Erste Bank : Präsentation Telefonkonferenz - Vorläufiges Jahresergebnis 2020

Erste Group investor presentation FY 2020 preliminary results

26 February 2021

Erste Group ends FY2020 on a strong note

Bernd Spalt, CEO Erste Group

Stefan Dörfler, CFO Erste Group

Alexandra Habeler-Drabek, CRO Erste Group

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.

Presentation topics

• • Key topics

  • • Macroeconomic update

  • • Business update

  • • Operating trends

  • • Asset quality and impairments

  • • Capital trends and dividends

  • • Key takeaways and outlook

• • Q4 20 presentation

  • • Executive summary

  • • Business environment

  • • Business performance

  • • Assets and liabilities

  • • Additional information

Macroeconomic update -

CEE economies prove their resilience, end 2020 stronger than expected

• • Real GDP declined 1%-8% in 2020 in core markets

  • • CZ & SK: manufacturing less impacted by recent policy measures

  • • RO & HU: relatively relaxed lockdown measures in Q4 20

  • • HR & AT: hardest hit due to higher dependency on tourism/services

• • Economic activity expected to rebound in 2021

  • • CZ: private consumption to benefit from tax cut & tight labour market

  • • HU: significant public investments expected in H2 2021

  • • HR: economic recovery significantly depends on tourism

• • CEE Recovery Index aggregates development of various economic activity indicators

  • • Recent decline reflects anti-Covid policy measures of varying degrees

1.2

(0 = point of lowest activity, based on weekly indicators)

1.0

0.8

0.6

0.4

0.2

0.0

1 Mar 20

1 May 20

Evolution of real GDP forecasts

2020e

• as of 30 April 20

• as of 31 July 20

• as of 31 Oct 20

• as of 15 Feb 21

CEE Recovery Index

Input factors: electricity consumption, air pollution, mobility in groceries, mobility in retail & recreation, mobility in workplace, capacity in automotive sector

1 Jul 20

1 Sep 20

1 Nov 20

1 Jan 21

1 Mar 21

Source. Erste Group Research

2021e

-2.3 -2.3

-1.1 -1.0

• as of 30 April 20

  -7.2 -6.2 -6.0 -4.5

  -5.6

  -7.5 -5.0

  -5.2

  -4.7 -4.7 -4.7

  -3.9

  -7.9 -7.0 -6.7

  -6.3

  -5.1 -5.8 -4.6 -4.2

• as of 31 July 20

  -8.5 -9.0 -9.0 -7.5

• as of 31 Oct 20

• as of 15 Feb 21

Business update -

Retail - what's happening on the ground? (1)

• • Diverging demand trends throughout 2020

  • • New housing loans sales up 36.0% in 2020 as customers attach higher importance to owning real-estate

• • Demand for consumer loans lower than in 2019, reflecting uncertainty among specific segments of client base

• • Customer deposits up 9.9% as clients trust Erste Group

• • Higher customer demand for securities products confirms strategic focus on wealth building; results in fee growth especially in AT, CZ and HU

• • Strong growth in regular securities savings plans, up 27%, supported by new digital solutions (e.g. tablet-based advisory processes in SK led to >50% rise in saving plans); yearly investment volume regular savings: > EUR 800m

• • Solid demand from customers for insurance products

• • Improved financial health advisory capabilities e.g. in SLSP >400k clients created their "personal financial plan"

  via a new tablet-based solution within 10 months after the launch

Quarterly new sales volumes

(2019 vs 2020, in EUR m)

Housing loans

Consumer loans

2019

2020

4,108

Q1

Q2

Q3

Q4

Development of fee income: securities

(2019 vs 2020, in EUR m)

356

315

Q1

Q2

Q3

Q4

Newly opened regular securities savings plans

(2019 vs 2020, in thd pieces)

192

2019

2020

2019

2020

Business update -

Retail - what's happening on the ground? (2)

• • Changing customer interactions

  • • Branch traffic dropped significantly after first lockdown in spring 2020, but recovered strongly thereafter to almost pre-crisis levels

  • • Clients going digital: almost 6.2m George users as

    George goes live in Croatia and Hungary (full roll-out to be completed in 2021); George now available in 6 countries

  • • Generally higher digital activity of customers, number of monthly log-ins per customer increased by ~10%

  • • Digital sales increased substantially; customers appreciate

    Erste's digital and remote offering

  • • Cashless and mobile transactions on the rise

  Development of digital sales

  (2019 vs 2020, in thd pieces)

  916

  601

  Number of George users

  (2019 vs 2020, in thd)

  6.190

  5.410

  2019

  2020

  2019

  2020

• • Erste's advice and support, both by its advisors and in George, is highly relevant to its customers, especially during difficult times

  Retail Customer Experience Index

  (2019 vs 2020, absolute)

• • Strongly improved customer experience rankings in 2020, outperforming our competitors

  67.1

  62.1

• • Erste will continue to strengthen its advisory proposition and its digital offering via George

2019

2020

Business update -

Corporates - what's happening on the ground?

• • Most corporate clients hold up well

  • • State guarantees for loans were widely used (particularly in

    Austria); low additional demand

  • • M&A and investment activity started to pick up again, in particular in the industrial (wood, pulp and paper, furniture), the consumer and commercial real estate sectors

  • • Prolonged containment measures proved earlier earnings recovery projections as too optimistic, however not questioning the overall recovery in 2021

• • Capital markets business gained further traction

  • • 170 mandated transactions (for all C&M customer segments)

    with a total issuance volume of EUR 108bn accompanied by Erste Group (2019 volume: EUR 73bn)

  • • Low rates continue to attract issuers to refinance

• • Reassuring drawdown behaviour

  • • Ratio of drawn loan volume to overall loan and guarantee exposure has only gone from 67.2% (YE19) to 68.7% (YE20)

• • SME business still growing despite restrictions in origination activities

  • • Active clients in 2020 rose by just under 2% (10% in 2019)

  • • SME average loans and advances to customers (gross) rose yoy in 2020 by 3%

52.5 56.8

Corporate loan stock development

(gross, business line view, in EUR bn)

55.1 58.1

53.8 57.6

55.2 58.1

Q1 19

Q1 20

Q2 19

Q2 20

Q3 19

Q3 20

Q4 19

Q4 20

Operating results development

(business line view, in EUR mn)

-1.8% 237.4 233.1

55.2 58.1

YE 19

YE 20

261.8 260.2

1,027.8 1,025.6

Q1 Q1 19 20

Q4 Q4 19 20

Q2 Q2 19 20

262.7

Q3 Q3 19 20

254.1

265.9

278.3

YE YE 19 20

Operating trends: loan volume -

Net loans grew 3.6% in 2020, supported by state measures

• • Net loan growth biased towards real business

  • • Impact of state-guaranteed loans: approx. EUR +1.9bn

  • • Moratoria effect (reduced redemptions): EUR +1.3bn

  • • Currency effect: EUR -1.2bn

  • • Real business growth: EUR +4.0bn or 2.5% in 2020

• • Volumes subject to Covid-19 measures declined materially in Q4 20, from 8.3% to 4.0% of (gross) customer loans

  • • Moratoria volumes declined to EUR 4.5bn or 2.7% of customer loans, driven by expirations in CZ, RO and RS

  • • Other forbearance measures fell to 0.2% of client loans

  • • Volumes of state-guaranteed loans slightly up from 0.9% to 1.1% or EUR 1.9bn of customer loans

Composition of net loan growth in 2020

(in EUR bn)

+3.6%

166.1

Dec 19

160.2

Guarantees Moratoria

FX-Effect

BusinessDec 20

Volume-based active moratoria participation

(in % of loans to customers)

as of 30 June 2020

as of 30 Sept 2020

Data source: EBA reporting, internal reports

Active volumes subject to key Covid-19 measures

(as of 31 December 2020, in EUR m)

Operating trends: revenues and costs -

Fees post record quarter in Q4 20, NII moves sideways

• • NII ends 2020 in positive territory, while Q4 20 was down both qoq and yoy

  • • Lower funding costs (TLTRO, deposit tiering) in 2020

  • • Flat performance of retail and SME business in 2020, except CZ, which suffered from significant rate cuts

  • • Growth in large corporate business

  • • Modification losses, mostly moratoria related, amounted to

    EUR 49.6m in 2020, EUR 12.4m in Q4 20

  • • Expectation is for flattish NII in 2021 vs 2020

• • Fees, in 2020 barely down on 2019 (-1.2%), post record performance in Q4 20

  • • Growth drivers: asset management and securities business

  • • Decline in 2020 entirely due to SEPA impact: ~ EUR -20m

  • • Fees are expected to grow in low-single digits in 2021

• • Trading & FV result declined in 2020, as weak start

  4,747

  4,775

  2019 2020

• • Expenses decreased in 2020

• to 2020 could not be fully made up by strong H2 20 244

  • • Improvement in 2021, if financial markets stable

  • • Covid-19 effects and ongoing efficiency efforts

• • Costs expected to increase slightly 2021

NII development

1,229

1,192

1,186

Q4 19

Fee development

Q3 20

Q4 20

Q4 19

Q3 20

Total fees

Payment servicesSecurities & AM & brokerage feesLending business

Credit risk: risk provisions -

Significant forward-looking provisioning in 2020, risk costs to decline in 2021

• • Risk costs rise significantly in 2020 as expected economic effects of Covid-19 policy responses are front-loaded

