Good morning, ladies and gentlemen. The pandemic has changed our lives and the way we work. I very much regret that today's AGM can only be conducted in a virtual manner, and we can only present ourselves via the Internet. I herewith open the 27th annual general meeting of Erste Group Bank AG. I take the chair in accordance with Section 116, Para 1 of the Stock Corporation Act. In order to protect shareholders and other participants, the management board decided to make use of the new legal provision permitting the conduct of virtual annual general meetings. Today's AGM is therefore taking place as a virtual AGM within the meaning of the Corporate COVID-19 Act and the Corporate COVID-19 Regulation, with due consideration given to the interests of the company and the participants. The AGM is being webcast in its entirety.
I welcome the shareholders of our company who are following the AGM on the Internet, and our guests. Holding the AGM as a virtual general meeting in accordance with the COVID-19 regulation leads to certain changes and modifications in the course of the AGM and in the exercise of shareholders' rights, which were described in the convocation and the information made available on the company's website and which will be dealt with in detail by Notary Brix. First of all, the reports. In particular, the presentation by the management board and the proposed resolutions on all items on the agenda will be presented en bloc. The special proxies will be given the floor to read out motions for resolutions. The general debate will then be held. That is, the members of the board of management will read out and answer the questions received.
After the questions on all items on the agenda have been answered, the respective motions are to be voted on in the order of the agenda. I note that first, the convocation to today's AGM was published in due time in Wiener Zeitung on the 13th of October in compliance with the provisions of Section 106 of the Stock Corporation Act, and that second, the convocation was disseminated electronically by press text in accordance with Section 107, Para 3 of the Stock Corporation Act on the 13th of October. On the same day, also in accordance with the new stock exchange regulations, the convocation was sent to the shareholders via the intermediary chain pursuant to Section 180, Para 2 of the Austrian Stock Exchange Act.
The documents to be disclosed pursuant to Sections 108, Paras 3 and 4 of the Stock Corporation Act were made available on the company's website on October 19th. In particular, information about the organizational and technical requirements for participation pursuant to Section 3, Para 3, in conjunction with Section two, Para 4 of the COVID-19 Regulation, a question form and a proxy and instruction form for the special proxies pursuant to Section 3, Para 4 of the COVID-19 Act. Notary Brix is requested to notarize the resolutions of today's AGM, to supervise the voting, and to take minutes pursuant to Section 120 of the Stock Corporation Act. I would now ask Notary Brix to explain the modalities for the exercise of shareholders' voting rights at today's virtual AGM and the conduct of the AGM, which have already been made available on the company's website. Notary, please.
Shareholders, in the convocation to the AGM of 13th October 2020, it was announced that today's AGM will be held as a virtual AGM without physical presence of shareholders. On 19th October, information on the organizational and technical requirements for participation in the AGM pursuant to Section 3, Para 3 in conjunction with Section 2, Para 4, COVID-19 Regulation was made accessible. Today's AGM will take place in the presence of the Chairman of the Supervisory Board, Friedrich Rödler, Chairman of the Management Board, Bernhard Spalt, members of the Management Board are Ingo Bleier, Stefan Dörfler, Alexandra Habeler-Drabek, and David O'Mahony. The four special proxies, Nikolaus Adensamer, Michael Knap, Christoph Nauer, and Ewald Oberhammer, and the lawyer Richard Wolf as legal advisor, as well as myself as notary public. Peter Bosek has apologized and can't be present because he is in quarantine.
As representative of the auditors, Sparkassen-Prüfungsverband, Gerhard Margetich is available to answer questions we may have by telephone and email. He will be following the AGM via live stream. The representatives of the auditor, PwC Wirtschaftsprüfung GmbH, Dorothea Rebmann is available to answer questions by telephone or email. She's also following the AGM via the live stream. As representatives of the FMA, the state commissioners received an invitation to today's AGM and have the opportunity to follow it via the live stream. The state commissioners can communicate with us during the AGM, and if necessary, contact the management board or the chairman of the AGM. How will shareholders' rights be exercised today? The exercise of voting rights, the right to propose resolutions, and the right to object can only be exercised by granting power of attorney and giving instructions to one of the special proxies proposed by the company.
The right to information may also be exercised at the virtual AGM by the shareholders themselves or by their proxies by way of electronic communication in text form, by email directly to the management board, exclusively via the email address fragen.erste@hauptversammlung.at. As regards the transmission and the conduct of today's AGM in detail, the AGM will be transmitted in its entirety visually and acoustically in real time on the internet pursuant to Section III, Para 4, COVID-19 Regulation, in conjunction with Section 102, Para 4, Stock Corporation Act. As Erste Group Bank AG offers you two alternative way of accessing the internet transmission in German, please select one of the Erste Group Bank AG homepage, transmission one or two. If you experience any disruptions during transmission, please switch to the other provider.
The AGM will be held in German and simultaneously interpreted into English, and we kindly ask you to visit the live stream of the English website. In addition, sign language interpreters will be available for the duration of the entire AGM. By broadcasting the AGM on the internet, all shareholders who so desire have the opportunity to follow the course of the AGM in real time, including the presentation by the management board and the answers to shareholders' questions. How can the right to information be exercised? The shareholders and their proxies authorized to exercise the right to information and the right to speak can submit their questions in text form to the management board electronically within a certain time window after the opening of the AGM, exclusively via the email address fragen.erste@hauptversammlung.at.
At today's AGM, these questions will be read out by the chairman of the supervisory board and answered by the management board. Please use a simple email to the email address fragen.erste@hauptversammlung.at. You are requested to send this email from the email address stated in the power of attorney in order to ensure quick verification of your identity. This email must contain the first name and surname or company name of the shareholders, the date of birth or the company register number of the shareholder, and the securities account number in order to enable the board of directors to establish the identity of and compliance with the deposit certificate. Please end your email with your name. That is the replica of the name signature according to Section 13, Para 2 of the Stock Corporation Act.
The shareholders thus have the opportunity to react to developments at the AGM, for example, by asking additional or follow-up questions. The chairman will structure the conduct of the AGM as he does for a meeting with shareholder presence and will announce, in particular, a specific time by which questions can be asked. Let me move on to the special proxies. The shareholders also have the opportunity to change their instructions, in particular, to submit motions for resolutions to vote or change their instructions regarding voting on one or several items of the agenda, but also to raise objections to one or several items of the agenda with a relevant special proxy, even during the AGM up to a certain point in time. To this end, please use a simple email to the email address of your special proxy, to whom you have also sent your power of attorney.
The addresses are adensamer.erste@hauptversammlung.at, knap.erste@hauptversammlung.at, nauer.erste@hauptversammlung.at, oberhammer.erste@hauptversammlung.at. In this simple email, the person of the shareholders, that is first name and surname of the shareholder or the company name of the shareholder, the date of birth or company name, a register of the shareholders in order to enable the special proxy to determine the identity of and compliance with the requirements. Please end your email with your name and indicate your securities account number. The email must be sent from the email address specified in the power of attorney. Please note that during the AGM, communication with your proxy is only possible by email.
Availability of the proxy by telephone cannot be guaranteed. The time up to which instructions regarding motions, votes, and objections are possible is determined by the chairman in the course of the general meeting. This point in time will probably be close to the end of the general debate. Please note that it may be necessary to interrupt the virtual AGM for a short period of time in order to process questions put to the management board, as well as instructions given by shareholders to the special proxies. This ends my summary of the modalities of today's virtual AGM.
Thank you.
Thank you, Dr Brix, for this explanation. As chairman, I note that today's AGM will be carried out in the way that was listed in the convocation on the organizational and technical prerequisites for participation, section 3, paragraph 3, in connection with section 2, section 4 of the COVID-19 regulation. The list of participants will be finished before the first vote. I will sign it, and I will then announce the attendance. The list of participants will be electronically made available to the special proxy holders. Now we are going to start with the agenda.
Item one on the agenda, presentation of the approved annual financial statements, the management report, and the consolidated corporate governance report of the management board, the non-financial report, the draft resolution on the appropriation of profit, as well as the report of the supervisory board for the financial year 2019, and presentation of the consolidated financial statements and the group management report for the financial year 2019. The approved financial statements, the management report, the corporate governance report, the non-financial report, and the proposal on the profit appropriation, as well as the report of the supervisory board on the year 2019 were made available pursuant to Section 108, Para 3 and 4 of the Stock Corporation Act on the company's website.
The approved financial statements, the management report, and the consolidated financial statement were audited by the Sparkassen-Prüfungsverband as statutory auditor, and the additional auditor, PwC Wirtschaftsprüfung GmbH, and received an unqualified audit opinion. The PwC Wirtschaftsprüfung GmbH was also entrusted with auditing the corporate governance report 2019, pursuant to Rules 1 to 76 of the Austrian Corporate Governance Code with limited collateral. The audit has not given rise to any objections. The Deloitte Audit Wirtschaftsprüfungs GmbH was mandated with a restricted audit of the non-financial report 2019. The supervisory board has reviewed and approved the annual financial statement, the management report, the corporate governance report, the non-financial report, and the consolidated financial statements and the group management report. The annual financial statement was approved and adopted. We therefore need no further approval by today's AGM.
Dear shareholders, now a short flashback of 2019 and 2020 from the position of the supervisory board. Our long-standing non-executive director, Brian O'Neill, died on the 20th of December 2019 after a short and serious illness, which filled us with great sadness. O'Neill wasn't only an internationally renowned financial expert, which enriched us with his knowledge. He was also a loyal friend of the Erste Group whom we miss very much. We will always keep fond memories of him. On the supervisory board in 2019, there were a number of changes. Matthias Bulach, Henrietta Egerth-Stadlhuber, and Michèle Sutter-Rüdisüli joined us as excellent finance, digitalization, and governance experts as new members of the supervisory board. The supervisory board was left in 2019 by Elisabeth Bleyleben-Koren, and she also did not stand for reelection. My special thanks to her for her excellent and longstanding support.
At the end of this AGM, the mandates of Wilhelm Rasinger and Gunter Griss will come to an end. Wilhelm Rasinger has been instrumental since 2005. He worked for us and helped us for more than 15 years. Gunter Griss was a member of the supervisory board since 2014. I should like to thank both gentlemen for their valuable and committed work on the supervisory board. Our thanks also go to Andreas Treichl, our CEO. After 26 years, he left the company on the 31st of December 2019. Under him, the Erste Bank developed into a large bank from local beginnings. Now I would like to read a message by Mr. Rasinger that he has sent us.
Ladies and gentlemen, dear shareholders, for over 60 years, I've been a customer of the Erste Bank, and I'm closely connected with this bank. I only think of Sparefroh and Weltspartag. I was there from the first hour as a non-executive director. I'm extremely grateful to Andreas Treichl that he has enabled me, through his initiative and the sniff of the private free float and the capital market, to be confirmed three times in my function for 15 years altogether.
The management team around Bernhard Spalt is well-positioned in order to resolve all the problems inherent in these difficult times. I should also like to thank Friedrich Rödler, the chairman of the supervisory board, who with circumspection, commitment and skill and profound knowledge has been an important pillar of the bank. I'm convinced that better times are ahead for the shareholders. Thank you for the shared path. I wish you all the best for the future.
I would also like to wish Mr. Rasinger only the best for the future. Let me continue. As to the composition and independence of the supervisory board, the criteria for the independence, the working method, the number of committees and their remit, the meetings of the supervisory board and the focus of their activities. As to this, please let me refer to the corporate governance report. For the activities of the audit committee, let me refer to the annual financial statement 2019. Let me just mention that the supervisory board had 38 meetings, and was informed quite comprehensively, enabling the supervisory board to realize all the tasks that the supervisory board is entrusted with.
The supervisory board could also convince itself from the orderly conduct of the management. In supplement to the report of supervisory board, let me inform you that the management board has presented a new proposal for the appropriation of profits. After a review, the supervisory board actually agreed to the new profit appropriation. Let me just also mention a few words on the COVID-19 pandemic and how we continued our work as supervisory board. Although we had difficulties in meeting personally, we intensified our cooperation on the supervisory board since March 2020.
The pandemic challenged us in keeping up the flow of communication. All planned and additional meetings could be held either virtually or in hybrid form, and all necessary resolutions could be taken. It was also ensured that through informal meetings between the CEO and the executive committee of the supervisory board and current reports, the impact of the pandemic on the Erste Group, on the customers and the employees could be discussed in detail. I should also like to thank the staff members of the Erste Group who managed the situation as best as they could, and I should also like to thank the team of our Health Center managed by Eva Höltl. The Austrian Corporate Governance Code prescribes that I will have to inform you now about the principles of our remuneration system.
Remuneration of the members of the management board includes fixed performance-linked and other components, the latter consisting of contributions to the pension fund, the provident fund, and various contributions in kind. In 2019, the performance-related remuneration and share equivalents, that is the so-called phantom shares, were paid out for the past years or allocated. As of 2010, the performance-linked part of the remuneration is spread over five years in line with the regulatory provisions and will only be paid out under certain conditions. With a view to the performance-related part for material risk takers, that is members of the management board, heads of divisions People assuming responsibilities relating to risks, a maximum of 60% are automatically distributed, half of it in cash and the other half in phantom shares.
Phantom shares are paid out on the basis of the weighted average daily share price of Erste Bank in the previous year and are then paid out one year later, provided the set targets are met. The remaining component of performance-linked remuneration is spread over five years according to the same principle. That is to say, in the second year, 4% are paid out in cash and 4% in phantom shares. This is repeated in the subsequent years. For other employees, there is the subsequent bonus system, which depends on the company performance and the personal performance. A, b onuses for employees in the securities trading unit, they are either paid out once or the payout is spread over two years, depending on the sustained performance. B, f or employees in the branches, there is an annually and quarterly bonus depending on the individual performance.
At least 40% of the targets are measured according to qualitative criteria and a maximum of 60% according to quantitative criteria. For other employees, there are one-time performance premiums. No employee share ownership program is offered at the moment. The fixed remuneration of the management board amounted to EUR 5.325 million In 2019. Other remuneration was EUR 1,637,400 . Performance-related remuneration amounting to EUR 911,000 were paid out for 2018. Performance-related remuneration amounting to EUR 1.1566 million was paid out. The non-cash performance-related remuneration in 2019 amounted to the years before 2018, 33,344 and for 2018, 33,075 share equivalents, that is to say phantom shares.
With a view to the EBA statement on dividends distribution, share buybacks, and variable remuneration of the 31st of March 2020, supervisory board decided that the variable remuneration, that is to say the bonuses in 2019, will be paid out non-cash in the form of phantom shares, and a considerable part of the performance-related compensation will be deferred. Thus, the variable compensation for the executive directors for 2019 is linked to the development of the share price of Erste Group. Comparable regulations for variable compensation are also applied for the management boards of the subsidiaries. An adequate adjustment of the variable part is now linked to the risks which result from the COVID-19 pandemic. The supervisory board remuneration paid out for the year 2018 and 2019 amounted to EUR 840,000.
Moreover, the attendance fees of the AGM 2019 was approved with EUR 1,000 per meeting of the supervisory board and the committees. Further details on the remuneration system are found in the corporate governance report, which was provided on our website. You also find the details for the remuneration policy to be voted on. In connection with today's proposed remuneration policy, let me explain as follows. It's a declared goal of Erste Bank to promote a sustainable and positive development of the company. Thus, the long-term interests of the shareholders, but also of the employees, should be secured. A considerable part of the performance-related compensation will be deferred and then paid out over several years. Thus, the long-term interests in the remuneration policy are being considered adequately. The principles do not encourage taking risks which go beyond the risks approved by the supervisory board. The management quality of the executive directors will also be evaluated including the ESG criteria. The individual achievement of objectives will be assessed.
By the supervisory board. In addition to financial performance targets, the non-financial criteria such as diversity, environment, and social responsibility are being considered. Moreover, starting with 2020, sustainability was set as one of the performance targets by the CEO in order to underline the long-term group-wide promotion and strengthening of sustainability as an important constituent of our corporate strategy. I'm now asking Mr. Dörfler to make his report on own shares .
In 7,677,249 shares were paid out with. 7,187,000 shares were sold. The market making was the result. 21,623,000, and the share capital was 0.4%. As to own shares for 2019, there is an annual profit of EUR 1,175,203.
Thank you, Mr. Dörfler, for his report. This takes us to the report by the CEO, Bernhard Spalt. I'm asking Mr. Spalt for his presentation on the financial year 2019.
Thank you.
Thank you very much, Mr. Chairman. Good morning, ladies and gentlemen. A cordial welcome to our AGM. It's unusual to report on 2019 on the 10th of November 2020. I'd like to outline the motivation that has induced us to do so. When the health crisis broke out in early March this year, we asked ourselves what to do with our AGM, how to deal with a health hazard for people, for employees, for shareholders in a situation where we didn't know how to cope with this problem. A situation in which we didn't know how profound the crisis was, how long it would last, when it would end. In this context, we said we are going to postpone the AGM. At that time, we hoped that in the fourth quarter of 2020, we would be able to have a physical AGM because we wanted a physical AGM.
