National Bank Of Greece S.a. · ATHEX:ETE
National Bank Of Greece — Q2 2020 Earnings Presentation
47 slides from National Bank Of Greece's earnings presentation, Aug 6, 2020
Slide 1: 2Q20 Financial Results
2Q20 Financial Results 06 August 2020
Slide 2: Table of Contents
Table of Contents 1 Highlights 2 Profitability 3 Asset Quality 4 Liquidity 5 Capital 6 Transformation Program Update 7 Macro 8 Appendix
Slide 3: Highlights
NATIONAL BANK OF GREECE | Highlights
Slide 4: 1H20 PAT at €465m; resilient performance absorbs Covid19 impact
1H20 PAT at €465m¹ (+90%yoy). Resilient performance absorbs Covid19 impact Profitable 2Q PAT 2Q CoR at Resilient 1H COP (cont. ops) €58m 106bps³ €132m (+34%² qoq) Post 1Q charge for total Covid19 (+21% yoy) provisions; Coverage at 57.2% Domestic Reduced Bank Solid capital position 1H Personnel Costs
Slide 5: Moving steadily towards transforming NBG into the Greek Bank of first choice
Moving steadily towards transforming NBG into the Greek Bank of first choice Safety and resilience Support to corporates & Acceleration of digital of operations households transformation • Health and safety of our • Payment moratoria extended to • Digital subscribers reach 2.7m in employees, custome
Slide 6: Actively supporting our clients through the Covid19 crisis
Actively supporting our clients through the Covid19 crisis Constitutes the primary eligible pool to receive further support through installment subsidies via “Gefyra” Eligible payment holiday balances €21b Moratoria measures €1.5b Mortgages Approved applications #39.5k / €3.5b €0.1b Consumer €0.2b S
Slide 7: Post the 2Q20 Covid19 lockdown, nascent signs of recovery appear
Post the 2Q20 Covid19 lockdown, nascent signs of recovery appear • Sharp drop in business turnover by 27% yoy in May, but with clear signs of bottoming out (+12% on a monthly basis in May) • Post lockdown, manufacturing production & retail trade recover (+5% and +26% mom in Activity edges May respec
Slide 8: Frontier constitutes a decisive step towards delivering an NPE-clean NBG
Frontier constitutes a decisive step towards delivering an NPE-clean NBG A single large transaction.. ..will slash c2/3rds of our NPEs Required provisions will be accommodated by our PPI >€6b of GBV Key preparatory steps taken: Key transaction milestones: • Data remediation completed • Rating Agency
Slide 9: A solid track record of NPE sales, achieving significant successes
Α solid track record of NPE sales, achieving significant successes Project Earth – June 2018 Project Symbol – July 2019 Project Marina • €2.0b NPEs • €0.9b NPEs • €0.3b NPEs • Unsecured Consumer / Credit Cards, • Secured SME/ SBL Loans • Cypriot, Secured and Unsecured SBL • Purchaser: Centerbridge,
Slide 10: Personnel and G&A costs are cut by c1/5th in 2 years
Personnel and G&A costs are cut by c1/5th in 2 years Personnel & G&As costs (€m) | Domestic Headcount & branches | Domestic HR cost FTEs (#) Branches (#) -15% -1.8k -98 268 267 251 240 228 9.8 486 461 9.2 8.5 389 388 G&As 8.0 -26% 114 117 102 89 84 1Η18 2Η18 1Η19 2Η19 1Η20 1Η18 2Η18 1Η19 2Η19 1Η20 F
Slide 11: 2Q20 PAT at €58m despite Covid19 headwinds
2Q20 PAT1 at €58m despite Covid19 headwinds P&L Highlights P&L | Group €m 2Q20 1Q20 QoQ 1H20 YoY 1H20 Group Core Operating Profit of €132m2 +21% yoy, reflects NII 273 278 -2% 551 -8% sharply lower personnel and G&A expenses, lower underlying credit Net Fees & Commissions 57 66 -14% 123 +3% risk char
Slide 12: Ahead of Frontier launch, NPE stock settles at €10b | CET1 at 15.9%
