Eurobank S.A. · ATHEX:EUROB
Eurobank — Eurobank EFG — Q1 2008 Earnings Presentation
35 slides from Eurobank's earnings presentation, May 6, 2008
Slide 1: First Quarter 2008 Results
SW-EUB022-2007-03-19-CMD-V7 May 6, 2008 First Quarter 2008 Results
Slide 2: 1Q 2008: Improved results in a challenging environment
Page 2 1Q 2008: Improved results in a challenging environment Strong loan growth at 34.2% y-o-y Accelerated deposit growth at 31% y-o-y; improved loans / deposits ratio at 125.5% Balanced growth of loans and deposits: added € 6.75bn deposits, vs. € 7bn new loans in the last 6 months Group Pr
Slide 3: Robust loan growth of 34.2% y-o-y
Page 3 Robust loan growth of 34.2% y-o-y Group Household Lending Total Group Lending + 33.1% 23.4 New Europe 17.6 12.3 + 34.2% 50.1 9.0 + 36.8% 2.4 + 211% Mortgages + 98% 2.9 10.9 Consumer credit + 29.2% 11.1 8.6 37.4 1Q 07 1Q 08 New Europe +123% 4.9 39.2 Group Business Lending Greece + 35.2% 26.7 +
Slide 4: Accelerated deposit gathering – Strong liquidity position
Page 4 Accelerated deposit gathering – Strong liquidity position Deposit gathering momentum Deposit growth rate accelerates to 31% +€3.0bn Greek deposits rise 25% resulting in market share 39.1 gains, with just 8bps spread reduction Deposit additions outpace loan additions in Greece 36.2 (€2.1
Slide 5: Decelerated cost expansion – further improvements ahead
Page 5 Decelerated cost expansion – further improvements ahead Significant deceleration in growth of expenses - Greece: down from 11.3% at year end to 8.6% in 1Q 08 - New Europe: down from 54% at year end to 35% (excluding Eurobank Tekfen & Universal Bank acquisitions) - Group: down from 27.5% at
Slide 6: New Europe
© Eurobank EFG New Europe
Slide 7: Regional macroeconomic environment – challenging and more volatile
Page 7 Regional macroeconomic environment – challenging and more volatile, but growth prospects maintained Major concern: rising inflation and inflationary expectations & widening of sovereign spreads Real GDP growth prospects remain strong for 2008 (>5% for most countries projected by IMF) No
Slide 8: Eurobank EFG in New Europe: Impressive performance
Page 8 Eurobank EFG in New Europe: Impressive performance Loans rise 123% y-o-y - € 1.7 bn added in the quarter Deposit gathering intensifies – NE deposits up 76% y-o-y Poland turns profitable in 2 yrs of operations Cost / Income improves to 66% from 85% in 1Q 07 Significant increase in NE
Slide 9: New Europe loan additions at € 1.7 bn in 1Q 08
Page 9 New Europe loan additions at € 1.7 bn in 1Q 08 NE contributes 49% of total new loans Net loan additions per country in 1Q 08 - NE organic loan additions / Greek loan additions (%) 48% originated in Poland & Cyprus 95% Bulgaria, 291 Romania, Serbia, 96 271 Turkey, 91 Ukraine, Universal 78 1,69
Slide 10: Improving returns and efficiency in New Europe
Improving returns and efficiency in New Page 10 Europe NE Operating income at 29% of Rapidly improving Cost / Income Group (%) NE share of Group operating income NE operating income, € m 28.9% 17.1% 227 85.4 + 105% 75.8 111 66.2 1Q 07 1Q 08 1Q07 FY07 1Q08 10
Slide 11: NE Profits at € 36.2m contributing 16.8% of total
Page 11 NE Profits at € 36.2m contributing 16.8% of total – Poland turns profitable Net profits contribution per quarter 16.8% Net profits per country NE share of quarterly Group net profits 14.3% NE net profits, € m 36.2 Bulgaria 15.9 9.1% 31.2 6.9% 19.7 Romania 10.6 3.5% 14.7 7.0 7.4 Serbia -1.6 -
Slide 12: Financial Review
© Eurobank EFG Financial Review
Slide 13: NII advances 27.3% y-o-y with stronger loan margin