  • • Update of forward-looking information (FLI) parameters, primarily of macro forecasts

  • • Significant increase in credit risk (SICR) overlays in relation to most affected sectors (cyclical industries, transportation, hotels and leisure), resulting in increased allocations for expected credit losses (ECL)

  • • Unlikely-to-pay (UTP)-assessment

  • • Ordinary course of business risk costs, driven primarily by negative corporate rating migrations

Risk costs in 2020, preview 2021

(baseline scenario, in bps of average gross customer loans)

148

Q1 20

78

<65

Q2 20

Q3 20

Q4 20

2020

2021e

• • Proactive IFRS 9 stage migration in preparation of increased defaults

  • • Stage 2 increase throughout the year driven by FLI updates and SICR overlays

  • • Comfortable coverage ratios across the stage spectrum

• • Improved outlook for 2021 on the back of currently expected macro recovery and forward-looking provisioning in 2020

in EUR million

Risk provisions by IFRS9 stages

CLACoverage

Dec 19	Mar 20	Jun 20	Sep 20	Dec 20
88.8%	86.5%	81.0%	80.4%	78.4%	0.3%
8.3%	10.7%	16.1%	16.7%	18.4%	3.8%
2.3%	2.2%	2.3%	2.2%	2.5%	54.2%
0.3%	0.2%	0.2%	0.2%	0.2%	34.1%
99.7%	99.7%	99.6%	99.6%	99.6%	2.4%
Not subject to IFRS 9	0.3%	0.3%	0.4%	0.4%	0.4%	0.0%
Gross customer loans	2.4%

Dec 20

Dec 20

Stage 1 358

Stage 2 1,193

Stage 3 2,326

POCI 125

Subject to IFRS9 4,002

0

163,417 164,268 167,369 168,276 170,020

4,002

Asset quality: NPL ratio inches up, initial post-moratoria trends promising

• • NPL ratio inches up from 20y-low

NPL ratio and NPL coverage

• Gross NPL inflows increased to EUR 2.1bn in 2020 (2019: 91.1

EUR 1.5bn), mainly driven by portfolio UTP assessment (EUR 0.5bn)

• • Recoveries, upgrades and write-offs comparable to 2019, lower NPL sales

• • Expectation for NPL ratio in range of 3-4% in 2021

• • NPL coverage significantly up yoy

  • • Qoq decline as new NPL inflows had lower coverage

  • • Further decline in coverage expected in 2021, as NPL inflows will likely rise

• • Post-moratoria experiences promising so far

  • • Increase of the defaults from the moratoria portfolios in Q4 20 due to portfolio UTP assessment

  • • No significant increase in hard defaults has been observed yet, after the moratoria expiration

  • • Further developments will depend on the development of

    Covid-19 policy responses

77.1

in %

95.5

88.6

80.9

Dec 19

Mar 20 Jun 20

Sep 20

NPL coverageNPL ratio

Post-moratoria loan performance

(as at 31 Dec 2020, in EUR bn unless stated otherwise)

Dec 20

Expired EBA compliant moratoriaLegislativeNon- Total expiredLegislativemoratoriaPost moratoria default rate

AT CZ SK RO HU HR RS Total

2.7

3.8

6.4 0.8%

2.0

0.2

2.2 1.0%

0.3

0.0

0.3 0.4%

0.7

0.4

1.1 3.4%

0.0

0.0

0.0

n.a.

0.2

0.5

0.7 1.9%

1.1 6.9

0.0 4.9

1.1 0.2%

11.9 1.0%

Gross credit exposure overview

Gross credit exposure by NACE code

Transport & comms Tourism

Focus exposures (gross)
Industry / Category	as of Dec 20	of which Savings Banks	Active Moratoria ratio	Exposure w/ State Guarantee
Metals	€ 3.6bn	€ 0.8bn	0.9%	€ 61m
Oil & gas	€ 2.8bn	€ 0.1bn	0.0%	€ 4m
Automotive	€ 4.2bn	€ 1.2bn	0.6% Data will	€ 92m be
Cyclical consumer prod. / Clothing & Footwear	€ 2.1bn	€ 0.7bn	availablelatest Tu noon 0.7%	esday € 101m
Machinery	€ 4.9bn	€ 1.6bn	0.3%	€ 128m
Passenger transportation	€ 1.5bn	€ 0.1bn	5.1%	€ 115m
Hotels & leisure	€ 9.1bn	€ 3.7bn	6.7%	€ 247m

*) Exposures in industry categories which are seen as critical and high-risk due to Covid-19 pandemic; assessment updated quarterly, therefore not fully comparable to previous quarter

Further details on selected exposures

Snapshot: real estate*

Snapshot: consumer loans

RRE - Non-profit housing associationsRRE - Other RRE for rent & sale

RRE - Development projectsMixed portfolio

CRE - OfficeCRE - RetailCRE - Other

• • Negative impacts of the crisis on the office market remain so far very limited. In the Retail market lockdowns brought footfall significantly down, however for short periods of time, reducing the need for credit payment deferrals

• • Strong focus (more than 80%) on income producing projects

• • Low risk profile: LTVs ~58%, NPE ratio 1.2% (Q3: 1.2%)

• • Exposure focused on capitals and regional centres in CEE markets showing a positive demographic development

Czechia

Austria Savings banksAustria EBOeSlovakiaCroatiaRomaniaHungarySerbia

• • Consumer loans portfolio represents 13% of the total retail portfolio exposure (EUR 76.5bn) of Erste Group

• • New sales volume decreased by 15% yoy due to significantly lower consumer demand and tighter lending standards, which led to an improved risk-profile

• • Consumer loan portfolio performance still very good with 1.27% 30+DPD and 0.51% for 90+DPD, but slightly deteriorated due to end of moratorium in several entities

• • Consumer loan NPE at 6% YE 2020 (5.1% YE 2019)

*) Business view distribution before risk transfer, includes exposure classified in various NACE categories. New, group-wide split based on rating method/collateral information, not fully comparable to Q3 20 presentation. Mixed portfolio includes both residential and commercial assets whose rating is based on financial standing of client rather than asset type or value.

Capital position -

CET1 ratio of 14.2% (fully loaded) allows for dividend distributions

0.37

0.36

in %

∆ RWA SME

YE'19

∆ RWA

Supporting

2020 Eligible Profit & RetainedAccrual for AT1 coupon

Factor

EarningsMinorities inclusion 2019 & 2020

OCI

CET1 - other

YE'20

• • Strong YE 2020 CET1 ratio, comfortably above 13.5% CET1 target

  • • CRR Quick Fix RWA relief from SME Supporting Factor in amount of EUR -4.5bn

  • • OCI positions worsening mainly due to decrease in foreign currency translation (-30bps, OCI only) due to development of FX rates and the FV changes of debt and equity instruments (-2bps)

  • • 2019 and partial 2020 minority interest profit included, 2020 eligible profit and AT1 coupon (EUR 148mn) considered

• • EUR 1.5 2019 dividend accrual rolled forward into 2020, resulting in fully loaded CET1 ratio of 14.2%

  • • Management board of Erste Group will propose dividend in line with ECB recommendation of EUR 0.5 per share to 2021 AGM for payment in May 2021; additional reserve of EUR 1.0 per share for payment once ECB recommendation is withdrawn; subject to profitability and capital performance

Conclusion -

Key takeaways and outlook for 2021

• • NII and fees performed well in 2020

• • Strong finish of trading/FV result in Q4 20, down yoy

• • Cost reduction due to Covid-19 and ongoing efficiency efforts

• • Forward-looking provisioning in Q4 20 and FY2020 to discount expected deterioration asset quality

• • Asset quality remained strong, NPL ratio at 2.7%

• • Fully loaded CET 1 ratio remained strong at 14.2%

• • Total capital ratio at 19.7%, supported by AT1 issuance in 2020 of EUR 1.2bn

  • • Real GDP to rise in mid-single digits in 2021 in Erste Group's markets contingent on further development of Covid-19 policy measures

  • • Loan growth in low to mid single digits

  • • Aiming for positive operating jaws with flattish NII, rising fees (low-single digits), improved FV/trading result, and cost growth < revenue growth

  • • 2021e risk charge expected to be below 65 bps of gross customer loans, on assumption of economic recovery materialising

