erste & steiermÄrkische bank d.d. - erste bank

Zagreb, October 9th, 2018

ERSTE & STEIERMÄRKISCHE BANK d.d.

Investor presentation

2

1. Erste Bank – About us

2. Macroeconomic Update

3. Business Overview

4. Indicative Terms of Bonds

5. Appendix

Agenda

Direct presence

Indirect presence

# possition on the market based on asset size

Czech

Republik

Austria

Slovakia

Hungary

Romania

Serbia

Croatia

Customers: 0.9m

Hungary # 3

Employees: 3,047

Branches: 115

Customers: 3.4m

Romania # 1

Employees: 7,265

Branches: 508

Customers: 0.4m

Serbia # 10

Employees: 1,069

Branches: 85

Customers: 1,2m

Croatia # 3

Employees: 3,452

Branches: 153

Customers: 4.7m

Czech Republic # 1

Employees: 10,171

Branches: 510

Customers: 2.2m

Slovakia # 1

Employees: 4,250

Branches: 270

Customers: 3.7m

Austria # 1

Employees: 16,283

Branches: 905

Erste Group at a Glance

Erste Group Footprint

Total assets EUR 230bn

Net profit EUR 774mn

NPL coverage 72,0%

NPL ratio 3,6%

CET 1 ratio* 12,5%

Total capital ratio* 17,3%

Loan/deposit ratio 92,3%

Leverage ratio 6,4%

Credit rating**

A (positive) /

A2 (positive) /

A- (stable)

branches

London

New York

Hong Kong

Germany

* Basel 3, fully-loaded

** S&P / Moody‘s / Fitch

Key financials 1H 2018

3

ERSTE&STEIERMÄRKISCHE BANK d.d. - Introduction

4

- Member of Erste Group – one of the leading FIs in eastern

part of EU

- Primary focus on retail clients and SMEs

- 3rd Bank in Croatia in terms of assets (14.53% of market

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)

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

Key events since formation

5

2000

Formation of ERSTE & STEIERMARKISCHE BANK d.d. through merger of Bjelovarska, Trgovačka and Čakovečka banks

2003

Acquisition of Riječka banka d.d.

2009

Acquisition of 100% equity stake in Opportunity bank AD Podgorica (now Erste bank AD Podgorica)

2011

Acquisition of shares in Erste Card Club d.d.

2018

Integration of Erste Factoring intothe Bank

40.98%

Ownership structure and group members

6

Erste Group Bank AG

Steiermärkische Bank

und Sparkassen AG

ERSTE &

STEIERMARKISCHE BANK

Erste nekretnine d.o.o.

Erste bank AD Podgorica

Erste Card Club d.o.o.

Erste factoring d.o.o.

Erste&Steiermärkische S-leasing d.o.o.

Izbor nekretnina d.o.o.

Erste Group IT HR d.o.o.

100%

100%

100%

75%

50%

100%

80%

59.02%

7





5. Appendix

Agenda

8

Macroeconomic developmentsStable mid-term growth prospects, with focus on domestic demand

• As far as the outlook goes, we see the headline figure remainingsupported by sound domestic demand profile going into 2H18, on bothprivate consumption and investments side

• Net exports contribution is seen, despite positive 2Q18 performance,remaining on FY18 scale overall in modest red amid normalization ofgrowth rates in tourism and more pronounced domestic-demand drivenimports pressures.

• Bottom line, we confirm our FY18 forecast at 2.8% (with risks lookingbroadly balanced), followed by similar growth performance in next year

• 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 bothprivate 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, positivesurprise came from the external demand side, where stronger exportsperformance (5.6% y/y) outpaced imports increase (4.7% y/y), thusresulting in marginally positive net exports contribution to the 2Q18 GDP

Real GDP growth Components of GDP

-0,1%

2,3%

3,5%

2,9% 2,8% 2,7%

-1%

0%

1%

2%

3%

4%

2014 2015 2016 2017 2018e 2019e

Source: Croatian Bureau of Statistics, Erste Group Research

-1,6%

1,0%

3,4% 3,6% 3,6%2,9%

-2,8%

3,8%

6,5%

3,8%

4,9%

6,0%

-4%

-2%

0%

2%

4%

6%

8%

2014 2015 2016 2017 2018e 2019e

Private consumption growth Investments

9

Macroeconomic developmentsFiscal position expected to remain balanced, with public debt further declining

