Ladies and gentlemen, as Chairman of the Supervisory Board, I take the chair pursuant to Article 160, paragraph one of the Stock Corporation Act, and open today's Extraordinary General Meeting of Erste Group Bank AG. For the protection of shareholders and other participants, the Management Board has decided to make use of the existing legal provision for holding a virtual general meeting. Today's general meeting will be held as a virtual general meeting in accordance with the COVID-19 Company Law Act and the COVID-19 Company Law Ordinance, taking into account the interests of both the company and the participants, and will be broadcast in full on the Internet.
Conducting the extraordinary general meeting as a virtual general meeting in accordance with the COVID-19 Company Law Ordinance results in certain changes and modifications in the procedure for the general meeting, as well as in the exercise of the rights of shareholders, which was set out in the convocation letter and in the participation information made available on the company's website and which Mr. Brix will discuss in detail later. First of all, you will be provided with the presentations of the management board regarding the sole item on the agenda of today's extraordinary general meeting, as well as the corresponding proposal for resolution. Afterwards, the special proxies will have the floor to read out any proposed resolutions. This will be followed by the debate on the sole item on the agenda.
That is to say, reading out and answering the questions by the members of the management board or myself. At this point, I would like to inform you, dear shareholders, that you can send your questions to the management board by email to the email address fragen.erste@hauptversammlung.at. I'd like to point out that during today's extraordinary general meeting, questions will be answered only on the sole item on the agenda, that is the distribution of profit. Other topics are not part of the debate today. Furthermore, I'd like to ask you to submit your questions as early as possible in order to enable us to answer any additional questions. At the appropriate point, if necessary, to answer incoming questions or to allow for final questions, there will be a short interruption of the general meeting.
After the questions on the sole item on the agenda have been answered, the motion on the sole item on the agenda will be put to the vote. I declare that, first, the convocation letter of today's extraordinary general meeting was published in accordance with the provision of Section 106 of the Stock Corporation Act in due time in Wiener Zeitung on the 4th of November , 2022. Second, furthermore, pursuant to Section 107, paragraph three of the Stock Corporation Act, electronic European distribution was conducted by pressetext on the 4th of November , 2021. On the 4th of November , 2021, also in accordance with the provision of the Stock Exchange Act 2018, transmission of the convocation letter pursuant to Section 180, paragraph two of the Stock Exchange Act 2018 took place via the intermediary chain to the shareholders.
I note that no motions for additions to the agenda and no further proposals for resolutions have been received from shareholders and therefore were not to be published on the company's website. Therefore, only the agenda item announced in the convocation letter of the 4th of November, 2021 can be dealt with at today's general meeting. The documents to be disclosed pursuant to Sections 108, paragraphs three and four of the Stock Corporation Act were made available on the company's website on the 4th of November, 2021, in particular, information on the organizational and technical requirements for attendance pursuant to Section 3, paragraph three in conjunction with Section 2, paragraph four of the COVID-19 Company Law Ordinance, a question form, a power of attorney, and voting instruction form for the special proxies pursuant to Section 3, paragraph four of the COVID-19 Company Law Ordinance.
Notary Brix is requested to notarize the resolutions of today's extraordinary general meeting. Furthermore, to supervise the conduct of the voting and to record minutes in accordance with Section 120 of the Stock Corporation Act. I'd now like to ask Dr. Brix to explain the modalities for exercising shareholders' rights during today's virtual general meeting and the proceeding for the extraordinary general meeting, which have been made available on the company's website. Mr. Brix, please.
Dear shareholders, in the convocation letter for the general meeting of the 4th of November, 2021, it was announced that today's extraordinary general meeting would take place as a virtual general meeting without the physical presence of the shareholders.
In addition, information on the organizational and technical requirements for participation in the general meeting pursuant to Section 3, paragraph three in conjunction with Section 2, paragraph four of the COVID-19 Company Law Ordinance was made available on the company's website on the 4th of November, 2021.