  • • 2021e NPL ratio expected between 3-4%

  • • CET1 ratio is expected to remain strong with significant cushion in case of worse than expected economic performance

  • • CET1 target of 13.5% unchanged

  • • 2021e net result to be meaningfully higher than in 2020

  • • Management proposes EUR 0.5 DPS in line with ECB recommendation to AGM for payment in May 2021, reserves EUR 1/share for potential later payment

  • • Political, regulatory, geopolitical, economic, health and competition risks, also nonfinancial and legal risks

  • • Elevated level of uncertainty due to Covid-19 crisis

  • • Economic downturn may put goodwill at risk

Presentation topics

• • Key topics

  • • Macroeconomic update

  • • Business update

  • • Operating trends

  • • Asset quality and impairments

  • • Capital trends and dividends

  • • Key takeaways and outlook

• • Q4 20 presentation

  • • Executive summary

  • • Business environment

  • • Business performance

  • • Assets and liabilities

  • • Additional information

Group income statement performance

QoQ net profit reconciliation (EUR m)

Operating Operating Risk costs income expenses

YoY net profit reconciliation (EUR m)

Q3 20

Other resultTaxes on Minorities income

Q4 20

2019

Operating Operating Risk costs income expenses

Other resultTaxes on Minorities income

2020

• • Q4 20 net result declined to EUR 146.0m on higher year-end risk costs in preparation for potential Covid 19- related defaults

• • Operating income improved on record fee quarter, strong trading and FV result, while NII moderated somewhat

• • Operating expenses showed usual year-end seasonality, but were down yoy, confirming the full-year trend

• • Yoy net profit mainly down on substantial rise in risk costs driven by forward-looking Covid 19-provisioning

• • Operating performance was better than expected (-1.3%) amid an uncertain and challenging business environment

• • Other result improves on negative one-offs related to RO and SK in 2019, while minorities' result declined from exceptional 2019 result

Executive summary - Key income statement data

Net interest income & margin

4,747

4,775

in EUR m

2.04%

2019

2.05%

1,192

1,186

2020

Q4 20

Q3 20

Banking levies

128

Operating result & cost/income ratio

2,973

2,935

in EUR m

2019

55.6% 806

58.7%

772

2020

Q3 20

Q4 20

Reported EPS & ROE

in EUR m

2019

17

17

2020

Q3 20

10.0%

3.23

Q4 20

2019

9.6%

in EUR

0.81

2020

Q3 20

Cost of risk

1,295

in EUR m

1.00%

2019

425

2020

Q3 20

Q4 20

Return on tangible equity

11.2%Q4 20

2019

10.5%

2020

Q3 20

Q4 20

Group balance sheet performance

YTD total asset reconciliation (EUR m)

245,693

+12.9%

31/12/19

CashTrading, Loans to Net loans Intangibles Miscella- 31/12/20

YTD equity & total liability reconciliation (EUR m)

financial assetsbanks

neous assets

31/12/19 Trading liabilities

Bank Customer Debt Miscellaneous Equity deposits deposits * securities liabilities

31/12/20

• • Total assets up by 12.9%, mainly driven by a substantial increase in cash (+235.1%); net loans to customers increased by 3.6%

• • Increase in cash attributable to AT (liquidity placed at central banks) mainly driven by TLTRO and to CZ (rise in cash position mirrors development in interbank and customer deposits)

• • Total liability growth driven by a continuation of rising bank

  deposits (+88.5%) and customer deposits (+9.9%)

• • Growing customer deposits result in a loan/deposit ratio of 86.9%

  (YE19: 92.2%)

• • Increase in equity attributable to issuance of AT1 instruments

  (+EUR 1.24bn) and increase in retained earnings (+EUR 764m)

  * excl. lease liabilities as of 2020

Executive summary -31/12/19

Key balance sheet data31/12/20

Loan/deposit & loan/TA ratio

92.2% 86.9%

Net loans & credit RWA

NPL coverage ratio & NPL ratio

in EUR bn

160.3 166.1

Loan/deposit ratioLoans/total assets

Net loans

Credit RWA

NPL coverage

NPL ratio

B3FL capital ratios

189.3%

Total capital

B3FL capital & tangible equity1

in EUR bn

CET 1

CET 1

Tangible equity

1) Based on shareholders' equity, not total equity

Liquidity coverage & leverage ratio2

LCR

2) Pursuant to Delegated Act

LR (B3FL)

Presentation topics

• • Key topics

  • • Macroeconomic update

  • • Business update

  • • Operating trends

  • • Asset quality and impairments

  • • Capital trends and dividends

  • • Key takeaways and outlook

• • Q4 20 presentation

  • • Executive summary

  • • Business environment

  • • Business performance

  • • Assets and liabilities

  • • Additional information

Business environment - Economic rebound expected in 2021

20202021

Real GDP growth (in %)

Dom. demand contribution* (in %)

CZ

Net export contribution* (in %)Consumer price inflation (avg, in %)

3.2

-6.5

-5.2

ATCZSKROHU

HR

AT

CZ

SKROHUHRAT

SK

ROHU

HRATCZ

• • CEE economies have proved their resilience, better than expected end 2020 performance indicates strong start to 2021

  2.9 3.3 3.4

  SKRO

• • Manufacturing less impacted by recent containment measures; hardest hit industries are tourism, services, transport and retail trade

• • 3-6% economic rebound expected in 2021

Unemployment rate (avg, in %)Current account balance (% of GDP)

7.7 8.7 2.4 2.4 2.2 0.3

HR

ATCZSKROHUHRATCZSK

RO

• • Unemployment rates have increased across the region

  Gen gov balance (% of GDP)

  HUHR

  ATCZ

• • Lower tax revenues and higher social payments have led to rising fiscal deficits

SK

RO

HU

* Contribution to real GDP growth. Domestic demand contribution includes inventory change. Source: Erste Group Research, EU Commission

HUHR

Public debt (% of GDP)

85 88

88 87

HRATCZSKROHU

3M Interbank10YR GOV

Policy rate cuts in 2020; CZ has rate hike potential in H2 21

Austria

Czech Republic

Romania

0.05% 1.12%

-0.29%

-0.42%

-0.36% 2019

-0.43% 2020

-0.47% Q3 20

-0.52% Q4 20

• • ECB has kept its discount rate at zero & significantly increased quantitative easing as response to Coronavirus

Slovakia

1.12% 0.86% 2020

0.91%

0.34% 0.35%

2019

Q3 20

Q4 20

• • National bank has cut the base rate in three steps by 200bps to 0.25% in March & May 2020

Hungary

4.54%

3.98%

2.97% 2019

3.88%

3.31%

2.24% 2020

1.91%

1.93%

Q3 20

Q4 20

• • Central bank cut the key policy rate in four steps by 125bps to 1.25% in March, May and August 2020 & January 2021

Croatia

0.28%

0.00%

-0.14%

-0.37%

-0.36% 2019

-0.43% 2020

-0.47% Q3 20

-0.52% Q4 20

• • As part of the euro zone ECB rates and actions are applicable in SK

2.47%

0.19% 2019

• • National bank cut the key policy rate in two steps by 30bps to 0.60% in June & July 2020

Source: Bloomberg, Reuters for SK 10Y. Annual and quarterly averages.

2.23% 0.70%

2.27% 0.65%

2.19% 0.76%

1.32%

0.92%

2020

Q3 20

Q4 20

2019

2020

Q3 20

• • Croatia joined ERM II in July 2020

  Q4 20

• • Central bank cut its 1w repo from 0.3% to 0.05% in March 2020

CEE currencies have weakened versus the euro since Covid-19 outbreak

EUR/CZK

EUR/RON

25.7	26.5	26.5	26.7	25.4	26.3	4.75	4.84	4.84	4.87	4.79	4.87
2019	2020	Q3 20	Q4 20	31/12/19	31/12/20	2019	2020	Q3 20	Q4 20	31/12/19	31/12/20

• • CZK reached its weakest level in March 2020 since 2014; benchmark rate cut in three steps from 2.25% to 0.25% in March & May 2020; 25-50 bps rate increase expected in H2 2021

• • RON depreciated significantly and remained close to its all time low in Q4 2020; policy rate cut by 125bps to 1.25% in March, May and August 2020 & January 2021

EUR/HUF

EUR/HRK

325.2

351.2

353.4

360.6

2019

2020

Q3 20

Q4 20

31/12/19

31/12/20

• • HUF reached all time low versus the euro and remained relatively weak since then; key policy rate was cut by 30bps to 0.60% in June & July 2020

Source: Bloomberg

7.42

7.54

7.53

7.56

7.44

7.55

2019

2020

Q3 20

Q4 20

31/12/19

31/12/20

• • HRK depreciated to its weakest level in April 2020 since 2016; 1w repo was cut to 0.05% in March 2020