We are a new team, and we wanted to have a physical discourse. At that time, we thought that by the fourth quarter, the health crisis would be under control. We said that in the fourth quarter, we would know more about the intensity of the crisis and its impact on our profitability, on our capitalization, and our liquidity. We thought that we would know more by that time. Now we are in the fourth quarter, and we are in the midst of a second setback, a second lockdown. Nevertheless, we know a great deal more about the disease. We know more about the economic forecasts. Today, we're able to make a proposal for profit distribution, which is very clear. I will come to that later. What are we talking about when we are talking about the business year 2019?
We're talking about a business year, which as far as the result goes, is a result that was achieved under the leadership of Andreas Treichl, and it's an excellent result. Andreas Treichl handed over a bank, a business which is sound, strategically well-positioned, and we're most grateful for that. We greatly appreciate that. We owe that to him. Looking back to 2019, it seems a long time ago, but nevertheless, it's important and it is the subject to be dealt with by today's AGM. The image you can see here is from Slovakia, from the Tatra Mountains, by the way. How did we start to 2019? This was a perfect illustration of the fact that our strategy, which we've been pursuing for 23 years, is absolutely right. We regard Europe and Eastern Europe in particular as our growth engine.
You can see that all our markets in Central and Eastern Europe were growing significantly faster than Western Europe. Austria had a growth rate of 1.3%, but Hungary, in terms of GDP, was going three times as fast and three times as strongly. This is not just a snapshot, it's a confirmation of a trend which we've been seeing for quite some time. All our economies were growing fast. They were growing sturdily. They were sturdier than Western European economies. Domestic demand was an essential growth factor, and although slightly weaker than in 2018, nevertheless, it confirmed that we were doing business in the right region for us. When we look at other conditions, again, we find confirmation of the fact that we are doing business in the right region. The labor market is characterized by almost full employment.
Of course, keeping the cost-income ratio under control is a challenge in that labor market context, but it's a sign of strength. It's a labor market that needs more labor than is currently available. That was true of all our markets. At the same time, as you can see on the right-hand side of this chart, all our economies, compared with the financial crisis 10 years ago, entered the new situation with very sturdy figures, and the same holds for 2019 when no one knew about what would be coming. Our state debt was improving. Trade deficits were improving. All these countries were characterized by very strong and sturdy financial management. When we look at our own business, you can see how well-balanced our business model is. This is a wealth of figures, I know. Essentially, there is only one important element. It's the loan-to-deposit ratio.
Our business, which is a simple business throughout the region, is characterized by the fact that our lending business, loans originated to retail customers, SMEs, and corporate customers, is covered by local saving deposits. This makes us resilient in a period of crisis. Although the interest rate situation is difficult, zero interest or even negative interests, we still have the unbroken inflow of savings deposits that refinance our loans. We saw credit growth last year. There was no credit crunch, nothing whatsoever, and we had an increase in our savings deposits. When we look at our operating result, this is very important because we always have to ask ourselves, do we have a business model that works? Are we engaging in business that makes sense in the long term? What you can see here is that we have a very strong business model. Operating income increased by almost 5%.
Operating expenses are lower than operating income. For the first time, we generated a significantly improved cost-income ratio. I'll come back to that later. For the first time in years, in our net fee and commission income, we exceeded the EUR 2 billion mark. This is very important because on the Capital Markets Day in November 2019, we said that net fee and commission income is a major part of our strategy. Money that is coming in is to be invested profitably, and in the field of asset management, we want to grow significantly. We also want to grow in terms of insurance business, be it in providing for old age or health insurance or insurance against other risks. We want to grow there as well, although the market penetration is still low.
This was something that worked very well already in 2019, and it will become a stable anchor of our business strategy, and it will remain so in the years to come. When we look at the figures across our geographic segments, we can see that operating results have been going up. The cost-income ratio for the first time dropped to 59%, for the first time below 60%. On our Capital Markets Day in 2019, we said that we're aiming at a cost-income ratio of 55% by 2024. Our income flows are being attacked, and the net interest income is depressed because of the general interest landscape. We stick to this target, although it hasn't become easier, regardless of COVID.
Net fee and commission income is something we regard as an essential element of our business model. When we look at the costs of risk in 2019, similarly to 2018, the impression was that there is no more risk. In 2018, we had negative risk costs. In 2019, we had negligible risk costs on the basis of a situation of a positive economic development in all countries. Over five years, we saw net releases of provisions. We had positive developments, micro and macroeconomic developments, you could get the impression that risk is no longer in existence. When we get to 2020, I can tell you that risk hasn't disappeared. It has hidden well for quite some time, this is part of our business model. It used to be part of our business model, and it will be so in the future.
Last year, we had an extremely positive result as regards risk costs. This is also reflected in our non-performing loan ratios, which declined to 2.5%. I've been with this bank for almost 30 years. I can't remember a year where we reported 2.5% non-performing loan ratio. Our coverage ratio last year were 74% for distressed loans, and that has gone up even further. It's no surprise. It's no miracle. It's due to the fact that we are a reflection of our economy. When our economy is doing well, when the order books are full, when employment is high, when revenues and profits are good, there are few loans in default. When the situation turns around, it will be different. What needs to be remembered about 2019 is that we have an excellent portfolio, we have a well-balanced risk policy. We never saw a credit crunch.
We were never afraid of originating loans. We kept growing, but we were growing in a way that was never irresponsible. Our net result last year, despite the fact that we had a good operating result and low risk costs, it declined by 18%. Why was that so? There were two one-off effects. In Romania, the Supreme Court pronounced a judgment on building societies, saying that customers must be paid out. We are fighting against this judgment. It cost us EUR 150 million. We had always been operating within the framework of laws on building societies. The second thing is, in December of 2019, the bank levy was doubled. This had two effects.
One effect was that we had to take the higher bank levy into account in our result, and the second thing was that we had to book goodwill impairment in the amount of a double-digit million amount. We booked almost EUR 1.5 billion in terms of the higher bank levy. The bank levy, which was doubled in 2019, was completely abolished at the beginning of 2020. In 2019, we generated a net result of EUR 1.5 billion and a net profit. This year, in the context of this net profit and in the context of the regulatory environment, we're proposing distribution of a dividend of EUR 0.75 on two conditions. The conditions are as follows. The recommendation of the regulator not to pay out a dividend on condition that this recommendation is lifted and on condition that there are no other restrictions on profit distribution.
The deadline for that is 8 February 2021. If these two conditions are lifted by that time, we're going to pay out the dividend of EUR 0.75 per share. That sends out the message that in terms of capitalization and profitability and liquidity, we are in a position to pay out a dividend. It's a justified expectation on the part of shareholders to receive a dividend. This is something that will have to be discussed and voted on today, and we're convinced that we are doing the right thing. We are not going to violate any negative recommendation by the regulator. We are acting within the regulatory environment, but in terms of fundamentals, we were able to pay out such a dividend. If we are allowed to do so, and if the shareholders agree, we will pay out a dividend. Let me move on to capital and capital accretion.
Capital accretion was continuing throughout 2019. Our CET1 ratio is 14.7 currently. We do have higher risk-weighted assets because we originated more loans, and loans constitute a higher risk. Nevertheless, we want to continue along these lines. We are profitable, we are strong in terms of capital and strong in terms of liquidity, and our business model works well. Now I'd like to say a few words about 2020. We can look back on three quarters of the year. The year didn't go as planned. The year didn't go as expected. I think that holds for all of us. The first few months of 2020, in fact, the first two months were quite relaxed. We saw a continuation of things in 2019. We had robust growth rates, full employment, a functioning business model, and then Corona hit us. That has changed the world.
It's not been a European phenomenon; it's a global phenomenon. It hit us all in different ways. When we look at the consequences, what happened in 2020, we had an excellent start to the business year. In March, all of a sudden, a health crisis broke out in our countries. We had never seen anything like that before. No vaccination, no therapy available. The essential strategic response of all our governments was to say, "Well, if this health hazard cannot be coped with through vaccination, we have to close down the economy." Therefore, governments in all our countries imposed a strict lockdown. The economy was brought to a standstill, except for critical infrastructure. Everything was brought down to zero except for critical infrastructure. For the first time, it became clear that banks are part of critical infrastructure.
Our branches remained open, our services continued to be provided, and we were quick in realizing that we had to protect the health of our customers and our employees. This was our first priority. Very quickly, we changed over to home office systems at the campus in Vienna. Out of 5,000 people, only 150 remained here. All others were working from home. It worked very well in technological terms, and as Chairman Rödler said, we have a highly competent health center here, which helped us cope with these difficulties. We were able to protect our customers, our employees. We had everything under control. Critical infrastructure remained operational, but everything else was shut down. We continued providing our services. All our countries, to varying degrees, developed similar programs, debt moratoria for borrowers who were not able to pay for quite some time.
Government-guaranteed loans were possible. We also reacted quickly to a situation which otherwise would have created a gap in liquidity. Whatever you think about these measures, I would say that the first lockdown was extremely effective. Of course, it was costly, very costly, but it's something that was essential in reacting to this critical and unknown phenomenon. The summer came. Everything was more relaxed. Infection rates went down significantly as a result of the lockdown. People were able to move outdoors. Everything looked as if the crisis was over. It isn't over. I said earlier, it takes a lot of patience to overcome this crisis, but it will be overcome. I think it's absolutely essential not to shame and blame one another, not to ask who did things wrong. We have to ask ourselves, what can we contribute to the overcoming of the crisis?
Solidarity is essential. We need to outline a path for us to move on in the months to come. We shouldn't close our eyes to the fact that the economy has gone down hugely. Does it help to inject capital into the economy? I think what we need is equity in order to come out stronger of this crisis, and we support the creation of a framework that enables SMEs to have access to capital. We're not going to depart from this position because we think it's essential. Let's take a quick look at the first nine months of 2020. Always in the context of the crisis of the century, and considering that we are going through the crisis of the century, our operating result is extremely sound. Again, it shows that our business model is the right one. We see a slight decline in operating income.
We were able to reduce our operating expenses and again, there is no credit crunch, and this holds not just for us, but also for other banks. Banks want to provide finance. The question really is how confident can we be that credits are taken out? Are businesses and people willing to finance investments? We are there to help. When you look at risk provisions, of course, they dominate the success of our business. There are two things to be said about that. This year, again, we find ourselves in a situation in which we report a record low in our NPL ratio. We still thrive on an economy that was booming. Liquidity gaps were filled, but in the second quarter of this year, we booked high-risk provisions because we know that next year we are going to see a higher number of insolvencies and higher unemployment rates.
This is what we anticipated. We didn't want to wait for it to happen, and we anticipated this year, and this reflects the depth of the crisis. We have to be aware of the fact the crisis will not just go away. It will cause real damage. It will hit not only our profitability, it will hit us also personally and economically. We have to find a common way out of the crisis in order to return to a growth path. We still have an NPL ratio of 2.4%. It won't remain like that. We're going to see a higher NPL ratio as we go along. When you look at the net result of the first nine months of 2019 and the first nine months of 2020, there are three essential aspects.
I mentioned the risk costs, which have been built up in order to anticipate what's going to happen next year. We also had a significantly worse trading and fair value result this year. This is not surprising. We had massive volatility in the first quarter and difficulties on the stock exchanges as the crisis broke out. We had significantly better other results because what happened in Romania with regard to the building societies last year is not happening again. The goodwill impairment in Slovakia, which we had to book last year, we won't be seeing again this year. We had a sturdy operating result, which again confirms our business model. Risk costs were high, and the trading result was worse. Therefore, our net income dropped by almost 48%, but again, it shows that we're doing the right thing. Finally, about this year's result.
We're now at a CET1 ratio of 14.1%. This justifies us in planning to pay out a dividend. It also allows us to look at potential acquisitions because we think in our region, in Austria, in the Balkans, Hungary, Czech Republic, Slovakia, Romania, we will be seeing potential targets. Banks will be up for sale, and if they fit to our business model, if they are in line with our strategy, and if they're capital accretive, we will take a closer look at them. We will be acting out of a position of strength. I'd like to show you a brief video. I suppose you've seen this video before.
Better than I ever did. Looking like a true survivor. Feeling like a little kid. I'm still standing. After all this time. Picking up the pieces of my life without you on my mind. I'm still standing.
Our country needs entrepreneurs who believe in themselves.
I'm still standing. Yeah, yeah.
Now you may wonder why?
You may wonder why we are showing a commercial at the AGM. There's an answer to that. We bow to those entrepreneurs in our region who we profoundly respect for their courage. They're working around the clock, assuming their responsibility, being innovative, creating jobs. They are the backbone of our economy. I deeply respect these people for doing what is good for all of us. This is what we want to support, because we want to preserve this attitude, and we all want to play our role in this context. I think it's important for us to remember who we are and what our role is in this critical phase of an economic downturn. I'm showing you four figures on this chart, and they express what is a major concern of ours. We've seen loan growth in the amount of 2.6%. What does this mean?
Even in the crisis of the century, even when everything is being shut down, there is no credit crunch. We still want to originate loans. We do originate loans. We don't withdraw. Second point, at the same time, although the interest rate environment is at a record low, we have seen a 6.3% in our deposit. Customers trust us, and trust and confidence is an essential pillar of our business model. We've supported over 1 million customers in our region since the beginning of the lockdown. In the context of moratoria and debt relief, we have implemented measures in the amount of EUR 18.4 billion in the COVID-19 context. We try to live up to our responsibility, and we try to do the right thing. On this chart, I'd like to show you how our economies are doing, and I'd also like to show you the loan volumes.
Let me single out one example. All other countries follow the same model. Look at Austria. We expect GDP to shrink by 6.2%. Next year, we will be seeing a recovery. 4.3% is the forecast. Now we'll see how much it's going to be after the second lockdown. This year already, we have seen growth in our loan book in Erste Bank Oesterreich and in the savings banks. And you can see a similar thing in all other countries. A steep decline of GDP in all countries. Next year, we're going to see growth in each of our countries. This is a health crisis that has been transformed into a real economic crisis. The crisis will be over at some point in time. Yesterday, we heard that a vaccine is about to be available. I don't know yet what to think about that.
The crisis will be over at some point in time. Then a recovery will set in, because the fundamentals of our strategy haven't changed at all. We ourselves, and you can see that on our website, we've developed our own index. We call it the CEE Recovery Index, which is published weekly. On the basis of input factors which are not measured by other indices, we try to measure how we are doing. We are using input factors like electricity consumption, air pollution, mobility in the food sector, mobility at the workplace. We try to establish for our entire region what's happening on a grassroots basis. We can see that after a steep decline, we are seeing a kind of upswing. It's not linear. There is no linear recovery, but the curve is moving upwards. Our business model is going to benefit from that.
If I may, let me attempt a brief outlook. This year, we saw a steep drop in GDP in all our markets. Next year, we expect to see a non-linear recovery, but it will still be a recovery. Now we are going through a second lockdown. The government is taking certain measures. We will learn how to live with this situation. We stick to our outlook as regards risk costs. As Alexandra Habeler-Drabek said very early this year, we will be between 65 and 80 basis points. Now we are at 70, we're not going to change our outlook. We think that next year, risk costs will be lower than this year. This is only logical because this year we've already anticipated risk costs for 2021, and we have digested them, and next year is going to be fragile but a year of recovery.
This year, the net result will be significantly below that of 2019 because of the high-risk costs. This year we are going to propose a profit, a distribution, which we think is a strong statement on the part of the management board and the supervisory board that we want to live up to the expectations of our shareholders. Ladies and gentlemen, let me conclude my report. In the course of last year's Jubilee year, I'm sure you heard a lot about the development and the history of Erste Group. If I venture a look to the future, I'm doing so not without referring to our basis and the purpose of our company. Erste Group was established with the objective of generating and disseminating prosperity. This still holds for our group. We take this mandate seriously.
I'm convinced that prosperity must rest on several pillars, and one of those pillars is trust and confidence. What you can see here are examples of eight of our 16 million customers. One of them comes from Vorarlberg, the westernmost province of Austria. During the past 200 years, we have addressed the most varied challenges and mastered them, and we are convinced that together with our customers we will always master the COVID-19 challenge, and we will emerge stronger from this crisis. Thank you for your attention.
Thank you, Mr. Spalt, for your report. On behalf of the supervisory board, I should also like to thank all members of the management board, also those who've left us in the meantime, and all employees of our company for their great commitment and the success for 2019. Over the past months, under the rather aggravating conditions of the pandemic. This takes me to the second item on the agenda, a resolution on the appropriation of 2019 profits. The management board and the supervisory board propose the AGM may pass the following resolution. The profit available for distribution recognized in the company's financial accounts at the 31st December 2019 amounting to EUR 644,700,000 will be appropriated as follows.
For each share entitled to a dividend, a dividend of EUR 0.75 will be dispersed on the dividend payment day, adding up to a total of no more than EUR 322,350,000, provided that on the 8th of February 2021, first, no mandatory legal ban on dividends is in effect, and second, in the company's own reckoning, no recommendation of the European Central Bank applicable to the company opposes the payment of a dividend. To the extent that the profit available for distribution is not to be dispersed on the dividend payment day in accordance with above calculation, it shall be carried forward to a new account. The company is not entitled to any dividend payments from own shares. The dividend payment day is the 15th February 2021. Now I give the floor to Stefan Dörfler to explain this appropriation of profits.
