GB00_erste lage_E - Erste Group

TRADINGAND INVESTMENT BANKING
After an excellent first quarter, above all in equity sales and investment fund business, Erste
Bank’s retail activities in this business segment started to slacken due to changes in interest
rates, disparate market trends and high volatility.
Despite the adverse market scenario, Erste Bank continued to expand its leading market position
in customized & structured products above all with corporates, savings banks and third-party
banks. Based on the know-how and experience gained with institutional clients, Erste Bank developed
and successfully marketed custom-made alternative investment products targeted at retail
customers.
Standardised mass customisation will be further automated and the products made available
above all to the savings bank sector’s retail customers in a cost-efficient way via web-based B2C
platforms (foreign currencies/money market, stocks, funds).
In 2001 efforts in this area will focus on creating access to these products and technologies
for customers throughout the extended home market in Central and Eastern Europe in order
to satisfy their need for state-of-the-art banking services.
Issuing business
In the field of own issues, activities in 2000 focused on the issuance of high-volume liquid bonds,
thus establishing Erste Bank as a benchmark issuer in the euro area and installing a reference
credit yield curve in the market (i.e. a curve covering several bond issues of a specific issuer
that mirrors the issuer’s credit premiums depending on the bonds’ maturities over a longer maturity
range—three to ten years for example. This curve serves as a benchmark for future issues
floated by this debtor or other issuers with comparable credit ratings).
The existing Debt Issuance Programme (DIP) was expanded to EUR 7 billion for this purpose.
One example of the issues made possible by this framework programme is a floating rate note
(FRN) with a volume of EUR 1 billion and maturity in 2005. This FRN represented the largest bond
issue ever floated by an Austrian non-government entity.
The total nominal volume floated by Erste Bank in 2000 amounts to EUR 3.4 billion and is
made up of issues in the amount of EUR 2.77 billion launched within the framework of the DIP
and a number of public issues, private placements and promissory notes.
Outside of Austria, Erste Bank demonstrated its dominating position also on the extended
home market of the Czech Republic, where Erste Bank, in the wake of the takeover of Česká
spořitelna, a.s., followed up the largest ever floated Eurobond issue in Czech crowns (CZK 5,000
million) as well as an issue in the amount of CZK 1,000 million for Artesia Banking Corp.
With a view to strengthening its equity base, Erste Bank issued EUR 125 million in perpetual
preference shares and EUR 190 million in supplementary capital. In order to ensure optimised
short-term cash management, Erste Bank set up a European Commercial Paper Programme
(ECPP) with a ceiling of EUR 1 billion.
58 Erste Bank 2000