Stable market shares across the region

31/12/1930/09/2031/12/20

Gross retail loans

ATCZROSKHUHRRS

Gross corporate loans

ATCZSKROHUHRRS

Retail deposits

• • • SK: increasing market shares in • Continued strong inflows in allCZ: stable market share in a growing market

all corporate segments

• • RO: increasing yoy market share • RO: increasing market sharedriven by mortgage & consumerdriven by public sector & SME

• • • HR: increasing yoy market share mainly driven by large and public sector lendingSK: declining market share due to aggressive pricing by some of the smaller competitors

* 31/12/2020 market share data for Austria not yet available

markets despite low interest rate environment

• • Stable qoq market shares across the region

Corporate deposits

ATCZSKROHUHRRS

• • Changes mainly due to normal quarterly volatility in corporate business

• • SK: declining yoy market share mainly in the large corporate segment due to pricing

Presentation topics

• • Key topics

  • • Macroeconomic update

  • • Business update

  • • Operating trends

  • • Asset quality and impairments

  • • Capital trends and dividends

  • • Key takeaways and outlook

• • Q4 20 presentation

  • • Executive summary

  • • Business environment

  • • Business performance

  • • Assets and liabilities

  • • Additional information

Business performance: performing loan stock & growth - Performing loans continued to grow, up 3.9% yoy, 0.7% qoq

QoQ30/09/2031/12/20

AT/EBOe

Group

AT/OAAT/SBOtherROCZHUSKHRRS

in EUR bn

159.3 164.3 165.5

-5.8%

3.9% .7% 2.7% .4% 5.4% 1.2% .6% 1.0% 2.4% 5.8% 2.7% 6.5% 1.2% 1.9% 2.4% 7.6% 1.5% 17.6% 1.3% Not meaningful

• • Yoy growth higher in Corporates (+4.4%) and

  Savings Banks (+5.0%) than in Retail (+3.0%), supported by state-guaranteed loans

• • Qoq accelerating growth dynamics in Retail (+2.5%),

  stable growth in Savings Banks, while volumes in Corporates decelerated (-0.3%)

• • Year-on-year segment trends:

  • • SK: balanced growth across all business lines with strong demand for mortgages (Retail) and terms loans (Corp)

  • • RO: strong performance across all business lines, except

    Large Corporates

  • • HR: growth in Corporates (+12.9%), primarily driven by public sector demand, while Retail remained flat

  • • RS: continuation of dynamic growth

• • Quarter-on-quarter segment trends:

  • • AT/OA: lower Holding corporate lending volumes

  • • CZ: strong qoq performance due to CZK appreciation, strong demand for mortgages

  • • HU: rise due to strong demand for baby loans

  • • RO: increase in most Corporates business lines

Business performance: customer deposit stock* & growth - Deposit growth continues apace

QoQ30/09/2031/12/20

AT/EBOe

Group

AT/OAAT/SBCZOtherROSKHUHRRS

-1.3 -0.6 -0.5

* Excludes lease liabilities as of 2020

• • 2020 sees best deposit growth since 2007 as retail and corporate clients park cash in overnight account

• • Strong Q4 deposit build confirms annual trend, but growth driven by Retail, while Corporates decline

• • Year-on-year segment trends:

  • • AT/OA: lower customer deposits in foreign branches

  • • SK: weaker overall growth as strong retail volumes are offset by lower Financial Institutions volumes

  • • CZ: higher Retail and SME current account volumes partially offset by currency depreciation

  • • RS: deposits grow faster than loans as EB Serbia moves towards balanced loan-to-deposit ratio (105.3%)

• • Quarter-on-quarter segment trends:

  • • CZ: decline due to year-end volatility in repo business

  • • HU: strong growth in Retail, complemented by increased volumes from financial institutions

  • • RO: strong growth in Retail and high year-end inflows from state-owned companies

Business performance: NII and NIM -

NII down yoy and qoq, pointing to continued pressure

Q4 19

Q3 20

Q4 20

AT/EBOe

Group

AT/SBAT/OAOtherROCZHUSKHRRS

Not meaningful

• • NII down yoy due to decline in CZ resulting from rate cuts and CZK depreciation, modification losses in AT

• • No material changes in NII qoq

• • Year-on-year segment trends:

  • • CZ: decline in NII mainly driven by lower interest rate environment; FX impact -EUR 12.3m

  • • AT/EBOe: NII declines mainly on higher loan modification losses

  • • Other: positive impact from lower refinancing costs (own issues, TLTRO, deposit tiering)

• • Quarter-on-quarter segment trends:

  • • CZ: lower interest expense on liabilities

  • • AT/EBOe: decline due to modification losses, margin pressure

Business performance: operating income -

Q4 20: record fee quarter, resurgence in trading & FV result

Q4 20

AT/EBOe

Group

AT/SBAT/OAOtherROCZHUSKHRRS

-21 -2 -11

• • Revenues slightly up yoy, pushed by resurging net trading & FV result, record fees, while NII was down

• • Qoq improvement due to strong fee income (+7.5%)

  and strong net trading and FV result

• • Year-on-year segment trends:

  • • AT/OA: better valuation results in markets business, higher securities and asset management fees

  • • CZ: operating income mainly impacted by lower NII, decline in fees due to SEPA regulation (EUR -8.0m full-year impact)

  • • AT/SB: better derivatives and investment fund valuations, higher fees from securities business

• • Quarter-on-quarter segment trends:

  • • AT/OA: see comment on yoy performance

  • • HU: increased revenues due to revaluation gains on fair value retail portfolio caused by long-term yield decrease

  • • AT/SB: improved net trading & FV result (better own issues and investment fund valuations) and higher securities fees

Business performance: operating expenses - Cost down yoy, up qoq on year-end seasonality

Q4 20

AT/EBOeAT/OA

Group

AT/SBOtherROHUCZHRSKRS

• • Yoy costs down due to lower personnel expenses on the back of release of bonus accruals

• • Seasonal increase qoq on higher IT and advertising costs, increased deposit insurance contributions

• • Year-on-year segment trends:

  1.1%
  8.5%
  •	HR: lower personnel/bonus and other administrative costs
  •	AT/SB: primarily lower IT expenses
  2.6%	•	RS: rising staff numbers and bonus provisions

  • • CZ: combination of release of bonus accruals and other administrative expenses as well as FX devaluation

• • Quarter-on-quarter segment trends:

  • • AT/EBOe: additional deposit insurance contributions (EUR +14.8m) and higher marketing expenses

  • • CZ: release of bonus accruals more than offset increase in other administrative expenses

  • • HR: see yoy comment above

  • • RS: see yoy comment above

Business performance: operating result and CIR - CIR at solid 58.7% in Q4 20

Q4 20

Operating result

Group

AT/EBOeAT/SBAT/OACZROOtherHUHRSKRS

-44 -41 -68

in EUR m

YoY & QoQ change

Cost/income ratio

60.3%

55.6%

58.7%

67.4%

59.4%

68.0%

62.5%

64.5%

54.4%

49.5%

46.4%

47.3%

48.3%

47.4%

51.3%

48.4%

52.9%

50.1%

44.9%

47.7%

48.4%

46.1%

44.7%

52.4%

51.9%

48.2%

Not meaningful

74.1%

76.9%

64.1%

86.7%

Business performance: risk costs (abs/rel*) - Continued forward-looking provisioning in Q4 20

Q3 20

Q4 20

AT/EBOe

Group

AT/SBAT/OAOtherROHUCZHRSKRS

• • 2020 risk costs in line with guidance: 78bps of average gross customer loans

• • Yoy increase due to incorporation of expected economic effects of Covid-19 policy responses into provisioning

  • • Update in forward-looking information (FLI) parameters, primarily of macro forecasts

  • • Significant increase in credit risk (SICR) overlays in relation to most affected sectors (cyclical industries, transportation, hotels and leisure), resulting in increased allocations for expected credit losses (ECL)

  • • Unlikely-to-pay (UTP)-assessment

  • • Ordinary course of business risk costs, driven primarily by negative corporate rating migrations

• • Key elements of Q4 20 provisioning:

0.42%
1.18%	•	SICR overlays: EUR 71.8m
1.58%
•	FLI: EUR 105.5m
•	UTP reassessment: EUR 167.9m
•	Regular provisioning net of recoveries: EUR 79.6m

*) A positive (absolute) figure denotes risk costs, a negative figure denotes net releases. Relative risk costs are calculated as annualised quarterly impairment result of financial instruments over average gross customer loans.

Business performance: non-performing loans and NPL ratio - NPL ratio deteriorates slightly yoy and qoq

31/12/1930/09/2031/12/20

AT/EBOe

Group

AT/SBAT/OACZ

OtherRO

SK

HU

HR

RS

Not meaningful

• • NPLs increased with EUR +550mn (+14%) in Q4 20, resulting in still benign NPL ratio of 2.7%

• • Gross NPL inflows amounted to EUR 1.1bn, partially offset by recoveries (EUR 0.3bn) and write-offs (EUR 0.2bn).