• Labor market continues to reflect positive economic trends asunemployment 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 movedabove 2% mark, given stronger oil price dynamics – we see inflationremaining at close levels also in remainder of the year, with average FY18seen at 1.7% mark, followed by similar CPI footprint also during 2019

• Following 2017 budget surplus of 0.8% of GDP and additional drop in thepublic debt trajectory, fiscal developments should remain on encouragingtrack, with 2018 expect to bring balanced budget and continued reductionof public debt towards 75% of GDP. Short-term downside risks aredominantly 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 asboth Fitch and S&P upgraded the outlook to ‘positive’ in 2H18, henceincreasing the likelihood that Croatia could receive an upgrade to IGR in2019

Unemployment and inflation Public debt and general government deficit

17,3%16,3%

13,1%

11,3%9,6%

8,7%

-0,2% -0,5% -1,1%

1,1% 1,7% 1,8%

-4%

0%

4%

8%

12%

16%

20%

2014 2015 2016 2017 2018e 2019e

Unemployment rate (%) Inflation (%)

84,0% 83,8% 80,6% 78,0%74,4% 71,4%

-5,1% -3,3% -0,9%

0,8% 0,0%

-0,5%

-20%

0%

20%

40%

60%

80%

100%

2014 2015 2016 2017 2018e 2019e

Public debt (% of GDP) General government deficit (% of GDP)

Source: Croatian Bureau of Statistics, Erste Group Research

10





5. Appendix

Agenda

11

Positive trends in economy affect loan activity

Source: audited non-consolidated financial reports for 2016 and 2017 and non-audited

non-consolidated financial reports for 1H 2018 (GFI-KI)

Total assets Loans vs. deposits, L/D ratio

• 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

• 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

56,1

57,2

58,3

53

54

55

56

57

58

59

2016 2017 1H 2018

Total assets (HRK bn)

*uključuje depozite banaka

34,9 35,1 36,2

42,0 43,844,8

83%80% 81%

20,00%

30,00%

40,00%

50,00%

60,00%

70,00%

80,00%

90,00%

0

10

20

30

40

50

2016 2017 1H 2018

Loans to customers (HRK bn)Deposits from customers (HRK bn)*L/D ratio (%) *Bank deposits included

12

Pronounced growth of loans volume in 1H 2018

• 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

Change of assets structure in 1H 2018 (HRK mn) Change of funding structure in 1H 2018 (HRK mn)

• 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



58.259

579

1.154

143

17

806

57.206

31/12/17 Cash Loans tofin. inst.

Securities& deriv.

Loans Other 30/06/18

1.014

323

95

7 23160

57.206

58.258

31/12/17 Loans Deposits Securitiesissued

Subord.Instr.

Other Equity 30/06/18

12,3813,91 15,00

14,62%

16,68%17,64%

0,00%

2,00%

4,00%

6,00%

8,00%

10,00%

12,00%

14,00%

16,00%

18,00%

20,00%

-1

1

3

5

7

9

11

13

15

17

2016 2017 1H 2018

Corporate loans - ESB (HRK bn)

Corporate loans - ESB market share (%)

15,616,17

16,87

13,33% 13,63% 13,89%

0%

2%

4%

6%

8%

10%

12%

14%

16%

10

11

12

13

14

15

16

17

18

2016 2017 1H 2018

Retail loans - ESB (HRK bn)

Retail loans - ESB market share (%)

13

Stable market position with continuous market share growthLoans volume grows both on corporate and retail side

• 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)

Gross loans to corporate and market share Gross loans to retail and 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%)

Source: Agregated non-consolidated statistic report of credit institutions wich CNB

provides to credit institutions

Growth of demand deposits with increase of ESB mkt. shareRetail deposits stable, while growth slightly more pronounced on corporate side

14

• 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

Corporate deposits and market shareRetail deposits and 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

Source: Agregated non-consolidated statistic report of credit institutions wich CNB

provides to credit institutions

7,328,52 8,84

12,59%

13,50%14,33%

5%

7%

9%

11%

13%

15%

0

2

4

6

8

10

2016 2017 1H 2018

Corporate deposits - ESB (HRK bn)