Today's extraordinary general meeting will take place in the presence of the Chairman of the Supervisory Board, Friedrich Rödler, the Chairman of the Management Board, Bernhard Spalt, the members of the Management Board, Stefan Dörfler, Ingo Bleier, Alexandra Habeler-Drabek, David O'Mahony, and Maurizio Poletto, the four special proxies, Lawyers Nikolaus Adensamer, Michael Knapp, Lawyer Christoph Nauer, and Lawyer Ewald Oberhammer, Lawyer Richard Wolf as Legal Advisor, and myself as Certifying Notary. As representatives of the auditor Sparkassen-Prüfungsverband, Gerhard Margetich and Herwig Hierzer can be reached by the Management Board and the Chairman of the Supervisory Board by telephone and email for any questions. They are following the general meeting via the live stream. As representative of the auditor PwC Wirtschaftsprüfung GmbH, Dorotea-E. Rebmann can be reached by the Management Board and the Chairman of the Supervisory Board by telephone and email for any questions.
She is following the general meeting via the live stream. As representatives of FMA, the state commissioners received an invitation to today's general meeting and have the opportunity to follow it via the live stream. The state commissioners can communicate with us during the general meeting and, if necessary, contact the Management Board or the Chairman of the general meeting. How are shareholders' rights exercised today? Voting rights, the right to propose resolutions, and the right to object are exercised exclusively by granting power of attorney and issuing instructions to one of the special proxies proposed by the company. The right to information can be exercised at today's virtual general meeting by the shareholders themselves or by their authorized representatives by means of electronic communication. Now to the transfer and the procedure for today's general meeting in detail. Pursuant to Section 3, paragraph four of the COVID-19 Company Law Ordinance, injunction...
In conjunction with Section 102, paragraph four of the Stock Corporation Act, a real-time audio and video webcast of the full general meeting will be streamed live online. Erste Bank AG offers you two alternative accesses to the online audio and video broadcast in German language. Please select one of them on the Erste Group Bank AG website: Video Webcast Extraordinary Annual General Meeting 2021 or Alternative Stream Video Webcast Extraordinary Annual General Meeting 2021. If you experience any disruptions during the transmission, please switch to the other access. Today's general meeting will be held in German. The entire general meeting will be translated from German into English. The corresponding live stream can be accessed on the English language website. Furthermore, the German stream will also be available in sign language for the duration of the entire general meeting.
By broadcasting the general meeting on the Internet, all shareholders who wish to do so have the opportunity to follow the procedure of the general meeting in real time via this acoustic and optical connection, and to follow the explanations of the management board on the sole agenda item, the answering of shareholders' questions and the voting procedure in real time. Please note that the live broadcast as a virtual general meeting does not allow for remote participation, Section 102, paragraph three, subparagraph two, Stock Corporation Act, or remote voting pursuant to Section 102, paragraph three, subparagraph three, Stock Corporation Act, and Section 126, Stock Corporation Act, and that the transmission on the Internet is not a two-way connection. The individual shareholders can therefore only follow the general meeting as it proceeds. How is the right to information exercised specifically?
Shareholders and their proxies authorized to exercise the right to information and the right to speak also have the opportunity during the general meeting to electronically submit their questions in writing within a certain time window after the opening of the general meeting to the management board exclusively via the email address fragen.erste@hauptversammlung.at. At today's general meeting, these questions will be read out by the chairman of the supervisory board and then answered by the management board or the chairman of the supervisory board. Please use the question form available on the company's website at www.erstegroup.com/hauptversammlung or send a simple email to the email address fragen.erste@hauptversammlung.at. Please send this simple email from the email address indicated in the proxy in order to ensure quick verification of your identity.
This simple email must state the shareholder's first and last name or company name, the shareholder's date of birth or commercial register number, and the deposit account number to enable the management board to establish identity and compliance with the deposit certificate. Please send your email with your name, reproduction of personal signature according to Section 3, paragraph two, Stock Corporation Act. Shareholders will thus have the opportunity to directly respond to developments at the general meeting themselves, for example, by asking a question or a supplementary question. The chair will structure the procedure of the general meeting in terms of time, as is also the case at an attendance meeting. Now for the special proxies.
In addition, shareholders may change their instructions to the special proxies, in particular regarding the submission of proposals for resolutions, voting, or changing their instructions regarding voting on the sole item on the agenda, but also regarding raising objections to the sole item on the agenda to the respective proxy, even during the general meeting, up to a certain point in time. Please use a simple email sent to the email address of your proxy, to whom you have also sent your power of attorney. These email addresses are adensamer.erste@hauptversammlung.at, knapp.erste@hauptversammlung.at, nauer.erste@hauptversammlung.at, oberhammer.erste@hauptversammlung.at.