• • NPL inflow has been accelerated by portfolio review and identification of unlikely-to-pay defaults, performed in Q4 20, with the latter resulting in EUR 518m new NPLs

• • NPL sales remained at low level in Q4 20: EUR 45.9m

Business performance: allowances for loans and NPL coverage - NPL coverage up yoy to 88.6%, down qoq

31/12/1930/09/2031/12/20

AT/EBOe

Group

AT/SBAT/OACZOtherROSKHUHRRS

77.1%

95.5%

88.6%

58.0%

79.5%

63.4%

63.9%

77.4%

70.2%

66.8%

107.8%

78.1%

96.3%

115.1%

115.1%

116.3%

119.6%

122.5%

80.8%

105.0%

107.4%

93.8%

122.3%

111.4%

79.7%

88.6%

89.7%

140.3%

168.2%

• • NPL coverage increases yoy due to rising allowances, down qoq as Q4 20 saw NPL inflows with lower coverage levels

• • Year-on-year segment trends:

  • • Allocations of allowances in performing portfolio in anticipation of future credit losses resulted in higher NPL coverage across all segments

• • Quarter-on-quarter segment trends:

  • • AT/EBOe and AT/OA: coverage decline is driven by additional unlikely-to-pay (UTP) portfolio assessment and related defaults, as well as by other new defaults with a lower coverage than average

  • • AT/OA additional UTP defaults coverage is around 30%, for AT/EBOe it stands around 21%

179.2%

Not meaningful

Business performance: other result -

Other result improved significantly yoy on lack of material one-offs

Q3 20

Q4 20

43

• • Other result improves significantly yoy, as Q4 20 is not affected by material one-off items

• • Qoq: minor deterioration primarily due to higher tangible asset impairments

• • Year-on-year segment trends:

  • • AT/SB: Q4 19 benefitted from positive one-off related to acquisition bad-will

  • • AT/OA: lower selling gains in commercial real estate and higher provisions

  • • RO: deterioration driven mainly by tangible asset impairments

  • • Other: Q4 19 was negatively impacted by one-offs (SK goodwill and book value impairments)

• • Quarter-on-quarter segment trends:

  • • AT/OA: higher provisions

  • • RO: increased tangible asset impairments

  • • CZ: selling gains and release of impairments

  • • Other: revaluation gain of SK participation

in EUR m

Business performance: net result -

Q4 20 net profit impacted by higher provisioning

Q3 20

Q4 20

AT/EBOe

Group

AT/OAAT/SBCZROOtherHUHRSKRS

-237

343

• • Yoy profitability hit by Covid-19 induced risk cost development; outweighing improved operating result

• • Qoq performance driven by higher risk costs, while operating result remained strong

• • Year-on-year segment trends:

  • • CZ: net result adversely affected by higher risk costs and lower operating result, primarily NII

  • • RO: higher risk provisions and weaker other result

  • • Other: Q4 19 was negatively impacted by one-offs (SK goodwill and book value impairments)

• • Quarter-on-quarter segment trends:

  • • AT/EBOe: decline due to higher operating expenses (deposit insurance) and increased risk provisioning

  • • CZ: deterioration due to higher risk provisions

  • • RS: higher costs and risk provisions

• • Return on equity at 2.3%, following 9.6% in Q3 20, and 5.5% in Q4 19

• • Tangible return on equity at 2.5%, following 10.5% in Q3 20, and 6.1% in Q4 19

in EUR m

Presentation topics

• • Key topics

  • • Macroeconomic update

  • • Business update

  • • Operating trends

  • • Asset quality and impairments

  • • Capital trends and dividends

  • • Key takeaways and outlook

• • Q4 20 presentation

  • • Executive summary

  • • Business environment

  • • Business performance

  • • Assets and liabilities

  • • Additional information

Assets and liabilities: YTD overview - Loan/deposit ratio at 86.9% (Dec 19: 92.2%)

Assets (EUR bn)

Assets (in %)

Liabilities & equity (EUR bn)Liabilities & equity (in %)

277.4

277.4

0.9%100%

2.1%

31/12/19

31/12/20

31/12/19

31/12/20

Trading liabilities
Trading, financial assets	Bank deposits
Loans to banks	Customer deposits
Net loans	Debt securities
Intangibles	Miscellaneous liabilities
Miscellaneous assets

Equity

Cash

Assets and liabilities: customer loans by country of risk - Net customer loans up by 3.6%, NPLs by 4.5%

Net customer loans (EUR bn)

7.1

7.2

Performing loans (EUR bn)Non-performing loans (EUR bn)

31/12/19

30/09/20

31/12/20

31/12/19

30/09/20

31/12/20

31/12/19

ATCZSKROHUHRRSOther EUOther

• • Performing loans enjoyed solid growth across most geographies, decline in CZ due to FX depreciation

• • Corporates performed better than Retail

• • Minor increase in NPL stock from multi-year lows

30/09/20

31/12/20

Assets and liabilities: financial and trading assets* - LCR at excellent 182.5%

By geography

100%

By debtor type

Liquidity buffer

in EUR bn

31/12/19

30/09/20

31/12/20

31/12/19

30/09/20

31/12/20

31/12/19

30/09/20

31/12/20

OtherSKDEHUCZATRO

* Excludes derivatives held for trading

OtherBanksSovereignLiquidity buffer

Liquidity buffer as % of total liabilities

• • Liquidity buffer is defined as unencumbered collateral plus cash

• • Total liabilities are defined as total on balance sheet liabilities excluding total equity

Assets and liabilities: customer deposit funding -

Customer deposits* up 9.9% in 2020, driven by customer business

By customer type

in EUR bn

8.6

191.1

By product type

Highlights

in EUR bn •

Continued deposit inflows driven by Retail segment with strong contribution from Corporate segment (esp. public sector) with highest demand for overnight deposits amid low interest rate environment

• • Increasing share of overnight deposits with significantly longer behavioural maturity provides a cost effective funding source

31/12/19

30/09/20

31/12/20

31/12/19

30/09/20

31/12/20

FV deposits
General governments	Repurchase agreements
Other financial corporations	Term deposits
Non-financial corporations	Overnight deposits
Households
* excludes lease liabilities as of 2020

FV deposits

Assets and liabilities: debt vs interbank funding -

Stable wholesale funding reliance, as customer deposits grow strongly

Debt securities issued

Interbank deposits

in EUR bn

31/12/19

30/09/20

31/12/20

• • Overall, relative stable development; volumes of mortgage covered bonds and senior unsecured bonds have risen ytd

in EUR bn

Overnight depositsTerm depositsRepurchase agreements

• • Significant increase in interbank deposits predominantly in term deposits; mainly driven by TLTRO3

Stable LT funding needs in 2021 with focus on senior preferred funding

Maturity profile of debt

in EUR bn

3.8

3.5

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

2032

2033+Senior unsec. bondsSenior non-preferred bondsCovered bondsCapital exc Tier 1Debt CEE

• • Erste Group started the year with a EUR 500m senior preferred notes issuance with a 10 year tenor in January; prolongation of the outstanding senior preferred benchmark-curve and priced at favourable MS+55bps

• • 2021 funding volume of Erste Group Bank AG comparable to 2020 levels, issuances in late 2020 to be seen as pre-funding

• • TLTRO outstanding as of 31 Dec 2020: EUR 14bn

Assets and liabilities: LT funding - Targeting MPE approach

Resolution strategy

Austrian resolution group

• • Direct presence in 7 geographically connected countries

• • Erste Group's setup suggests a multiple point of entry (MPE)

  resolution strategy

• • When determined, MREL needs are likely to be met with a mix of own funds, senior non-preferred and senior preferred instruments

• • Major entities within the Austrian resolution group*:

  • • Erste Group Bank AG

  • • Erste Bank Oesterreich and its subsidiaries

  • • All other savings banks of the Haftungsverbund

• • Subordination requirement does not seem to be a limiting factor

• • Binding MREL targets under BRRD1 for the Austrian, Slovak,

  Romanian, Hungarian and Czech resolution groups have been received; for Croatia the first binding target is expected in 2021

• • All CEE resolution groups with a binding decision received in 2020 will receive a transition period until year-end 2023 enabling them to reach their MREL targets gradually

• • MREL targets under BRRD2 are expected for all 6 EU-based resolution groups in H1 2021

*) Subject to joint decision of resolution authority

Expected total MREL-related issuance volume unchanged

MREL resolution groups (December 2020)

in EUR bn

174

AT

CZSKROHRTotal assetsTotal RWA

HU

• • Under MREL there are 6 resolution groups covered by the

  Single Resolution Board

• • The Austrian resolution group (parent company, EBOe and savings banks) is not considered a legal entity or reporting unit, hence there is neither a statutory reporting nor a capital requirement for the Austrian resolution group

Preliminary 3year* MREL issuance plan (avg. p.a.)