Ahead of Frontier launch, NPE stock settles at €10b | CET1 at 15.9%1 Asset Quality, Liquidity & Capital Highlights Key P&L Ratios | Group 2Q20 1Q20 4Q19 3Q19 2Q19 2Q20 Bank NPE stock edges lower nearing the €10b mark NIM2 (bps) 216 236 261 268 278 • NPEs are reduced by €0.3b qoq in 2Q20 organically
Slide 13: Profitability
NATIONAL BANK OF GREECE 2.| Profitability
Slide 14: Group operating result up +25% qoq despite 1Q20 Covid19 charge-offs
Despite 1Q20 Covid19 charge-offs and a difficult economic environment, Group operating result up +25% qoq Group operating result bridge 1H20 (€ m) Group operating profit decomposition 2Q20 (bps) Excl: trading one-off Reported Excl. €10m of 2Q & Covid19 CoR Covid19 provisions Excl. Trading one offs a
Slide 15: Domestic NII pressure abates in 2Q20
Domestic NII pressure abates in 2Q20 (-1% qoq) as funding cost savings offset lending NII drop due to lower rates Domestic NII breakdown (€ m) Domestic NIM & CoR (bps); Risk adj NII (€ m) 287 281 278 Total 293 284 271 262 259 256 238 276 NIM¹ ex. cash 266 258 232 NIM¹ 214 CoR 140 153 32 100 94 Under
Slide 16: Loan disbursements reach €2.8b ytd
Loan disbursements reach €2.8b ytd, will be complemented by a solid pipeline of >€2b in 2H20 Greek loan evolution; performing loans1 (€ b) Loan disbursements (€ b) 28.6 27.8 27.9 27.6 27.6 Net loans1 +14% yoy 1.1 22.7 22.8 22.9 23.0 +2% yoy 1.1 22.3 1.0 0.9 +8% yoy 11.9 11.8 12.2 12.6 12.8 0.7 0.7 0
Slide 17: Yields remain at healthy levels despite pressure in Covid19 environment
Yields remain at healthy levels despite pressure in Covid19 environment Greek lending yields3 (bps) Greek new production lending yields3 (bps) 408 390 317 Total Book Total 368 366 357 344 338 1079 1001 992 Performing Consumer 871 867 862 644 854 611 840 579 Consumer SBLs 369 325 325 370 Mortgages SB
Slide 18: Repricing of time deposits provides support to domestic NII
Repricing of time deposits provides support to domestic NII (-1% qoq); private deposit momentum maintained Greek deposit yields (bps) Greek deposits evolution (€ b) 80 79 New 71% 76% Core deposits/total 64 production 52 at 23bps +€2.3b/+4% yoy State 41 deposits Term 44.0 -€1.6b qoq 55 54 43.3 52 53
Slide 19: Despite the 2Q20 lockdown, 1H fees up by 4% yoy
Despite the 2Q20 lockdown which put pressure on Fees (-14% qoq), 1H fees up by 4% yoy due to retail Domestic fees (€ m) Domestic retail fees decomposition (€ m) YoY 40bps 32bps 37bps 36bps Fees/Assets1 68 +15% -10% qoq, incorporating the 59 maximum YoY Intermediation & Covid19 impact 21 +20% other 1
Slide 20: Post lockdown, transaction volumes recover to pre Covid19 levels
Post lockdown, transaction volumes recover to pre Covid19 levels, driven by alternative channels Transactions per channel (monthly volume €m) Transactions per channel (m) Pre Covid19 Lock-down ATMs & APS Post Covid19 Pre Covid19 Lock-down Post Covid19 15.7 E-banking Branches 13.3 14.9 yoy ±% 13.0 14
Slide 21: Cost reduction accelerates in 2Q20 driving lower personnel and G&A expenses
Cost reduction accelerates in 2Q20 driving 1H20 personnel and G&A expenses lower by 9.2% and 6.1% yoy Group OpEx by category (€ m) Domestic Branch evolution (#) Domestic Group 528 527 1H20 1H19 yoy 1H20 1H19 yoy 510 -73 branches 486 Personnel 228 251 -9% 241 264 -9% 461 438 Due to 1H19 G&As 84 89 -6
Slide 22: Asset Quality
NATIONAL BANK OF GREECE 3) Asset Quality
Slide 23: NPE inflows reduce sharply in 2Q20 despite uncertainty
NPE inflows reduce sharply in 2Q20 despite uncertainty, aided by payment moratoria and Government schemes Domestic NPE stock per category – 2Q20 (€ b) NPE balance change (€ m, Bank) 6.1 FNPE & other NPE inflows 395 332 254 289 impaired 1.6 140 Curings -264 -350 -294 -361 -210 -246 -121 2.7 10.3 Debt