Let me mention the following justification. The European Central Bank published its recommendation ECB/2020/19 on dividend distributions during the COVID-19 pandemic, and repealing recommendation ECB/2020/1 on the 27th March 2020. The purpose of the recommendation is to conserve capital so that credit institutions can continue to fulfill their role in funding households, small and medium businesses, and corporations amid the coronavirus disease 2019. Holding the opinion that the level of economic uncertainty remains elevated, the European Central Bank decided to extend this recommendation on the 1st of January 2021. In its view, distributions need to be postponed or canceled in order to preserve the capital position of credit institutions. It is important to keep the capital position of these companies, as this measure is temporary in nature and warranted only by these exceptional circumstances.
The European Central Bank intends to decide in quarter four of 2020 on the approach to be followed after the 1st January 2021. The recommendation issued by the European Central Bank is addressed to credit institutions, that is to significant supervised entities and significant supervised groups as defined in point 16 and 22 of Article 2 of Regulation Number 468/2014, and to the national competent authorities with regard to less significant supervised entities and less significant supervised groups as defined in point 7 and 23 of Article 2 of Regulation EU Number 468/2014, that is ECB/2014/17, but not to shareholders who do not fall into any of the aforementioned categories. As the group's dividend policy is dictated by the bank's profitability, growth expectations, and capital requirements, except for 2011 and 2014, dividend payments have been made every year since 1997.
The management board would have proposed an unqualified disbursement of dividends this year too had there been no COVID-19 pandemic. However, as the recommendation of the European Central Bank cited above is addressed to the company, the management board has resolved to defer to this recommendation. The management board thus proposes not to pay out the dividend until after the 1st of January 2021, as there is currently no recommendation for the period after the 1st of January 2021 that opposes disbursements.
In its recommendation, the European Central Bank announced that it will decide on the fourth quarter of 2020, I quote, "On the approach to be followed after the 1st January 2021 in consideration of the economic environment, the stability of the financial system, and the level of certainty around capital planning." In view of how the COVID-19 pandemic is currently playing out, as explained by our CEO and the ongoing economic uncertainty, the management board expects the European Central Bank to either extend its recommendation of the 27th July or to issue a new recommendation, possibly based on differentiated criteria. It is impossible to say from today's perspective what such a new recommendation will look like.
It is particularly unclear which criteria this recommendation will include, how compliance with the criteria will be determined, and who will assess this, which company data will have to be used, and how long the review of the criteria will take, and what procedure will be applicable in the event of differences in opinion. The management board deems it imperative in a company's interest to comply with any future recommendations issued by the ECB concerning dividend disbursements. A dividend will only be paid after the 1st January 2021 if no such recommendation provides otherwise, as there is no knowing at this present point in time whether a new recommendation will follow or what such a recommendation will likely contain.
The company will need to closely consider all the facts with all due care and determine whether the conditions set forth in Section 2 of the resolution on the appropriation of profit presented to it by the AGM have been met for the disbursement of a dividend. Unless the company is able to determine with reasonable assurance, on the 8th February 2021 at the start of the day, that the payment of a dividend is compatible with the recommendation of the ECB, no dividend will be paid out. This will also apply if the material criteria for a disbursement have been met, but not all formal criteria have been fulfilled yet. The company reserves the right to call an extraordinary general meeting if necessary. One short supplement. Unlike previous years, the disbursement of dividends will be subject to withholding tax in accordance with the tax regulations. Thank you.
Thank you, Mr. Dörfler. We come to item three on the agenda, resolution on granting discharge to the members of the management board with regard to the financial year 2019. The management board and the supervisory board propose the following: The management board members of the Erste Group Bank are granted discharge for the financial year 2019. Item four Resolution on granting discharge to the members of the Supervisory Board with regard to the financial year 2019. The following resolution should be passed. The Supervisory Board members of the Erste Group Bank are granted discharge for the financial year 2019. To item five on the agenda. Resolution on appointment of an additional auditor to audit the annual financial statements and the management report, as well as the consolidated financial statements and the group management report for the financial year 2021. The following resolution should be taken.
In addition to Sparkassen-Prüfungsverband in its capacity as statutory auditor, PwC Wirtschaftsprüfung GmbH will be appointed auditor of the company's annual financial statement, the management report, as well as the consolidated financial statements and group management report for the financial year 2021, in accordance with Section 1 of the audit rules for savings banks, Annex 2, Section 24, Savings Bank Act. Now to the justification. In 2018, PwC was appointed additional auditor on the annual financial statements and management report, as well as the consolidated financial statements and the group management report for the financial year 2019 by the AGM of Erste Group Bank AG.
Among other activities, the Audit Committee of the Erste Group Bank AG Supervisory Board regularly reviewed and monitored the independence of PwC, particularly in connection with the additional services provided to Erste Group, the non-audit services pursuant to Section 63A, Para 4 of the Banking Act during the financial year 2019. After consideration of the threats to the independence of PwC and submission of a statement of independence in accordance with Section 270 Austrian Commercial Code by PwC Wirtschaftsprüfung GmbH, the Audit Committee's recommendation to the Supervisory Board was to renew the audit mandate given to PwC as additional auditor of the annual financial statements and management report, as well as the consolidated financial statements and group management report for the financial year 2021.
The fees invoiced by the auditors of Erste Group Bank AG and their subsidiaries for the year 2019 can be read up in the Erste Group Annual Report for financial year 2019. PwC's fees indicated in this report include the services of PwC and of companies belonging to the PwC network. This takes me to item six, elections to the Supervisory Board. The terms of Maximilian Hardegg and Gunter Griss and Wilhelm Rasinger will be expiring at the end of the AGM on the 10th November. Brian O'Neill passed away on the 20th December 2019. Therefore, four members would need to be appointed at today's AGM to ensure that the number of Supervisory Board members totals 13 again, like after the election at the AGM in 2019.
The Supervisory Board proposes to reduce the number of members appointed by the AGM to 12, so that three members will have to be appointed today. The proposal endorsing a decrease in the number of members must be voted on prior to the election of members. With the number of Supervisory Board members appointed by the AGM holding at least 12, at least four positions must be filled by women and men each in order to satisfy the minimum proportionality requirements set forth by Section 86 [7] Stock Corporation Act. If the Supervisory Board is staffed according to the election proposal below, that is capital representatives only, it will be composed of four women and eight men, thus complying with the minimum proportionality requirements set forth by Section 86 [7] of the Stock Corporation Act.
No objection pursuant to Section 86 (9) Stock Corporation Act was raised neither by the majority of capital representatives nor by the majority of employee representatives, so that the full Supervisory Board's compliance with the minimum proportionality requirement generally suffices. At present, employee representatives in the Supervisory Board number three women and three men. It is hereby proposed to re-elect Supervisory Board member Maximilian Hardegg. He has been a member of the Erste Group Bank Supervisory Board since 2015. He has accepted to stand for re-election. Gunter Griss will no longer be available so that compliance with the age limit specified in subsection 12 (1) of the Articles of Association is ensured. It is further proposed to elect Friedrich Santner and András Simor. Unfortunately, Maximilian Hardegg, Friedrich Santner, and András Simor cannot personally introduce themselves at this AGM.
I will therefore briefly introduce these three gentlemen. Afterward, after the series of the three candidates, we will see a short introduction video, which was also published on our website. I will start with Maximilian Hardegg. He studied agricultural sciences at the Weihenstephan campus of Technische Universität München in Freising, Germany. After working for the Vienna AWT Trade and Finance Corporation, Hardegg devoted himself to managing his family's estate. Maximilian Hardegg has been a member of the supervisory board of the DIE ERSTE österreichische Spar-Casse Privatstiftung and the supervisory board of Česká spořitelna, and member of the supervisory board of Tiroler Sparkasse Bankaktiengesellschaft Innsbruck. For further information, please refer to his CV available on our website. I will show you a video now to introduce Maximilian Hardegg.
I'm in charge of our family estate. In the '20s, I joined our Sparkassen, and what fascinated me the most was the founding idea of the bank, which was founded 200 years ago by a priest and by citizens, with an aim to help people have no banking connection and to provide such a connection for these people in order to increase their prosperity. I gladly took up this idea because I have a lot of economic common sense and can contribute to this good path that the Erste Bank has had over 200 years.
Thank you. This takes me to Friedrich Santner. He studied psychology and educational science. He has been managing director of Anton Paar GmbH, an Austrian company domiciled in Graz that develops, produces, and distributes analytical instruments for laboratories and process analytical technology, and provides custom-tailored automation and robotic solutions. Since 2017, Mr. Santner has been Chair of the Supervisory Board of Steiermärkische Bank und Sparkassen Aktiengesellschaft. For further information, please refer to the extensive CV available on our website since October the 19th, 2020. A short video introducing Mr. Santner.
Very good day, ladies and gentlemen. I'm Friedrich Santner. Let me briefly introduce myself. By profession, I'm a managing director of a Graz high-tech company, Anton Paar GmbH. We're active worldwide, and we have EUR 409 million in turnover. We teach with technology. Each beer has been measured by us, soft drinks and chocolate, et cetera. All this goes through our hands. In addition to this main task, I am the Chairman of the Supervisory Board of Styria Medien AG and also Chairman of the Steiermärkische Bank und Sparkassen AG. This is how I got to Erste Group. I'm looking forward to this job, my new job, and I promise to make a positive contribution to your group.
Thank you. The third candidate is András Simor. He has a degree in international finances from the Budapest Business School. In the course of his career in the financial sector, he served as CEO of Creditanstalt Securities in Budapest, CEO of Creditanstalt Investment Bank in Vienna, CEO of Deloitte Hungary, and he also served as governor of the Hungarian National Bank. In July 2013, he moved to the European Bank for Reconstruction and Development in London, where he served as vice president and CFO from 2014 to 2016, and as senior vice president, CFO, and COO from 2016 to 2019. From 1998 onwards to 2022, András Simor also chaired the supervisory board of the Budapest Stock Exchange and sat on the board of directors of Deloitte Central Europe from 2002 to 2006. I also refer to the extensive CV available on our website. Now András Simor will introduce himself in his video.
Construction and development, where I worked for six years in various positions, most recently as CFO and COO. I spent most of my adult life in the banking industry. I was privileged to serve as the governor of the Central Bank of Hungary in a most challenging period between 2007 and 2013. During the '90s, I set up and led the investment banking subsidiary of Creditanstalt and later Bank Austria in Hungary, and subsequently, I moved to Vienna to head up the investment banking operations across the region for the group. I would be most interested to work for the Erste Group in an oversight capacity, utilizing my experience both of the various segments of the financial industry and my knowledge of the Central East European region.
Thank you. The nomination committee has established compliance with the reliability criteria, and has also followed the EBA guidelines and the internal policy of Erste Group Bank AG for the selection and aptitude assessment of supervisory board members. The suitability policy of Erste Group Bank AG, the nomination committee is obliged to carry out suitability assessments of the proposed candidates. In performing these suitability assessments, the nomination committee has established compliance with the reliability criteria, the presence of sufficient theoretical and practical experience, sufficient time availability, as well as the demonstration of sufficient independence, the lack of any conflict of interest and conformity with the diversity criteria. Furthermore, all review was carried out to determine whether all the candidates contribute to the collective suitability of the full supervisory board.
The nomination committee has come to a positive decision for all candidates and has recommended that the supervisory board propose the election and re-election of the proposed candidates at the AGM. Supervisory board has endorsed this assessment. Candidates who have already served a five-year term of office as supervisory board members are to be appointed for the maximum term provided by law. For candidates who are to be appointed to the supervisory board of Erste Group Bank for the first time, a three-year term of office is provided. The candidates proposed by the supervisory board were selected on the basis of the criteria set forth in the Stock Corporation Act and the Austrian Banking Act, including the diversity provision under Section 86 (seven) of the Stock Corporation Act.
The candidates proposed by the supervisory board have submitted to the declaration required under Section 87 (2) Stock Corporation Act. This declaration is available on the company's website referenced in the company register. I'm now reading out the proposed resolution. The following resolution should be taken. The number of members of the supervisory board appointed by the AGM will be decreased from 13 to 12 members. Second, Maximilian Hardegg, born on the 26th of February 1966, is appointed to the supervisory board of Erste Bank AG, effective from the end of the AGM until the end of the AGM, due to resolve on the granting of discharge for financial year 2024.
Third, Mr. Friedrich Santner, born on February 7, 1960, and Mr. András Simor, born on May 17, 1954, are appointed to the supervisory board of Erste Group Bank, effective from the end of the AGM until the end of the AGM, due to resolve on the granting of discharge for the financial year 2022. This takes me to item seven on the agenda, resolution on the remuneration policy setting out the principles for emoluments payable to management board members and supervisory board members. According to Section 78, in conjunction with Section 98a Stock Corporation Act, the supervisory board shall draw up the principles for remuneration of management board and supervisory board members, the so-called remuneration policy, and put them to the vote of the AGM at least once every four years.
In accordance with Section 78 (b1) Stock Corporation Act, the vote shall be recommendatory in nature. The resolution is not contestable. The remuneration policy put to the vote of the AGM was prepared by the Remuneration Committee to be finalized for adoption and was discussed in depth and unanimously adopted by the Supervisory Board. The following resolution should be passed. Adoption of the remuneration policy setting out the principles for emoluments payable to management board members and supervisory board members. This remuneration policy has been attached to the draft resolution as Annex one and was made available to the Erste Group Bank AG website referenced by the company register under www.erstegroup.com/hauptversammlung, no later than 20th October 2020. This takes me to item eight on the agenda, resolution on the amendment of Section 19 of the Articles of Association.
This has been made accessible on our website since the 19th of October 2020. Management and Supervisory Board suggest that the AGM may take the following resolution. Section 19 of the Articles of Association will be amended by inserting the options for electronic participation in the AGM by remote participation and remote vote. Items 19.10 to 19.15. These items follow the wording of the proposed resolution. I take it that I do not have to read out the proposed amendments in Section 19 are not necessary because this is all contained in the proposed resolution as published on our website on October the 19th, 2020. This concludes the presentation of the reports and the proposed resolutions of the Management and Supervisory Boards. Mr. Spalt will take the floor again. Bernhard, you have the floor.
Thank you very much, Mr. Chairman. I apologize, I failed to mention something in my presentation. Peter Bosek is in quarantine, and he decided to leave our bank. Peter Bosek, who has been a great friend of ours, spent a quarter of a century in this bank, and I should like to mention a couple of things. Peter Bosek was one of the architects of this bank. He was hugely committed to this bank. He was a great expert, and he helped to make us what we are today. I'm most grateful to him, and I wish him all the best for his future job, and he will always be a member of our family. Thank you very much.
I fully endorse what you just said. This ends the presentation of the reports and the proposed resolutions of the management board and the supervisory board. I now give the floor to each of the special proxies, asking them if they have received motions for resolutions from the shareholders who gave them their proxies. If so, please read them out. If not, please confirm that you have not received any motions. First, I give the floor to Nikolaus Adensamer.
Thank you very much, Mr. Chairman. I represent shareholder Václav Černý, and I've received one motion regarding item two of the agenda. The motion reads that payment of the dividend be postponed until the final conclusion of the following proceedings. The Chamber of the Economy and another body in the Czech Republic are engaged in litigation before the official court. A case for damages in the amount of more than CZK 15 billion with the Czech National Bank, a proceedings regarding the revocation of a judgment pronounced, and with the Austrian National Bank, a case concerning the revocation of a banking license from 2020.
The proposal is to suspend payment of the dividend until these cases have been resolved. I take it that Mr. Adensamer has not received any additional motions. I give the floor to Michael Knap.
Thank you, Mr. Chairman. I represent 450 shareholders holding 31,266,000 shares. 20 out of the 440 shareholders are private investors. All others are institutional investors. I've also received a motion on item two of the agenda from shareholder Radomír Jonák. 1,949 is the ballot card number. I read out the motion. Counter motion concerning agenda two. As shareholder of Erste Group Bank AG, I propose that the decision on payment of the dividend be postponed until the following proceedings are concluded. I can only read out the German sentences. A court of arbitration, Chamber of the Economy and Chamber of Agriculture, CZK 900, number 67717. Official court in Prague, CZK 115 billion, a case for damages.
The speaker is mentioning the numbers of the cases. Česká národní banka, Czech National Bank, introduction of proceedings regarding the revocation of a banking license. 2018. Austrian National Bank proceedings aimed at the revocation of a banking license. Case number. Proposal for a vote. I propose that a vote be taken on the counter-proposal, and I ask for transmission of a certified copy of the minutes of the AGM. Signature, Radomír Jonák. I've not received any other motions.
Thank you, Mr. Knap. I now hand over to Christoph Nauer.
I can confirm that I have received no motions for resolutions.
I now give the floor to Ewald Oberhammer.
