Eurobank S.a. · ATHEX:EUROB
Eurobank — Q3 2016 Earnings Presentation
49 slides from Eurobank's earnings presentation, Nov 16, 2016
Slide 1: Third Quarter 2016 Results
Third Quarter 2016 Results 16 November 2016
Slide 2: Disclaimer
Disclaimer By attending the meeting where this presentation is made, or by reading the presentation slides, you agree to be bound by the following limitations: This presentation has been prepared by Eurobank. The material that follows is a presentation of general background information about Euroban
Slide 3: Table of contents
Table of contents Highlights 3 3Q2016 results review 9 Asset Quality 17 International operations 22 Appendix I – Supplementary information 29 Appendix II – Macroeconomic update 34 Appendix III – Glossary 43 Page 2
Slide 4: 3Q16 results highlights
3Q16 results Highlights Key financials €m 3Q16 2Q16 Δ(%) 9M16 9M15 Δ(%) 1 Net profit of €85m in 3Q16; €192m in 9M16 Net interest income 388.9 387.7 0.3 1,159.4 1,087.6 6.6 NII up 0.3% q-o-q to €389m Commission income 76.4 71.3 7.1 215.6 182.1 18.4 Commission income up 7.1% to €76m, driven by low
Slide 5: Pre-provision income (PPI)
Pre-provision income (PPI)1 Core PPI and other income (€ m) Highlights 54 (8) 64 67 31 Other income Core PPI up 4.3% q-o-q at €218m 218 NII up 0.3% q-o-q to €389m 198 209 Core PPI 173 Commission income up 7.1% to €76m, driven by lower Pillar II cost 151 Operating expenses l-f-l down 2.5% y-o
Slide 6: Asset quality
Asset quality NPE formation in Greece down 70% q-o-q 90dpd, NPEs and respective coverage ratios Second quarter of negative 90dpd formation 65.0% 65.5% 90dpd 64.8% 64.3% 65.0% Coverage 90dpd ratio at 34.8%, NPE ratio at 45.6% NPEs 52.7% 52.1% 50.7% 50.0% 50.0% coverage Coverage ratios: 90dpd
Slide 7: Funding and liquidity
Funding and liquidity Eurosystem funding (€ bn) ELA eligible collateral (€ bn)2 Other 34.0 32.7 0.4 Pillar II bonds 1.7 9.8 25.3 19.0 21.5 5.3 5.7 16.8 15.5 3.7 2.4 ECB 22.9 Credit Claims 20.0 15.0 15.8 ELA 14.1 13.1 13.1 Jun 12 Jun 15 Dec 15 Jun 16 Sep 16 Nov 16 1 Interbank repos and eurosystem fun
Slide 8: Capital position
Capital position Phased-in CET1 Fully loaded Basel III CET1 (FLB3) 23bps 17bps 17.4% 17.4% 17.0% +70bps (40bps) 16.3% vs FY15 (70bps) 13.8% (250bps) 1 2Q16 CET1 3Q16 result 3Q16 CET1 AFS & other 3Q16 CET1 FLB3 incl. pref. FLB3 CET1 DTA phase out Minorities and Preference adjustments shares shares ot
Slide 9: International Operations
International Operations Net Profit before discontinued operations & restructuring Core PPI (€ m) costs1 (€ m) 65 37 65 63 63 30 25 20 60 15 3Q15 4Q15 1Q16 2Q16 3Q16 3Q15 4Q15 1Q16 2Q16 3Q16 Loan loss provisions (€ m) Net Loans and Deposits (€ bn) 2.1% 2.7% 2.0% 3.1% 1.9% Cost of Risk 10.2 52 45 36
Slide 10: 3Q 2016 results review
3Q 2016 results review | Pageo
Slide 11: Loans and deposits
Loans and deposits Gross loans (€ bn) Deposits (€ bn) Δ loans l-f-l1 (€m) (163) (141) (327) 133.0% 126.9% 125.1% 51.7 51.7 119.9% 51.3 51.0 50.6 117.2% Loans/Deposits 7.6 7.6 7.7 7.5 International 7.4 Greece 33.0 33.4 31.4 31.8 30.0 International 22.0 22.1 21.9 21.9 Business 21.7 10.2 10.2 9.3 9.7 8
Slide 12: Assets
Assets Total assets (€ bn) Gross Loans Consumer 13% Corporate 38% 68.2 Mortgages 35% Small Business Net loans and advances to customers 14% 39.1 Securities Trading & other GGBs 6% 12% Securities 13.6 GTBs 11% PP&E, intangibles and other assets 3.8 Derivatives 2.2 Other Loans and advances to banks 2.