Slide 24: 2Q20 NPE reduction benefits from mortgage restructurings
2Q20 NPE reduction, benefits from mortgage restructurings, gradually recovering to pre Covid19 levels Mortgages (€ m) Consumer (€ m) NPE change1 (€ m) -4 -33 -31 -26 -149 NPL sale -179 -173 -184 (€0.7b) -214 -256 -304 c1/2 due to debt forgiveness 2Q19 3Q19 4Q19 1Q20 2Q20 -701 2Q19 3Q19 4Q19 1Q20 2Q2
Slide 25: NPE coverage at 57.2% provides strategic flexibility
NPE coverage at 57.2% provides strategic flexibility Domestic 90dpd ratios and coverage | 2Q20 Domestic 90dpd – NPE bridge (€ b) | 2Q20 Collateral 72% 23% 67% 63% 66% coverage1 43% 0.3 10.3 2.6 0.3 90dpd 32% 106% 24% 7.1 ratio 21.4% 20.9% 118% 9% 90dpd 57% 81.8% 81.9% coverage 133% Mortgages Consume
Slide 26: Exposure to Stage 3 loans keeps coming down; S3 coverage at 51.4%
Exposure to Stage 3 loans keeps coming down via organic means; S3 coverage at 51.4% Group loan staging and evolution (€ b) Group Stage 2 ratios and coverage (%) Group Stage 3 ratios and coverage (%) Δ qoq Stage 3 13.6 10.4 10.9 10.7 -0.3 36.4% o/w: €2.7b FPEs 31.2% 30.9% €2.1b SICR 29.9% Ratio €0.4b
Slide 27: Liquidity
NATIONAL BANK OF GREECE 4 | Liquidity
Slide 28: NBG's exposure to ECB's TLTRO/LTRO facilities exceeds €10b
NBG’s exposure to ECB’s TLTRO/LTRO facilities exceeds €10b, supporting NII Eurosystem funding (€ b) Repo funding (net, € b) 27.6 NBG Funding Cost (bps) 3.6 3.4 41 31 24.0 1.9 19 1.6 14 0.9 0 Blended 0.2 0.3 0.3 -17 4Q17 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 ELA¹ 17.6 11.5 -50 -67 Group LCR & NSFR ECB 1
Slide 29: Domestic deposits are up by c€1b ytd
Domestic deposits are up by c€1b ytd, driven by private inflows reflecting increased household savings Deposit evolution by geography (€ b) NBG domestic deposit flows (€ b) YoY Group 43.0 42.9 43.7 45.5 44.8 +4.0% 3.4 SEE & 1.5 1.0 1.4 1.5 1.5 1.5 1.5 +4.3% 1.1 Other 0.2 0.5 44.0 43.3 41.6 41.4 42.2
Slide 30: Capital
NATIONAL BANK OF GREECE 5 | Capital
Slide 31: 2Q20 CET1 and Total capital at 15.9% and 16.9%
2Q20 CET1 and Total capital at 15.9% and 16.9%, post Covid19 related provisions incurred in 1H20 2Q20 CET1 ratio movement Total Capital ratio at 16.9% 1 15.9% +0.17% 16.1% 15.5% +0.15% +0.35% +0.07% -0.13% 11.5% CET1: €5.7b O-SII: 0.5% CET1: CET1: €5.7b €5.7b CET1 FL: Factoring in ECB 13.1% communic
Slide 32: Transformation Program Update
6 Transformation Program Update
Slide 33: Transformation Program acts as a competitive advantage supporting change
Transformation Program acts as a competitive advantage supporting change PURPOSE, VALUES & BRAND (PVB) Strong governance and momentum, with full sponsorship of management team and Board Covid19 RESPONSE HEALTHY BEST BANK EFFICIENCY BALANCE SHEET FOR OUR CLIENTS & AGILITY 800+ colleagues across w
Slide 34: Transformation Program supports move towards a new business and operating model
Transformation Program supports move towards a new business and operating model HEALTHY BALANCE • Finalization of Icon transaction despite Covid19 pandemic outbreak SHEET (HBS) • Preparation of Frontier securitization for imminent launch • Strengthening of organic NPE efforts across segments, with S
Slide 35: Macro
NATIONAL BANK OF GREECE 7 | Macro
Slide 36: The maximum impact of the Covid19 shock has been felt in 2Q20
The maximum impact of the Covid19 shock has been felt in 2Q20 Economic sentiment & Greek GDP growth Turnover of Greek enterprises (double-entry bookkeeping category) 6 y-o-y index 130 20 y-o-y 20 4 120 0 0 2 110 0 100 -20 -20 -2 90 -40 -40 -4 80 -60 -60 -6 70 -8 60 -80 -80 Oct-19 Sep-19 4Q12 2Q13 4Q
