National Bank Of Greece S.a. · ATHEX:ETE
National Bank Of Greece — Debt Investor Presentation (September 2022)
44 slides from National Bank Of Greece's debt investor presentation, September 2022
Slide 1: Fixed Income Investor Presentation Credit Update
Fixed Income Investor Presentation Credit Update September 2022
Slide 2: Disclaimer
Disclaimer Not an Offer to Sale The information contained herein is not and must not be construed to be an offer to sale or to purchase or an invitation or any type of solicitation or a recommendation or an advice to invest in any way on the shares or any other security issued or to be issued by the
Slide 3: Table of Contents
Table of Contents 01 Macro 02 Bank Overview 03 Profitability & Balance Sheet Evolution 04 Asset quality 05 Capital, MREL, Liquidity & Funding 06 Appendix 2
Slide 4: 01 Macro
NATIONAL BANK 01} Macro
Slide 5: Greece's economic performance exceeds expectations in 1H22
01 Macro Greece’s economic performance exceed expectations in 1H22, overcoming headwinds from surging inflation and geopolitical turbulence • 2Q22 GDP up by +7.7% y-o-y (+4.0% in Euro Area), coupled with sustained strong business activity and revived tourism amplifies the strong 1Q19 1Q20 1Q21 1Q22
Slide 6: Greek economy in a different phase of the economic cycle
01 Macro The Greek economy is in a different phase of the economic cycle with low leverage in the private sector and real estate valuations still well below their pre-crisis levels. Defenses against rising energy risks are being built up in 2H22 • Inflation is likely to have peaked in June-July but
Slide 7: Economic activity remained resilient in 8M22
01 Macro Economic activity remained resilient against rising global headwinds in 8M22, with tourism heading to a new all-time high, sustaining the upward trend in domestic demand and favorable labor market conditions Key indicators point to resilient growth in early-3Q22 International arrivals at AI
Slide 8: Buoyant business activity endures cost-side pressure
01 Macro Buoyant business activity endures cost-side pressure, with nascent signs of modest slowing in CPI inflation in July-August Business turnover*: +28% (€28 bn) above its pre- A combined rebound in labor income and firms' profits pandemic level in 1H22 and +30% y-o-y (€29 bn) 20 y-o-y 20 26 €bn
Slide 9: Impact of inflation partly cushioned by fiscal measures
01 Macro The impact of inflation on private disposable income has been partly cushioned by fiscal measures, financed mostly by tax revenue growth; further escalation of the energy crisis in EU could pose additional stress on 2H22 activity Latest futures-implied NG prices for 2H22 up by Structure of
Slide 10: NBG's view on Greece's economic outlook
01 Macro NBG’s view on Greece’s economic outlook Table: Key macros for the Greek economy – preliminary estimates GDP growth decomposition by expenditure component 20 Key macroeconomic indicators of the Greek Economy contributions in pps 2021 2022e 2023f 2024f 2025f 15 Nominal GDP (y-o-y) 10.1 13.4 2
Slide 11: 02 Bank Overview
02 | Bank Overview 10
Slide 12: NBG at a glance
02 Bank Overview NBG at a glance Trusted brand Balance sheet metrics with more than 1H22 PAT at €490m¹ continue to improve 100 years of history Branches 332 PAT €490mn LCR 259% NSFR 134% FTEs 8,7k NIM2 188bps L:D 58% Total assets €79,4bn Cost to core income 50% NPE 80,3%/ Gross Loans €36,0bn Cost of