1,000 - 2,500

in EUR m

HoldingCZSKROHRHU

• • CEE issuances will mainly be placed in domestic market and

  Euro markets

• • First NPS issuances by Erste Group Bank AG (in EUR) and

  BCR (in RON) in 2019 and Slovenská sporiteľňa in Feb 2020

• • Erste Bank Croatia issued a EUR PS in Q1 2021 in the domestic market

*) Horizon reduced to 3y from 5y to provide more accurate data range

Assets and liabilities: MREL for the Austrian resolution group MREL requirement based on RWA fulfilled

MREL capacity based on TREA (RWA)*

Other Senior Unsec > 1yr

NPS > 1yr

Other subordinated > 1yr

33.50%

27.49%MREL requirement

T2

4.80%

AT1

Subordination requirement

CET1

16.10%

*) TREA… total risk exposure amount

Key take-aways

in %

• • Erste Group's setup is based on a multiple point of entry

  (MPE) resolution approach

• • In April 2020, Erste Group Bank AG received its MREL requirement calibrated on balance sheet data as of 31 Dec 2017 and based on BRRD1

  18.94%

• • Erste Group Bank AG, as the Point of Entry of the Austrian resolution group, must comply with a MREL requirement of 14.90% of TLOF and a subordination requirement of 10.27%, which equals RWAs of 27.49% and 18.94% for the subordination requirement based on BRRD1

• • Based on the Austrian resolution group's RWAs as of Dec 2020 of approx. EUR 78bn, the current MREL ratio stands at 33.50%, thereof 27.00% being subordinated eligible liabilities. Both ratios are well above the currently valid minimum requirements (MREL 2020 decision)

• • A new MREL requirement based on SRB's 2020 MREL policy and BRRD2 is expected in H1 2021

• • As of YE 2020 the AT resolution group would be compliant with the interim MREL requirement (based on draft MREL 2021 decision) to be fulfilled from 1 Jan 2022 and set under BRRD2

  Dec 20

• • Potential changes in the MREL requirement will be reflected in Erste Group Bank AG's funding plan as to ensure compliance with MREL & subordination targets

Assets and liabilities: capital position -

CET1 ratio at a strong 14.2%, phased-in at 14.5%

Basel 3 capital

Risk-weighted assets

Basel 3 capital ratios

in EUR bn

in EUR bn

31/12/19 31/03/20 30/06/20 30/09/20 31/12/20

31/12/19 31/03/20 30/06/20 30/09/20 31/12/20

31/12/19 31/03/20 30/06/20 30/09/20 31/12/20

Tier 2AT1CET1

• • CET1 capital up by EUR 0.8bn ytd:

• • Retained earnings: +EUR 764m

• • Minority interest: +EUR 443m

• • OCI (mainly on FX impact): -EUR 233m

• • AT1 issuance in 2020: EUR +1.2bn

Market riskOp riskCredit RWA

• • Ytd key credit RWA drivers:

• • Business effects: ~ EUR +6.6bn (growth)

• • Regulatory effects:: ~ EUR -6.3bn (SME support factor, 0% sovereign risk weight)

• • Asset quality effects: ~ EUR -0.5bn (negative rating migrations in Corporate offset by Retail)

• • FX depreciation: ~ EUR -1.0bn

CET1Tier 1Total capital

• • CET1 ratio benefits from SME support factor: +51bps

• • FX impact: -16bps (OCI and RWA)

• • 2019 dividend deduction of EUR 1.5/share rolled forward to 2020

• • Medium-term target remains unchanged at 13.5%

Presentation topics

• • Key topics

  • • Macroeconomic update

  • • Business update

  • • Operating trends

  • • Asset quality and impairments

  • • Capital trends and dividends

  • • Key takeaways and outlook

• • Q4 20 presentation

  • • Executive summary

  • • Business environment

  • • Business performance

  • • Assets and liabilities

  • • Additional information

Additional information: segment structure - Geographical/operating and business segment view

Erste Group - Geographical/operating segments

Austria

Central and Eastern Europe

Other

Erste Group - Business segments

Additional information: income statement - Year-to-date and quarterly view

Year-to-date view

Quarterly view

in EUR million	2019	2020	YOY-Δ	Q4 19	Q3 20	Q4 20	YOY-Δ	QOQ-Δ
Net interest income	4,746.8	4,774.8	0.6%	1,229.5	1,192.4	1,185.6	-3.6%	-0.6%
Interest income	5,544.0	5,107.9	-7.9%	1,404.6	1,237.7	1,225.0	-12.8%	-1.0%
Other similar income	1,655.2	1,461.7	-11.7%	423.8	344.6	357.9	-15.5%	3.9%
Interest expenses	-1,054.9	-621.2	-41.1%	-237.1	-122.1	-120.3	-49.3%	-1.5%
Other similar expenses	-1,397.5	-1,173.6	-16.0%	-361.8	-267.8	-277.0	-23.4%	3.5%
Net fee and commission income	2,000.1	1,976.8	-1.2%	515.9	491.6	528.5	2.4%	7.5%
Fee and commission income	2,373.5	2,354.5	-0.8%	567.7	587.3	621.2	9.4%	5.8%
Fee and commission expenses	-373.4	-377.7	1.2%	-51.8	-95.7	-92.7	78.8%	-3.2%
Dividend income	27.9	19.9	-28.5%	3.8	0.9	4.3	11.4%	>100.0%
Net trading result	318.3	137.6	-56.8%	-101.0	28.2	128.6	n/a	>100.0%
Gains/losses from financial instruments measured at fair value through profit or loss	-24.5	62.0	n/a	164.9	52.9	-19.4	n/a	n/a
Net result from equity method investments	17.1	10.4	-39.2%	7.0	4.0	0.5	-93.3%	-88.3%
Rental income from investment properties & other operating leases	170.1	173.6	2.0%	41.7	44.0	41.3	-1.1%	-6.3%
Personnel expenses	-2,537.1	-2,520.7	-0.6%	-650.0	-636.7	-618.5	-4.8%	-2.9%
Other administrative expenses	-1,205.1	-1,158.9	-3.8%	-325.8	-235.6	-339.9	4.3%	44.2%
Depreciation and amortisation	-541.0	-540.9	0.0%	-146.6	-136.1	-138.9	-5.2%	2.1%
Gains/losses from derecognition of financial assets measured at amortised cost	0.9	6.8	>100.0%	1.3	-0.1	6.6	>100.0%	n/a
Other gains/losses from derecognition of financial instruments not measured at fair value through profit or loss	23.5	-0.4	n/a	5.5	1.4	0.3	-93.9%	-76.7%
Impairment result from financial instruments	-39.2	-1,294.8	>100.0%	-82.1	-194.7	-424.7	>100.0%	>100.0%
Other operating result	-628.2	-278.3	-55.7%	-230.9	-43.8	-64.6	-72.0%	47.7%
Levies on banking activities	-128.0	-117.7	-8.0%	-37.1	-17.3	-17.4	-53.1%	0.3%
Pre-tax result from continuing operations	2,329.7	1,368.0	-41.3%	433.2	568.3	289.6	-33.1%	-49.0%
Taxes on income	-418.7	-342.5	-18.2%	-67.8	-123.9	-78.3	15.5%	-36.8%
Net result for the period	1,911.1	1,025.5	-46.3%	365.4	444.4	211.3	-42.2%	-52.5%
Net result attributable to non-controlling interests	440.9	242.3	-45.0%	118.2	101.0	65.2	-44.8%	-35.5%
Net result attributable to owners of the parent	1,470.1	783.1	-46.7%	247.2	343.3	146.0	-40.9%	-57.5%
Operating income	7,255.9	7,155.1	-1.4%	1,861.8	1,814.0	1,869.3	0.4%	3.0%
Operating expenses	-4,283.3	-4,220.5	-1.5%	-1,122.4	-1,008.5	-1,097.3	-2.2%	8.8%
Operating result	2,972.7	2,934.6	-1.3%	739.4	805.5	771.9	4.4%	-4.2%

