Despliegue de la función de la calidad (QFD)

In 2013, there was no big change in the CEE ranking. The Top 5 banks account for roughly one third of the total market share. 52% of total CEE assets are held by the Top 15 banks, a slight increase compared to 2012. In EUR-terms, aggre- gated banking assets grew by 2.3% yoy due to the performance of the Russian banking sector. The strongest increase in CEE market share was achieved by Sberbank, the largest player in the region. The bank reached a 14.8% market share in 2013 (up 170bp yoy), mainly due to strong loan book growth. In a yoy perspective, only Russian banks managed to increase their relative market shares in CEE (VTB up 20bp, Gazprombank up 20bp, RusAgro up 10bp). As a consequence, the market shares of foreign banks in CEE deteriorated in the range of 0.1-0.3%, also because of the lack of M&A activity over the last 12 months. Similar to prior years, Russian banks strengthened their presence at the expense of Western European players. The largest Western European bank in CEE remains UniCredit with a market share of 4.7%, followed by RBI and Erste with 3.2% and 3.1% respectively. KBC ranks behind with 2.1%. For the second consecutive year, UniCredit, RBI, Erste and SocGen lost market share, altogether some 80bp yoy.

Sberbank strengthens top position in CEE

Total assets in CE remain stable

Sberbank, 14.8% VTB, 7.6% UniCredit, 4.7% RBI, 3.2% Erste, 3.1% Gazprombank, 3.0% SocGen, 3.0% PKO BP, 2.2% KBC*, 2.1% ING**, 1.5% Intesa, 1.5% OTP, 1.5% RusAgro Bank***, 1.5% Alfa Bank, 1.4% Citibank****, 1.2% Commerzbank*****, 1.1% Santander, 1.0% Other, 45.7%

Market shares in CEE (in % of total assets, 2013)

CEE: PL, CZ, SK, HU, SL, LT, LV, EE, RO, BG, HR, RS, MD, BH, AL, KO, MK, RU, UA, BY, KZ * BG as of 31 December 2012

** CZ, SK, BG, HU, RO, RU, UA as of 31 December 2012 *** as of 30 June 2013

**** CZ, SK, HU, RO, BG, RU, UA as of 31 December 2012 ***** CZ, SK, HU, RU as of 31 December 2012

Source: company data, local central banks, Raiffeisen RESEARCH

From a sector point of view, aggregated banking assets in the CE region re- mained broadly at the same level. Concentration on this sub-market is relatively high, with the Top 10 players accounting for a combined market share of nearly 50% in the region. UniCredit is still the market leader in CE with 8% market share, followed by PKO BP (6.9%) and Erste (6.8%). While UniCredit and KBC could slightly expand their market shares, PKO BP has benefitted from a local takeover of Polish Nordea Bank assets (the deal has been announced but is not yet fully finalized, up 20bp market share). On the other hand, Erste (down 40bp) and RBI (down 30bp) fell somewhat behind due to Erste´s loan volume decrease, while especially RBI saw asset volumes decline in the Czech Republic and in Hungary. SocGen remained stable at 4.6%.

With UniCredit, RBI and PKO BP three of the Top 5 banks are present in Poland, which for all of them is a crucial part of their CE market. In 2013, ING and Com- merzbank saw a decrease in market share as well, standing at 3.5% and 3.3% respectively. On average, the largest contribution to the CE market share stems from Poland and the Czech Republic.

UniCredit, 13.1% Erste, 10.1% RBI, 8.7% SocGen, 7.9% Intesa, 6.5% OTP, 3.6% EFG Eurobank, 3.5% NBG, 3.5%

Hypo Alpe Adria*, 3.0% Alpha Bank, 2.4% ING**, 1.5% Volksbank, 1.3% Sberbank, 1.1% Citibank***, 0.6% KBC****, 0.4% Other, 32.9%

Market shares in SEE (in % of total assets, 2013)

SEE: RO, BG, HR, RS, MD, BH, AL, KO, MK * as of June 2013

** BG, RO as of 31 December 2012 *** BG, RO as of 31 December 2012 **** BG as of 31 December 2012

Source: company data, local central banks, Raiffeisen RESEARCH

The SEE market is characterized by a relatively low concentration. The Top 6 banks by assets account for half of the market. In 2013, market leader UniCredit saw a decline in its market share to 13.1% (down 30bp) due to a decrease in assets. Erste´s loan book in Romania shrank, with the country representing more than half of Erste’s SEE exposure. Therefore the bank lost 60bp yoy to stand at a 10.1% market share in 2013. Following a slight decrease, RBI comes in third in the asset ranking with a market share of 8.7%. Like RBI, SocGen and Intesa lost a moderate 10bp yoy, though they managed to clearly defend their positions in the size ranking. SocGen and Intesa both reduced their exposures in Russia. Interestingly, not a single one of the Top 15 foreign players in the region man- aged to increase its market share in 2013. With a decline of 120bp Austrian Hypo Alpe Adria saw the strongest market share fall, now ranking in ninth place, presumably due to its limited operational activity during the ongoing political solution-finding process for its NPL portfolio. It is worth mentioning that Volksbank Romania also suffered from a relatively strong decline in market share (down 50bp yoy). The Greek NBG as well as Sberbank were both able to keep their market shares stable at 3.5% and 1.1% respectively.

Small players on the upside in SEE

UniCredit, 8.0% PKO BP, 6.9% Erste, 6.8% KBC, 6.5% RBI, 4.8% SocGen, 4.6% ING*, 3.5% Commerzbank**, 3.3% Santander, 3.1% OTP, 2.9% Intesa, 2.5% Swedbank, 2.4% Citibank***, 2.4% BCP, 1.8% Sberbank, 0.9% BLB, 0.8% Other, 38.7%

Market shares in CE (in % of total assets, 2013)

CE: PL, CZ, SK, HU, SI, LT, LV, EE * CZ, SK, HU as of 31 December 2012 ** CZ, SK, HU as of 31 December 2012 *** CZ, SK, HU as of 31 December 2012

Sberbank, 24.5% VTB, 13.0% Gazprombank, 5.2% RusAgro Bank*, 2.5% Alfa Bank, 1.6% Nomos Bank, 2.4% UniCredit, 1.4% RBI, 1.3% SocGen, 1.1% PrivatBank, 1.1% Promsvyazbank, 0.8% Kazkommertsbank, 0.7% Halyk Bank, 0.8% Belarusbank, 2.0% Citibank, 0.6% Uralsib Bank, 0.5% BTA**, 0.6% OTP, 0.4% Other, 39.5%

Market shares in CIS (in % of total assets, 2013)

CIS: RU, UA, BY, KZ * as of 30 June 2013 ** as of 30 June 2013

Source: company data, local central banks, Raiffeisen RESEARCH

Traditionally strong Russian banks further strengthened their market presence, with Sberbank leading the way (up 270bp yoy), followed by VTB (13.0% market share) and Gazprombank (5.2% market share). Apart from the Top 3 banks, the CIS region is characterized by high concentration. RusAgro Bank ranked fourth in 2013, with a market share of only 2.5%. The biggest Western European player is UniCredit with a market share of 1.6% (down 20bp due to decreasing assets in Russia and Ukraine), followed by RBI (down 10bp) and SocGen (down 20bp). For these Western European players, the Russian market accounts on average for approximately 80% of their total assets in the CIS region. Analogous to the SEE market no foreign bank from Western Europe managed to improve its market share in the CIS region (overall, as well as country level).

Market share of Russian banks further increasing