Slide 13: The Bank's Transformation Plan continues to deliver value
02 Bank Overview The Bank’s Transformation Plan continues to deliver value for its investors Profitability1 Asset Quality, Capital & Liquidity1 2019 2020 2021 1H 2022 2019 2020 2021 1H 2022 Net Interest 268bps 206bps 188bps 80,3% 228bps NPE Coverage 53,4% 63,3% 77,2% Margin Fees / Total 35bps 42bps
Slide 14: Positive trends across financial and operating KPIs continue in 1H22
02 Bank Overview Positive trends across financial and operating KPIs continue in 1H22… Profitability | € m Performing loans¹ | € b COP 200 250 280 +40% yoy 26,5 +10% yoy 24,2 25,2 Core Income 734 764 770 +5% yoy 16,7 +17% yoy Corporate 14,3 15,2 Opex -383 -400 -386 +1% yoy -104 Retail 9,8 10,0 9,8 +
Slide 15: Supporting guidance on profitability, asset quality and capital
02 Bank Overview … supporting guidance on profitability, asset quality and capital Profitability | € b Asset quality¹ | € b Coverage% 77,5% 80,8% >80% >80% NPE% 6,9% 6,1% c6% c3% RoTE%² 8,1% 9,2% c9% c10% NPEs €b 2,1 1,9 1,8 0,7 COP 0,45 c1,1 0,49 0,28 FY21 1Η22 FY22 FY24 Core Income guidance guidan
Slide 16: Sovereign, bank and debt ratings on upwards trajectory
02 Bank Overview Sovereign, bank and debt ratings on upwards trajectory Highest ratings and positive outlooks in GREEN Lowest ratings and negative outlooks in RED Greece Ba3 / Stable BB / Positive BB+ / Stable Latest Rating Action on Sovereign Upgrade to ‘Ba3’ Stable Outlook Affirmation at ‘BB’ Posi
Slide 17: NBG credit positioning vs. domestic peers
02 Bank Overview NBG credit positioning vs. domestic peers across various metrics1 Liquidity & Capital MREL Resources2 LCR 259% 174% 160% 205% MREL 19,1% 20,7% 18,4% 18,0% Resources FL Total Capital 16,1% 16,3% 14,7% 15,2% 2,0% 3,6% FL CET13 15,0% 2,6% 1,9% 14,0% 1,1% 2,3% ratio 2,8% 2,0% 11,7% 2,4%
Slide 18: 03 Profitability & Balance Sheet Evolution
03 Profitability & Balance Sheet Evolution 17
Slide 19: Improvement in recurring profitability leads to widening jaws
03 Profitability & Balance Sheet Evolution Improvement in recurring profitability driven by strong core income leads to widening “jaws” Profitability “jaws” | € m – 1H22 Profitability “jaws” | € m – 2Q22 COP & PAT cont. operations | € m C:CI 60,3% 52,1% 50,1% 55,6% 51,5% 48,8% NPE NII down NPE NII d
Slide 20: 1H22 Group COP benefits from core income growth
03 Profitability & Balance Sheet Evolution 1H22 Group COP (+40% yoy) benefits from core income growth, CoR normalization and flat costs Group core operating profit bridge 1Η22 (€ m) Group operating profit decomposition 1H22 (€ b) +40% yoy COP (€m) 200 280 +40% yoy OpEx +1% yoy COP margin (bps) 148 1
Slide 21: 2Q NII recovers sharply driven by PE expansion
03 Profitability & Balance Sheet Evolution 2Q NII recovers sharply (+9% qoq) mostly driven by PE expansion, putting 1H NII back to a growth trajectory (+1%) Domestic NII breakdown (€ m) Domestic NII (€ m), Group NIM & CoR (bps) NIM (Group) NII 283 291 292 270 294 214 216 206 182 194 +9% 1H22 at 68bp
Slide 22: 1H22 domestic fees increase by 24% yoy
03 Profitability & Balance Sheet Evolution 1H22 domestic fees increase by 24% yoy, driven by card fees, payments and trade finance Domestic fees (€ m) Domestic retail fees decomposition (€ m) Fees/Assets 35bps 42bps YoY YoY 160 +24% 87 +31% 17 -2% 11 +26% 130 Deposits 66 17 +22% 22 +24% 57 Payments