Additional information: group balance sheet - Assets

Quarterly data

Change

in EUR million	Dec 19	Mar 20	Jun 20	Sep 20	Dec 20	YOY-Δ	YTD-Δ	QOQ-Δ
Cash and cash balances	10,693	23,031	18,433	27,848	35,839	>100.0%	>100.0%	28.7%
Financial assets held for trading	5,760	7,706	6,984	6,764	6,356	10.4%	10.4%	-6.0%
Derivatives	2,805	4,034	3,233	3,369	2,954	5.3%	5.3%	-12.3%
Other financial assets held for trading	2,954	3,672	3,752	3,394	3,402	15.1%	15.1%	0.2%
Non-trading financial assets at fair value through profit and loss	3,208	3,130	3,122	3,157	3,083	-3.9%	-3.9%	-2.3%
Equity instruments	390	361	374	395	347	-11.0%	-11.0%	-12.0%
Debt securities	2,335	2,250	2,129	2,124	2,048	-12.3%	-12.3%	-3.6%
Loans and advances to banks	0	0	0	0	0	n/a	n/a	n/a
Loans and advances to customers	483	519	619	638	687	42.1%	42.1%	7.7%
Financial assets at fair value through other comprehensive income	9,047	8,953	8,883	8,578	8,519	-5.8%	-5.8%	-0.7%
Equity instruments	210	139	132	136	130	-38.2%	-38.2%	-4.7%
Debt securities	8,836	8,815	8,750	8,442	8,389	-5.1%	-5.1%	-0.6%
Financial assets at amortised cost	204,162	207,133	214,464	212,824	210,940	3.3%	3.3%	-0.9%
Debt securities	26,764	27,700	29,298	28,649	29,579	10.5%	10.5%	3.2%
Loans and advances to banks	23,055	24,264	27,418	25,672	21,466	-6.9%	-6.9%	-16.4%
Loans and advances to customers	154,344	155,168	157,749	158,502	159,895	3.6%	3.6%	0.9%
Finance lease receivables	4,034	4,040	4,082	4,118	4,127	2.3%	2.3%	0.2%
Hedge accounting derivatives	130	226	270	254	205	57.7%	57.7%	-19.2%
Property and equipment	2,629	2,558	2,526	2,496	2,552	-2.9%	-2.9%	2.2%
Investment properties	1,266	1,254	1,257	1,245	1,280	1.1%	1.1%	2.9%
Intangible assets	1,368	1,322	1,331	1,331	1,359	-0.7%	-0.7%	2.1%
Investments in associates and joint ventures	163	163	166	170	190	16.6%	16.6%	11.6%
Current tax assets	81	80	135	151	175	>100.0%	>100.0%	16.0%
Deferred tax assets	477	453	467	454	460	-3.5%	-3.5%	1.4%
Assets held for sale	269	265	260	209	212	-21.2%	-21.2%	1.4%
Trade and other receivables	1,408	1,391	1,287	1,256	1,341	-4.8%	-4.8%	6.8%
Other assets	1,001	1,191	1,019	1,123	751	-25.0%	-25.0%	-33.2%
Total assets	245,693	262,898	264,692	271,983	277,394	12.9%	12.9%	2.0%

Additional information: group balance sheet - Liabilities and equity

Quarterly data

Change

in EUR million	Dec 19	Mar 20	Jun 20	Sep 20	Dec 20	YOY-Δ	YTD-Δ	QOQ-Δ
Financial liabilities held for trading	2,421	3,322	2,737	2,845	2,625	8.4%	8.4%	-7.7%
Derivatives	2,005	2,945	2,308	2,253	2,037	1.6%	1.6%	-9.6%
Other financial liabilities held for trading	416	377	429	592	588	41.4%	41.4%	-0.8%
Financial liabilities at fair value through profit or loss	13,494	12,591	12,607	12,334	12,091	-10.4%	-10.4%	-2.0%
Deposits from customers	265	252	295	279	254	-4.1%	-4.1%	-8.8%
Debt securities issued	13,011	12,128	12,136	11,878	11,657	-10.4%	-10.4%	-1.9%
Other financial liabilities	219	211	177	178	180	-17.6%	-17.6%	1.4%
Financial liabilities at amortised cost	204,143	219,988	222,321	229,525	235,125	15.2%	15.2%	2.4%
Deposits from banks	13,141	20,703	21,984	26,433	24,771	88.5%	88.5%	-6.3%
Deposits from customers	173,066	181,439	182,376	184,551	190,816	10.3%	10.3%	3.4%
Debt securities issued	17,360	17,285	17,295	17,797	19,020	9.6%	9.6%	6.9%
Other financial liabilities	576	560	666	743	518	-10.2%	-10.2%	-30.3%
Lease liabilities	515	520	521	516	560	8.7%	8.7%	8.4%
Hedge accounting derivatives	269	207	209	209	189	-29.9%	-29.9%	-9.9%
Fair value changes of hedged items in portfolio hedge of interest rate risk	0	0	0	0	0	>100.0%	>100.0%	-20.6%
Provisions	1,919	2,046	2,033	2,008	2,082	8.5%	8.5%	3.7%
Current tax liabilities	61	94	62	67	58	-3.5%	-3.5%	-12.9%
Deferred tax liabilities	18	24	17	31	20	11.9%	11.9%	-35.6%
Liabilities associated with assets held for sale	6	7	7	3	1	-77.3%	-77.3%	-43.9%
Other liabilities	2,369	3,045	2,978	3,006	2,232	-5.8%	-5.8%	-25.8%
Total equity	20,477	21,053	21,200	21,438	22,410	9.4%	9.4%	4.5%
Equity attributable to non-controlling interests	4,857	4,875	4,922	5,024	5,073	4.4%	4.4%	1.0%
Additional equity instruments	1,490	1,987	1,987	1,987	2,733	83.4%	83.4%	37.5%
Equity attributable to owners of the parent	14,129	14,190	14,291	14,427	14,604	3.4%	3.4%	1.2%
Subscribed capital	860	860	860	860	860	0.0%	0.0%	0.0%
Additional paid-in capital	1,478	1,478	1,478	1,478	1,478	0.0%	0.0%	0.0%
Retained earnings and other reserves	11,792	11,853	11,953	12,090	12,267	4.0%	4.0%	1.5%
Total liabilities and equity	245,693	262,898	264,692	271,983	277,394	12.9%	12.9%	2.0%

Additional information: regulatory capital position/requirement (SREP) - Capital requirements (SREP) for 2021; Erste Group target of 13.5% unchanged

Fully loaded	Measures 1)	Fully loaded
2018	2019	Q4 2020	Q4 2020	YE 2021	2018	2019	Q4 2020
Pillar 1 CET1 requirement	4.50%	4.50%	4.50%	4.50%	4.50%	4.50%	4.50%	4.50%	4.50%
Combined buffer requirement 5)	3.19%	4.91%	4.68%	2.18%	4.68%	3.07%	4.75%	4.63%	4.63%
Capital conservation buffer	1.88%	2.50%	2.50%	0.00%	2.50%	1.88%	2.50%	2.50%	2.50%
Countercyclical capital buffer 2)	0.31%	0.41%	0.18%	0.18%	0.18%	0.20%	0.25%	0.13%	0.13%
OSII	1.00%	2.00%	2.00%	2.00%	1.00%	1.00%	2.00%	2.00%	1.00%
Systemic risk buffer	1.00%	2.00%	2.00%	2.00%	1.00%	1.00%	2.00%	2.00%	1.00%
Pillar 2 CET1 requirement 3)	1.75%	1.75%	0.98%	0.98%	0.98%	1.75%	1.75%	0.98%	0.98%
Pillar 2 CET1 guidance	1.05%	1.00%	1.00%	0.00%	1.00%	0.00%	0.00%	0.00%	0.00%
Regulatory minimum ratios excluding P2G
CET1 requirement	9.44%	11.16%	10.16%	7.66%	10.16%	9.32%	11.00%	10.11%	10.12%
1.50% AT1 Tier 1 requirement	10.94%	12.66%	11.99%	9.49%	11.99%	10.82%	12.50%	11.94%	11.95%
2.00% T2 Own funds requirement	12.94%	14.66%	14.43%	11.93%	14.43%	12.82%	14.50%	14.38%	14.38%
Regulatory minimum ratios including P2G
CET1 requirement	10.49%	12.16%	11.16%	n.a.	11.16%	9.32%	11.00%	10.11%	10.12%
1.50% AT1 Tier 1 requirement	10.94%	12.66%	12.99%	n.a.	12.99%	10.82%	12.50%	11.94%	11.95%
2.00% T2 Own funds requirement	12.94%	14.66%	15.43%	n.a.	15.43%	12.82%	14.50%	14.38%	14.38%
Reported CET1 ratio as of December 2020	14.45%	22.07% 4)

• • Buffer to MDA restriction as of 31 Dec 20: 429bps

• • Available distributable items (ADI) as of 31 Dec 20: EUR 3.0bn (post EUR 0.5 dividend per share and AT1 coupon);

  based on CRR II, which allows additional own funds components to be included, ADIs are at EUR 5.5bn

• 1) Following ECB's announcement re. measures in reaction to COVID-19 on 12 March 2020. (MDA restrictions still apply in case of a combined buffer requirement breach).

