Erste Group Bank Ag S/Adr

Hello everybody, welcome to everybody that came from CEI.

My name is Margarita Thiel and I'm heading enterprise communication of Erste Group and I will guide you through the press conference today. The results will be presented by CEO Peter Boszek, The presentation will be held in German. You can ask your questions in German as well as in English. I'd like to pass the floor to Peter Vosick.

Good morning. I guess you can still say good morning at 11 o'clock. Thank you very much for the last turnout. very pleased about the interest coming from other countries outside of Austria and in particular I would like to also welcome our Polish colleagues who are here for the first time for our half year press conference. So I think that you are aware of the fact that this has been a very exciting first half year because we have managed to enter the Polish market. In autumn of last year We informed you about the fact that we had completed our strategy and that we had been interested in entering the Polish market for some time. So we're very pleased that we were able to announce on the 5th of May that we had agreed with Santander and that the Santander Bank Polska would be acquired. So actually we will acquire 49% of this bank. It still gives us the possibility of full consolidation to appoint members of the supervisory board and to name all the board members. And in addition, we also acquire the asset management company that is in part a subsidiary of the bank and partially belongs to Santander Bank. Now, it is of course a situation where We will be transformed as a group. As you know, over the past few years, we have operated very successfully in seven countries. I think that the figures that Stefan Derfer will be referring to in more detail, these figures are extremely positive for the first six months of this year. But of course, due to the market entry in Poland, we are now coming to a completely different level. Poland is one of the biggest economies of the European Union. It's our biggest market with 38 million inhabitants. And if you look at Poland and its economic development over the last 30 years, it's been clearly one of the biggest success stories in Europe. Poland has annual growth rates of... more than 3% in the past and the outlook for the years to come will always provide for economic growth of more than 3%. We're in a situation where there's a good internal demand, domestic demand, there's also a lot of development, research and development, especially in banking. There are very experienced and well-trained employees because American banks started operating there very early. So on the banking side, it's a very interesting market. And like I said, Poland is definitely a poster child of the European economic development, not only because the training of people there is extremely good and that also their mindset with respect to work is at an extremely high level. the acquisition of Santander Bank Polska for us. Well, what does it mean? It's the third largest bank in Poland. It is the largest privately owned bank because the first two banks belong to the government. And what we have been able to do in our negotiations with Santander to acquire a 49% stake. Now, if you take a look at the KPIs of the Polish Bank, they have 6 million customers, they have close to 10,000 employees, there's a large credit book there, a large loan book, and we as a group, after we get all the approvals from the authorities, two-thirds of our customer portfolio will be outside of Austria. So that is quite a strong significant statement, a strong commitment to this region of Europe, because we are convinced that it is the best region to be in Europe, because this is where economic growth is happening and because there's also good long-term prospects that are suitable for banking. Polska has a very strong retail arm and a strong corporate arm. So I believe that it is worth mentioning what we are focusing on, what we are looking forward in a positive sense. What you see on this slide is the result of the excellent work of our customers on the markets on the corporate side. In recent years Erste Bank has always succeeded to be leading in the region in terms of the bond business and the equity business. This is something that actually happens quite a lot so that we are in the global ratings but we are the fifth largest when it comes to covered bonds issuance. And we know the league tables of our potential colleagues in Poland who are also leading in the area of debt and capital markets and debt and equity capital markets. So what we are going to do is we are going to come up with a capital markets powerhouse in Central Europe, which is very interesting. good for us because you know that we are interested in building a capital market infrastructure in the countries where we are operating because we are firmly convinced of the fact that a capital market infrastructure is a prerequisite for long-term economic growth. And this puts us in a position where the region that we have been operating in we now have a a good or an excellent position even in Central Europe and I think this is extremely positive for the future outlook. Of course there is a lot that needs to be done now and I would like to use this opportunity to thank all our employees in the group because the workload has really increased in the past months so we have already achieved a lot and there's a lot that's still ahead of us so such a major transaction means that we had the signing of course and then there's the closing so the closing is when the bank really belongs to us now we've just signed the purchase agreement with Santander and the The phase in between is about getting all the required approvals and authorizations, also the approvals of the local Polish supervisory authorities, and also some additional approvals from the European Commission, antitrust approvals, but also other approvals in countries where we are working indirectly through our savings banks, so we need the antitrust approvals from them. And I can tell you that all the supervisory authorities, including the European Central Bank, that is, of course, the authority that has the oversight. It's not that they overlook it, they have the oversight. So, of course, they are all very supportive, and I think it's positive momentum because That's the biggest cross-country M&A acquisition since 2014 in Austria. It's the biggest transaction that a company has been doing in another country. So as far as we can see, we are on track. in order to obtain these approvals, and we believe that towards the end of the year, we can have the closing, and then this 49% of Santander Bank Post will belong to us, and then we'll also have the ownership of the asset manager there. If you take a look at the first half of the year, and of course Stefan Beffler will be reporting about this in more detail, we are extremely happy that we have managed to build up so much capital. You know that we are refinancing this transaction without the need for any capital increase. That has also been one of the reasons why the capital markets reacted so positively. Because We have the same number of shares, 410 million shares, and we'll have higher profits. And with KPI, the earnings per share is, of course, highly relevant for us. And this is only possible if we have the possibility of generating capital. And we can only generate capital if we have profits. So this is why we are so pleased. that the Common Equity Tier 1 is now at 17.4%. And it's also a very positive fact that the volumes in Central Europe have developed positively in the past 12 months. We already reported that housing finance in the Czech Republic and in Slovakia and partially also in Austria has begun to increase again. In some countries such as Romania we are seeing positive growth in consumer lending and that has led to an increase not only in the loan volume but also in the net interest income because the interest rates have developed positively and this has led to a better result. Something that's also very positive is asset management, the development of asset management, and that's also a phenomenon of the capital market structure that we are trying to implement and deploy in the region. You know that asset management has always played a very strong role in the past 12 months. We made two minor acquisitions in the area of asset management. This is why we now have assets under management to the amount of almost 96 billion euros and if the markets develop more or less positively we will probably soon cross the 100 billion limit. Of course there are also other activities that we consistently pursued such as as you can see here we are continuing to bet on securities savings plans investments in asset management products because we think this is a suitable instrument for our customers so they don't need to worry about the volatility so if the markets develop positively they will buy less and in the long run this leads to the best results so we continue to develop additional models that help us facilitate online banking for our customers. In the Czech Republic we developed HeyGeorge, which is a digital assistant which makes online banking easier to handle. So we have close to 2 million customers for HeyGeorge. The feedback is very positive, but you know that We normally use the customer feedback to develop our products further, so step by step we are going to also implement this and roll it out to other countries. Our corporate variant of online banking has also been further developed and we now have more customers and we are also beginning to roll it out to other countries. So I believe that essentially This is something that you're already familiar with. So this is what we're doing. This is our day-to-day efforts to improve our services to our customers. And, of course, we will continue along this line. And this is where we place the emphasis to ensure that the existing customers in the various countries we're operating in will have a better service quality. And now I'd like to hand over to Stefan.