Mr. Chairman, I too can confirm that I have received no motions.
Notary Brix will include the motions in the minutes. Here is the current attendance. According to the list of attendance drawn up pursuant to Section 117 of the Austrian Stock Corporation Act, 2,158 shareholders are represented by the four special proxies who are entitled to cast 303,474,151 votes. The general meeting, therefore, has the necessary quorum to take valid decisions on all agenda items. The list of attendance is transmitted electronically to the four special proxies. For data privacy reasons, the list of attendance will not be disclosed on the internet. We are going to start the general debate. That is, questions will be read out and answered.
I will read out the questions put by shareholders, and the members of the Supervisory Board will answer them. As soon as we've read out and answered almost all questions, we will tell you how long questions can still be handed in. I'm going to read out the questions, starting with questions by shareholder Staller or Staller Investments GmbH. I've been asked to read out the questions fully in my capacity as Chairman of the Supervisory Board. I will try and meet the shareholders' expectations. It will be a pleasure for the Chairman of the Supervisory Board to read out the surprisingly short comments by Staller Investments GmbH clearly and with a firm voice. Staller Investments GmbH, represented by its managing director, Rupert Heinrich Staller. The company is represented by special proxy, Michael Knap from IVA.
Ladies and gentlemen, in view of the fact that this is a virtual AGM, I will be very brief today in exercising my right to speak and put questions in accordance with the COVID-19 regulation. I will focus on a few aspects and questions only. I regret that we're not able to be present at the AGM, which is always characterized by productive and also amusing discussions with the bodies of Erste Group. I'm firmly convinced that I must not be remiss in thanking all employees of the bank for the enormous work they have done in 2019 and the efforts they will continue to make in the months to come. My cordial thanks are expressed to them. We, as shareholders, greatly appreciate their dedication and commitment to our Erste Group.
The dedication of the Management Board to the company is expressed not in the engine power of their service cars, but in their shareholdings. Evangelist Lucas knew that because he said in the Gospel, according to Lucas in chapter 12:34, "Where your treasure is, there will be your heart." Therefore, my first question: how many shares do the members of the Management Board hold? I want to know that individually as of the record date of today's AGM. An add-on question, would each member of the Management Board please explain why, since the official beginning of the pandemic on the 11th March, did not acquire a single share of Erste Group outside the blocking periods? It appears that Bernhard Spalt, Chairman of the Management Board, is aware of this embarrassing situation and acquired 5,000 shares at the beginning of November.
Ladies and gentlemen, today, for the first time, we have to deal with the report of the Supervisory Board on the remuneration policy. We have to take note of remuneration policy for the coming four years. For the first time, we can take a vote on the remuneration report, and we are explicitly informed about the remuneration of the members of the Management Board and the Supervisory Board. I, as a member of the Corporate Governance Task Force and the Austrian Financial Reporting and Auditing Committee, and its working group on remuneration, take a great interest in this topic. While the remuneration policy of the Supervisory Board is presented in concrete figures, the remuneration policy for the Management Board members of Erste Group Bank AG is nothing but hot air. A vote on such a trivial collection of commonplaces and truism is simply too much for me.
I will not be able to approve that. My question to Chairman Fritz Rödler, the total remuneration of Andreas Treichl of EUR 2.8 million, how many times is that the average salary of an employee of Erste Group in 2019? A question to the chairman, which multiple does the chairman regard as adequate in social and economic terms? A question four continues. Our management board members also hold various supervisory board functions or similar functions in Austrian and foreign companies and subsidiaries of Erste Group. Do our management board members receive separate remuneration for that, and to what extent? Can you give details on that? Why isn't there any indication thereof in the corporate governance report or in the remuneration policy to be voted on? Question to Ingo Bleier.
Which are the five biggest single risks in the corporate customer and commercial real estate segment defined by size of exposure and average interest rate? Of course, we don't want to hear customers' name because this is not a question of naming and shaming. Like many other banks, Erste Group finances certain real estate companies whose rental income is often far below the financial expense. Profits are made solely, and year after year, through the so-called revaluation of real estate. The monetary policy of the ECB makes such revaluation gains possible. One could also say it is making some rich. A question to Alexandra Habeler-Drabek. Do our risk models quantify such real estate companies and all changes of factors in case the ECB one day decided to make some poorer? A question to Fritz Rödler.
To what extent does the full Supervisory Board deal with the five biggest customers in the corporate customer commercial real estate segment and their risks? 2019 was a successful year, the last one of the first 200 years of the bank. It was a jubilee, which was celebrated. It was also the last year of Andreas Treichl, which was also celebrated. Some feel that the celebration was going a bit too far. It's high time to thank a member of our Supervisory Board, Wilhelm Rasinger. Over the past 15 years, he served on our Supervisory Board as a loyal and critical member. Thank you, Willy. Peter Bosek has served our company even longer, for almost 25 years. Peter, managers come and go. Usually, they come too early and they go too late. It's the opposite with you. You're going far too early.
None of your companions would have thought that you would just leave us, but that you would be going east is something none of the Supervisory Board members ever thought. One or the other of them may now regret that and regret other things, perhaps, as well. As shareholders, I have often criticized. I've also criticized you. Therefore, I wish you all the best for your new job as CEO of an exciting young bank in an exciting region of Europe. I wish you, from the bottom of my heart, every success. I hope you will be happy and also earn a bit of money. I would like to underline that no one deserves the degree of appreciation which you deserve, and I thank you for your virtual attention.
I, the chairman, hope that I have met Mr. Staller's expectations in terms of rhetoric, although I'm no match to him. We now move on to the round of questions. I have received questions from shareholder Knap. The questions were received in due time before the AGM, therefore, I can also answer the questions. Mr. Knap withdrew his first question, so I can move on to question two, Consolidated Governance Report. The question goes to the chairman of the Supervisory Board and the chairman of the Audit Committee. Following an international governance trend, more and more supervisory boards in Austria separate the positions of chairman of the Supervisory Board and chairman of the Audit Committee. RBI, for example, did so already, but not Erste Group Bank AG. Are you considering or discussing such a separation of position?
The answer is the following: At Erste Group Bank AG, the Chairman of the Supervisory Board and the Chairman of the Audit Committee is not always the same person. After the AGM 2016 up to the AGM 2019, Mr. Hohmann was Chairman of the Audit Committee, and I was Chairman of the Supervisory Board. The decision on the appointment of the Chair of the Supervisory Board and its committee is taken on the basis of the professional qualifications and the suitability of the candidates. Another question, when will this separation be affected at Erste Group Bank AG? I can answer the question as follows. After the elections to the Supervisory Board by the AGM, the Supervisory Board holds a constituent meeting to deal with the appointments to the committees and the assignment of functions.
When exactly there will again be different persons holding the chair of the Supervisory Board and the Audit Committee cannot be answered right now. Mr. Knap asks, if not, any arguments against that? The important thing is the professional suitability. There are no legal, regulatory, or other reasons or any concern of incompatibility that would make a separation of the two functions expeditious or required. As the regulator has perceived a potential incompatibility between the two chairs, I have been asked to hand over the chairmanship of the Audit Committee. Next question. The remuneration of Supervisory Board members not subject to income tax in Austria is subject to so-called withholding tax. Do the Supervisory Board members concerned receive their remuneration gross or net? Do the Supervisory Board members pay the withholding tax themselves so that they receive Supervisory Board remuneration reduced by the withholding tax?
The answer is yes. Next question by Mr. Knap. The shareholdings of Erste Group Bank shareholders is not disclosed in the annual report. Could you please close this gap in the future? A simple answer to that, when you look at the annual report notes, this is chapter 38 on pages 189 and 190, you will find the shareholdings of Supervisory Board and Management Board members. This is not part of the remuneration. Therefore, it doesn't need to be disclosed in the corporate governance report. Next question, on-site inspections by supervisory authorities. In the annual report on page nine, reference is made to on-site inspections in the report by the Supervisory Board. Which regulators performed on-site inspections? In which areas? What were the findings addressed by the regulatory authorities?
Which essential findings of the regulatory authorities had to be implemented or are being implemented, and which of our fields of activities are concerned? Answer is the following: As of the end of 2019, there were open findings from 12 on-site inspections. Most of these inspections were inspections by the European Central Bank and conducted by the Austrian national banks. Two non-relevant inspections concerned IT risks. They were not model relevant. The ECB and OeNB inspections concerned credit risk models. As of the end of 2019, there were 77 open findings. Another 63 findings came in later. Three of them are model relevant. One concerns IT security management. The final follow-up letter for the last mentioned inspection is not yet available. Most of the findings concern credit risk models, validation of models, data quality, documentation, methodology, and rating management.
As of the end of 2019, the findings were assigned to the following areas, 57 findings, credit risk models, now credit risk methods, six findings on group credit risk management and the credit risk portfolio. The other findings, a small number of them, were assigned to other areas. All findings were addressed on the basis of a risk mitigation plan and are being implemented. Many of the findings were closed in 2020, including findings from inspections performed in the previous year. The audit committee is following the implementation of the findings regularly and receives reports in the course of its meetings. The next question concerns the savings bank segment, the acquisition of Ohridska Banka in Skopje.
The question is, I take it, the rather cryptic indication in the report on page 32, booking of the negative goodwill for a new subsidiary of a savings bank, and on page 37, positive effects from the goodwill impairment concern participations, which in the notes are shown under scope of consolidation, annual report 126 and 127. What is this all about? Our 25% subsidiary, Steiermärkische Bank und Sparkassen from Société Générale, which wants to exit from the bank participation in SEE, acquired 56% of Ohridska Banka in North Macedonia. The participation was topped up to a higher percentage, and a passive difference was the result. It was really a lucky buy for us. The answers will be given by Mr. Spalt. The question are as follows. As of December 2019, who owned the outstanding 8.43% of Ohridska Banka? Next question, have we topped up further in the meantime?
Is a squeeze-out procedure in North Macedonia provided for by law, and will we make use of that? Has the extensive data analysis of Ohridska Banka been concluded in the meantime, and what are the results? Details on the market position of Ohridska Banka should also be indicated. Our public takeover bid, according to the Takeover Act, was addressed to all shareholders and wasn't limited to the participation of Société Générale. There was an agreement with Société Générale that it would accept our bid for its participations. Other shareholders also accepted our bid, which gave us a participation of 91.57%. This was not due to a subsequent top-up. The outstanding shares belong to the free float. We know them by name, and the next bigger package, 1.65%, belongs to one private individual. Answer two, small shareholders currently hold only 6.84%.
Steiermärkische Sparkasse in the second quarter of 2020 within the framework of a capital increase of Ohridska Banka contributed EUR 10 million, increasing the share to 93.16%. Answer three, none of the North Macedonian acts provides for a squeeze-out at a later point in time. This would only have been possible if we had received more than 95% in the takeover phase. Answer four, the data analysis will be concluded in November. According to IFRS, we have 12 months. First-time consolidation happened in November 2019. There will be no major changes according to colleagues from Styria. A slight adjustment of goodwill will have to be made, and possibly, intangible assets in the form of a customer base will have to be booked, but we don't need to disclose that yet. Answer five. Now, the essential figures I'm going to read out come from the group reporting package on 2019.
Ohridska Banka total assets end of 2019, EUR 686 million. Loans to customers, EUR 468 million. Customer deposits, EUR 522 million. Branches, 28. Market position, number four in terms of total assets. Sparkasse Bank Makedonija, an existing institution, total assets EUR 399 million. Loans to customers, EUR 262 million. Deposits from customers, EUR 258 million. Number of branches, 26. Market position, number seven in terms of total assets. If we were to consolidate that on a pro forma basis, market share in loans, 14.3% as of end of 2019. Market share in deposits, 10.7% end of 2019, and a combined market position in terms of total assets, number four. Thank you very much. Next question from Mr. Knap concerns Hungary. It's a question to Mr. Spalt. It refers to pages 50 and 51 in the annual report in 2019. Erste Bank Hungary took over the building society business of Aegon Bank Hungary.
57,000 contracts were thus acquired to Erste Bank Hungary, which increased our market share to 14%. How much did we pay for the building society portfolio of Aegon, and how was the fair value of that portfolio determined? Are any other transactions of that kind being envisaged to increase our market share in Hungary? Mr. Spalt?
Compensation consideration paid was 1.9 billion HUF, that is 5.2 million EUR. We acquired a deposit portfolio of the building society of Aegon. We didn't take over any other parts of the business. All building society contracts still benefit from government premiums, while for contracts concluded as of October 2018, no such premiums are granted. On the basis of regular contributions from old contracts, the volume of the portfolio will increase up to 2023, and then it will gradually mature.
The basis for the valuation is the yield from assets, mainly government bonds, in which the building societies invest. The calculation of the fair value is based on the discounting of net interest income from the investment in government bonds. At peak times, HUF 44 billion, EUR 120 million, over the remaining tenure of the deposit portfolio average yield 2.8% across selling potential of this customer base was not taken into account in the valuation. Answer three, Aegon was a great opportunity because we were able to acquire a portfolio in rundown mode at a very good price. We were able to win 50,000 new customers, and in a concentrated market like Hungary, we also benefit from an advertising effect. We are open to any acquisition that supports our core business and that is profitable beyond the capital costs, always on the prerequisite that this is being supported by the shareholders of Erste Bank Hungary, including Corvinus and EBRD.
The next question concerns Croatia, page 53. In Croatia, tourism, with a share of 20% in GDP, plays an important role. Our 69.3% subsidiary, Erste Bank Croatia, Rijeka, has concluded a contract with the EBRD on a new credit line of EUR 150 million for the financing of tourism in Croatia and Montenegro. Tourism is that economic sector which suffers most from the corona pandemic and will continue to suffer. The question is, how do you assess this tourism financing in Croatia and Montenegro after the experience of the summer of 2020? Has the full credit line been drawn, and how is the credit risk divided between EBRD and Erste Bank Croatia? Ms. Habeler.
Let me say that the summer 2020 in Croatia was better than originally expected, for the full year 2020, overnight stays declined by about 50% compared to 2019. There is a steep north-south gradient. Things are much better in the north. In Montenegro, logically speaking, the decline is even steeper, but our credit portfolio is only EUR 30 million in the hotel sector. The Croatian hotel portfolio is about EUR 500 million.
There is a private law moratorium for the tourism industry running until summer 2021, and we have offered this moratorium to our customers, and it was accepted by the majority of them. We've been happy to see that a major part of our customers benefiting from this moratorium are still paying interest. We are confident that in 2016-2018, a great deal was invested in tourism in Croatia. Hotels and tourist infrastructure are in very good condition. For 2021, we expect on account of the geographic location, Croatia is easy to reach by car. We expect that Croatia will benefit from a slowdown of the epidemic very quickly. As regards the EUR 100 million, the credit line currently has been drawn up to EUR 50 million, and various projects in Croatia were financed, none in Montenegro.
It's a pure refinancing line, so the risk is entirely with Erste Bank Croatia. Thank you.
Next question goes to Mr. Dörfler and concerns real estate as a finance investment. EUR 1.3 million we have residual book value. The question is, the geographical distribution, the asset classes, apartments, houses, hotels, the vacancy rates, and what about the rental losses? Thank you.
As to the geographical distribution, 80% go to Austria, about 7% to the Czech Republic, and the remaining part is distributed over other countries. About half of this, of the assets in apartments. Let me point out the non-profit housing construction, the remaining part goes to offices. The vacancy rates are quite low, there is no tangible impact on our assets through COVID-19. The rentals delays about EUR 2.1 million. However, this, of course, does not consider the impact of the second lockdown.
We go to the litigations, pages 274, 275, and the half year financial report, page 73. Update especially to the prospect liability claims, an update on Croatia. The basic decision of the Supreme Court, what about that? Also the foreign currency impact. What could be derived from this in the meantime? Mrs. Habeler-Drabek will answer this question.
The mentioned procedures and business years. Not much has happened in these litigations. All litigations are still at quarter of the first instance courts and agreement. We also made agreements, but there were hardly any court sittings. Of course, we have these bundled emissions. The expert opinion of the lawyers was presented. The expert summarizes as follows. No indications for an indebtedness of the issuer or the daughter can be read according to the equity capital law, and thus a future test of the realization is no longer necessary and therefore, can be stopped. The party discussions will only take place in the future. As to Croatia, the Supreme Court decided that for the conversion of the former Swiss franc loans, because of a legal measure in 2015, this relieved the situation, and the banks read this as follows, that the loan takers do not receive any further money. A lot was also changed into euro loans. There are a lot of claims still pending. A lot of these clauses were declared not appurtenant. I can't find this.
Thank you. The next question goes to Mr. Dörfler. The conditional dividend item two of the agenda, you propose a dividend of EUR 0.75 per share, payable on the 15th of February 2021, on condition that no legal obstacles will arise. The Raiffeisen Bank took a different course from Erste Bank. From whom is the question? It was pretty sure that this does not depend on a deadline. Things will take the usual course. What induced you to decide on the non-deadline? What happens if the deadline goes by without the payout will be made? Could there be a scrip dividend be issued, that is to say, additional shares? The shares to be issued could be taken from the stock of one's own shares. Has this alternative been discussed? What spoke for it and what spoke against it? I hope this is all answered or if it's not.
