŚ Bank 10 10#11Positive trends in economy affect loan activity Total assets Loans vs. deposits, L/D ratio 56,1 2016 57,2 2017 58,3 1H 2018 83% 80% 81% 44,8 42,0 43,8 34,9 35,1 36,2 2016 2017 1H 2018 • Total assets (HRK bn) 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 ERSTEŚ • • Loans to customers (HRK bn) Deposits from customers (HRK bn)* L/D ratio (%) *Bank deposits included 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 Source: audited non-consolidated financial reports for 2016 and 2017 and non-audited non-consolidated financial reports for 1H 2018 (GFI-KI) Bank 11#12Pronounced growth of loans volume in 1H 2018 Change of assets structure in 1H 2018 (HRK mn) Change of funding structure in 1H 2018 (HRK mn) 57.206 17 806 579 1.154 58.259 143 58.258 23 323 160 1.014 57.206 95 31/12/17 Cash Loans to Securities fin. inst. & deriv. Loans Other 30/06/18 31/12/17 Loans Deposits Securities Subord. issued Instr. Other Equity 30/06/18 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 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 ERSTEŚ Source: audited non-consolidated financial reports for 2016 and 2017 and non-audited non-consolidated financial reports for 1H 2018 (GFI-KI) Bank 12#13Stable market position with continuous market share growth Loans volume grows both on corporate and retail side Gross loans to corporate and market share Gross loans to retail and market share 14,62% 16,68% 17,64% 13,33% 13,63% 13,89% 13,91 15,00 12,38 16,87 16,17 15,6 2016 2017 1H 2018 2016 2017 1H 2018 • • Corporate loans - ESB (HRK bn) Corporate loans - ESB market share (%) 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) ERSTEŚ Source: Agregated non-consolidated statistic report of credit institutions wich CNB provides to credit institutions Retail loans ESB (HRK bn) Retail loans - ESB 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%) Bank 13#14Growth of demand deposits with increase of ESB mkt. share Retail deposits stable, while growth slightly more pronounced on corporate side Retail deposits and market share Corporate deposits and market share 13,67% 13,71% 13,79% 13,50% 12,59% 14,33% 25,7 26,1 26,36 8,52 8,84 7,32 2016 2017 1H 2018 2016 2017 1H 2018 Retail deposits - ESB (HRK bn) Retail deposits - ESB 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 of the corporate deposits market. Nevertheless, in this category, ESB has also slightly outperformed the total market ERSTEŚ . • Source: Agregated non-consolidated statistic report of credit institutions wich CNB provides to credit institutions Corporate deposits - ESB (HRK bn) Corporate deposits - ESB market share (%) The current low interest rate development could encourage clients to direct excess funds into different types of 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 Bank 14#15NPL share below market average NPL share (Bank vs. Sector) NPL coverage (Bank vs. Sector) 16,65% Share of NPL - ESB Share of NPL - SECTOR NPL coverage ratio - ESB NPL coverage ratio - SECTOR 63,70% 65,30% 64,60% 14,88% 13,80% 61,60% 61,50% 59,70% 11,35% 11,19% 10,38% 58,20% 9,96% 8,75% 56,90% 2015 2016 2017 1H 2018 2015 2016 2017 1H 2018 • 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 ERSTEŚ Bank Source: Statistical reports of CNB (Credit quality per sectors, Credit quality per currencies) and internal data of ESB • • 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 15#16Positive operating result trend highlighted in 1H 2018 Net profit and ROE • • 9,7% 9,4% Operative P&L, Cost Income ratio 13.8% 0,63 0,65 2,28 0,51 44% 2,33 46% 45% 2016 2017 1H 2018 Net profit (HRK bn) ROE (%) 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 ERSTEŚ Bank • • • • 2016 1 Operating income (HRK mn) Cost/income ratio (%) 1,06 1,18 0,53 2017 1H 2018 Operating expenses (HRK mn) 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) 16#17Stable net interest margin throughout the period. Net interest margin (%) Risk cost (impairment and provision for losses/avegare loans to customers) 3,2% 3,1% 3,0% 1,4% 1,4% 2016 2017 1H 2018 2016 2017 0,0% 1H 2018 • • The increase in net interest margin has been achieved by interest costs optimization 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 ERSTEŚ Bank Source: audited non-consolidated financial reports for 2016 and 2017 and non-audited non-consolidated financial reports for 1H 2018 (GFI-KI) 17#18Emphasis on maintenance of adequate capital level CET 1 capital - ESB Regulatory capital - ESB 18,0% 6,11 YE 2016 10% 21,6% 18,8% 17,0% 6,54 6,81 7,35 YE 2017 HY 2018* YE 2016 CET1 (HRK bn) CET 1, % CET1 Pillar 1 regulatory minimum, % CET 1 capital - ESB group 15,6% 6,72 13,5% 22,4% 19,9% 7,77 7,95 YE 2017 Regulatory capital (HRK bn) Total capital ratio, % HY 2018* Pillar 1 regulatory minimum, % Regulatory capital - ESB group 16,6% 15,3% 15,6% 13,5% 10% 7,14 7,35 16,6% 17,7% 7,94 8,36 8,49 HY 2018* YE 2016 YE 2016 YE 2017 CET1 (HRK bn) CET 1, % CET1 Pillar 1 regulatory minimum,% YE 2017 HY 2018* Regulatory capital (HRK bn) Total capital ratio, % Pillar 1 regulatory minimum, % *HY 2018 profit not included in regulatory capital, while