Page 13 NII advances 27.3% y-o-y with stronger loan margin and greater contribution from NE NII quarterly evolution New Europe contributes 27.3% to total - from 12.4% a year ago 566 560 517 482 566 404 + 27.3% 445 352 382 Total NII 342 322 445 155 Loan margin + 96% New Europe 79 + 12.4% 411 10 3 Int
Slide 14: Resilient loan margins – Group NIM at 3.22%
Page 14 Resilient loan margins mostly offset competitive pressure on deposits – Group NIM at 3.22% Volatile gap of 3M Euribor vs ECB 1Q 07 FY 07 1Q 08 Group NIM (%) 3.24 3.28 3.22 2Q 07 3Q 07 4Q 07 1Q 08 Avg. 1M Euribor 3.96 4.28 4.37 4.22 Avg. 3M Euribor 4.07 4.49 4.72 4.48 Spreads in Greece 1Q 07
Slide 15: Fees grow 16.1% y-o-y at € 168m
Page 15 Fees grow 16.1% y-o-y at € 168m Lending fees rise 90% - strong capital markets fees (up 20%) Fees from mutual funds decline, as clients switch to risk averse products New Europe fees jump 130% reflecting profitable product distribution Total Fees evolution Total Fees Composition NE sha
Slide 16: Group recurring revenues grow by 27% y-o-y
Page 16 Group recurring revenues grow by 27% y-o-y Greek recurring revenues up 9% Total Operating Income up 21% y-o-y Breakdown of Operating Income 786 764 + 26.7% 714 689 735 650 721 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 Operating Income per Region 580 +105% €(19) 227 New Europe 111 69.3 35 GR Non-Core Inc
Slide 17: Cost containment – Group Cost / Income improves to 47.7%
Page 17 Cost containment – Group Cost / Income improves to 47.7% Greek cost growth decelerates to 8.6% y-o-y and is Cost / Income (%) down 4.4% q-o-q 75.8 72.7 66.2 Sharp improvement in New Europe with Cost / Income at 66% 48.1 50.9 47.7 42.5 40 40.2 Group costs rise 17% like-for-like Aim fo
Slide 18: Sound credit quality
Page 18 Sound credit quality Group NPL Ratio (% of loans) NPLs at 2.45%, from 2.65% in 1Q 07 Greek NPLs at 2.77% in 1Q 08 vs. 4.5% for the Greek banking 3.02% system (FY07) 2.65% Coverage at 86% - coverage of non-collateralized loans at 126% 2.45% Provisions at 107 bps in 1Q 08, due to effec
Slide 19: Segmental Performance
Page 19 Segmental Performance 19
Slide 20: Recurring profitability before tax up 23% y-o-y
Page 20 Recurring profitability before tax* up 23% y-o-y Total PBT rises 5.3% to € 270 m PBT* per Segment Group PBT* Share of profits 38.4% 23.5% 9.3% 19.6% 10.7% 270 256 Non Core Income 42 & Gapping** 71 104 228 Recurring Revenues + 23% 185 1Q 08 63 53 29 25 (4) Retail Corporate Wealth Global & New
Slide 21: Retail – quarterly returns growing again
Page 21 Retail – quarterly returns growing again, with emphasis on efficiency Quarterly PBT evolution (€ m) 111 112 112 4Q 07/1Q 08 2.0% (3.6)% 11.4% 3.4% 104 growth 100 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 343 337 FY 07 1Q 08 – Cost to Income 44.3% 44.8% – Return on Equity 42.2% 38.8% 154 – Return on RwA
Slide 22: Corporate – improved quality and profitability produce record results
Page 22 Corporate– improved quality and profitability produce record results Quarterly PBT evolution (€ m) 59 63 57 52 47 4Q 07/1Q 08 4.7% (3.6)% (10.3)% 10.8% growth 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 98 FY 07 1Q 08 94 63 – Cost to Income 31.6% 29.1% – Return on Equity 23.9% 24.0% 29 – Return on RwA 1.6
Slide 23: Wealth Management – profitability maintained
Page 23 Wealth Management – profitability maintained Quarterly PBT evolution (€ m) 35 4Q 07/1Q 08 0.4% (2.5)% 2.7% 27 29 24.6 25.2 growth 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 FY 07 1Q 08 41 – Cost to Income 34.2% 38.4% 41 – Return on Equity 82.2% 86.1% 25.2 – Share of profits 13.5% 9.3% 16 16 24.6 Revenues