Corporate deposits - ESB market share (%)

25,7 26,1 26,36

13,67% 13,71% 13,79%

2%

4%

6%

8%

10%

12%

14%

16%

8

13

18

23

28

2016 2017 1H 2018

Retail deposits - ESB (HRK bn)

Retail deposits - ESB market share (%)

15

NPL share below market average

NPL share (Bank vs. Sector) NPL coverage (Bank vs. Sector)

• 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

• 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

Source: Statistical reports of CNB (Credit quality per sectors, Credit quality per

currencies) and internal data of ESB

14,88%

10,38%

9,96%

8,75%

16,65%

13,80%

11,35% 11,19%

8%

9%

10%

11%

12%

13%

14%

15%

16%

17%

18%

2015 2016 2017 1H 2018

Share of NPL - ESB

Share of NPL - SECTOR

58,20%

61,60%

64,60%65,30%

56,90%

63,70%

61,50%

59,70%

55%

57%

59%

61%

63%

65%

67%

2015 2016 2017 1H 2018

NPL coverage ratio - ESB

NPL coverage ratio - SECTOR

0,63 0,65

0,51

9,7% 9,4%

13,8%

0%

2%

4%

6%

8%

10%

12%

14%

0,2

0,3

0,4

0,5

0,6

0,7

0,8

0,9

2016 2017 1H 2018

Net profit (HRK bn) ROE (%)

2,28 2,33

1,181 1,06

0,53

44%46%

45%

20%

25%

30%

35%

40%

45%

50%

0

1

2

3

2016 2017 1H 2018

Operating income (HRK mn) Operating expenses (HRK mn)

Cost/income ratio (%)

16

Positive operating result trend highlighted in 1H 2018

Net profit and ROE Operative P&L, Cost Income ratio

• 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

• 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



17

Stable net interest margin throughout the period.

Net interest margin (%) Risk cost (impairment and provision for

losses / avegare loans to customers)

1,4% 1,4%

0,0%0,0%

0,5%

1,0%

1,5%

2,0%

2016 2017 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

3,0%3,1%

3,2%

1,5%

2,0%

2,5%

3,0%

3,5%

2016 2017 1H 2018



18

Emphasis on maintenance of adequate capital level

CET 1 capital - ESB Regulatory capital - ESB

CET 1 capital – ESB group Regulatory capital – ESB group

Source: internal data of ESB

* HY 2018 profit not included in regulatory capital, while write-offs are included

** Pillar 1 regulatoy minimum includes combined protection level of capital, while it doesn’t include SREP add-on

6,72 7,14 7,35

15,6% 16,6%15,3%

10%

0%

5%

10%

15%

20%

25%

0

2

4

6

8

10

12

14

YE 2016 YE 2017 HY 2018*CET1 (HRK bn)CET 1, %CET1 Pillar 1 regulatory minimum,%

6,11 6,54 6,81

18,0% 18,8%17,0%

10%

0%

5%

10%

15%

20%

25%

0

2

4

6

8

10

12

14

YE 2016 YE 2017 HY 2018*CET1 (HRK bn)CET 1, %CET1 Pillar 1 regulatory minimum,%

7,35 7,77 7,95

21,6% 22,4%

19,9%

13,5%

0,0%

5,0%

10,0%

15,0%

20,0%

25,0%

0,00

2,00

4,00

6,00

8,00

10,00

12,00

14,00

YE 2016 YE 2017 HY 2018*Regulatory capital (HRK bn)Total capital ratio, %Pillar 1 regulatory minimum,%

7,94 8,36 8,49

15,6% 16,6%17,7%

13,5%

0,0%

5,0%

10,0%

15,0%

20,0%

25,0%

0,00

2,00

4,00

6,00

8,00

10,00

12,00

14,00

YE 2016 YE 2017 HY 2018*Regulatory capital (HRK bn)Total capital ratio, %Pillar 1 regulatory minimum,%

19





5. Appendix

Agenda

Indicative terms & conditions of planned transaction

20

Issuer ERSTE & STEIERMÄRKISCHE BANK d.d.