write-offs are included ERSTEŚ Source: internal data of ESB Bank ** Pillar 1 regulatoy minimum includes combined protection level of capital, while it doesn't include SREP add-on 18#19Agenda 1. Erste Bank - About us 2. Macroeconomic Update 3. Business Overview 4. Indicative Terms of Bonds 5. Appendix ERSTEŚ Bank 19#20Indicative terms & conditions of planned transaction Issuer Instrument Offer Principal repayment Nominal size and currency Denomination Coupon Reference yield Margin Listing Settlement Law Expected timing Subscription period ERSTE & STEIERMÄRKISCHE BANK d.d. Unsubordinated and unsecured bond, sixth level of higher priority in accordance to article 274 of Credit institutions law Exclusively to professional investors and eligible counterparties Bullet, after 5 years from issue date Up to HRK 500.000.000,00 1.000.000,00 HRK Fixed, semi-annual payment Bid yied of RHMF-O-23BA bond [•] bps Official Market of ZSE CCDC Law of Republic of Croatia October 2018. 1 day ERSTEŚ Bank 20 20#21Agenda 1. Erste Bank - About us 2. Macroeconomic Update 3. Business Overview 4. Indicative Terms of Bonds 5. Appendix ERSTEŚ Bank 21 21#22Erste bank - non-consolidated P&L ESB HRK mn 31.12.2016. 31.12.2017. 30.6.2017. 30.06.2018. 1. Interest income 2. Interest expense 3. Net interest income (048-049) 4. Fees and comissions income 5. Fees and comissions expense 2.314 2.112 1.065 1.009 733 456 252 164 1.582 1.656 813 845 561 610 277 287 150 165 68 77 6. Net fees and comissions income (051-052) 410 445 208 210 8. Gains/losses from trading activities 92 92 36 17 14 10. Gains/losses from assets which are not traded, but are designated at fair value through profit or loss 0 0 0 3 11. Gains/losses from activities related to assets available for sale 50 3 0 14 14. Gains from investment in subsidaries, associates and joint ventures 15. Income from other equity instruments 0 0 0 0 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 24. PROFIT/LOSS FOR THE PERIOD (069-070) ERSTEŚ Bank 204 162 82 117 627 649 330 505 22 22#23Erste bank - non-consolidated assets ASSETS ESB Bank HRK mn 31.12.2016. 31.12.2017. 30.06.2018. 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 4. Securities and other financial instruments held for trading 5. Securities and other financial instruments held for sale 0 0 800 0 195 192 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 ERSTEŚ Bank 23#24Erste 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 2. Deposits 41.992 1.327 43.780 3. Other loans 2.139 2.139 1.340 44.794 2.031 4. Derivate financial liabilities and other traded financial liabilities 5. Issued debt securities 76 52 60 300 376 369 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) EQUITY 49.390 50.064 50.793 1. Share capital 2. Profit (loss) for the current year 3. Retained earnings (loss) 3.500 3.500 3.500 627 649 505 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 231 213 220 assets C) TOTAL EQUITY (036 do 042) 6.729 7.142 D) TOTAL LIABILITIES AND EQUITY (035+043) 56.119 57.206 7.465 58.258 ERSTEŚ Bank 24 24#25Erste bank consolidated P&L ESB Group HRK mn 31.12.2016. 31.12.2017. 30.6.2017. 30.6.2018. 1. Interest income 2. Interest expense 3. Net interest income (048-049) 4. Fees and comissions income 2.911 2.624 1.332 1.258 851 553 303 203 2.060 2.071 1.029 1.055 865 937 429 453 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 0 0 0 4 11. Gains/losses from activities related to assets available for sale 65 5 1 14. Gains from investment in subsidaries, associates and joint ventures 15. Income from other equity instruments 0 0 10 11 0 6 165 27 -9 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 24. PROFIT/LOSS FOR THE PERIOD (069-070) ERSTEŚ Bank 300 183 24 150 913 457 25 596 25#26Erste 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 4. Securities and other financial instruments held for trading 5. Securities and other financial instruments held for sale 327 301 800 0 195 192 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 ERSTEŚ Bank 26 26#27Erste bank - consolidated liabilities LIABILITIES ESB Group HRK mn 31.12.2016. 31.12.2017. 30.6.2018. 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 5. Issued debt securities 77 52 60 300 376 369 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) EQUITY 57.616 57.719 58.453 1. Share capital 2. Profit (loss) for the current year 3. Retained earnings (loss) 4. Legal reserves 3.500 3.500 3.500 874 457 596 3.266 3.920 4.187 85 85 85 5. Statutory and other capital reserves -3 -5 -15 6. Unrealised gain (loss) on value adjustment of available-for-sale financial 266 250 253 assets 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 ERSTEŚ Bank 27#28Formulas for calculation of alternative performance measures CIR ratio, % ROE, % NIM, % Cost of risk, % L/D 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)) 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) 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) 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) ERSTEŚ Bank 28#29Disclaimer 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. ERSTEŚ Bank 29 29