Thank you, Mr. Chairman, for this question. In the presentation, a lot of these items were addressed. Let me still mention the significance of the subject. It has always been the intention of the Erste Group Bank AG to pay a dividend. After intensive discussions and weighing all legal and regulatory conditions, especially considering the recommendation of the ECB, the management and the supervisory boards have taken the decision to propose this conditional dividend payout. This proposal gives the shareholder the security that if all conditions are met, the dividend will be paid out. We also have the option at the beginning of next year to have an extraordinary AGM if this is considered to be pertinent. We do not exclude this. Moreover, the regulation that was issued because of COVID-19 has not been prolonged yet.
The Erste Group Bank was, when the decision was taken, not convinced of this proposal to be able to carry out an AGM with all those present and not a virtual AGM in January or February. Second question, what happens if all these conditions take effect? If the conditions cannot be met, formally or materially, the entire assets will be carried forward to a new account. Independent of this, the Erste Group Bank AG can also call an extraordinary AGM and to make a new proposal for the appropriation of profits. This AGM also has a deadline with the declaration of the financial statement 2020. Question three. Scrip dividend was discussed in detail and was also legally tested. Scrip dividends are not explicitly mentioned in our Stock Corporation Act. There are no concrete legal framework conditions. There's a certain legal uncertainty contained, connected with this for the company and for the shareholder. What we can, of course, pay out a dividend in kind, but this is not a version that we considered.
Thank you. Next question refers to the remuneration policy. I will answer this. When working, did you have external support when working out the remuneration policy? How much did this cost and what were the external consultants? Yes, we had Professor Mittelbach-Hörmannseder. She supported us when drafting the principles for the remuneration of the members of the supervisory and the management boards in connection with Para 78a and 98a of the Stock Corporation Act. Mrs. Mittelbach-Hörmannseder is an assistant professor at the Vienna University of Economics and Business.
As to the contractual conditions, we cannot give you any information on this because we cannot. All I can say is that it doesn't amount to more than a two-digit number, what she received. This brings us to the end of the first round. Now we move on to the next questions. We have a number of questions on sustainability and environment. I have a number of questions by Mr. Baumüller, but his questions are being answered at the moment. He also wrote us a prologue, which I would like to read out, because the first questions put by other shareholders concerning sustainability come to bear here. Mr. Baumüller will have to wait a bit longer for the answer to his questions. Okay, his prologue.
My central concern, and I think this is also the central concern of many other shareholders, is the issue of sustainability and the contributions that companies can make here. The accountability they can provide in the form of non-financial reporting, and this is of special significance, especially in the EU, financial institutions are the focus of attention. The keyword here is sustainable finance. In other words, action plan for the financing of sustainable growth. Capital flows should promote sustainable economic activity and to steer these capital flows accordingly, that is the task of the financial sector.
This list of questions includes six questions. We'll come back to this in a minute. He goes on to say in the continuation, to the writing of this questionnaire, I had the opportunity to talk to representatives of the Erste Group, and many of my sometimes very technical issues could be clarified. In many respects, this gave me the impression of a high level of awareness of the relevant issues and of a commitment to addressing them appropriately. Not least on the part of the supervisory board, which by law is required by the special focus of the responsibilities in this regard. This and the obviously positive development of the non-financial reporting in the last few years has led to many of my usual questions omitted, and I would like to thank the company representatives very much for the openness they have shown. In comparison to a large part of the other companies in the ATX, it also seems to me that the handling of sustainability issues with the remuneration policy can be emphasized as well-founded in many points.
Admittedly, the financial sector in particular will remain at the center of a host of regulations by political actors in the coming years, and we can only wish all those involved in the sector every strength to continue to take appropriate account of this development and continue along the path that has been so positive so far. For your efforts in answering my following questions, I thank you very much, and I look forward to continuing our critical dialogue on sustainability. I wanted to read this out because subsequent questions by other shareholders touch upon this issue and focus on sustainability.
I'm now starting with a question that goes to Mr. Spalt. Karl Adrian His with the voting card 26. Our climate situation releases certain tilting points. For instance, the thawing of the thermo frost region. Per one degree centigrade, we receive a 2.5 meter increase in the sea level. 2.073 billion people would have a temperature of 29 degrees centigrade. Greenland and other Arctic ice sheets are melting. This all refers to meltings of this year, and I'm afraid of this development. This is why I'm asking my questions. They are the questions of an entire generation. We all have to live through this. In 2018, the International Energy Agency is responsible for the rapid decrease. What can we do to mitigate all this, Mr. Spalt?
Thank you, Mr. Chairman. The Erste Group follows this urgency to mitigate this urgency, and we will revise our ideas. Fossil fuels in the countries of Central Eastern Europe provide energy safety for all those concerned, and this is why we have to use the transition time and look exactly into this transition time as concerns the exit from coal-based electricity. I think it is very important. To make this transition as easy as possible, it's not what can we do and what can we not do. The question is to find a way towards a more sustainable and green Europe. Thank you.
Further questions by Mr. Heath. The Erste Group says it takes more than just offering sustainability funds to reduce this development. We are trying to realize the 1.5-degree climate target. We are fund managers and there have been others who made an investment in ESG. Over EUR 40 million were invested in these ESG funds. Green energy does not suffice. We have to change the consumer behavior according to the fifth report of the IPCC, Intergovernmental Panel on Climate Change. The biggest growth of emissions has to be mitigated. This is why we are working on assessing carbon emissions. We are actually in line with all the authorities having the same acts. We want to create more transparency in our action. Our footprint will be linked with our offer in order to achieve the climate neutrality by 2050. Next question goes to Mr. Bleier. Comes from Mr. Heath.
Failing.
Global consumption of coal will have to decline by 78% by 2030. The Secretary General of the United Nations says that we must not build any new coal-fired power plants. Erste Bank, however, does allow that and invests in coals. In 2022, a new coal-fired plant will be connected to the grid. By when can such investments be excluded?
Thank you, Mr. Chairman, ladies and gentlemen. Since I've been on the management board of Erste Group Bank AG, I don't remember financing a coal project or having approved that. As CEO Spalt said, we are continuously revising the policy. We've published our responsible financing policy. You may rest assured that our exposure to coal will go down. The Mělník project, which I think is the one you referred to, will not be realized.
Another question by Mr. Heath to Mr. Bleier. 41 out of 54 big European banks have better exclusion criteria than Erste Bank. 41 out of 54 European banks have better exclusion criteria for coal projects. Erste Group, Bank Austria, and other banks are not among those. When will you exclude coal projects or projects in which coal accounts for more than 20% of the power output? A list of all these companies can be found on the website coalexit.org, and the criteria apply as of the second week of November. Mr. Bleier.
Thank you very much. We are aware of the urgency within the framework of the 1.5 degree centigrade target of the Paris Agreement, and we are about to revise our policies. We have to take the interests of our stakeholders into account and make sure that this transition works well also for our customers. We are determined to support the economies in our core regions in the transition phase. We can see that governments in the core countries intend to work towards the 2030 targets. Otherwise, I refer to what Mr. Spalt already said.
Another question by Mr. Heath to Mr. Spalt. Does Erste Group recognize that electricity generation from natural gas is no alternative to coal electrification? It is just as bad for the environment.
We would like to quote the special IEA report of 2020 on innovation in the field of clean energy. The report says, in the value chain for low carbon electricity, several technologies have reached a high degree of maturity, while others still have a long way to go. The European Commission regards natural gas as a transition source of energy. It is clear that in the coming years, we find a balance between fast changes through innovation, the exit from the most harmful resources such as coal, and the guarantee of modularity of the load of the grid. We will therefore support the development of energy procurement in the region. We will follow it very carefully and support projects which diminish the dependence on coal, including through the use of hydrogen technology.
Next question from shareholder His to Mr. Bleier. When will Erste Group no longer originate loans, issue bonds, or issue shares if the companies concerned invest in oil and gas in the Arctic? Is that an exclusion criteria?
As we said already, Erste Group is highly sensitive to the problem of projects that are harmful for the environment. As far as I know, we are not involved in exploration projects in the Arctic. We would not finance projects there, so I can't tell you more about that.
Thank you. Next question from shareholder His to Mr. Spalt. Can we expect a publication of a 1.5 degree centigrade conforming carbon policy of Erste Group by the end of 2020?
Erste Group is working on a new coal policy with regard to the maximum climate increase limit of 1.5 degree centigrade. We want to consult relevant NGOs in the elaboration of the new policy to obtain an independent external perspective on the issue of climate protection and sustainability. If we want to get better, we have to cooperate with NGOs. Together, we have to learn what can be implemented meaningfully. We can confirm that any new financing transaction of coal-related assets or coal-dependent enterprises will be examined carefully.
Next question from shareholder Peter M ichl to Mr. Dörfler. It concerns the dividend. I expect that this bank, as others, will follow the recommendation not to pay out a dividend. We congratulate you to the excellent result, and we thank all those who have contributed to it.
Thank you very much. I think we've already outlined the steps we have taken. Next question, also from Mr. Peter M ichl, addressed to me. I don't understand that CEO Treichl is to get 31.11% of the Management Board remuneration. At the AGM 2011, he said he earns in a month as much as the federal president in a full year. Something must be left over from that amount, and a reduction of the Sorry, EUR 2.810 million for 2019 should be reconsidered. I suppose you have added all remuneration components, but I must ask for your indulgence. We cannot retroactively reduce Management Board remuneration, and we see no reason why we should do that. Next question to Mr. Spalt, again from shareholder Peter M ichl. What we read in the Annual Report with regard to Management Board remuneration, I don't like that. The share price took a very negative development this year.
Thank you. We always try to make the annual report as transparent as possible, but there are limits to what we can do. We will, of course, welcome your input and take your recommendations into account. As regards to the share price. Both the share price and the performance of our business were satisfactory until COVID-19 broke out. After that, however, all bank shares suffered greatly, and that is easy to understand. When an economy is hit hard by policy measures taken by the government, if there is a lockdown, that, of course, has implications for people's confidence in the performance of a bank.
When regulators restrict dividend distribution, this is something that is not good for the share price. We're not happy with the share price, but it's directly related to the COVID crisis. It's not related to our business model. As we saw yesterday, the share price reacted very positively when news came in about the possibility of a vaccine being available soon, and we're sure that our share price will recover.
Thank you. Another question from shareholder Peter M ichl, put to me. Will Mr. Treichl leave the payment scheme, and what else is contained in other remuneration of EUR 1,637,000? Mr. Treichl originally was appointed as CEO of Erste Group Bank AG until the 30th June 2020. He stepped down from the management board on the 31st December 2019, and his employment relationship ended, according to the contract, on the 30th June this year. Other remuneration also contained contributions to the employee fund and to the pension funds. Next question. Remunerations of the Supervisory Board increased by 28% from 2018- 2019. We don't get a dividend.
Why do only the chairman and the deputy chairman of the Supervisory Board get more and not the other members? I don't know which figures you are referring to, but Supervisory Board remuneration was not increased for 2018 and 2019. The Supervisory Board remuneration was last adjusted in the AGM for the business year 2017 and has remained the same since. Simple or ordinary Supervisory Board members get a fixed annual remuneration of EUR 60,000. The deputy of the chairman, EUR 150. The first deputy, EUR 90,000. Second deputy, EUR 80,000, and so on. Changes in the total only are due to the change in the number of Supervisory Board member and the total sum of allowances for meetings is not the same because the number of meetings is not always the same.
It must also be borne in mind that the annual report indicates the meeting allowance for the previous year but the Supervisory Board remuneration for the current year. Next question. Shareholder Peter M ichl addressed to me. How many hours per year do the Chairman and his deputy of the Supervisory Board work for Erste Bank? I'm afraid I can't indicate the exact number of hours. I don't keep a log on those. I did so when I was a certified public accountant, but I can tell you that the time spent is extremely high. I spend three to four days a week at Erste Campus, and it hasn't changed during Corona times, although I work more from home. Next question from shareholder Peter M ichl. He would like to see an explanation of the need for an additional auditor. Does that come from the FMA?
Is Erste Group Bank AG not satisfied with its audited works? Were the costs of the audit for 2018 and 2019? How much more will have to be paid once the additional auditor starts operating? Erste Group as an international group, in addition to its statutory auditor, Sparkassen Prüfungsverband, has always had on a voluntary basis an additional internationally operating auditor because Sparkassen Prüfungsverband can't audit abroad. A change of auditor occurred in 2017. It has nothing to do with our satisfaction with the auditor. It's required by law. The law requires a certain rotation. An EU directive says that auditors have to change at least every 10 years. Starting in 2017, PwC was recruited as an additional auditor. The costs of the auditor, the statutory and the voluntary auditor taken together amounted to EUR 13.2 million in 2019 and EUR 12.1 million in 2018.
In 2019, EUR 5.9 million, and in 2018, EUR 5.5 million accounted for by PwC. Sparkassen-Prüfungsverband 2019, EUR 7.3 million, 2018, EUR 6.6 million. Through the appointment of PwC as an additional auditor, audit costs have not increased over the years when Ernst & Young were the additional auditor. Of course, it always depends on the scope of the audit, but the costs are in accordance with market practice. Next question from shareholder Peter M ichl. Reduction in the number of supervisory board members is to be welcomed. What's the impact on remuneration? Could the supervisory board work with 10 members? Remuneration for an ordinary member, as I said, is EUR 60,000 per year, and supervisory board remuneration is reduced by this amount if there is one member less and no meeting allowances are incurred.
Second part of the question, I take it that you mean 10 capital representatives because we also have six employee representatives. The supervisory board of Erste Group has numerous tasks relating to financial and capital market issues. Moreover, the supervisory board has to meet the requirement of diversity in terms of various criteria, men, women, older people, younger people, different professional backgrounds. With the current number of 12 capital representatives, we can meet these requirements, and it justifies the number of 12. Fewer capital representatives on the supervisory board would not be appropriate. Another question from shareholder Peter M ichl. What I said earlier also concerns the remuneration of the management board and the supervisory board. Would a reduction have an impact on remuneration? Well, we will pass on this suggestion. Next question to Mr. Dörfler from shareholder Peter M ichl. Cost-income ratio in 2015 was 57%, 2019, 59%. What is the target for the cost-income ratio in 2020, 2021, and 2022?
Good indicators should be possible through the reduction in the number of branches by 5.3% and plus 2.5% customers. Between 2015 and 2019, the cost-income ratio was well above 60%. The medium to long-term target in terms of cost-income ratio is still 50%. According to our guidance at the Capital Markets Day, we indicated our target for 2024. COVID hasn't made it easier to reach this target, but it still remains in effect. For 2020 and 2021, we expect a negative impact on the operating results, although less so than in net profit, because net profit is burdened by risk costs. Our earnings are depressed by interest rate reduction and the volatility in the markets, which had an impact on the trading and fair value result. The high cost discipline is a matter the management board is focused on also in our subsidiaries, and we expect to generate a robust operating result also for the full year 2020.
Next question from shareholder Peter Michl to Mr. Bleier. Mr. Peter Michl says, "I'm a customer of Sparkasse Oberösterreich, and I was struck to notice that branches are only open from 9:00 A.M. to 3:00 P.M. Why do banks reduce their opening hours? Can we expect fees to be reduced accordingly?
Well, stepping in for Mr. Bosek, you will have to ask Sparkasse Oberösterreich. We at Erste Bank Oesterreich are open from 9:00 to 6:00 in the afternoon at the major locations, and longer times for advisory can even be agreed upon request. Opening hours have nothing to do or not much to do with our personnel policy. There are many other factors of influence.
The next question goes to Mr. Scheiber and focuses on the impact of the corona epidemics in 2020. What about short-term work schemes? Neither the Erste Group Bank AG nor their subsidiaries have used the short-term work scheme. The measures by the government to secure work is welcomed by us, of course, but we are of the opinion that these measures are aimed at companies that rely on state subsidies and state support, but we are not part of this, thank goodness.
Next question, Peter Michl, to Mr. Dörfler. Expectations for the result 2020.
As I've already said, the net result 2019 is about 68 to 80 basis points, and it will certainly be heavily burdened. As to concerning the operating results, this will go down slightly. Last week, we had the report for the first three quarters. In the third quarter, it developed rather favorably. Now, of course, we'll have to wait for the impact of the lockdown on the fourth quarter. We assume that it will be a slight turn down in 2020 as opposed to 2019. Thank you.
Next question to Mr. Spalt. Expectations as to the share price, the development of the share price is meant, I take it.
Thank you. I think I've already talked about this. The share price depends essentially on two factors. First, it's the assessment of the macroeconomic conditions in our region, and second, our ability and the willingness of the regulators to enable dividend payments. I think that the present lockdown, which is all across Europe, will be used also with us and our government to make the right preparation so that we actually can steer through the next phase, and that we also hope for a growth in the economy. Of course, we'll also be able to pay out dividends.