Slide 23: OpEx near flat yoy drives C:CI at 50%
03 Profitability & Balance Sheet Evolution Despite accelerating inflation throughout 1H22, OpEx near flat yoy drives our C:CI at 50% (<49% in 2Q22) OpEx by category (€ m) Domestic Branch evolution (#) -34 Group 527 branches 461 1H22 1H21 YoY 2yrΔ¹ Personnel 207 213 -2,7% -14% 389 qoq drop due to 366
Slide 24: Strong pick up in 2Q22 disbursements
03 Profitability & Balance Sheet Evolution Strong pick up in 2Q22 disbursements (+80% qoq) drives PEs higher by €1.1b qoq Greek loan evolution; performing loans (€ b) Loan disbursements (€ b) +50% yoy (+38% retail, 25,7 25,5 28,9 28,8 29,8 Net loans² +53% corporate) 3,0 26,5 25,2 25,5 +€2,3b 24,2 24
Slide 25: 04 Asset quality
NATIONAL BANK 04 | Asset quality 24
Slide 26: Organic NPE flows consistently negative
04 Asset Quality Organic NPE flows consistently negative, driven by successful restructurings yielding high cure rates Domestic NPE stock per category | 2Q22 (€ b) NPE balance change (€ m, Bank) o/w: €0,3b or Affected by FNPE & other c30% <30dpd finalization impaired <90dpd of Frontier II 90+dpd 1,1
Slide 27: 1/3rd of domestic gross NPEs comprise FNPEs <30dpd
04 Asset Quality 1/3rd of domestic gross NPEs of €1.9b comprise of FNPEs <30dpd, likely to cure in the next few quarters Domestic 90dpd ratios and coverage | 2Q22 Domestic 90dpd – NPE bridge (€ b) | 2Q22 Collateral 86% 5% 85% 71% 68% coverage1 12% 149% 90dpd 8% 1,9 ratio +0,6 +0,2 138% +0,05 3% 3,5%
Slide 28: Organic growth of S1 loans supports NII
04 Asset Quality Organic growth of S1 loans already offers increasing support to NII Group loan staging and evolution (€ b) Group Stage 2 ratios and coverage (%) Group Stage 3 ratios and coverage (%) Stage 3 Δ yoy 4,1 -2,0 2,2 2,1 2,1 o/w: €2.2b FPEs €2.2b SICR Stage 2 €0.3b +30dpd 4,4 4,7 4,7 4,7 +
Slide 29: 05 Capital, MREL, Liquidity & Funding
05 Capital, MREL, Liquidity & Funding 28
Slide 30: Recurring organic capital generation in 2Q22
05 Capital, MREL, Liquidity & Funding Recurring organic capital generation in 2Q22 at +c20bps qoq Capital evolution - bridge Regulatory capital requirements +c20bps in organic & recurring capital generation 16.7% pro forma EVO Payments merchant acquiring completion 14,25% 16,2% +c0,5% 16,1% CAD FL -
Slide 31: Sound liquidity profile provides strong foundation for creditors
05 Capital, MREL, Liquidity & Funding Sound liquidity profile provides strong foundation for creditors Liquidity Coverage Ratio Funding structure Bank(%) (Bank, %) 280% 259% 240% Current,sight & other Deposits Time Deposits 200% ECB funding Interbank funding 160% Long term wholesale Debt 120% 2% 80%
Slide 32: Funding cost at zero levels
05 Capital, MREL, Liquidity & Funding Funding cost at zero levels, benefits from all time low deposit rates and ECB’s TLTRO facility Funding Cost Evolution (bps) Greek deposits evolution (€ b) 41 29 21 18 33 13 Total Deposit 82% 87% Core deposits/total 8 6 5 5 4 4 0 31 19 -17 12 7 +€3,0b 2 1 0 -2 -2
Slide 33: NBG is meeting the binding interim MREL target
05 Capital, MREL, Liquidity & Funding NBG is meeting the binding interim target – capital trajectories support future interim targets Interim binding MREL Target (01/01/2022) Considerations 19,10% 18,04% ▪ Single point of entry and issuance from Senior preferred & Parent Company National Bank of Gre
