Erste Group Bank AG: Report of the management board of the intended use of own shares

Vienna (pta046/12.05.2023/18:45 UTC+2)

REPORT

of the management board of Erste Group Bank AG

with its registered office in Vienna (FN 33209 m)

of the intended use of own shares

on 12 May 2023

The Management Board of Erste Group Bank AG, having its registered office in Vienna and its business address at Am Belvedere 1, 1100 Vienna, registered with the Commercial Register of the Commercial Court of Vienna under FN 33209 m (the "EGB" or "Company") submits the following report to the shareholders of the Company on the intended use of own shares of the Company and its affiliated companies within the meaning of Section 189a no. 8 of the Austrian Commercial Code (UGB) in the form of a transfer (i) to entitled members of the management bodies of the Company and to employees of the Company and affiliated companies of the Company (the "Participating Companies") as well as (ii) to the asset-managing Sparkassen Beteiligungs GmbH und Co KG, to savings banks foundations as well as to Anteilsverwaltungssparkassen in the context of share transactions of savings banks in the Haftungsverbund.

1. The share offer

The Company intends to deliver shares of the Company (relating to the ESP, the "ESP Shares") to eligible employees and selected members of the management bodies of the Company and the Participating Companies (the "Eligible Persons") under the current Long Term Incentive ("LTI") programme and the employee share ownership programme "WeShare by Erste Group" 2023 ("ESP").

The ESP is divided into two components, based on which ESP Shares can be allocated to the Eligible Persons:

• The Participation Component, on the basis of which each Eligible Person will receive ESP Shares in the net amount of at least EUR 350 or an equivalent amount in the local currency (the "Participation Component") on the basis of a reference price per ESP Share equal to the closing price of the Erste Group Bank AG share (ISIN AT000652011) on the Vienna Stock Exchange (www.wienerboerse.at) on 26 June 2023.
  
  The number of shares resulting from the mathematical calculation is rounded up to the nearest whole number and this resulting number represents ESP Shares under the Participation Component.
• The Investmentplus Component, which is at the discretion of the Eligible Persons and on the basis of which each Eligible Person, who undertakes to invest in shares of the Company up to a certain amount (the "Own Personal Investment"), shall be allocated an additional number of ESP Shares of the Employer in accordance with the Conditions of Participation without consideration (the "Benefit Investment"); the relationship between the Benefit Investment and the Own Personal Investment shall be set forth in the Participation Conditions to the ESP (the "Participation Conditions") (Own Personal Investment and Benefit Investment together the "Investmentplus Component", the Investmentplus Component and the Participation Component together the "Share Offer").
  
  The Own Personal Investment amount per Eligible Person will be used to determine the number of ESP Shares, based on the Benefit Investment, to be allotted to an Eligible Person under the Investmentplus Component (unless otherwise provided in the terms and conditions for certain Participating Companies). The determination shall be made on the basis of a reference price per ESP Share in the amount of the closing price of the Erste Group Bank AG share (ISIN AT000652011) on the Vienna Stock Exchange (www.wienerboerse.at) on 26 June 2023 and the respective exchange rate, if such exchange rate is applicable pursuant to the Terms and Conditions.
  
  The number of ESP shares for the Investmentplus component resulting from this mathematical calculation is rounded down to the nearest whole number.

The acceptance of the Share Offer by the Eligible Persons took place from 2 May 2023 until 19 May 2023 (or for Participating Companies in Serbia until (and including) 26 May 2023). The transfer of the ESP Shares to the securities accounts of the Eligible Persons will take place on or about 26 June 2023 at the closing price of Erste Group Bank AG shares (ISIN AT000652011) on 26 June 2023.

Regarding the current LTI programme, reference is made to the applicable remuneration policy and the remuneration report (both available at www.erstegroup.com). If the targets are met, Erste Group Bank AG shares may be delivered to eligible members of the company's management bodies at the parameters defined in the remuneration policy and the remuneration report.

Furthermore, savings banks in the Haftungsverbund, which are to be classified as affiliated companies of Erste Group Bank AG within the meaning of section 189a no. 8 of the Austrian Business Code (UGB) due to the control exercised by Erste Group Bank AG within the Haftungsverbund, intend to transfer Erste Group Bank AG shares held by them to the asset-managing Sparkassen Beteiligungs GmbH und Co KG in the form of contributions in kind or to their respective savings bank foundation or Anteilsverwaltungssparkasse. Through their position as limited partners, these savings banks remain involved in the economic success of the contributed shares, while the management of the contributed shares (including the exercise of voting rights) is carried out by Sparkassen Beteiligungs GmbH as general partner. The sole shareholder of Sparkassen Beteiligungs GmbH is DIE ERSTE österreichische Spar-Casse Privatstiftung (ERSTE Foundation).