In this simple email, the shareholder, that is to say first name and surname or company name of the shareholder, date of birth or commercial register number of the shareholder must be stated in order to enable the proxy to establish the identity and conformity with the power of attorney. Please send your email with your name, reproduction of the name signature according to Section 3, paragraph two Stock Corporation Act, and also state your deposit number as already mentioned. The email must be sent from the email address indicated in the power of attorney. Please note that during the general meeting, communication with your proxy is only possible by email and in particular that the proxy cannot be reached by telephone.
The point in time up until which, instructions regarding the submission of motions, the casting of votes, and the raising of objections are possible will be determined by the chairman during the general meeting. This time is expected to be close to the end of the debate on the sole item on the agenda. It should be noted that it may be necessary to interrupt the virtual general meeting briefly in order to safely deal with questions to the management board and instructions from shareholders to proxies received during the general meeting or to admit final questions.
This was a summary of the procedure for today's virtual general meeting as disclosed on the company's website, in particular in the document Information on the Organization on Technical Requirements for Attendance pursuant to Section three, paragraph three in conjunction with Section two, paragraph four of the COVID-19 Company Law Ordinance. Thank you for your attention.
Notary Brix, thank you for your explanations. As Chairman, I order that today's general meeting be conducted in the manner announced in the letter of convocation and in the information made available on the company's website regarding the organizational and technical requirements for attendance pursuant to Section 3, paragraph three in conjunction with Section 2, paragraph four of the COVID-19 Company Law Ordinance and presented by Notary Brix. The list of participants will be completed before the vote, signed by me, and the attendance will be announced to you.
The list of participants will be made available electronically for inspection by the special proxies present in the room. We now open the agenda, and I give the floor to Bernhard Spalt. Mr. Spalt, please.
Thank you, Mr. Chairman. Good morning, ladies and gentlemen. I'd like to use the opportunity at this extraordinary general meeting to describe the economic frame conditions and the economic development of the company, which also result in the draft resolution of today's annual general meeting, namely the distribution of an additional distribution. Before I give my explanation, let me make a statement. When the pandemic broke out in March 2020, it was completely unclear what would happen. It was clear that the health crisis would hit the world, that it would affect the economic development of companies.
We had a lockdown, and the economic environment changed overnight. It was unclear how and when this health crisis could be fought. Many macroeconomic experts and scientists tried to anticipate the development. Would we hit rock bottom and then see a sharp economic rise like a V? Would we have a decline and then develop at a stable condition like an L? Would it be in a U form, which requires a longer process to recover? Or how would the situation look like? In the meantime, we know, and this is due to effective vaccination schemes, we know that we have a V-shaped recovery. That is to say we had a sharp decline in 2020, and due to the fact that vaccines were developed quickly, the economy quickly recovered in our countries.
It was the ideal case and the ideal form of an economic recovery. Now we have to question ourselves, what happens now? In all of our countries, and you see it in this slide, we saw that, and we see that the real economic growth is increasing, and it is better than the rest of Europe in our countries because we have a more dynamic economic region as compared to other European regions. We have to ask ourselves, "How will be the future development?" This slide says, "Strong recovery in 2021 with positive outlook," and some question marks. It is important to mention that we have some question marks. We know that the economy recovered. We see good development, but no one expected another lockdown. This is the first confirmation of a question mark, so to speak.
We all hoped that we wouldn't see any further lockdowns. This is not something that had been planned or could be planned. There are also other question marks as regards future development. We know that inflation has been described as being temporary and could be explained with base effects, but I think the situation is different. The question is, can inflation be a long-term topic, increasing energy prices, fragile supply chains, lack of qualified labor. What about the supply-demand situation? The supply demand situation might not be able to be addressed by monetary policy alone. The question is, can companies produce if they lack resources or if they don't have skilled labor? These are the topics that will accompany us in the future and will be the major challenges ahead of us.
Our economies are developed extremely robust. Domestic demand supports economic growth. As far as next year is concerned, we basically are positive as far as the development is concerned. It is much too early to say that we have overcome the pandemic. We have had some setbacks in fighting the health crisis, but the basic macroeconomic model is very strong, and this is also reflected in our business development. If you look at the performance of the first nine months in the business model of Erste Group, you see an extremely robust and dynamic result. We have an operating result that grew year over year by 20%, by almost 20%.