• 2) Planned values based on Q4 2020 exposure (Q4 20 countercyclical buffer of 0.18% for Erste Group consolidated)

• 3) As of 12 March 2020 ECB brought forward measures for the use of the P2R re. capital stack (56.25% for CET1 capital and 75% for Tier 1 capital. The overall P2R remained at 1.75% for Erste Group

• 4) Consolidated capital ratios pursuant to IFRS on phased-in basis. Unconsolidated capital ratios pursuant to Austrian Commercial Code (UGB) and on phased-in basis. ADIs pursuant to UGB.

• 5) Combined buffer requirement: until YE 2020 higher of OSII and systemic risk buffer; in 2021 OSII and systemic risk buffer are cumulative

Capital position -

Erste Group applies regulatory quick fixes conservatively

Quick Fix	Applied by Erste Group	From	Phased-in/ Fully loaded	Estimated impact on CET1 ratio*	Comment
SME Supporting Factor		Q2 20	Fully-loaded	+51 bps	Regulator pulled forward permanent introduction from 2021 to Q2 20
Sovereigns in EU currency (STD approach)		Q2 20	Phased-in	+12 bps
Sovereigns in EU currency (IRB approach)		Q4 20	Phased-in	+14 bps
Software		in the course of 2021	Fully-loaded	up to +20-25 bps	Internal preparations currently ongoing and application in the course of 2021
Retail loans backed by pensions		H1 21	Fully-loaded	No impact
Leverage ratio and exclusion of central banks		Q2 20	Phased-in	+68 bps on leverage ratio	Erste Group boasts strong leverage ratio (>6%), hence no need for application
FVTOCI debt securities		Q2 20	Phased-in	+ 1 bp	Immaterial impact, hence no application
IFRS9 provisions for expected credit losses (ECL)		Q2 20	Phased-in	Impact calculation not yet available	Erste Group adopted fully loaded IFRS9 approach right from inception in 2019

* Impact calculation based on Q4 20 RWA / leverage exposure

Additional information: gross customer loans - By risk category, by currency, by industry

Gross cust. loans by risk category (EUR bn)

31/12/19

31/03/20

30/06/20

30/09/20

31/12/20

Gross customer loans by risk category (in %)

100%

31/12/19

31/03/20

30/06/20

Non-performingSubstandard

30/09/20

31/12/20

Management attentionLow risk

Gross customer loans by currency (EUR bn)

31/12/19

31/03/20

30/06/20

30/09/20

31/12/20

Gross customer loans by currency (in %)

31/12/19

Gross customer loans by industry (EUR bn)

31/12/19

31/03/20

30/06/20

30/09/20

31/03/20

30/06/20

Other

30/09/20

USDCHFCEE-LCY

31/12/20

Other

Financial inst.

Transport & commsPublic admin

EURTourismServicesConstructionTrade

4.9

4.2

31/12/20

ManufacturingReal estateHouseholds

Additional information: footprint -

Customer banking in Austria and the eastern part of the EU

Erste Group footprint

Czech Republic

Majority ownership

Austria

Minority ownership

Slovakia

Customers: 3.8mEmployees: 15,942

Branches: 845 (EBOe: 196)

Croatia

Customers : 1.3mEmployees : 3,252

Branches: 139

Customers: 2.2m

Employees: 3,770

Branches: 206

Hungary

Customers: 0.9mEmployees: 3,227

Branches: 107

Romania

Customers: 2.9m

Employees: 5,645

Branches: 370

Serbia

Customers: 0.5mEmployees: 1,198

Branches: 88

Highlights

• • Leading retail and corporate bank in 7 geographically connected countries

• • Favourable mix of mature & emerging markets with low penetration rates

• • Potential for cross selling and organic growth in CEE

• • Number of customers: 16.1 million

• • Number of employees: 45,690

• • Number of branches: 2,193

Employees: FTEs as of end of reporting period

(The presented FTE data exclude FTEs outside Erste

Group's core markets in Austria and CEE as well as FTEs of specific services entities not located in Austria)

Additional information: strategy -

A real customer need is the reason for all business

Customer banking in Central and Eastern EuropeEastern part of EU

Focus on CEE, limited exposure to other Europe

Focus on local currency mortgage and consumer loans funded by local deposits

FX loans (in EUR) only where funded by local FX deposits (Croatia and Serbia)

Savings products, asset management and pension products

Expansion of digital banking offeringSME and local corporate banking

Advisory services, with focus on providing access to capital markets and corporate finance

Transaction banking services (trade finance, factoring, leasing)

Commercial real estate business

Focus on customer business, incl. customer- based trading activities

In addition to core markets, presences in Poland, Germany, London, New York and Hongkong with institutional client focus and selected product mix

Building debt and equity capital markets in CEEFinancing sovereigns and municipalities with focus on infrastructure development in core markets

Any sovereign holdings are only held for market-making, liquidity or balance sheet management reasonsFocus on banks that operate in the core markets

Any bank exposure is only held for liquidity or balance sheet management reasons or to support client business

Additional information: Ratings -

Composition of Erste Group Bank AG's issuer ratings

+

Financial Profile
Asset Risk Capital Pr of itability Funding Structure Liquid Resources	baa2
baa1
baa3
a3
baa1

+

Qualitative Factors
Business Diversification Opacity, Complexity Corporate Behaviour	0
0
0

= + = +

LGF Loss Given Failure	+2
Government Support	0

Adjusted BCA

baa1

Affiliate Support

0

BCA Baseline Credit Assessment

baa1

SACP - Stand-Alone Credit Profile
a
▲
Anchor	bbb+
Business Position	Strong	+1
Capital & Earnings	Adequate	0
Risk Position	Adequate	0
Funding	Above Average	+1
Liquidity	Strong

+

Support	0
▲
ALAC Support	0
GRE Support	0
Group Support	0
Sovereign Support	0

Additional Factors

0

+ =

Status as of 1 December 2020

Additional information: ESG ratings, indices and alignment with UN SDGs

ESG Indices and Ratings

Erste Group has been included in the Vienna Stock

Exchange's sustainability index since its launch in 2008

Included since 2016: The FTSE4Good Index Series measures the performance of companies with strong environmental, social and governance (ESG) practicesSince 2017 included in the Euronext Vigeo Index: Eurozone 120

Included since 2019 in the Bloomberg Gender-Equality Index. Erste Group is the only Austrian company represented in this index (as of 2020).

Erste Group was awarded prime status in ISS ESG ratings in October 2018.

In March 2020, imug Investment Research confirmed the rating for Erste Group at positive (B), mortgage covered bonds are currently rated positive (BB) and raised the public sector covered bonds rating to very positive (A).

Erste Group was upgraded to AA in July 2019 and is considered a leader among approx. 200 companies in the banking industry.

UN Sustainable Development Goals

In principle, Erste Group supports all SDGs. Given its regional footprint and business model, Erste Group is in fact able to make notable contributions to the achievement of the below-mentioned SDGs:

• • Since its foundation 200 years ago, Erste Group's purpose has been to promote and secure prosperity. Erste Group values responsibility, respect and sustainability.

• • Financial literacy is key to economic prosperity.

  Therefore, Erste Group offers a variety of financial literacy trainings.

• • Erste Group respects and promotes work-life balance among its employees and also contributes to their good health.

• • Diversity and equal opportunity are key elements of Erste Group's human resource strategy.

• • For Erste Group social and/or ecological criteria are as important as economic criteria in its investment decision process.

• • Erste Group has launched social banking initiatives aiming at the financial inclusion of those parts of the population that are often excluded.

• • Erste Group contributes to the cultural and social development of society.

• • Erste Group aims at protecting the environment by minimising its ecological footprint, in particular with its consumption of energy and paper.

• • Erste Group cooperates with national and international organisations and it promotes corporate volunteering.

Additional information: shareholder structure - Total number of shares: 429,800,000

By investor

By region

Unidentified *

Retail 18.15%

• 1 Syndicated Savings Banks Foundations, own holdings of Savings Banks, Erste Employees Private Foundation

• 2 Other parties to the shareholder agreement of Erste Foundation, Savings Banks and CaixaBank 3

* Unidentified institutional and retail investors ** Including Market Makers, Prime Brokerage, Proprietary Trading, Collateral and Stock Lending positions which are visible through custodian banklists

Status as of 17 February 2021

Investor relations details

• • Erste Group Bank AG, Am Belvedere 1, 1100 Vienna

  E-mail: Internet:

  [e-mail]://www.erstegroup.com/investorrelationshttp://twitter.com/ErsteGroupIRhttp://www.slideshare.net/Erste_Group

  Erste Group IR App for iPad, iPhone and Androidhttp://www.erstegroup.com/de/Investoren/IR_AppReuters: ERST.VI Bloomberg:EBS AV

  Datastream: O:ERS ISIN: AT0000652011

• • Contacts

  Thomas SommerauerTel: [phone]

Peter Makray

Tel: [phone]

Simone Pilz

Tel: [phone]

Gerald Krames

Tel: [phone]

e-mail:[e-mail]-mail:[e-mail]-mail:[e-mail]-mail:[e-mail]