This takes me to the questions of Mr. Baumüller. The prologue I've already read out. Okay. Question number one, which turns to Mr. Spalt. Is addressed to Mr. Spalt. I would like to ask you to explain what sustainability means to Erste Group from a financial perspective derived from the roots of the group of companies in the savings bank idea. What is the difference here? What distinguishes the Erste Group at this point from all the other market players? How is this reflected in the day-to-day business? How is this reflected in the non-financial reporting presented? Thank you.
A very important question indeed. Since the foundation of the Erste Group about 200 years ago, responsibility towards society is an important part of our business activities. Those portions of the population who have no access to banks should be offered financial services. This was one of the main motives for setting up and founding our bank in 1819. As to this foundation idea, financial products and services should be provided to everyone in order to enhance prosperity has not changed. The social banking program, step by step of Erste Group, started in 2016, aims at including people with a low income.
Social banking was introduced in our local banks of Erste Group, and since its start, has supported 32,500 customers. Loans of EUR 230 million were granted, and educational programs were supported. With 15,000 customers, Zweite Sparkasse has supported about 19,000 people. The 224,000 new foundations were made. The BCR, the social finance, this was the good. bee credit before, offers microcredits for farmers and small entrepreneurs in Romania. In 2019, 1,294 loans were granted with a total volume of EUR 20.7 million. All loans taken together were EUR 23 million. For non-profit organization and social companies, the Erste Group offers operational credits, transition credits, and investment credits. Erste Financial Life Park, the largest financial educational institution in Europe. Since its opening in October 2016, about 47,000 visitors could be counted within more than 2,500 guided tours.
Next question goes to Ms. Habeler-Drabek. Again, from Mr. Baumüller: I would like to ask you to explain with which concrete effects the business partners of Erste Group will be confronted from next year onwards as a result of the new regulations according to question two. For instance, which additional obligations for borrowers to provide evidence will accompany the first-time application of the disclosure and Taxonomy Regulation? Which developments and changes in behavior on the part of the business partners should be induced by this? What roles do future sustainable finance models play? Finally, in supplement to this, to what extent is the Erste Group as a financial institution aware of the sustainability role for the idea of sustainable finance?
Well, I'm extremely happy that you have reacted so positively, where you also said that we are taking this quite seriously, the sustainability issue. The fact that ESG has changed from me to the CRO does not mean that I'm just as committed to this issue. Naturally, what we want to express is how high the value of this topic is. As to your concrete questions, there are two questions that I have to answer. I now relate to the concrete impact on our business partners. There is no doubt that this regulatory impact goes not only to us but also to our customers. It's our corporate customers to which this relates. These corporate customers, because of the Taxonomy Regulation, will have to improve their situation. Companies, as of the end of 2021, this is quite sure, must classify their activities, their income, and their investments.
They have to analyze whether the business activity meets the relevant criteria for environmental protection and whether other environmental goals are not impaired by this. This is a very major challenge for us, but also for investors and banks to be the right information source for climate and environmental risks of their credit portfolio. The Erste Group is fully aware of its obligations in connection with sustainable financing. Bernhard Spalt has already mentioned this, and this doesn't only go for the environment, but also for social goals. As has been said, let me mention again that in the past years, Erste Group has made a major contribution to equal chances and finance formation and financial inclusion of persons with very low income. We are supported by all important rating agencies in this and are also valued accordingly, as you can see on our website.
Next question by Mr. Baumüller, again, goes to me and to Bernhard Spalt, maybe. In my opinion, sustainability and sustainable management is first and foremost a governance issue that raises questions about the established role models. I would therefore ask you to use the individual qualification profiles of the members of the Board of Management and the Supervisory Board to show in which extent of sustainability-related expertise is available. This goes especially for the question whether the overall available competencies are suitable for sustainable corporate management according to the current understanding that is based on ecological and social success criteria. What are adequately the amount and control them in the course of the Supervisory Board activities? Well, I can answer this as follows. As you know, the Management Board is a collegiate group, which has to meet the required qualifications and criteria.
One of these criteria is experience in the field of sustainable management. When nominating members of the Management Board, the Nomination Committee looks exactly into the qualifications of the candidate, whether he contributes to all the qualifications of the Management Board. Sustainability is of special significance, and therefore it is with the CEO. Sustainability is, among others, a key performance indicator of the Group CEO, and that's one of the criteria according to which a potential bonus will be paid out. This underlines the significance of this subject for Erste Group. The significance of the subject is, of course, different from the individual sectors. This corporate sector is particularly affected, especially when it comes to responsible finance, but also in the risk sector. The members of the Management Board have a lot of experience in all these fields, and I think we are well equipped here. If Bernhard Spalt wants to supplement this.
Well, what comes to my mind in the context of ESG, environmental, social, and government, the has been a pioneer in the field of social banking. When I was CEO there, we extended social practice and concentrated on three fields to support nonprofit organizations, to support startup companies, to create sustainable jobs and also people who are in a financial strain to advise them and support them. This is one aspect of this ESG. The second aspect, I look back on many years of risk management activities. This implies that, of course, we have to fight money laundering. We have to regulate conflicts of interest and have very clean and clear government structures. The environmental issue has been newly positioned in our bank. This sector reports to me directly and also internally and externally We wrote out a number of applications, and there are highly qualified candidates for these jobs. We had over 150 applications within a very short period of time, and so we have stocked up the coworkers, and we know that this field is going to extend rather than shrink.
Thank you. Next question, again, by Mr. Baumüller. "I would like to ask the members of the Board of Management and the Supervisory Board for a brief personal statement on the importance of the issue of sustainability in general and in particular for the management and supervision of the company. In addition, which focal points in the personal sphere of activity are planned for the current term of office, and how to achieve greater transparency in terms of Erste Group sustainability performance vis-à-vis its stakeholders? Well, as to this question, I would like to refer to the questions that have already been answered by the individual members of the Management Board.
It's been quite clear that on the Supervisory Board and on the Management Board, we're taking this issue and this topic very seriously and try to do our best in this field. Next question. The non-financial statement was subject to a voluntary external audit by Deloitte. This question goes to Mr. Spalt. In accordance with Austrian practice, this was performed with limited audit assurance. The benchmark for the internal audit of non-financial reporting by the Supervisory Board is, however, a higher sufficient audit reliability.
For instance, see Schmidt Strenger in literature. In my opinion, this results in a reliability gap regarding which I ask for information as to what were the reasons for commissioning the external service provider? To what extent is the actual benefit derived from the audit ex-post evaluated? Please name the latter specifically. What concrete specific qualifications and reference does the two examination service providers, that is in the sense of individuals, who signed the submitted certificate have in terms of non-financial reporting?
That is, how does the statement below on page 85 of the annual report, according to which only selected standard GRI disclosures were reviewed, the Global Reporting Initiative were reviewed, fit in with the statement in the attestation according to which it is examined whether information required in sections 243B and 267A of the Austrian Commercial Code in connection with the Sustainability and Diversity Improvement Act, to what extent are they disclosed in the report? In other words, what systematic approach did the external audit service provider adopt in this respect? 302/4 GRI, 305, 406, 405 (1) . Which additional internal audit procedures were specifically set by the supervisory board to close the reliability gap mentioned above?
Thank you. Well, the mandate was newly pronounced in 2018 together with Deloitte was selected as auditors. Gerhard Marterbauer and Christian Wolf were in charge of the team. Both have long years of experience with Verbund, UNIQA, and Wienerberger. In Austria, this is common practice that the audit opinion of the auditor has a limited security, limited assurance, which means that in addition to the assessment, also the specifications of sections 243 and 276 of the Austrian Commercial Code are contained.
The limited security, of course, limited liability, is common practice here. It means that this complies with the legal requirements. The supervisory board will then evaluate with sufficient audit security. This wording actually complies with our mandate. We just want to have confirmed that the NFI report is in compliance with the legal requirements, and this is what we got. Of course, we will evaluate the whole matter.
Let me also tell you that the Austrian audit board has looked into our report and has found no objections as to the audit of the non-financial report follows all statutory regulations and the Austrian Commercial Code. This, of course, is all contained in the audit report as support by the own audit activity. The supervisory board does not control the work of the external auditor. Let me stress again that this is just a voluntary audit in order to get this limited assurance.
Next question comes from Mr. Hiss. It goes to Mr. Bleier. Austria has no longer any energy from coal.
This is [non-English content ]. As to the bank, we have an exposure of 0.2% of loan book as to the coal industry, direct and indirect exposure. In the asset management, we have no exposure at all. Thank you.
Thank you. We now move on to Mr. Staller's question. How many shares do the management board members hold as of today? In the annual report, in the notes in chapter 38 on pages 189 and 190, the shareholdings of the management board members are disclosed.
Any changes in the shareholdings can be a ccessed under the following link, www.erste.com/de/investoren/aktie/directorsdealings. The next question also comes from Mr. Staller, who asks each management board member to explain why, since the official beginning of the pandemic on the 11th of March, didn't buy a single Erste Group share outside the regulatory blocking periods. This statement is not quite correct. As was already said, Mr. Spalt acquired 5,000 shares in Q3. Moreover, the management board received its entire bonus for 2019 in phantom shares, and half the bonus is normally paid out as phantom shares. Which means that the bonuses strongly depend on share performance. Moreover, the main focus since the outbreak of the pandemic was on protecting customers and employees and implementing numerous government-decided support measures. The next question concerns the total remuneration for Andreas Treichl of EUR 2.8 million. How many times the average salary of an employee in 2019 is that?
Related to the average salary of an employee, the multiple is 31.94-fold. The amount you mentioned also includes contributions to the pension fund. Without contributions to the pension fund, the multiple is 24.8x . Next question by Mr. Staller to me. Which multiple does the supervisory board regard as adequate, socially and economically speaking? The total remuneration of Andreas Treichl was critically reviewed in recent years by the nomination committee, and we can confirm that we regard the remuneration as in accordance with prevailing market practices. Next question from Mr. Staller. Do our management board members receive separate remuneration for other supervisory board functions? Why don't we find any indication of that in the corporate governance report or in the remuneration policy to be decided upon today? Our management board members do not receive separate remuneration not published in the annual report.
I hope we understand your question correctly. You wanted to know if special remuneration is paid. We can confirm that all remuneration components are disclosed in the annual report, and the disclosure is made in accordance with the Austrian Corporate Governance Code. When management board members take on supervisory board functions in other companies, they do not receive separate remuneration. A question by Mr. Staller to Mr. Bleier. Which are the five biggest single risk in the corporate customers and commercial real estate segment, defined on the basis of size of exposure and average interest rate? No names are to be mentioned. Mr. Bleier,
I will try and answer your question as well as I can. I refer to the exposure that is loans drawn and loan commitments made undrawn so far. A big Austrian telecommunication group represented in Eastern Europe is one of the five big ones. A major automotive producer, a major metallurgical producer, both production sites in our core markets, and a big energy group. As regards real estate, there is only one among the top five, that is a non-profit residential developer. The top five account for 0.3% to 1.7% of our total portfolio. Sorry, that was the average interest rate, 0.3% to 1.7%. According to our rating, these customers all have an investment-grade rating.
Next question to Ms. Habeler-Drabek. A quantification of risk models for real estate companies and changes of factors in case the ECB were to decide one day to make certain investors a bit poorer.
Thank you, Mr. Chairman. A very important point. A cash flow view is an essential principle of our loan origination criteria. That also holds for real estate projects. The risk models for the financing on real estate projects are based on cash flow available for debt service. That is rental income minus costs, which are related to credit installments to be redeemed. The second component is loan-to-value. Basically, that is the market value of the properties to be financed. The rules are extremely strict and detailed, and each market value opinion is subjected to a plausibility check by our real estate appraisers. We don't see any risk in connection with ECB decisions.
Next question to Ms. Habeler from shareholder Alexander Kozlik. Will impairments on loans be expected for 2020? For 2020, we expect risk costs of between 65 and 80 basis points relative to customer loans.
As regards the current development of infection numbers and the impact to be expected on the macroeconomic environment, it is realistic to expect that we will end up at the upper range of this guidance.
Another question from shareholder Kozlik. Presence at Supervisory Board meetings 2019, and were Supervisory Board meetings in 2020 held as video conferences? I refer to page 93 of the annual report. Presence was extremely high at Supervisory Board and committee meetings since the outbreak of the pandemic. Supervisory Board meetings have also been held as video conferences. A few Supervisory Board members also participated physically in meetings at the Erste campus. Those were hybrid meetings, partly physical, partly virtual. Next question also from Mr. Kozlik, who asks about the costs of legal advice and auditing of the annual financial statements. The total amount was EUR 137 million for legal costs and consultancy costs.
The audit of the annual financial statements, consolidated and solo, accounted for EUR 13.2 million. Next question from shareholder Kozlik, addressed to Mr. Spalt. What was the impact of the Corona crisis in the individual countries?
International tourism was hit hardest, especially in Croatia, Austria, and to a certain extent in the Czech Republic, because there, tourism accounts for a high share of GDP. Airlines were also hit hard. Airlines and their subcontractors, as well as the automotive industry, because production was stopped during the first phase of the lockdown. The economic performance of the countries of the CEE region, including Austria, depends very much on the share in and access to the global value chain in Austria, Czech Republic, Slovakia, and Hungary. Temporarily, industrial production was slowed down, which led to a decline or a downturn for a period of six months before a slight recovery set in. The originally expected drop in GDP was not as significant as anticipated, and the rebound came faster than expected.
It is now 1:36 P.M., w e have already read out and answered numerous questions. We only have a few questions left, I therefore decide that last questions can be submitted until 2:00 P.M. sharp at the address mentioned earlier. After that appointed time, questions can no longer be accepted. The question received by 2:00 P.M. will, of course, be answered. Motions from shareholders or instructions from shareholders to the special proxies can also be sent in by email until 2:00 P.M. Instructions and motions received after that point in time will not be taken into consideration. I continue. Question by shareholder Kozlik, addressed to me. What were the total costs of the Supervisory Board in 2019, broken down by remuneration and travel costs and other costs?
Total costs for the Supervisory Board in 2019. Those are costs paid out in 2019 for 2018, amounted to EUR 1,271,244. Pure remuneration amounted to EUR 840,000. The rest was accounted for by meeting allowances. Additional costs for the Supervisory Board paid in 2019 amounted to EUR 178,135, of which EUR 105,572 were travel costs. Next question by Mr. Kozlik to Mr. Dörfler. What's the business plan for the coming three years?
Thank you. For the time being, we have no detailed financial outlook for the years 2021 to 2023. We said already that on account of the COVID pandemic, the environment is characterized by a high lack of visibility. Making forecasts is more difficult than ever. On the 26 February 2021, we will be giving a guidance to the capital market. That's the date of publication of the results for 2020. In the analyst call for the third quarter, we communicated our assessments that risk costs in 2021, on the basis of our best estimate, should be lower than the risk costs in 2020. As our business as a whole is concerned, we expect an economic recovery in 2021 and a return to a stable growth path. We will be seeing additional loan growth across our region, and as regards net fee and commission income, we hope to grow there as well. Overall, we do reckon with a rising operating income based, of course, on cost discipline. The medium-term target of achieving a double-digit return on tangible equity remains in place.
Next question from Mr. Kozlik to Mr. Spalt. Do you think that the impact of the Corona crisis will also be felt in coming years?
I'd like to come back to what I said earlier. Basically, the impact depends on how the health crisis can be mastered and to what extent the economies in our markets recover. We take it on the basis of economic forecasts that 2021 will be the first year in which slight growth will be possible, and that after that, we will return to a sound growth path.
Next question by Mr. Kozlik concerning D&O insurance. Who is the insurer, sum insured, premium, and persons covered? The insurer is AIG Europe S.A. with various reinsurers. Sum insured is EUR 200 million. In addition, for the Supervisory Board of the holding, the sum insured is EUR 50 million on top of that. Premium for 2020, EUR 2,382,165. That is the net premium plus insurance tax for the entire Erste Group, which is distributed among the subsidiaries of Erste Group annually on the basis of an agreed key or breakdown.
Persons covered, Management Board, Supervisory Board, and all executives. The insurance covers Erste Group Bank AG and all subsidiaries in which EGB directly or indirectly holds more than 50%. Next question, what kind of government assistance did Erste receive or will Erste receive? Mr. Bleier.
Mr. Kozlik. We did not get any help for ourselves. We did not claim any help for ourselves in the form of short-time work, but we did benefit from government guarantee programs. As of the end of September, we were at EUR 1.45 billion in COVID-guaranteed drawn loans. Guarantees were given by the Oesterreichische Kontrollbank and by COFAG.
Next question by shareholder Kozlik. It's addressed to the auditors, but I've received a response from the auditor. The question was, how did the auditor audit account balances? I think the background for the question is the Mattersburg case. I got feedback from Mr. Margetic and Miss Repmann. The auditors received sufficient proof of completeness and existence of all loans and advances to banks, as shown in the consolidated financial statements. For other balances, a confirmation was received in the form of counterparty confirmation and SWIFT confirmation. That is sufficient evidence to show that our loans exist. Next question to Ms. Habeler-Drabek. Is Erste Bank involved in major litigation? Which legal clauses had to be withdrawn from or amended in customer contracts?