Slide 13: New time deposits spreads and client rates (Greece)
New time deposits spreads and client rates (Greece) Time deposit client rates (bps) Deposits mix Core 56% 178 Time 44% 165 153 139 126 128 New time deposit spreads (bps) 114 106 112 105 111 (108) (109) (110) 103 97 (113) (114) (107) (102) 97 100 99 92 91 (104) (117) 88 88 (112) (109) (109) 88 (116)
Slide 14: Net interest income
Net interest income NII breakdown (€ m) NII per region (€ m) 375 383 388 389 360 100 104 106 104 International 102 285 258 276 279 282 Greece Loan margin 497 497 496 487 480 3Q15 4Q15 1Q16 2Q16 3Q16 NII evolution q-o-q (€ m) Bonds & other 48 53 47 55 49 13 2 (7) 388 (2) 389 Money market & Repos (13)
Slide 15: Spreads & net interest margin
Spreads & net interest margin Lending spreads (Greece, bps)1 Deposit spreads (Greece, bps) (7) (13) (24) (32) (35) 1M avg Euribor 542 525 525 Corporate 511 (34) 507 (38) (48) Savings (56) (53) and sight 479 480 Total Total 477 470 467 (72) (73) (75) (74) (89) Time 460 (108) (104) (103) 455 Retail (1
Slide 16: Commission income
Commission income Commission income breakdown (€ m) Commission income per region (€ m) Fees / Assets excl. Total fees 0.47% 0.47% 0.46% 0.47% 0.41% Govt. guarantees expense excluding 74 83 84 81 81 0.44% Govt. guarantees 0.40% Fees / Assets expense 0.38% 0.34% 0.26% 76 71 68 62 68 62 71 76 27 48 13
Slide 17: Operating expenses
Operating expenses1 OpEx per region (€ m) OpEx breakdown (€ m) Greece (4.4%) 257 264 253 770 (2.5%) 750 250 247 63 61 65 65 Depreciation 66 67 66 International 294 281 Administrative 192 199 188 183 182 Greece Staff 413 408 3Q15 4Q15 1Q16 2Q16 3Q16 9M15 9M16 Cost-to-income ratio (%) Headcount and ne
Slide 18: Asset Quality
Asset Quality | Page 17
Slide 19: Asset quality metrics - 90dpd loans
Asset quality metrics - 90dpd loans 90dpd ratio per segment (%) 90dpd ratio per region (%) €3.0bn €4.9bn €3.8bn €5.9bn €17.6bn 37.4 37.7 37.5 37.6 37.7 Greece 53.4 47.6 35.2 35.0 34.8 34.7 34.8 Group 34.8 30.5 27.4 20.7 20.9 19.6 17.7 17.5 International 3Q15 4Q15 1Q16 2Q16 3Q16 Consumer Mortgages Sm
Slide 20: 90dpd formation per segment (Greece)
90dpd formation per segment (Greece) Mortgages (€ m) Consumer (€ m) 245 221 149 205 216 143 135 160 171 83 84 82 138 54 72 66 129 55 41 122 119 115 109 43 36 35 35 94 17 84 84 73 82 72 (12) (9) 22 (39) 1Q12 3Q12 1Q13 3Q13 1Q14 3Q14 1Q15 3Q15 1Q16 3Q16 1Q12 3Q12 1Q13 3Q13 1Q14 3Q14 1Q15 3Q15 1Q16 3Q1
Slide 21: 90dpd formation analysis (Greece)
90dpd formation analysis (Greece) 90dpd formation (€ m) 3Q16 Modifications breakdown Short Term 12% 207 164 49 1 (18) 90dpd formation Long Term (17) 88% 1,101 745 775 788 628 Inflows Reverse ratio (Modifications / Inflows) Modifications 102% 103% 94% (581) (645) 78% 81% (726) (806) (895) (11) (15) W
Slide 22: NPEs metrics (Group)
NPEs metrics (Group) 90dpd bridge to NPEs (€ bn) NPEs per region Provisions & 1Q16 2Q16 3Q16 Total NPEs Provisions/ 4 collaterals / formation formation formation NPEs ratio NPEs NPEs (€ m) (€ m) (€ m) (€ bn) (%) (%) (%) 1.0 23.1 4.5 Consumer 35 38 28 3.4 63.9 77.4 82.2 Mortgages 315 278 100 6.3 39.1
Slide 23: International operations
International operations Page 22
Slide 24: International presence
International presence Total Assets (€ bn) 1.5 Net Loans (€ bn) 0.3 Deposits (€ bn) 1.2 Total Assets (€ bn) 1.2 Net Loans (€ bn) 0.8 Deposits (€ bn) 0.7 Total Assets (€ bn) 2.8 Branches (#) 80 Net Loans (€ bn) 1.7 Deposits (€ bn) 1.9 Branches (#) 147 Total Assets (€ bn) 3.2 Net Loans (€ bn) 2.2 Tota
Slide 25: Income statement highlights
Income statement highlights Core PPI (€ m) Pre Provision Income (€ m) 87 3Q15 13 3 4Q15 8 75 18 ROM 65 2 67 LUX 1Q16 12 63 2 16 3 2Q16 8 3 8 13 19 CYP 3Q16 17 7 7 9 33 7 SER 8 3Q15 26 32 4Q15 24 26 24 30 BUL BUL 1Q16 25 25 2Q16 29 14 16 ROM 10 8 3Q16 30 3Q15 4Q15 1Q16 2Q16 3Q16 3Q15 9 Net Profit bef