Slide 24: Global & Capital Markets – outstanding efficiency
Page 24 Global & Capital Markets – outstanding efficiency Quarterly PBT evolution (€ m) 63 63 57 52.6 53 4Q 07/1Q 08 (0.5)% (3.6)% 0.8% growth 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 71 71 FY 07 1Q 08 53 – Cost to Income 22.9% 24.5% – Return on Equity 70.7% 51.4% 52.6 – Share of profits 24.7% 19.6% 17 18 (1)
Slide 25: New Europe: impressive efficiency gains
Page 25 New Europe: impressive efficiency gains - higher profitability contribution Quarterly PBT evolution (€ m) 4Q 07/1Q 08 5.7% (2.8)% 71.5% 18.2% 29 growth 24 -3.7 5 11 224 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 212 159 FY 07 1Q 08 164 – Cost to Income 81.9% 71.0% – Return on RwA 0.55% 1.16% – Share of p
Slide 26: Solid Shareholder Returns
Page 26 Solid Shareholder Returns 26
Slide 27: Healthy returns in a volatile environment
Page 27 Healthy returns in a volatile environment Group profitability (€ m) 215 204 + 5.7% 55 32 Non Core Income & Gapping* 1Q 08 up 5.7% y-o-y to € 215m. 184 Recurring + 23% Revenues Recurring profits up 23% y-o-y 149 RoE at 20% from 22% in FY 07** 1Q 07 1Q 08 * Including Trading Income, Gain
Slide 28: Appendices
© Eurobank EFG Appendices
Slide 29: Financial Ratios
Page 29 Financial Ratios Financial Ratios 1Q 08 1Q 07 Net Interest Margin 3.22% 3.24% Cost-Income 47.7% 46.4% NPLs (% of loans) 2.45% 2.65% NPLs coverage 86.0% 91.7% Provision Charge (% of net loans) 1.07% 1.04% Tier Ι Ratio 8.46% 7.46% Total Capital Adequacy 11.29% 9.27% ROA after tax 1.25% 1.50% R
Slide 30: Summary Figures
Page 30 Summary Figures Summary Figures (€ m) 1Q 08 1Q 07 Δ% New Europe Net Interest Income 565.9 444.6 27.3% 154.7 Net fees & Commissions 148.7 126.0 18.1% 61.6 Insurance and Non banking fees 19.3 18.7 3.1% 1.1 Total Operating Income 785.6 649.9 20.9% 227.1 Operating Expenses 374.8 301.3 24.4% 150.
Slide 31: Key figures of New Europe operations
Page 31 Key figures of New Europe operations Romania Bulgaria Serbia Cyprus Poland Turkey Ukraine NE Δ% Total Assets 4,491 3,683 1,501 660 3,083 1,736 599 15,760 108% Balance Sheet Total Loans 3,415 2,728 944 225 2,372 805 459 10,948 123% Total Deposits 1,520 1,822 665 442 1,080 600 139 6,267 76% Op
Slide 32: Key regional macroeconomic data
Page 32 Key regional macroeconomic data Monetary policy Real GDP CPI Inflation Current account Exchange rate response growth (%) (%) % of GDP Movement (12 mths, %) (since Jul.07) 2007 2008 2007 2008 2007 2008 US Euro Romania 6.0 5.4 4.8 7.0 (13.9) (14.5) +275 bps 3.3 (10.5) Bulgaria 6.2 5.5 7.6 9.7
Slide 33: 1Q 2008 – Summary per Segment
Page 33 1Q 2008 – Summary per Segment Segmental Results 1Q 08 Wealth Global & Capital Capital & Elimination Total (€ m) Retail Corporate Management Markets Other Center New Europe Interest income 299 72 9 27 4 - 155 566 Net fee & commission income 12 10 21 44 0 - 62 149 Net Insurance income 0 - 12 -
Slide 34: 1Q 2007 – Summary per Segment
Page 34 1Q 2007 – Summary per Segment Segmental Results 1Q 07 Wealth Treasury & Capital Capital & Elimination Retail Corporate New Europe Total (€ m) Management Markets Other Center Interest income 278 60 9 20 -1 0 79 445 Net fee & commission income 16 10 29 44 0 0 27 126 Net Insurance income 0 0 14
Slide 35: Contacts
Page 35 Contacts EFG Eurobank Ergasias, 20 Amalias Avenue, 105 57 Athens, Greece Fax: +30 210 3337 160 E-mail: investor_relations@eurobank.gr Internet: www.eurobank.gr Reuters: EFGr.AT Bloomberg: EUROB GA Investor Relations Dimitris Nikolos Tel: +30 210 3337688 E-mail: dnikolos@eurobank.gr Marle