This underlines that after a phase of uncertainty when people didn't know about the development on the labor market, didn't know about incoming orders, and people were rather reluctant to decide on the consumer side as well as on the production side. This states clearly that the world improved and that the environment improved. I will come back later on what the individual contributors were for this positive development. Let me state the operating result shows that we are doing business in the right region and that our business model, retail and commercial business banking in our region, is the appropriate model to see sustainable and long-term result. Risk costs is an extremely important topic because risk costs are a driver of our net result.
Last year, for reasons of prudence and anticipation, and because we didn't know what the future would bring, how unemployment would develop, how many insolvencies we would see after profits have gone down, we posted high risk costs. This year we have much less, and I'll come back to our business outlook a little bit later. Of course, this contributes to a positive result. I'll come back to the credit portfolio quality and coverage later on as well. Let me also state that this is not a reflection of a short-term reaction of the crisis, but proof of our good business and risk policy in the past years. As far as credit quality is concerned, the portfolio of Erste Group is extremely excellent, robust, very stable, and will overcome the crisis. This is not a tactical effect.
It is a consequence of prudent business making. We have a strong operating result which also reflects our cost policy. Not only in COVID, we have an extremely disciplined approach as far as costs are concerned. This is very important, especially in an environment where increasing efficiency is key. We always were watching our costs, and this is independent of COVID. I'd like to state that. This is one of our commitments. This hasn't happened without any underlying business model. This would have happened without COVID as well. The cost-to-income ratio is of course depending on high turnovers. I already mentioned inflation. In our portfolio, we are not as a sole Euro player.
We also have currencies and countries that do not have the Euro as a currency. These countries reacted in a very good way to inflation and already increased interest. This helps us in the Czech Republic and Hungary and Romania, and this will also support our business development. Our portfolio, we have a good portfolio mix, which against the inflation landscape benefits from non-Euro countries. In the first nine months, we have 130% increase in the net result, and this is also the reason why we can have this extraordinary general meeting today, where we discuss and resolve on the distribution of an additional dividend from a position of strength. Credit growth came back after the first deep crisis, +6% customer loans.
At the beginning of the crisis, we had bridge financing and revolving loans, but now we have investment financing. Companies believe in the future and believe in investing in the future. This is what it is all about. How do we get out of this valley of tears? How can we finance growth? Now this robust growth is coming back and people invest in new business models. Customer deposits in this low interest environment still rose. They are still growing, but not as fast as before.
This is leveling out, and this is logical because customers say, "I wanna be cautious, I want to save money," but at the same time say, "I want to travel, I want to spend money, I want to invest, and I want to consume." This is why the growth curve is flattening as far as customer deposits are concerned, and this also helps our business model. If we look at the NPL ratio, it states that the NPL ratio is 2.4%. In the past 30 years, this is a record low percentage rate. This is surprising. Because we hadn't thought that all the COVID measures by the state will be as effective as they were.
Subsidies, state-subsidized loans had a strong effect in the first phase of the crisis and helped people overcome the first time of the crisis. We have a surprisingly low NPL ratio, and the coverage ratios are historically high at almost 90%. That results in a capital situation which is extremely comfortable. We always said that our goal is 13.5% CET1 ratio. At the moment, we have 14.2. These 14.2 do not take into account the profit of the third quarter. If we calculated including the results of the third quarter 2021, we are at 14.5% CET1 ratio. That is to say we have a very solid buffer.
Based on this buffer, based on this comfortable situation, we think that our shareholders can take part in our success. In May, we decided to distribute a dividend of EUR 0.5 per share. Not because we wanted to distribute only 0.5% per share, but because there were regulatory recommendations to pay out not more in a situation where the COVID pandemic and the effects of the COVID pandemic could not be anticipated and calculated. The situation has changed, and we today propose that we pay out an additional dividend of EUR 1 per share, and this results in a dividend of EUR 0.5 per share.
We already reserved EUR 0.8 per share for the next year in order to come back to our dividend policy, which is progressively increasing. What we propose today, the distribution of an additional EUR 1 does not have an effect on our CET1 ratio because we already deducted that from the CET1 ratio. This is not something that is affecting our company. We already deducted that. We think that the shareholders are entitled to an additional dividend. This is a slide containing much information. I don't know whether you can read it. Let me try to give an outlook for 2021. Operating environment. Basically, I think the environment is positive. The question marks I already mentioned should not be left out.