InstrumentUnsubordinated and unsecured bond, sixth level of higher priority in accordance to article

274 of Credit institutions law

Principal repayment Bullet, after 5 years from issue date

Nominal size and currency Up to HRK 500.000.000,00

Denomination 1.000.000,00 HRK

Coupon Fixed, semi-annual payment

Reference yield Bid yied of RHMF-O-23BA bond

Margin [●] bps

Listing Official Market of ZSE

Settlement CCDC

Law Law of Republic of Croatia

Offer Exclusively to professional investors and eligible counterparties

Expected timing October 2018.

Subscription period 1 day

21





5. Appendix

Agenda

22

Erste bank – non-consolidated P&L

ESB HRK mn 31.12.2016. 31.12.2017. 30.6.2017. 30.06.2018.

1. Interest income 2.314 2.112 1.065 1.009

2. Interest expense 733 456 252 164

3. Net interest income (048-049) 1.582 1.656 813 845

4. Fees and comissions income 561 610 277 287

5. Fees and comissions expense 150 165 68 77

6. Net fees and comissions income (051-052) 410 445 208 210

8. Gains/ losses from trading activities 92 36 17 14

10. Gains / losses from assets which are not traded, but are designated at

fair value through profit or loss0 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 0 0 0 0

15. Income from other equity instruments 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 204 162 82 117

24. PROFIT / LOSS FOR THE PERIOD (069-070) 627 649 330 505

23

Erste bank – non-consolidated assets

ESB Bank HRK mn 31.12.2016. 31.12.2017. 30.06.2018.

ASSETS

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 0 0 800

4. Securities and other financial instruments held for trading 0 195 192

5. Securities and other financial instruments held for sale 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

24

Erste 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 1.327 1.340

2. Deposits 41.992 43.780 44.794

3. Other loans 2.139 2.139 2.031

4. Derivate financial liabilities and other traded financial liabilities 76 52 60

5. Issued debt securities 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) 49.390 50.064 50.793

EQUITY

1. Share capital 3.500 3.500 3.500

2. Profit (loss) for the current year 627 649 505

3. Retained earnings (loss) 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

assets231 213 220

C) TOTAL EQUITY (036 do 042) 6.729 7.142 7.465

D) TOTAL LIABILITIES AND EQUITY (035+043) 56.119 57.206 58.258

25

Erste bank – consolidated P&L

ESB Group HRK mn 31.12.2016. 31.12.2017. 30.6.2017. 30.6.2018.

1. Interest income 2.911 2.624 1.332 1.258

2. Interest expense 851 553 303 203

3. Net interest income (048-049) 2.060 2.071 1.029 1.055

4. Fees and comissions income 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 loss0 0 0 4

11. Gains / losses from activities related to assets available for sale 65 5 1 27

14. Gains from investment in subsidaries, associates and joint ventures 0 0 0 -9

15. Income from other equity instruments 10 11 6 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 300 183 24 150

24. PROFIT / LOSS FOR THE PERIOD (069-070) 913 457 25 596

26

Erste 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 327 301 800

4. Securities and other financial instruments held for trading 0 195 192

5. Securities and other financial instruments held for sale 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

27

Erste bank – consolidated liabilities

ESB Group HRK mn 31.12.2016. 31.12.2017. 30.6.2018.

LIABILITIES

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 77 52 60

5. Issued debt securities 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) 57.616 57.719 58.453

EQUITY

1. Share capital 3.500 3.500 3.500

2. Profit (loss) for the current year 874 457 596

3. Retained earnings (loss) 3.266 3.920 4.187

4. Legal reserves 85 85 85

5. Statutory and other capital reserves -3 -5 -15

6. Unrealised gain (loss) on value adjustment of available-for-sale financial

assets 266 250 253

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

28

Formulas for calculation of alternative performance

measures

CIR 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))

ROE, % 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)

NIM, % 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)

Cost of risk, %

L/D ratio, %

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)

29

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ON, THE FAIRNESS, ACCURACY, COMPLETENESS OR CORRECTNESS OF THIS INFORMATION OR OPINIONS

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OTHER FORWARD-LOOKING STATEMENTS THAT ARE BASED ON MANAGEMENT’S CURRENT VIEWS AND

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RESULTS, PERFORMANCE OR EVENTS TO DIFFER MATERIALLY FROM THOSE EXPRESSED OR IMPLIED IN SUCH

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