Erste Group Bank and some of our subsidiaries have been sued in a number of cases, which are still pending cases initiated by consumer protection organizations. After thorough analysis, this has been reflected in the balance sheet. For litigation, in accordance with the rules of IAS 37, details are given in the notes under note 51, contingent liabilities and litigation. You will find there information on the validity of individual clauses, particularly clauses in the general terms and conditions. The litigation with the consumer protection organization is still pending. It's mainly about clauses concerning liabilities, termination rules, and safe boxes for savings books.
Next question to Mr. Spalt from Mr. Kozlik. Is administrative staff working in open plan offices or are they working from home?
Most of our employees who have a workplace at the campus or on Geiselberg are working from home. Of 4,500 employees, only 500 are physically present. In a normal year before Corona, one employee, depending on the size of the home base, had 12- 18 sqm Available. Since the return to the campus at the end of the lockdown, employees now have 24- 36 sqm of space available because we're working in two separate teams.
Next question, also to Mr. Spalt from Mr. Kozlik. Were there any Corona cases in Erste Bank, and which protective measures were taken?
In the first wave in the spring, we had hardly any cases, only in a few branches. The number went up in the second half of the year. During the past four months, we had 140 cases. We have a testing system which we organized ourselves, and a 24-hour hotline is available for our employees, and it works well. We also organize the contact tracing, and we are very proud that so far we have succeeded in avoiding contagion in our building, the campus. We do the testing very fast, and employees are sent home to work from home or to be in quarantine there immediately. This also holds for our branches. The health of our employees and our customers is an absolute priority. From the beginning of the pandemic, our employees have been supplied with face masks, disinfectants, and plexiglass shields. Since the end of the first shutdown, we've been working in two separate teams that alternate at weekly intervals. Meetings and business travel has been reduced to an absolute minimum, and training programs are provided online.
Next question to me. Mr. Kozlik wants to know how many service cars are available for the management board, costs per management board member, types of cars, average cost per kilometer. Are any chauffeurs working for Erste Bank? Each management board member has one service car. We have a pool of drivers, and a driver can be requested from that pool. These drivers, in 2020, were used mainly for the transport of Corona tests and not for the transport of management board members. On average, per management board members, the distance covered is 15,000 km.
The costs are approximately EUR 1/km . The cars are BMW 5 and Audi A6 models. A question from shareholder Berthold Berger. How many shareholders are logged in via the internet today, broken down by Austria and other countries? Logged in today at 12:00 P.M., in the A1 stream, 309 from Germany, 69 were in the German stream, 309 in the English stream, 69 were logged in. That is for the provider A1, 378 for the second stream, 116 for the German transmission, and 14 for the English transmission. The provider was B Video. That is 508 participants at 12:00 P.M. in this virtual AGM. Next question by Mr. Berger. What is the book value per share? Question to Mr. Dörfler.
Thank you, Mr. Chairman. The book value per share as of 31st December 2019 was EUR 32.9. As of the 30 June, the book value was EUR 33.2. End of September, EUR 33.6, that is an unaudited figure.
Next question by Berthold Berger. What did last year's AGM cost, how many people were present? What will the virtual AGM cost? What are the costs of the individual special proxies, what are the costs of overtime for the special proxies, how much do the two internet lines cost? Costs in 2019, EUR 426,753. Shareholders registered at the last AGM, 3,120 shareholders, represented by 645 natural persons. Special proxies for this AGM cost EUR 3,500, each depending on the duration of the AGM and the number of proxies. Overtime is paid on the basis of the usual hourly rates. Cost of internet lines, EUR 6,674. Next question by Berthold Berger. What's the circulation of the annual report in German and English? How much did it cost? Question to Mr. Spalt.
The German version, 2,700 copies. English version, 1,040 copies. Printing costs, EUR 33,627.80.
Next question to Mr. Dörfler from Mr. Kozlik. Was there a management letter from the auditor for 2019? Any findings, objections, suggestions for improvements? Have any of those already been implemented?
This question was also put by Mr. Rohr. It's an identical question, so I'd like to answer the two questions at the same time. Yes, the auditor did send a management letter to the Supervisory Board, which contains recommendations regarding existing processes and documentation methods in risk management, accounting, and IT, but there were no major findings. All recommendations are being worked on. Many have already been implemented. The Audit Committee regularly receives information on work on these findings.
Next question to our COO O'Mahony. How much do you spend on security software? How often have you been hacked?
Thank you, Mr. Chairman. We had arranged this in advance. If I can take the second part of the question first. We differentiate between phishing attacks on our clients and then attempted attacks on our systems and infrastructure here in the Erste Group. In terms of phishing attacks, there are constant support and update in terms of these attacks on our clients, and we believe that we have quite successfully supported the clients and managed to deal with these. In terms of the security of our infrastructure and our systems, this is constantly being invested in and updated to the most modern standards that we require and demand here in the Erste Group, and we believe that we have the most up-to-date security systems in place to support and protect the systems that we have. In terms of the spend overall here for the group, in terms of the infrastructure, in terms of the software, in terms of the personnel, and in terms of the training, it would be approximately 5% of the overall IT budget.
I have a question for Mr. Spalt from shareholder.
A question to Mr. Spalt from Mr. Berger. How much do you spend on online advertising and on social media?
Well, I hope you won't mind if I can't disclose the accurate figures, but online advertising, and this includes social media, is of course, going up, and that corresponds to changes in the usage of media by our customers. Currently, it's about 30%-35% of the total advertising budget.
Next question by Mr. Berger. How much do you spend on insurance in addition on D&O insurance, and who are the insurers? I think the question was already answered. Of course, we have D&O insurance, we have survivors insurance, we have invalidity insurance, and we pay contributions to pension funds, which go to VBV-Mitarbeitervorsorgekasse. The amounts are published in the corporate governance report. A question to Mrs. Habeler-Drabek. In fact, two questions from Mr. Berger. First, did you sell NPL loans? To whom and to what extent? Is that something you do to keep the NPL ratio low?
In 2019 and in 2020, there were no major sales of NPL portfolios. In 2019, we sold NPLs in the amount of EUR 235.8 million. As of today, in 2020, EUR 59 million. Essentially, those are regular sales of smaller portfolios in a non-collateralized consumer loan business. These NPL sales play a minor role in the current rundown of our NPL portfolios. As you have seen, despite the difficult environment, the NPL portfolio has been further reduced, but we don't want to make major sales of NPLs.
Thank you. It's going to be 2:00 P.M. In 10 seconds, and I may remind you that as of 2:00 P.M., we are not answering any more questions. We're not admitting any more questions. We have a question to Mr. Spalt from Mr. Berger. What do you spend on sports sponsoring, ice hockey and tennis? Mr. Berger, thanks for the sponsoring of tennis, and what do you intend to do about sports sponsoring in times of Corona? Thank you.
In 2019, Erste Group spent EUR 5 million on sports sponsoring. This included ice hockey, tennis, and running. The ice hockey commitment is expiring after 17 years. The contract with Erste Bank Open is continuing, we are also sponsoring the Erste Bank Marathon. To reach or access young target groups, we also sponsor esports. Due to Corona, numerous events had to be canceled. The Erste Bank Open took place under strict security and safety conditions. We hope that 2021 there will be more sports events. We are in continuous contact with all organizers, and of course, we depend on the framework conditions.
I have now a question from shareholder Staller to Ms. Habeler. Could you please explain the shareholder motions and the basis on which they have been submitted? Are we talking about the squeeze-out proceedings of Česká spořitelna in Prague? What's the status of the proceedings?
First of all, a general comment. The motions do sound rather warlike, and that may have been intended by those who introduced the motions, but I can reassure you, we're not confronted with any proceedings about the withdrawal of a license, neither in the Czech Republic nor in Austria. As regards the litigation mentioned, let me repeat what I said earlier. Erste Group and some of its subsidiaries in their respective jurisdictions have been sued in a number of cases.
In all these cases, the risks are being analyzed thoroughly and reflected in the balance sheet in according both accounting rules, and compliance with these rules is monitored by the auditors from time to time, and this cannot be prevented. Our subsidiaries are confronted with frivolous claims without any factual or legal foundation. In the interest of the bank concerned and in the interest of our shareholders, we defend ourselves, in most cases, successfully against such claims. We cannot prevent that representatives of complainants buy shares of Erste Group and then introduce motions as shareholders. This is not in the interest of our bank. We are aware of the arbitration proceedings against Česká. It was initiated by former corporate customers in connection with the customer's financing of Česká in the 1990s in the amount of EUR 34.50 + interest.
Česká says the claim is unfounded and nonexistent. 10 years ago, a decision was already taken in favor of Česká, there is no valid claim. The second proceedings mentioned did not involve Česká as a party as far as we know. The Prague court rejected the case because it was inconclusive. Česká was not invited to make a statement on that. Of course, in the interest of our bank and in the interest of our shareholders, we will keep defending ourselves against unfounded claims. As to your additional question, no, this is not about the squeeze-out procedure at Česká. Let me say something about that now. In 2019 and 2020, nothing new has occurred. There are proceedings of minority shareholders connected with it, against Česká. The Prague court decided that the AGM of 2018, which decided on the squeeze-out, was correct, but a decision is still outstanding. Thank you.
There is a question by Mr. Rohringer on the management data that has already been answered. Now we move on to Mr. Baumüller. Can it be that my question two got lost on the Disclosure Regulation and the taxonomy disclosure and project realization? Could you please explain to me again what your opinion on the regulatory measures is in the course of implementation and what further steps you will take in order to prepare and ensure the timely preparation?
That is capital adequacy, that is to say Chapter 449A of the CRR II, the Disclosure Regulation, and the Taxonomy Regulation. Please also explain the relevance on the different activities of the Erste Group. I would also like to tell me which environmental goals, according to Article 9 of the Taxonomy Regulation, were of special relevance. You have not overheard this, but we do apologize that this question somehow got lost. The regulations come into force at different points in time, some in 2021, as I said in answering another question of yours, or in 2022 or 2023.
We, as Erste Group, meet all our disclosure obligations, and we work in implementing all regulations that will come into force in the not-too-distant future. First is sustainability disclosure regulation, which will come into force in March 2021. We also work on other projects, and we will meet all our obligations for disclosure in due course. We also disclose our obligations in connection with the CRR II Pillar 3 disclosure obligations. Thank you.
Next question goes to Mr. Dörfler. It's actually a piece of advice. Don't use the cost-income ratio as a key indicator for the million costs and for million income. It's the same as EUR 5 million costs and EUR 1 billion. Nevertheless, the second case is much more important than the first one. Mr. Dörfler would like to mention this.
The comment is not wrong. The cost-income ratio is a recognized indicator that is used by capital market observers, but as an only indicator, it would not be enough. However, if you compare similar business models, the cost-income ratio is a very good parameter for establishing the efficiency of the operative result. I would also like to inform you that when you take an overall view of the profitability of a bank, not one single indicator will suffice. This is why the cost-income ratio is one important indicator, one of our goals, but certainly not the only one. I already pointed out that return on tangible equity, just to give you another example, is another important indicator. Thank you.
Thank you. Mr. Rohringer, the number of Supervisory Board members should be reduced. There is no more space for a representative of the minority shareholders like Dr. Rasinger. Why is Mr. Rasinger not replaced, for instance, by a lady? I would like to reconsider this decision. I don't know what you're aiming at. We want to reduce the number of Supervisory Board members to 12, and whether we also have a representative of the minority shareholders will remain to be seen. Next question by Mr. Rohringer. Usually, how long does one Supervisory Board meeting last? Much longer than the AGM, in any case. It also, of course, depends on the agenda, but a normal meeting lasts for about three to five hours. As I said, it depends on the agenda and on the topics discussed. Next question by Mr. Rohringer. Goes to Mrs. Habeler. This bank, that is the Slovenská sporiteľňa, data mining and data usage is mentioned as a central issue. Aren't there any problems with data protection there? Are external data sources used or data passed on selectively, Ms. Habeler?
I can assure you that data processing in all companies of Erste Group is particularly tested. All employees in all sectors are trained accordingly, and each company has a special data protection officer, which advises the individual sections and also checks that. The Erste Group and SLSP, of course, want to offer more and more support to everyone. Of course, the legal requirements are always met. Moreover, we also oblige ourselves to protect the customer data according to ethical aspects, and we use external data sources only if we are permitted to do so and if this can be transparently displayed to the customer. We do not transfer data unless our customer gives us his explicit consent.
Next question to Mr. Spalt from Mr. Berger. What do you have to pay for banking security?
Deposit insurance. Insurance. Probably insurance. We understand your question in such a way how high the financial burden of Erste Group is because of the individual deposit insurances. I would also like to mention that the Erste, together with the Sparkassen, has its own system and is not affected by the Commerzialbank insolvency.
Thank you. Again, from Mr. Rohringer to Mr. Dörfler. Loans to banks amounting to EUR 23 billion seem to be quite high. They rose by EUR 4.8 billion since 2015. Why? Especially, this has risen in Czechia, page 26 of the annual report. Do you offer such favorable conditions there?
Well, let me just mention this specifically. I'd also like to refer to the liquidity situation in the market because this is very important for the deposits. What we're trying to do is to use EUR liquidity as well as we can. During the epidemic, we had higher interest rates in Czechia because there was a higher liquidity there and repo business was used, transactions were used in order to make deposits with the Czech National Bank. This was a specific reference to the Czech situation, and the Česká spořitelna also has a lot of deposits, which takes me to my next remark, especially in a very difficult environment. The Erste Group has a lot of new deposits due to the fact that the confidence of our customers is quite high, so we have an above-average increase in deposits. Third remark. This refers to the overall environment of a promoted liquidity is particularly enhanced by the European Central Bank. In 2020, driven by the crisis situation, this ensures that the liquidity situation remains good in the Euro region and that the banks get a lot of new deposits. A major part of our liabilities is with the central bank.
Next question, Mr. Rohringer. What is the volume of Czech bonds held by the Erste Bank? I'll be very brief on this. In EUR, the level is EUR 9 billion at group level. EUR 8.5 billion are used by Česká and EUR 0.5 billion by the holding. Next question. In the sector group corporate center, report is made on the writes down of impairments with the Slovenská sporiteľňa of EUR 165 million.
Well, in the fourth quarter, the banking tax was increased. It was doubled, to be quite concrete, and was also extended for an indefinite period of time. That is to say, the impairment test of our bank has led to a depreciation of the goodwill of EUR 165 million, and this explains the depreciation. In the meantime, the banking tax was abolished mid-2020, and this, of course, shows that Česká spořitelna will fare better in the future, but it will not be revalued because this is not provided for by law.
Next question to Mr. Bleier. What is the credit volume extended in connection with the corona reasons? Which applications were denied and for what reason? Were the Basel III regulations an essential criterion, or was there not enough positive view of the future?
Well, we had. Moratoria. EUR 3 million for moratoria. As I've already mentioned, EUR 1.5 billion were extended by the end of this year, and you will find further details in the Q3 report on page 58. Refusal. All these denials, the credits were denied or loans were denied because the loan criteria were not met by the customers. As concerns Basel III i f we get the guarantees, we test, of course, all applications and then decide. We scrutinize all applications and then decide.
Thank you. Another question from Mr. Rohringer. In August and September 2020, real estate loans increased significantly. Do you know what the reasons are? Is there the risk of a bubble? Yes, we did grow in our real estate business, and the reasons are good ones. They don't deprive me of my sleep at night. On the one hand, there is strong demand for financing for housing, driven by the fact that in some of our countries, especially in the Czech Republic, interest rate for residential finance is lower than ever before. There are incentives provided also by the public sector for people to acquire residential real estate. Experience from the Corona crisis has also contributed to customers attributing more value to real estate.
They've been at home so much, how they live and where they live is more important to them. We do see healthy growth. Particularly non-profit residential developers are doing very well. No negative traces to be found of the crisis, the same goes for the logistics sector and for office real estate. In accordance with our loan policy, we finance Class A assets in prime locations. Next question by shareholder Rohringer, addressed to myself. The departure of Peter Bosek occurred on a very short-term basis. Are there any provisions in the contract regarding a termination? In addition to the bonus payments acquired already, will there be additional claims for payments? Why did the Supervisory Board agree to such a short-term termination? Termination clauses are contained in the Management Board contracts. You can read them up.
Mr. Bosek's contract was dissolved by mutual agreement as of the end of 2020. In addition to the bonus payments due, no severance pay will be made, Mr. Bosek allowed us to disclose this information as of today. As regards the competition clause, it relates to countries in which Erste Group is represented, which is not the case in any of the Baltic countries. Mr. Bosek will be moving to the Baltics, so the competition clause does not apply, and there were no objections to a speedy termination of the contract. Next question to myself from shareholder Peter Michl. It concerns the additional auditor. Well, if this is a requirement, no question about that, and if you have Deloitte as an auditor, a second auditor cannot harm. I remember the terrible Deloitte opinion on the squeeze out of Bank Austria in 2007.