We have fragile supply chains, we have scarce resources, and we have pressure on energy prices. The question is how this will develop in the course of 2021. The fundamental drivers for economic growth are there. Business performance, business development, is also very positive.
We saw robust growth on the commission side.
We expect double-digit growth in the operating result.
We also expect double-digit growth in the operating result.
We expect that the provisions business will also have.
In percentage terms.
A very good development this year.
We also expect...
On the insurance side and the securities side and payment development will be positive.
Yes.
We will see double-digit growth rates.
Credit risk is extremely well controlled.
Is robust and also covered sufficiently.
Capital, as already said, is CET1 ratio is above our targets. This gives us room to maneuver to look for further investment opportunities and to pay out dividends to our shareholders.
I think it's worth mentioning to say that based on a CET1 ratio that is markedly above 14.2%.
We have a 15% return on equity. This is something not many banks can state. We haven't talked about the share price yet. The share price r eflects that there is an overbooking. We are one of the few banks in Europe that are overbooked. This means that we have a robust and good business model.
That we also have been very disciplined in implementing our business model. We are setting the right focus points, the right priorities, ecological transformation or, digital transformation, just to mention two examples. I think that we can rest assured and propose a dividend of EUR 1 per shareholder today. Thank you very much.
Thank you, Bernhard Spalt, for your explanations. I would like to ask Stefan Dörfler for his report on own shares required by Section 65, paragraph three of the Stock Corporation Act.
Thank you very much, Chairman. The following report explains the acquisition and sale of own shares by Erste Group Bank AG and its affiliated companies from May 1st to 31st October , 2021. The reasons and purposes were securities trading, market making, and authorized share buyback programs. The transactions took place on and off the stock exchange. For the purpose of securities trading and market making, 1,350,470 shares, with a share of 0.31% in the share capital were acquired in the aforementioned period.
A total of 1,363,089 shares were sold, representing 0.32% of the share capital. The total purchase price was EUR 45,688,027.25. The total sales price was EUR 46,091,947.51. The respective gain or loss was recognized in trading profit. As at October 31st, 2021, Erste Group Bank AG held a short sale portfolio of 52,439 treasury shares, which was covered by borrowing transactions. Within the scope of authorized share buyback programs, 31,000 shares with a share of 0.0072% in the share capital were acquired in the reporting period. The total purchase price was EUR 1,080,971.
The respective profit or loss was recognized in the income statement. On October 31st, 2021, the company held 1,623,493 treasury shares, representing 0.38% of the share capital.
I thank Mr. Dörfler for his report and now proceed to the sole item on the agenda, that is resolution on the appropriation of the profit 2020. The management board and the supervisory board propose that the general meeting pass the following resolution: The profit available for distribution recognized in the company's financial accounts as at 31st December 2020 and amounting to EUR 644.7 million, of which a partial amount of EUR 240.9 million has already been appropriated in accordance with the resolutions adopted by the annual general meeting on 19th May 2021, will be distributed as follows in accordance with the present proposal put forward by the management board and the supervisory board.
For each share entitled to a dividend, a further dividend of EUR 1 will be distributed, adding up to a total of no more than EUR 429.8 million. The company is not entitled to any dividend payments from treasury shares. Notwithstanding clause 23.4 of the articles of association, which stipulates payout of the dividend 10 days after the general meeting, the dividend payment date will be on the second of December 2021. I now give the floor to Stefan Dörfler and would ask him to explain the proposed resolution, the draft resolution of the Management Board and the Supervisory Board on the sole item on the agenda.
I would like to present the justification in more detail.
At the Annual General Meeting on May 19th, 2021, a resolution was adopted in line with the proposal put forward by the Management Board and the Supervisory Board for the appropriation of profit recognized in the company's financial accounts as at 31st December , 2020, in the amount of EUR 644.7 million to disburse a dividend in the amount of 50 euro cents for each share entitled to dividends, specifically a total of no more than EUR 214.9 million, and to carry forward to new account the remaining profit of EUR 429.8 million.