Slide 26: Gross Loans
Gross Loans Romania (€ m) Bulgaria (€ m) 2,654 2,604 2,516 2,494 2,530 2,340 2,307 368 361 2,244 387 383 357 Consumer 2,093 14% 2,046 18% 560 536 528 Consumer 359 370 871 868 52% 48% 765 764 862 Mortgage 34% 765 753 716 34% 733 725 Mortgage 9M16 1,415 9M16 1,363 1,348 1,375 1,311 Business 1,014 1,01
Slide 27: Deposits
Deposits Romania (€ m) Bulgaria (€ m) 2,675 2,716 2,623 2,262 2,351 937 901 1,893 969 1,794 1,850 1,887 850 Time 807 1,600 33% 41% 1,092 1,117 1,128 1,110 Time 67% 1,050 59% 1,654 1,737 1,814 Core 1,455 1,501 702 733 765 777 Core 550 9M16 9M16 9M15 FY15 3M16 6M16 9M16 9M15 FY15 3M16 6M16 9M16 Serbia
Slide 28: Asset quality
Asset quality Romania Bulgaria 72.0% 73.4% 64.5% 64.8% Coverage 66.3% 66.9% 67.2% 59.7% 60.3% 60.4% Coverage 31.6% 32.0% 31.7% 90dpd 26.6% 25.7% 23.1% 23.4% 20.1% 20.1% 19.9% 90dpd 90dpd gross 90dpd gross formation 10 9 2 1 formation (€ m) - 2 (€ m) (3) (4) (2) (4) 3Q15 4Q15 1Q16 2Q16 3Q16 3Q15 4Q15
Slide 29: Key figures – 3Q16
Key figures – 3Q16 Romania Bulgaria Serbia Cyprus Lux Sum Assets 2,849 3,237 1,244 4,152 1,483 12,965 Gross loans 2,093 2,530 917 1,534 344 7,418 Balance Sheet (€m) Net loans 1,698 2,222 814 1,458 343 6,535 Balance 90dpd Loans 538 508 142 109 2 1,299 Sheet Deposits 1,887 2,716 719 3,688 1,221 10,231
Slide 30: Appendix I – Supplementary information
Appendix I – Supplementary information Page 29
Slide 31: Income statement highlights (Greece)
Income statement highlights (Greece) Operating income (€ m) Operating expenses (€ m) 374 372 364 332 301 226 177 188 183 182 3Q15 4Q15 1Q16 2Q16 3Q16 3Q15 4Q15 1Q16 2Q16 3Q16 Net Profit before discontinued operations, restructuring Provision charge (€ m) costs & tax adj.1 (€ m) 221 226 23 10 4 1 171
Slide 32: Summary performance
Summary performance Balance sheet – key figures Income statement – key figures €m 3Q16 2Q16 €m 3Q16 2Q16 Gross customer loans 50,645 51,039 Net interest income 388.9 387.7 Provisions (11,527) (11,495) Commission income 76.4 71.3 Net customer loans 39,117 39,544 Operating income 496.6 526.5 Customer
Slide 33: Consolidated quarterly financials
Consolidated quarterly financials Income Statement (€ m) 3Q16 2Q16 1Q16 4Q15 3Q15 Net Interest Income 388.9 387.7 382.8 375.3 359.9 Commission income 76.4 71.3 67.8 61.7 47.7 Other Income 31.3 67.4 63.5 (7.5) 53.6 Operating Income 496.6 526.5 514.1 429.5 461.2 Operating Expenses (247.3) (249.9) (253
Slide 34: Consolidated financials
Consolidated financials Income Statement (€ m) 9M16 9M15 Δ y-o-y (%) Net Interest Income 1,159.4 1,087.6 6.6 Commission income 215.6 182.1 18.4 Other Income 162.2 62.2 >100% Operating Income 1,537.2 1,331.9 15.4 Operating Expenses (750.3) (726.0) 3.4 Pre-Provision Income 786.9 605.9 29.9 Loan Loss P
Slide 35: Appendix II – Macroeconomic update
Appendix II – Macroeconomic update Page 34
Slide 36: Short-term macroeconomic outlook improves
Short-term macroeconomic outlook improves Completion of 1st program review & expectation for a swift conclusion of 2 nd review Swift completion of 2nd program review (i.e., ahead of Dec. 5th Eurogroup) to open the door for: release of next ESM loan tranche (€6.1bn) to help service external debt
Slide 37: Domestic economic activity
Domestic economic activity Gradual stabilization following last summer’s turbulence Economic Sentiment: gradual recovery continues PMI manufacturing: struggling to surpass the boom- bust threshold Retail trade volume: a rebound in Q3 2016 Industrial Production: positive signs in recent months Source
Slide 38: Economic slowdown milder than expected
