Investor Presentaiton

Deposit insurance Since 2010, the deposit limit for 100-percent protection has risen to EUR 100,000. The de- posit claims of banks, foreign banks, financial institutions, health insurance companies and state funds are not insured. All banks and branches of foreign banks (ex- cluding branches of parent banks participat- ing in the deposit insurance scheme in their parent country) are obliged to participate in the scheme and to contribute to the deposit insurance fund in compliance with the Act on Banking. Banking sector The Czech banking sector is primarily represented by banking institutions with international owner ship. It is dominated by big foreign banking groups such as Erste, KBC, Societe Generale, UniCredit, Raiffeisen or GE Money. Although the banking sector is significantly concentrated, small and me dium banks have been able to strengthen their pe sition on the Czech market in previous years. Typical activities include commercial lending to corporate and retail clients, customer accounts and deposits administration, credit card opera tions, international lending and loan syndications, mutual funds management and administration, bank treasury operations and back office activities. 47 As at 30 September 2015, 47 banks (including for eign branches) offered banking services to clients in the Czech Republic; 39 of them were controlled by foreign investors and eight by local stakehold ers. The group of the four largest banks (banks with total assets greater than CZK 200 billion) played a predominant role in the banking sector in the Czech Republic. As at 30 June 2015, their share of total banking assets equalled approximately 58 percent. Despite a low interest rate environment, the Czech banking sector maintained very good profitability in 2015. Net profits for the first half of 2015 ex ceeded CZK 37 billion (for the whole year of 2014 it was more than CZK 61 billion) with the level of non-performing loans at approximately 6 percent. Profitability of the Czech banking sector 70 60 50 40 30 2008 2009 2010 2011 2012 2013 2014 6/2015 extrapolated Figure 10: Net profit of the Czech banking sector, in billions of CZK Source: http://www.cnb.cz/en/supervision_financial_market/ aggregate information_financial_sector/basic_indicators_finan- cial market/index.html

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