The draft resolution put forward by the management board and the supervisory board took into account the recommendation of the European Central Bank of 15 December 2020, ECB/2020/62 on dividend distributions during the COVID-19 pandemic and repealing recommendation ECB/2020/35. The ECB repealed this recommendation, replacing it with recommendation of 23rd of July 2020, ECB/2020/31. ECB considers that the reasons underpinning the recommendation of 15th December 2020 are no longer present as the latest macroeconomic projections indicate the start of economic recovery and a further reduction in the level of economic uncertainty. According to the ECB, this allows the thorough supervisory assessment of the prudence of banks' plans to distribute dividends on an individual basis with a careful forward-looking assessment of capital plans in the context of the normal supervisory cycle.
In view of the ECB's recommendation of 23rd July 2021, ECB/2021/31, the management board and the supervisory board carefully considered the sustainability of the business model and the risks and their impact on the capital trajectory, and to that effect, proposed disbursement of the total profit of the 2020 financial year in the amount of EUR 429.8 million, which was carried forward to new account at the annual general meeting on 19th May, 2021. This draft resolution also constitutes the proposal for the appropriation of profit. The disbursement of dividends will be subject to withholding tax in accordance with the tax regulations.
Thank you very much, Mr. Dörfler, for your explanations.
This concludes the explanations of the management board and the presentation of the draft resolution of the management board and the supervisory board on the sole item on the agenda. I now give the floor to each of the special proxies. Please let me know if any motions for resolutions have been received from the proxy shareholders, and if so, please read them out. If not, please confirm that you have not received any motions for resolutions so far. I give the floor first of all to Nikolaus Adensamer.
Thank you very much, Chairman. There are no resolutions I have received from shareholders. Thank you.
The floor is granted to Mr. Michael Knapp.
Chairman, thank you very much. I would like to report that I represent 529 shareholders with holding 9.19% of the share capital.
From them, no proposed resolutions have been received.
Thank you, Mr. Knapp. I give the floor to Mr. Christoph Nauer.
Chairman, thank you very much. No proposals for resolutions have been received from my shareholders I am representing.
I give the floor to Ewald Oberhammer.
Chairman, I have not received any motions for proposed resolutions so far.
Thank you very much. Civil law notary will record these comments and statements. I hereby inform you of the current attendance at today's general meeting. I note that according to the list of participants prepared in accordance with Section 29 of the Stock Corporation Act, 4,119 shareholders are represented by the four special proxies who are entitled to represent 57,467,101 votes. The general meeting has the necessary quorum for the agenda item. The list of participants will be made available electronically to the four special proxies present. For data protection reasons, we refrain from disclosing the list of participants in this transmission on the Internet.
We now start the debate on the sole item on the agenda, that is reading out and answering the questions of shareholders. I will read out the questions. Only questions on the sole item on the agenda will be answered. I ask for your understanding in this regard. I will read out the questions and the management board or I myself will answer them. I have a list of questions here in front of me, before me. From Mr. Berthold Berger, voting card 162: How many people are present or logged in in Austria and abroad?
At 10:10 A.M., 91 persons have logged on, 5 of them from abroad and 86 from Austria.
The next question refers.
It was stated by Alexander Kozlik, voting card 55. He wants to know about the cost of a virtual meeting and an in-person meeting, and the cost of this extraordinary annual general meeting, total costs and detailed costs. Today's general meeting has not been settled. The most recent virtual meeting was EUR 200 ,000 gross. We assume that we will have lower costs for this meeting today. The most recent attendance meeting was EUR 480 ,000 in terms of costs.
The next question is from Alexander Kozlik
That was raised by Mr. Kozlik, 55 voting card. Each shareholder will be happy to receive a dividend. Why is this amount not distributed in the next meeting in May 2022? This would save a lot of costs. Please, could this be answered by Mr. Dörfler?
Thank you very much, Mr. Kozlik, for your question. In May, at the annual general meeting, we spoke about this issue. We said then that if the ECB requirements permit, we will distribute the proposed dividend even in this very year, and this is now being implemented consistently.
Next question.
Next question by shareholder Berthold Berger, voting card 162. How many shareholders were present in Vienna general meeting, logged in in Austria and abroad? You referred to the most recent annual general meeting, regular meeting in May 2020. We answered the question already, but we do that again. At the 2021 annual general meeting, 378 people were logged on, 352 from Austria.
Next question.
This action is Berthold Berger.
Can you say something about the third quarter w hich you presented on the second of November? Could you say a few words on that and on the countries in which Erste AG is operating? This question goes to Mr. Spalt, but I think he has answered this question in detail at the beginning of his presentation.
