Erste Group

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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

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Agenda

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

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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.
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Banking the unbanked
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Current and Future Markets
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Agenda

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

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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

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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 Habitats
  technical advisory network (for nominal fee)
• An initiative of

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• 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

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• 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

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The Development Perspective
Before
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The Development Perspective
After
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Agenda

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

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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.

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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.
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Erste Group Base numbers
The total number of small business customers
actually managed within advisor portfolios.
Small business customers include micros and
free professionals.
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Agenda

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

18
Erstes 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.