Slide 37: High frequency indicators rose in June-July 2020
High frequency indicators rose in June-July 2020, especially on the production and retail side; tourism activity remains suppressed Ergani: Recruitments & dismissals Covid19 Community Mobility: Retail & recreation 400 thousands 400 20 20 300 300 Base 0 Base 0 200 200 -20 -20 100 100 0 0 -40 -40 -100
Slide 38: Fiscal reaction cushions the shock, assisted by monetary stimulus
Fiscal reaction cushions the shock, assisted by monetary stimulus and countercyclical credit expansion EU Recovery and Resilience Fund will speed up the curing process and economic transformation Bank lending growth (y-o-y) & corporate credit expansion State budget revenue, expenditure & primary bal
Slide 39: Appendix
NATIONAL BANK OF GREECE 8 | Appendix
Slide 40: Group Balance Sheet & P&L
Group Balance Sheet & P&L Balance Sheet¹ | Group P&L¹ | Group historic €m 2Q20 1Q20 4Q19 3Q19 2Q19 €m 2Q20 1Q20 4Q19 3Q19 2Q19 Cash & Reserves 6,705 5,650 3,519 2,975 1,859 NII 273 278 289 300 310 Interbank placements 3,562 3,794 3,008 3,333 3,085 Net fees & commissions 57 66 71 64 61 Securities 15,
Slide 41: Regional P&L: Greece & Other International
Regional P&L: Greece & Other International Greece International¹ €m 2Q20 1Q20 4Q19 3Q19 2Q19 €m 2Q20 1Q20 4Q19 3Q19 2Q19 NII 259 262 272 284 293 NII 14 16 17 17 16 Net fees & commissions 54 63 68 60 58 Net fees & commissions 3 3 3 4 4 Core Income 313 325 340 344 351 Core Income 16 19 20 21 20 Tradin
Slide 42: ESMA Alternative Performance Measures (APMs), definition of financial data and ratios used
ESMA Alternative Performance Measures (APMs), definition of financial data and ratios used The 2Q20 Financial Results Press Release contains financial information and measures as derived from the Group and the Bank financial statements for the period ended 30 June 2020 and for the year ended 31 Dece
Slide 43: Definition of financial data, ratios used and alternative performance measures
Definition of financial data, ratios used and alternative performance measures Name Abbreviation Definition Balance Sheet B/S Statement of financial position Common Equity Tier 1 Ratio CET1 ratio CET1 capital as defined by Regulation No 575/2013, with the application of the regulatory transitional a
Slide 44: Definition of financial data, ratios used and alternative performance measures
Definition of financial data, ratios used and alternative performance measures 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 earning assets at Net Interest Margin NIM
Slide 45: Important Notice – Disclaimer
Important Notice – Disclaimer The information, statements and opinions set out in the 2Q20 Results Press Release and accompanying discussion (the “Press Release”) have been provided by National Bank of Greece S.A. (the “Bank”) (together with its consolidated subsidiaries (the “Group”)). They serve i
Slide 46: Important Notice – Forward Looking Information
Important Notice – Forward Looking Information Forward Looking Statements reflect knowledge and information available at the date of the Press Release and are subject to inherent uncertainties and qualifications and are based on numerous assumptions, in each case whether or not identified in the Pre
Slide 47: Contact details
Contact details Pavlos Mylonas Christos Christodoulou Grigoris Papagrigoris CEO CFO Head of IR +30210 334 1521 +30210 334 3051 +30210 334 2310 pmylonas@nbg.gr cchristodoulou@nbg.gr papagrigoris.gr@nbg.gr Panagiotis Alevras Maria Kanellopoulou Maria Constantinou Investor Relations Officer Investor Re
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