Next question.
Berthold Berger.
How many employees are available in the back office? How many of them are outside people? Today, around 20 people work at the back office, but there are more employees available by telephone or via emails. We also have an external person in terms of legal advice, if necessary.
Next question.
By Mr. Berger.
How many employees work from home before the lockdown, and how many are there right now? Before the lockdown in the central areas, we had 60% of our employees working from home. As of Monday this week, it has gone up to 75% working from home. The branches, since the beginning of the pandemic, they were considered as critical infrastructure are fully staffed. Thank you very much.
Another question by Mr. Berger. What will be the costs, estimated costs of this virtual meeting? This question has been answered in detail. Another question by Mr. Berger. What are the effects of the COVID-related measures? What are the impacts on the business of Erste Bank? Thank you very much. The branches are not affected by the lockdown measures, and we see strong frequency continuously, I must say. So far, I have not heard of any negative impact due to the lockdown, but there are indirect ones, for sure, which are due to the fact that we do not know what the further subsidy measures will be, in terms of financial impacts. None of us would have believed that we would ever see another lockdown, looking back.
We can handle the situation quite well in operating terms. Next question by Mr. Berger. Why do we not have female proxies here? Well, we relied on the tried and tested representation by proxies, but we do appreciate your note, and we will take it into account as we go on. Next question by Mr. Berger. What is the cost of the 4 proxies, and how many shareholders do they represent? The cost is, for today's meeting, presumably EUR 5,000 gross. This will depend, of course, on the duration of the meeting, and they represent 4,119 shareholders. Next question by Mr. Berger. What are the effects of the distribution of dividends to equity and net debt and gearing? This question is for CFO Stefan Dörfler.
Thank you very much. As already mentioned by Mr. Spalt, the proposed distribution has no effect on the current capital ratios and not on the leverage ratio. After the disbursement of dividends has been subtracted from the CET1.
Next question by Mr. Berger. In other countries where Erste Bank is operating, there is a risk that a lockdown will be imposed. What are your provisions for this eventuality? Thank you very much. Of course, this is a justified concern, as Slovakia has imposed a two-week lockdown. As long as we cannot control the pandemic, as long as incidence rates go up and intensive care units are working full capacity, we need to combat the repercussions. We do hope that we will arrive at a situation to get a vaccination rate that allows for ruling out any lockdown. We are well prepared.
We know how to deal with it, and we are quite prudent and careful in managing the crisis. I have another question by Mr. Berger. What is the book value per share at the moment? I'd like to thank the CEO and the employees of Erste Bank, and he extends his warm greetings and all the best, and he hopes that there will be an attendance meeting next year as we used to know from before. Who can answer that? Thank you, Chairman. Thank you for your wishes. We can return these wishes regarding good health, and we hope that the pandemic will be controlled soon. A book value as of 31st of December, EUR 34. At the end of September, it's EUR 36.7.
Tangible book value is EUR 33.6, but economically relevant is EUR 36.7 at the third quarter of 2021. Thank you very much. Another question by Mr. Berger. What is the view of the Management Board on inflation in Romania and Austria? Mr. Spalt.
Thank you. Let me start with Austria. The year started with an inflation rate of 1.1, rising to 3.2% in August and to September. This market rise was due to the spike in energy prices and due to base effects of lower prices in 2020. These effects should at least last until the spring of 2021, so monthly inflation rates will remain high in the months to come.
In the next year, this is our hope, in particular as of the second quarter, we expect and hope that the robust recovery of the economy will help us. In total, inflation in Austria in March 2021 will be 20.7%, and in 2022 it should be 2.4%. These are expectations, hopes I must say, which are influenced by many drivers. This is our assessment. It may well be that the situation in demand and supply will have an effect. Looking at Romania, 2.7% was the figure for 2021 to 2022, and it's almost 5% this year. For next year, it's 5.5% presumably. Short-term predictability here is quite restricted due to the energy price situation. We don't know how they will develop.
Government subsidies, which is another topic here. But we do see that this will be around 5% for this year, next year.
Thank you very much for your answer. I have another question by Mr. Berger. How long will we have to pay, will the bank have to pay negative interest rates to the ECB? Thank you very much. The answer is, as the chairman has just said, it's a crystal ball we need to have. All analysts see no change in ECB's interest rate policy. For a foreseeable period of time, we will see no change, supposedly. The environment of, as Mr. Spalt said and commented, regarding inflation, there may be some change. From today's perspective, we cannot make any statement in this regard. Thank you very much for your answer.