We take it that you are referring to PwC as the additional auditor for the annual financial statements 2019 and 2020. We had a statutory auditor, Sparkassen-Prüfungsverband. Deloitte audits the non-financial report and neither the solo nor the consolidated financial statements of Erste Bank. Next question comes from Mr. Berger, and it's addressed to Mr. Bleier. As of which deposit amount does an Erste Bank customer pay negative interest?
Mr. Berger, the limit is at EUR 3 million. The exact threshold depends on the overall situation in terms of earnings with the customer. This is a question that only concerns the euro and not the other currencies.
Next question also from Mr. Berger. How much have you paid in terms of negative interest for money deposited with the ECB? The answer is rather sobering and links up to the question about negative interest put before. In fact, in 2020, we paid approximately EUR 25 million in negative interest on the ECB deposit facility. Thank you. Next question from Mr. Peter Michl to Mr. Rödler, and it concerns the supervisory board data from the annual reports 2018 and 2019. The remuneration indicated there has increased from EUR 840,000 to EUR 1,075,000. That is an increase by 28%. Could the supervisory board do with fewer members? How much do the chairman and deputy chairman earn per hour?
I think you're mixing up remuneration and meeting allowance. Of course, with the number of supervisory board members, remuneration also increased. As we said earlier, the chairman and the deputy chairman are not paid on an hourly basis, nor the management board members. The figure of EUR 1,075,000 you mentioned include meeting allowances. The EUR 840,000 do not include meeting allowances. In fact, the remuneration even declined from EUR 1,100,000 to EUR 1,075,000.
Next question from Mr. Staller, addressed to me. His question three referred to the average salary of an employee of Erste Group as a whole, not of the holding only. Mr. Staller asks for a clear and correct answer. Now, if we include all employees of Erste Group, Mr. Treichl's remuneration is 4x that of the salary of an average employee. Next question to Mr. Dörfler from Mr. Peter Michl. Most probably only half the dividend will be paid out, EUR 0.75 instead of EUR 1.5. Do we stand a chance of receiving the full dividend for financial year 2019?
Your assumption is correct. It will be EUR 0.75 per share.
Next question from Mr. Staller. A follow-up question to question number seven, which referred exclusively to the five biggest customers, the five biggest single risk in commercial real estate. The answer given was either based on a misunderstanding or an attempt to hide something. Could we have a clear and correct answer?
Mr. Staller, of course, we didn't want to hide anything. The results referred to corporate customers, including commercial real estate. Now, the answer exclusively about commercial real estate, if we look at the five biggest ones, the individual or the single exposures, a European commercial real estate group headquartered in Austria, the biggest real estate group focused on logistics, active primarily in the Czech Republic. That is a company that builds logistics real estate. Then a group of a regional real estate developer and investor operating all over Eastern Europe, a developer of retail real estate in Southeastern Europe, and a big shopping center in Austria.
Those are the five biggest commercial real estate financing transactions. They account for less than 1% together of the entire portfolio. They account for 4.5% of our real estate industry exposure. Generally speaking, as Ms. Habeler-Drabek said, we finance on a cash flow basis. We don't do group financing. You will find hardly any financing of holding companies, but focused on the projects because the risk ends at the curbstone.
Next question to Mr. Dörfler from shareholder Rohringer. How much negative interest was paid on deposits in 2019? Deposits with the ECB were reduced. What did you do with the money thus freed up?
In 2019, we paid negative interest in the amount of EUR 50 million. Earlier I mentioned EUR 25 million for 2020. You may wonder why this has gone down rather than up, although interest rates have not gone up. This has to be seen against the background of the fact that the ECB also took supportive measures for the banks. The costs for deposits or for certain portions of the deposits declined. EUR 50 million negative interest in 2019. EUR 25 million negative interest year to date in 2020. All liquidity, which we need not deposit with the ECB but can deposit with other central banks, are not exposed to negative interest.
A question from Mr. Berger to Mr. O'Mahony: How much do you spend on SAP software?
We have SAP solutions throughout the group. SAP HANA is mentioned here. This is new technology. We can provide details of supplier contracts. For SAP group solutions, software licenses, support for infrastructure and IT staff, around EUR 15 million was spent in 2019.
A follow-up question from Mr. Staller regarding his question nine, which apparently has not been answered yet. The question is: To what extent does the entire Supervisory Board deal with the five biggest customers in the corporate customers commercial real estate business and their risks? The question can be answered quite easily. The Risk Committee of the Supervisory Board discusses these cases extensively, and the Risk Committee reports to the full Supervisory Board on such cases regularly. Next question, also from Mr. Staller, a follow-up question to his question four. The question did not concern a certain Mr. Treichl, because that is a thing of the past, but rather about the ratio between the average salary of the group to the salary or the remuneration of the CEO, and which multiple do you consider appropriate. We use external market values as a basis for our decisions, and the question of the ratio you are mentioning is of secondary importance for us.
Our management board remuneration is compared with remuneration earned by our peers, and we're at the lower end of the range. It's not really informative and/or relevant to say anything about the average of the group as a whole. A question from Mr. Berger to Mr. Spalt: How many customers does internet banking George have in Austria and the Czech Republic? How many customers have you won? How many did you lose? Will George be rolled out to other countries, and how much is that going to cost?
George is online in the following countries: Austria, Czech Republic, Slovakia, Romania, and Croatia, where it was rolled out in 2020. In Hungary, George will go live next year. The costs per country cannot be generalized because the expense depends on country-specific factors. Currently, the group has 5.9 million George customers, Austria 1.2 million, Czech Republic 2.3 million, Slovakia 1.1 million, and Romania 1.2 million customers. In 2019, 274,000 active George customers were won across the group.
I have one last question from shareholder Peter Michl, addressed to Mr. Dörfler. Mr. Peter Michl says he's happy to hear that the operating result for 2020 will be only slightly below that of 2019. He would like to know if he can look forward to receiving a dividend for 2020.
Well, for 2020, we are planning to pay out a dividend or to propose a dividend. The final decision can only be taken on the basis of the year-end figures. Details will be disclosed on the occasion of the communication of the results for 2020 on the 26 February 2021. There is no more question coming up.
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Of course. This has led to the fact that not all was in line with the provisions. The shareholders could have made a much better contributions. Innovative technologies that were used now could also have been used at a much earlier date for better use. Now to Mr. Knap.
Thank you. I have not received any further motions, proposed resolutions.
Now, Mr. Nauer.
I confirm that no further proposed resolutions have been received.
Mr. Oberhammer.
Thank you. One motion by Mr. Rohringer, card 834 on item 3 was made. The resolution on granting discharge of the members of the management board should be carried out as individual votes, especially with Mr. Bosek.
I've given the floor to all the proxy holders. Mr. Brix will take all this down and certify it. It is now 2:41 P.M. Our meeting has lasted for quite some time. I think those who have followed us via the live stream, but also those present here, will agree to a 15-minute break now and will start again at 2:55 P.M. or 3:00 P.M. Our AGM is interrupted hereby. Well, thank you for this short break. I'm taking up the AGM again. Here comes the current attendance of the participants. 2,161 shareholders are represented by the proxy holders who are authorized for 303,481,985 votes, and thus the AGM is quorate. The list of attendees is, of course, electronically sent to the four proxy holders. This takes us to the votes on items two to eight on the agenda. We're following the subtraction procedure. The no votes and the abstentions are counted and then deducted from the overall number of votes, which results in the yes votes.
For the voting procedure, the four instructional proxy card holders use the cards that they have received before the AGM. Entering the instructional proxy cards into the IT system results in the number of shares. With yes votes, the proxy cards do not have to be kept up because the yes votes can be determined according to the subtraction procedure. The proxy cards are going to be read aloud by our notary, Mr. Brix. The procedure is supervised by Mr. Brix and then calculated by Daniel Bauer. Furthermore, voting bans automatically recorded and considered in the results. That takes us to the vote on item two on the agenda. Resolution on the appropriation of the 2019 profits. I state that three vote proposals are presented, this implies that different payout days were presented for the payout day.
I read out the proposed resolution of the supervisory and management board of the Erste Group Bank AG and take this to the vote. Should this proposed resolution be adopted, then we do not have to vote on the other proposed resolutions by voter against Mr. Radner, because there can only be one single payout day. It's clear that for a deviating payout day, there will be no majority if this is accepted as it stands. The following resolutions should be taken.
For each share entitled to a dividend, a dividend of EUR 0.75 will be dispersed on the dividend payment day, adding up to a total of no more than EUR 322,350,000, provided that on February 8, 2021, First, no mandatory legal ban on dividends is in effect, and two, in the company's own reckoning, no recommendation of the European Central Bank applicable to the company opposes the payment of a dividend. To the extent that the profit available for distribution is not to be dispersed on the dividend payment day in accordance with above calculation, it shall be carried forward to new account. The company is not entitled to any dividend payments from own shares. Who is against this resolution? I read out the votes against Adensamer, Nauer, Oberhammer, and Knap. Are there any abstentions? Carl Nauer, Oberhammer, and Knap. Okay. Here we go. Let me read out the result.
For votes, 303,019,734. That is the no votes, 354,491. Number of shares. Valid votes were given for respective the valid votes, 303,374,225. Percentage of the total share capital is 70.59%. Abstentions, 107,760. I herewith announce the result. This motion was adopted with the necessary required majority, and thus the appropriation of the profit has been decided. Radomír Jonák and Václav Černý motions are thus not required anymore. Now we go to item three on the agenda. Resolution on granting discharge to the members of the Management Board with regard to the financial year 2019. I refer to Section 125 of the Stock Corporation Act. When voting on the discharge of the Management Board, the members of the Management Board belonging to the Management Board in 2019 cannot exercise their voting rights. I'm now taking the read-out proposed resolution to the vote.
We also have a proposed resolution for an individual vote on Dr. Peter Bosek. I'm asking you first to vote on the discharge of Mr. Peter Bosek. Who is against this proposal? Adensamer is a counter vote. Nauer, Oberhammer. These were the votes against. Are there any abstentions? Adensamer, Oberhammer, and Knap. Thank you. Here comes the result. For votes, 302,096,665. No votes, 1,080,234. Number of shares valid votes were given for respectively valid votes, 303,176,899. Percentage of the total share capital, 70.54%. Abstentions, 304,074. I herewith state that this resolution has been carried with a required majority and the AGM has decided on the discharge of Peter Bosek. This takes us to the discharge of the other management board members. I read out the proposed resolution. Again, Adensamer, Nauer, and Oberhammer are against. Abstentions, Adensamer, Oberhammer, and Knap. Here the result is four votes, 302,096,812.
Against, 1,080,087. Number of shares valid votes were given for respective valid votes, 303,176,899. Percentage of the total share capital, 70.54%. Abstentions, 304,074. This motion has been carried with the required majority. All other members of the Management Board for the financial year 2019 has been decided. Item four on the agenda, resolution on granting discharge to the members of the Supervisory Board with regard to the financial year 2019. I refer to Section 125 of the Stock Corporation Act. All those shareholders that were members of the Supervisory Board in 2019 cannot exercise their voting right here. I am now taking this proposed resolution to the vote. The AGM may discharge the members of the Supervisory Board who were active in 2019. Who is against this? Instruction cards Adensamer, Nauer, Oberhammer, Knap. Abstentions. Proxy cards Adensamer, Nauer, Oberhammer, and Knap. Results. For votes, 300,955,996. Against votes, 1,893,817.
Number of shares valid votes were given for respectively valid votes, 302,849,813. Percentage of the total share capital, 70.46%. Abstention, 606,918. I herewith state that the motion has been carried with the required majority, and the AGM has thus discharged the members of the Supervisory Board with regard to the financial year 2019. Thank you for your confidence. We move on to item five, appointment of an additional auditor to audit the annual financial statements and the management report, as well as the consolidated financial statements and the group management report for the financial year 2021. I'm taking this proposed resolution to the vote. The AGM shall, in addition to the Sparkassen-Prüfungsverband as a statutory auditor, PwC Wirtschaftsprüfung GmbH elect as auditor for the annual financial statements, the management report, the consolidated financial statement, and the group management report. Who is against this proposal?
Proxy cards Nikolaus Adensamer, Christoph Nauer, Ewald Oberhammer, and Michael Knap. Abstentions? Nikolaus Adensamer, Christoph Nauer, Ewald Oberhammer, and Michael Knap. This proposed resolution has received the required majority. The AGM has elected an additional auditor for the annual financial statement, the management report, the consolidated financial statement, and the group management report. Now item six on the agenda, Supervisory Board election. I first take the proposed resolution to the vote to reduce the number of Supervisory Board members from 13 to 12. Who is against this? Again, proxy cards Nikolaus Adensamer, Ewald Oberhammer, Michael Knap, and Christoph Nauer. Abstentions? Nikolaus Adensamer, Ewald Oberhammer, and Michael Knap. Here comes the result on item 6A. Reduction of the members of the Supervisory Board. For votes, 298,985,170. Against votes, 308,615. Number of shares valid votes were given for respective valid votes, 299,266,785. Percentage of the total share capital, 70.58%. There were 4,215,200 abstentions.
This motion was carried with the required majority, the AGM has reduced the number of supervisory board members from 13 to 12. Now, adoption of the original proposed resolution. Maximilian Hardegg should be elected to the supervisory board, ending with this AGM until the end of the fiscal year 2024. Who's against this proposal? Adensamer, Nauer, Oberhammer, and Knap with their proxy cards. Abstentions? Adensamer, Nauer, Oberhammer, Knap. Result: for votes, EUR 187,780,078. Against votes, EUR 115,000,074,260. Number of shares valid votes were given for respectively valid votes, EUR 302,854,338. Percentage of the total share capital amounts to 70.46%. Abstentions, EUR 627,647. This motion has been carried with the required majority. Maximilian Hardegg is now elected to the supervisory board. Now, the proposed resolution on Friedrich Santner should be elected with the effect of the end of this AGM until the end of the AGM for the fiscal year 2022.
Who's against this proposed resolution? Adensamer, Nauer, Oberhammer, and Knap. Abstentions. Are there any abstentions? Adensamer, Oberhammer, Knap and Nauer. The result: For votes, 302,030,147. Against votes, 1,327,025. Number of shares valid votes were given for, respectively, valid votes, 303,355,172. Percentage of the total share capital, 70.85%. Abstentions, 124,813. This motion has been carried with the required majority, and Friedrich Santner has been elected to the Supervisory Board by the AGM. I now move on to the proposed resolution pertaining to András Simor to be elected to the Supervisory Board as of the end of this AGM until the end of the AGM for the business year 2022. Who's against this? Adensamer, Nauer, and Knap. Any abstentions? Adensamer, Nauer, Oberhammer, and Knap. The result: For votes, 302,764,367. Against votes, 591,674. Number of shares valid votes were given for, respectively, valid votes, 303,356,041. Percentage of the total share capital, 70.58%.
Abstentions, 125,944. I herewith state that this motion has been carried with the required majority, and the AGM elected András Simor to the Supervisory Board. Let me also state that Maximilian Hardegg, Friedrich Santner, and András Simor declared before the election that they would accept their positions. My congratulations to the Supervisory Board. To become a member of the Supervisory Board. Item 7, resolution on the remuneration policy setting out the principles for emoluments payable to Management Board members and Supervisory Board members. I'm now taking this proposed resolution to the vote. As published on our website, the AGM may decide and on this motion. Who's against it? Adensamer, Nauer, Oberhammer, Knap. Abstentions? Adensamer, Nauer, Oberhammer, and Knap. The result on item 7: for votes, 170,000,031,003. Against votes, 132,908,595. Valid votes given, 302,939,598. Percentage of the total share capital, 70.48%. Abstentions, 542,387.
I herewith state that this motion was carried with the required majority, and the AGM has adopted the remuneration policy. A contradiction to the protocol. Staller card 29/4. Staller Investments GmbH voting card 2094. Now we resolve on item eight of the agenda. Resolution on the amendment of Section 19 of the Articles of Association. I'm taking the resolution read out by me to the vote. The AGM may decide on the amendments of the Articles of Association item 19. Who's against it? Adensamer, Nauer, Oberhammer, and Knap. Abstentions? Adensamer, Nauer, Oberhammer, and Knap. Result on item eight on the agenda: for votes, 200,216,057. Against votes, 103,142,676. Number of valid votes cast, 303,358,733. Percentage of the total share capital, 70.58%. Abstentions, 123,252. I herewith state that this motion was carried with the required majority, and the AGM has agreed to the amendments to the AGM in item 19.
I was made aware that the justification of Mr. Staller was not read out. Okay, I'll do this herewith. Contradiction on item seven. When I emailed my questions on 13:53 hours, a comment was ignored, and thus my proxy holder has to mention this and should be added to the protocol. The low shareholdings of the management board members are a shame, and the indication of the fact that the supervisory board chairman bought 5,000 shares doesn't make it any better. We take note of that, and this concludes today's AGM. We have exhausted our agenda. The results of the votes will be published on the website of Erste Group Bank AG. I thank the shareholders for having followed the AGM on the internet, and I herewith close the 27th annual general meeting. Keep healthy and remain loyal.