Erste Group

1. Erste Group Enabling Financial Inclusion and Facilitating Economic & Social Development Jennifer Rowe The work of Savings Banks in Microcredit in Europe Brussels, May 10, 2011

2. Agenda • financial inclusion in a contemporary perspective • selected Group Initiatives • Austria • Hungary • Romania • business as usual: serving small businesses • conclusion

3. Guiding Principles of Financial Inclusion Business Our Vision: All individuals and firms in CEE have access to responsible banking services. Our Mission: To develop innovative solutions to break down the barriers to financial inclusion. • Our Operating Principles: • 1st Principle: The good of the customer is at the heart of our business. • 2nd Principle: We and our customers do business on a commercially viable basis. • 3rd Principle: We do business with like-minded partners with whom we share common goals.

4. Banking the “unbanked”

5. Current and Future Markets

6. Agenda • financial inclusion in a contemporary perspective • selected Group Initiatives • Austria • Hungary • Romania • business as usual: serving small businesses • conclusion

7. Initiatives • Business start-up loans to unemployed individuals and those at risk of losing their jobs • Up to €12,5k for private individuals • Maximum tenor 5 years; maximum 6 months without amortisation • Running since May 2010 as an initiative of the Austrian Federal Ministry of Labour, Social Affairs and Consumer Protection; since February 2011, running in partnership with Erste Bank • Immediate plans to roll out in 4 of 9 Austrian provinces • To date, 237 enquiries and 57 loans granted • Social Enterprise Finance • Since May 2010, extending debt financing under pilot programme to social enterprises • Up to €500k for investment and working capital needs for up to 7 years • Provided alongside capacity building services through pro-bono Support Network partners

8. Initiatives • “Van esély!” / “There is a Chance!” • Home improvement loans offered under a pilot since March 2011 • Specific goal of reducing energy poverty • Offered exclusively to low-income families • Standard commercial loan terms waived: no disbursement or loan management fees charged to the customer • No collateral required • Very small co-financing requirement • technical support to customers via Habitat‘s technical advisory network (for nominal fee) • An initiative of

9. Our mobile micro-payments product, working on any mobile phone & network in Romania current account balance inquiry + mini account statement inter- and intra-bank cash transfers Sale of pre-paid airtime The bank is “brought” to the client Account opening anytime, anywhere National coverage through 7 regional centers and a network of mobile sales agents Centralized Customer & Agent support Launched in March 2009; currently in excess of 38,000 clients Fully owned by 0 0 / 0 0 1 2 3 4 5 6 7 8 9 1 2 3 4 6 7 8 9 1 2 3 4 6 7 8 9

10. Launched in 10/2009 in partnership with CDE, an established microlender in Romania Total loan portfolio of approximately EUR 7 mil. 1200+ clients Excellent portfolio quality Focused on and active in rural areas and smaller towns Staffed by a mobile staff of loan officers Runs parallel to

11. The Development Perspective Before

12. The Development Perspective After

13. Agenda • financial inclusion in a contemporary perspective • selected Group Initiatives • Austria • Hungary • Romania • business as usual: serving small businesses • conclusion

14. Existing customer segmentation Segmentation is the basis for creating and using common products and product packages tailored to the specific needs and habits of particular clients groups. There are 6 main segments: 1) Private Customers – all private individuals 2) Free Professions (e.g. physicians, lawyers, dentist, etc.) – including employed and self-employed free professionals and entrepreneurs. 3) Corporates • Start-ups • Micros • SME • Large Corporate Clients • GCIB 4) Non Profit Sector – e.g. political parties, religious institutions, etc. 5) Financial Institutions – e.g. Banks, Savings Banks, etc. 6) Public Sector – e.g. governmental and regional bodies, municipalities etc. The “Micro” segment includes registered micro companies, sole proprietors, private entrepreneurs. The Micro Business is served and “owned” by each retail bank of the Erste Group.

15. Micro Segment Criteria Micro Segment Turnover “Cap” Assets: short and long term loans, overdrafts, revolving loans, cards, etc. Liabilities: deposits, term deposits, deposits for special purpose loans, other purpose deposits Services: Guaranties, Letter of Credits, Insurance, Custody, Investment funds, Cash transactions, Treasury services, Derivatives, etc.

16. Erste Group – Base numbers * The total number of small business customers actually managed within advisor portfolios. “Small business customers” include micros and free professionals.

17. Agenda • financial inclusion in a contemporary perspective • selected Group Initiatives • Austria • Hungary • Romania • business as usual: serving small businesses • conclusion

18. Erste’s “genetic code” Erste Oesterreichische Spar-Casse founded in Leopoldsstadt in Wien, 1819 “No age nor gender group, no estate or nation is excluded from the benefits which are offered by the Savings Association to all those who deposit money with it.” “The association has the purpose of providing the means for the factory worker, the craftsman, the daily wage-labourer, the household helper, the farmer or any other industrious and provident person, adult or minor, to put aside from time to time some small capital from their hard earned income, to use it in days to come as a foundation for better sustenance, a dowry, a support in sickness and old age or to achieve any other laudable purpose. “