I have no more questions from the shareholders before me, in front of me. I would now like to interrupt the general meeting for a break of five minutes. It's now 10:57. I order that only those questions that are received by 11:03 by email to the address frage.erste@hauptversammlung.at will be answered. After that time, further questions will no longer be considered. Only questions received by that time will be answered. Furthermore, I hereby order that the final submission of motions by transmitting motions for resolutions of shareholders, as well as the issuance of instructions for the exercise of voting rights to the special proxies by email is possible also until 11:03 A.M., and that motions, instructions, received thereafter will no longer be considered. I interrupt the meeting for this short break.
Dear shareholders.
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The countdown is now over.
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No further relevant questions have been received. I therefore close the debate on the sole item on the agenda.
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I now once again give the floor to the four special proxies present and ask for the reading of any motions that have been received so far or ask for confirmation that no further motions have been received.
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I pass the floor to Nikolaus Adensamer.
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Thank you, Mr. Chairman.
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No proposals for resolutions have been received by me.
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Mr. Knapp. Thank you very much.
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I haven't received any proposals, either. I had a change of instruction of one of the shareholders, but this has already been registered.
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Mr. Nauer.
Thank you. I haven't received any proposals for resolutions either.
Mr. Oberhammer.
Oh, I didn't receive any proposals either. Thank you very much. Mr. Brix will record the procedure.
It is now 11:05 A.M., and no further motions will be considered from now.
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That takes us to the vote on the sole item on the agenda. I order that the vote be taken according to the subtraction procedure. In this procedure, the no votes and abstentions are counted and subtracted from the total number of votes represented. This results in the yes votes. For the voting, the four special proxies use the instruction cards or voting cards they received before the opening of the general meeting. By entering the respective instruction cards or voting cards into the IT system, the corresponding number of shares is recorded. In the case of yes votes, the instruction cards or voting cards do not need to be held up, as the yes votes are determined according to the subtraction procedure. The instruction cards or voting cards will be read aloud by Notary Brix, as usual, for better recording.
The voting process will be supervised by Notary Brix and Mr. Bauer from the counting service will calculate the result.
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Let us now vote on the sole item on the agenda: Resolution on the appropriation of the balance sheet profit, 2020.
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I now put to the vote the draft resolution I read out at the beginning, which was also made available on the website. As a motion that the general meeting resolve the following. The profit available for distribution recognized in the company's financial accounts, as at 31st of December, 2020 and amounting to EUR 644.7 million, of which a partial amount of EUR 214.9 million has already been appropriated in accordance with the resolution adopted by the Annual General Meeting on 19th of May 2021, will be distributed as follows. In accordance with the present proposal put forward by the Management Board and the Supervisory Board.
For each share entitled to a dividend, a further dividend of 1 EUR will be distributed, adding up to a total of no more than EUR 429.8 million. The company is not entitled to any dividend payments from treasury shares.
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Notwithstanding clause 23.4 of the Articles of Association, which stipulates a payout of the dividend 10 days after the general meeting, the dividend payment date will be on the 2nd of December 2021.
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The proxies, who is against this motion?
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Oberhammer, Adensamer. Objections? Abstentions?
Knapp.
Knapp, Oberhammer.
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I can announce the result of the vote.
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In the next moment.
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306,881,958 yes votes. This is 99.838937%. Objections: 495,084, 0.1610673%. Number of shares for which valid votes were given: 307,370,042. Percentage of the total share capital is 71.52%.
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I state that this motion has been adopted with the required majority and that the general meeting has therefore approved the proposed appropriation of the profit by distributing a further dividend in the amount of EUR 1 per share entitled to a dividend.
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The agenda for today's Extraordinary General Meeting is thus completed. The voting result will be published on the company's homepage. I'd also like to take this opportunity to thank the members of the Management Board and all employees of the company on behalf of the Supervisory Board for their great commitment in the financial years 2020 and 2021. I'd also like to thank you, dear shareholders, for following today's virtual general meeting via the internet, and I'd like to close the Extraordinary General Meeting. I'd like to say goodbye. I wish you all the best, and stay healthy. Thank you.