Economic slowdown milder than expected Gradual recovery expected from H2 2016 onwards Real GDP s.a.: -1.0% YoY in H1-16 vs. -1.2% YoY in H2-15 Inflation rate: recent uptick due to increased taxation Forecasts: +0.4% YoY in Q3-16; +0.4% in Q4-16 Full-year 2016: between -0.3% and 0.0% 2.0% 0.4% 0.4% 0
Slide 39: Labour market
Labour market Gradual improvement in recent quarters, but major challenges still lying ahead Unemployment rate: still at elevated levels despite Long term unemployment: major obstacle in the way recent improvement towards labour market recovery Labour productivity: key factor behind the recession… E
Slide 40: Progressive improvement in domestic financial conditions
Progressive improvement in domestic financial conditions Following completion of 1 st program review, reinstatement of waiver Stabilization of macro environment & gradual relaxation of CCs to facilitate return of bank deposits Deposit outflows by private-sector residents amounted to c. €42.5bn i
Slide 41: Greece outlook 2016
Greece outlook 2016 Macro indicators: realizations & forecasts 2015, €bn 2015 2016 2017 (nominal)1 Real YoY%1 Real YoY%2 Real YoY%2 GDP* 176.0 -0.2 -0.3 2.3 Private Consumption 123.8 0.3 -0.9 1.3 Government Consumption 35.2 0.0 -1.7 -0.1 Gross Capital Formation 17.3 -13.1 4.3 12.7 Gross Fixed Capita
Slide 42: Medium-term growth drivers
Medium-term growth drivers Real GDP (Index 2007 = 100) EC Autumn Tourism (focus on promising sub-sectors: home-porting Forecasts for cruises, health tourism, city breaks, other) -0.3% Transportation and Logistics 2016 (positive externalities to other important sectors of the economy e.g. manufacturi
Slide 43: 2nd program review: key prior actions
2nd program review: key prior actions Expected to conclude by end-November 2016 Policy areas Key deliverable Alignment of collective dismissals, industrial action framework & collective bargaining with EU best practices Labour Market & Human Capital Adoption of an integrated action plan for fighting
Slide 44: Appendix III – Glossary
Appendix III – Glossary Page 43
Slide 45: Glossary - Methodology
Glossary - Methodology This document contains financial data and measures as published or derived from the published consolidated financial statements which have been prepared in accordance with International Financial Reporting Standards (IFRS). Additional sources used, include information derived
Slide 46: Glossary – Definition of Financial measures / ratios
Glossary – Definition of Financial measures / ratios Commission income: The total of Net banking fee and commission income and Income from non banking services of the reported period. Other Income: The total of Dividend income, Net trading income, Gains less losses from investment securities and net
Slide 47: Glossary – Definition of Financial measures / ratios
Glossary – Definition of Financial measures / ratios Cost of Risk: Impairment losses on Loans and Advances charged in the reported period, annualized and divided by the average balance of Loans and Advances to Customers. The average balance of Loans and Advances to Customers is calculated as the ari
Slide 48: Glossary – Definition of Financial measures / ratios
Glossary – Definition of Financial measures / ratios Loans to Deposits: Net Loans and Advances to Customers (net of Impairment Allowance) divided by Due to Customers at the end of the reported period. Risk-weighted assets (RWAs): Risk-weighted assets are the bank's assets and off-balance-sheet expos
Slide 49: Investor Relations contacts
Investor Relations contacts Dimitris Nikolos +30 210 3704 754 E-mail: dnikolos@eurobank.gr Yannis Chalaris +30 210 3704 744 E-mail: ychalaris@eurobank.gr Christos Stylios +30 210 3704 745 E-mail: cstylios@eurobank.gr E-mail: investor_relations@eurobank.gr Fax: +30 210 3704 774 Internet: www.eurobank