2. Number of shares to be used

From today's perspective and depending on the closing price of the share of Erste Group Bank AG on the Vienna Stock Exchange as of 26 June 2023 and until 22 May 2024, the number of own shares to be used would amount to approximately 3,000,000 shares, but in no case more than the equivalent value of EUR 41 million. This therefore corresponds to approximately 0.7% of the total shares of the Company.

The Company intends to satisfy claims under the LTI programme and claims of Eligible Persons arising from acceptance of the share offer by transferring own shares of the Company excluding shareholders' repurchase or subscription rights. The management board of the Company intends to adopt a resolution to this effect and to request the supervisory board to approve the transfer of own shares to beneficiaries excluding the subscription rights of existing shareholders. For the Eligible Persons, a separate approval of the Annual General Meeting or an authorisation of the management board for such a resale by the Annual General Meeting is not required on the basis of § 65 para. 1b last sentence of the Stock Corporation Act.

Savings banks of the Haftungsverbund intend to transfer up to 10,000,000 own shares to Sparkassen Beteiligungs GmbH und Co KG in the form of contributions in kind or to their Sparkassen private foundations/Anteilsverwaltungssparkassen from 26 June 2023 to 12 May 2028. This therefore corresponds to up to 2.33% of the total shares in the Company.

3. Exclusion of the shareholders' subscription rights

The ESP aims to strengthen the identification of the Eligible Persons with Erste Group, to create incentives for organisational commitment, to arouse interest in Erste Group's business through the ownership of shares and to offer the Eligible Persons financial recognition for their commitment to Erste Group. In their capacity as shareholders of the Company, employees also gain greater interest in the economic success of the Company. In addition, the ESP is also attractive from a tax perspective. The use of own shares under exclusion of shareholders' subscription rights is therefore in the interest of the Company

With the LTI, a compensation model for the management board was established in line with international standards, taking into account investor feedback. Among other things, this model provides for a long-term variable share-based compensation component and thus sets appropriate performance incentives for the management board.

The transfer of own shares to or the use of own shares for employees, executives and/or members of the management body of the Company or of a company affiliated with the Company is already objectively justified by law pursuant to Sec. 65 para. 1b last sentence AktG (analogous). In the specific case, the exclusion of the subscription right is furthermore objectively justified because

• the transfer of shares is in the interest of the Company in light of the reasons stated above;
• the exclusion of the subscription rights is also suitable for achieving the objective stated with the ESP;
• no other equivalent means exists by which the objective can be achieved without excluding the subscription rights of existing shareholders; and
• the exclusion of subscription rights is proportionate.

The use of own shares excluding shareholders' subscription rights for the purpose of transferring them to eligible members of the Company's management bodies and employees is also a customary and recognized procedure whose objective justification is now beyond doubt. Nor does the use result in the "typical" dilution of shareholders because no "new" shares are issued. The situation as it was prior to the repurchase of own shares is merely restored once the own shares have been transferred.

With regard to the transfer of shares to Sparkassen Beteiligungs GmbH und Co KG, the transferring savings banks remain the economic beneficiaries of the contributed shares as limited partners.

In view of the approval requirement by the supervisory board, the management board of the Company cannot decide on this alone, so that the interests of the shareholders are not exposed to any particular risk as a result.

As a result, the proposed transfers of own shares under exclusion of shareholders' subscription rights comply with the statutory provisions.

4. Next steps

After expiry of a period of at least 14 days after publication of this report and no earlier than three trading days after publication of the framework programme for the intended use of own shares, own shares of the Company may be transferred under the conditions described above.

Vienna, on 12 May 2023

The management board of Erste Group Bank AG

Willibald Cernko mp, Chairman Ingo Bleier mp, Member

Stefan Dörfler mp, Member Alexandra Habeler-Drabek mp, Member

David O'Mahony mp, Memeber Maurizio Poletto mp, Member

(end)

Emitter:	Erste Group Bank AG Am Belvedere 1 1100 Wien Austria
Contact Person:	Thomas Sommerauer / Gerald Krames
Phone:	+43 (0)50100-17326
E-Mail:	investor.relations@erstegroup.com
Website:	www.erstegroup.com
ISIN(s):	AT0000652011 (Share)
Stock Exchange(s):	Vienna Stock Exchange (Official Trade)
Other Stock Exchanges:	Bucharest Stock Exchange, Prague Stock Exchange