Highlights
• The adoption of FINREP does not impact historic net profit, equity or balance sheet totals but introduces a more granular income statement and balance sheet structure
• The introduction of a more detailed segment report results in a separation of business line and geographic performance.
• The attached Excel file contains the historic quarterly time series for 2013. Data is optimized for easy data processing, not printing.

Adoption of EBA financial reporting standards as of 1 January 2014 (Q1 2014)

Rationale for adoption:
Starting with 2014, as a result of harmonization with FINREP reporting, Erste Group will change the structure of the line items in balance sheet and income statement in order to align with EBA requirements for financial reporting.

Major changes in balance sheet presentation:
• The overall structure (assets and liabilities) follows the IAS 39 measurement categories.
• Loans to customers and loans to credit institutions are presented on a net basis. Thus, no separate position for risk provisions is shown.
• Derivative financial instruments are now presented in two lines: Derivatives hedge accounting and Financial assets/liabilities held for trading.
• Subordinated liabilities are allocated to the relevant categories of Financial instruments, following measurement principle.

Major changes in income statement presentation:
• Dividend income, results from equity measured investments and rental income are presented now separately from Net interest income in individual line items
• Deposit insurance contributions are now included in Other administrative expenses (operating expenses) as opposed to Other operating result
• Amortisation of customer relationships are now included in Depreciation and amortisation (operating expenses) as opposed to Other operating result
• A separate line for Impairment for financial assets not measured at fair value through profit or loss was introduced containing risk provisions and other impairments for financial assets.
• A separate line for Levies on banking activities was introduced which includes banking tax, financial transaction tax and other banking levies.

Introduction of new, more granular segment report as of 1 January 2014 (Q1 2014)

Rationale for introduction:
• Ensuring that external segment report reflects internal steering and reporting
• Improving transparency of business line and geographic performance

Major changes:
• Introduction of business line segmentation (with exception of the savings banks)
• Introduction of geographic segmentation

Details on new business line segmentation in comparison to existing segmentation
• The former Group Corporate and Investment Banking segment is split into the segments Large Corporates, Commercial Real Estate and Other Corporate Business.
• The former Retail & SME segment is split into the following business segments: Retail, SME as well as Asset and Liability Management & Local Corporate Centers. The Corporate Center of Erste Group Bank AG remains in the Group Corporate Center and the cross guarantee system savings banks, in which Erste Group has no majority ownership, remain as a separate segment due to the different management approach.
• The former Group Markets segment remains almost unaffected, covering the divisional business Group Treasury and Capital Markets. Erste Asset Management which was previously fully allocated to this segment is now split into institutional and private customers between the Retail segment and the Group Markets segment.
• The new Other Corporate Business segment consists mainly of the International Business which covers all lending and investing activities outside Erste Group's core markets (including the branches in London, Hong Kong and New York). In addition this segment also includes the investment banking activities related to Corporate Finance, Merchant Banking, Equity Brokerage and Sales as well as Structured Trade Finance.
• The new Group Corporate Center consists of all non-core and centrally managed business activities. Thus it continues to include the Corporate Center of Erste Group Bank AG which mainly consists of dividends and refinancing costs, banking tax and other one-off effects and general administrative expenses which cannot be allocated to any other business segment. All non-core financial institutions and internal service providers (e.g. IT, procurement, and facility management) also remain in this segment as well as specific group bookings and the free capital of the group.
• The Intragroup Elimination segment is not regarded as a separate segment, but reflects the reconciliation to the Group Accounting result.

Details on new geographic segmentation in comparison to existing segmentation
• The new geographical segmentation follows the legal entity booking principle and hence is a much closer approximation to the respective local entity results than was the case previously.
• Geographical areas consist of the two core markets Austria and Central and Eastern Europe as well as a residual segment (Other) comprising the remaining non-core participations of Erste Group as well as the reconciliation to the accounting result.
• The Other Austria segment comprises the holding business of Erste Group Bank AG, Erste Group Immorent and Erste Asset Management.

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