Slide 34: 06 Appendix
NATIONAL BANK 06 | Appendix 33
Slide 35: Pushing forward with environment and climate strategy
06 Appendix We are pushing forward with our environment and climate strategy Highlights from ECB’s 2022 Climate risk Stress Test Scope 1-2-3 emissions (tCO2) ▪ Successful completion of ECB’s 2022 Climate risk Stress 20201 Test 2021 ✓ Full adherence to requirements ✓ Reflects NBG’s firm commitment an
Slide 36: The Bank has decreased its stock of NPEs by ~€20bn since 2015
06 Appendix The Bank has decreased its stock of NPEs by ~€20bn since 2015 -€19,9b 49,0% NPE 44,9% Ratio 43,9% 40,9% 2,8 1,5 32,2% 2,1 NPEs 22,0 (€bn) 4,8 19,2 13,6% 17,7 15,6 6,9% 6,3% 10,8 6,4 4,4 2,3 2,1 0,0 2,1 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 1H 2022 35
Slide 37: Solid track-record of NPE disposals
06 Appendix Solid track-record of NPE disposals Purchaser Servicer Completed: Total c.€6,0bn Signed: c.€1,0bn Project Earth: €2,0b Project Symbol: €0,9b Project Icon: €1,6b Project Marina: €0,3b Project Consumer / Credit Cards, SBL Secured SME/ SBL Secured Large Corporate, SME Cypriot Corporate, SME
Slide 38: Project Frontier II: transaction signed and on track
06 Appendix Project Frontier II: transaction signed and on track, completion expected in 2H22 Portfolio attributes Securitization structure ✓ HAPS1 eligible Consumer 11% Corporate & ✓ c80% secured by real SBLs 41% Retain 100% of estate collateral senior notes c€1,0b ✓ >1.7b real estate value c€0,45b
Slide 39: Group and Shareholder Structure
06 Appendix Group and Shareholder Structure Group Structure (material subsidiaries) Shareholder Structure1 Domestic institutional & retail 11,43% Hellenic Financial Stability Fund; Μarket cap: €3,0bn 40,4% International institutional; 48,2% 1(as of 26/8/2022) 38
Slide 40: Group Balance Sheet & P&L
06 Appendix Group Balance Sheet & P&L Balance Sheet¹ | Group P&L¹ | Group €m 2Q22 1Q22 4Q21 3Q21 2Q21 €m 2Q22 1Q22 4Q21 3Q21 2Q21 Cash & Reserves 15.261 14.530 15.827 11.587 11.001 NII 312 288 308 308 300 Interbank placements 2.711 3.715 3.639 3.152 2.906 Net fee & commission income 86 85 74 74 70 S
Slide 41: Geographical segment P&L: Greece & International
06 Appendix Geographical segment P&L: Greece & International Greece International¹ €m 2Q22 1Q22 4Q21 3Q21 2Q21 €m 2Q22 1Q22 4Q21 3Q21 2Q21 NII 294 270 292 291 283 NII 18 18 16 18 17 Net fee & commission income 80 80 70 69 66 Net fee & commission income 5 5 4 5 4 Core Income 375 350 362 360 349 Core
Slide 42: Definition of financial data, ratios used and APMs
06 Appendix Definition of financial data, ratios used and APMs Name Abbreviation Definition Balance Sheet B/S Statement of financial position Third covered bond CBPP3 ECB Covered Bond Purchase Programme purchase programme Common Equity Tier 1 CET1 ratio CET1 capital as defined by Regulation No 575/2
Slide 43: Definition of financial data, ratios used and APMs (continued)
06 Appendix Definition of financial data, ratios used and APMs (continued) Net interest income over average interest earning assets. Net Interest Margin equals net interest income divided by the average of interest earning assets (the average of interest Net Interest Margin NIM earning assets at the
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