National Bank Of Greece S.a. · ATHEX:ETE
National Bank Of Greece — FY2020 Earnings Presentation
57 slides from National Bank Of Greece's earnings presentation, Mar 26, 2021
Slide 1: FY20 Financial Results
FY20 Financial Results 26 March 2021
Slide 2: Table of Contents
Table of Contents 1 Key Highlights 2 Outlook 3 Financial Results 4 ESG Framework 5 Transformation Program Update 6 Macro 7 Appendix
Slide 3: Key Highlights
NATIONAL BANK OF GREECE 1 | Key Highlights
Slide 4: NBG FY20 Group financial highlights
NBG FY20 Group financial highlights FY20 PAT cont. ops FY20 COP¹ CoR €591m €328m €1.1b, 403bps of which 106bps¹ up +26% yoy, post €1.1b of provisions up by 41% yoy, reflecting core income including for Covid-19 and Frontier resilience and rigorous cost cutting securitization underlying Personnel Cos
Slide 5: 2020: a year of challenges and transformatory achievements
2020: a year of challenges and transformatory achievements • NPE reduction of €6.5b in 2020 driven by Frontier and organic flows, following a reduction of Accelerated pace of NPE €4.9b in 2019, avoiding a hive-down reduction despite Covid-19 • Domestic NPEs at €4.3b or 13.8% over gross loans (13.6%
Slide 6: Frontier transforms NBG's balance sheet with zero capital impact
Frontier transforms NBG’s balance sheet with zero capital impact NPE flow¹ (€b) NPE decomposition¹ (€b) FNPEs >30dpd & other Net NPEs 4.4 1.6 impaired 10.8 10.1 FNPE <30dpd 10.8 5.8 90+ dpd 0.8 0.6 €4.2 at Bank level 2.5 2.5 4.3 c40% of residual Gross NPEs 0.7 4.3 0.4 NPE stock <30dpd 7.5 7.0 1.7 4.
Slide 7: Project Frontier: senior tranche will comprise c50% of the securitization
Project Frontier: senior tranche will comprise c50% of the securitization Portfolio attributes Securitization structure ~60% of Current NPE stock HAPS2 eligible Of which c€0.3b reduced in 4Q20 on debt forgiveness, curings & write offs Retain 100% of c90k borrowers, senior notes ~€6.0b of Gross Book
Slide 8: Solid track record of transactions of c€12b in GBV
Solid track record of 8 transactions of c€12b in GBV Jun Jul Nov Jun Oct Nov Jun 2018 2019 2019 2020 2020 2020 2021 Project Earth – Jun18 Project Leo – Nov19 Project Marina– Oct20 Project Frontier • €2.0b • €0.3b • €0.3b • c€6.0b • Unsecured Consumer / • Shipping loans • Cypriot, Corporate, SME • Mo
Slide 9: Ethniki Insurance sale to add c60bps of capital upon completion
Ethniki Insurance sale to add c60bps of capital upon completion Transaction highlights Key Company Financials Agreement to sell 90% of Ethniki Insurance to CVC Capital P&L (€m) – selective items 2018 2019 2020e reached and approved by our BoD and HFSF (subject to EGM approval in April) GWP & polic
Slide 10: In two years c€150m of costs have been cut
Ιn two years c€150m of costs¹ have been cut – cost savings will continue Personnel & G&As costs (€ m) | Domestic Headcount & branches | Domestic HR cost FTEs (#) Branches (#) -€84 (-16%) -1.9k -130 536 492 451 9.8 486 7.6k at Bank level 461 9.2 8.5 389 366 G&As 356 7.9 -€61m (-27%) 230 192 169 2 FY1
Slide 11: Moving steadily to transform NBG into the Greek Bank of First Choice
Moving steadily to transform NBG into the Greek Bank of First Choice Safety and resilience Acceleration of digital of operations transformation • Health and safety of our employees, customers and • Digital subscribers reach 3.0m in Dec (+26% yoy) stakeholders is our top priority • Digital monthly ac
Slide 12: First signs of expired moratoria payment performance are encouraging
First signs of expired moratoria payment performance are encouraging Support to corporates & households • Payment moratoria of €3.8b expired on 31.12.20 • Approximately half of moratoria clients (€ terms) have not requested further payment assistance and are low risk clients • State subsidy program
Slide 13: Activity is set to accelerate rapidly from 2Q21
Activity is set to accelerate rapidly from 2Q21 Turnover of enterprises, retail trade & exports of goods Pandemic impact cushioned by unprecedented fiscal support, mitigating the 2020 30 y-o-y 30 20 20 recession to a better-than-expected -8% y-o-y 10 10 GDP drop in 0 0 2020 contained Fiscal policy r
Slide 14: Outlook
NATIONAL BANK OF GREECE 2| Outlook
Slide 15: Reaching a 6% NPE ratio on negative formation and transactions of c€1.5b
Reaching a 6% NPE ratio on negative formation and transactions of c€1.5b NPE evolution 2020-2022¹ Organic formation 2021-22 -€0.8b +c€1.4b NPE ratio 13.5% €4.2b Assuming moratoria defaults up to a max of NPE ratio €0.6b -c€2.2b c6% c€1.8b 3.4 -c€1.5b 1.9 2 FY20A NPEs Organic inflows Organic outflows
Slide 16: Organic capital generation and completion of transactions yield 2022 CET1 of >16%
Organic capital generation and completion of transactions yield 2022 CET1 of >16% • Post Ethniki Insurance and Frontier completion capital ratios will be enhanced by c170bps • 2020-2022 CET1 uplift of c50bps, despite 200bps impact from IFRS9 transitional adjustment Group capital evolution 2020-22 Fr
Slide 17: 2022 core RoE of c9% reflects a clean balance sheet and higher efficiency
2022 core RoE1 of c9% reflects a clean balance sheet and higher efficiency Group core operating profit evolution 2020-2022 CoR of c60bps in FY22 C:CI improvement • NII CAGR -3% c400bps Core RoE • Fees CAGR +10% c9% 1 +c€120m c€490m +c€70m €328m -c€30m • Swift NPE clean up • High coverage • NPE NII r
Slide 18: Financial Results
NATIONAL BANK OF GREECE 3 | Financial Results
Slide 19: P&L Highlights | Group
FY20 PAT from continued operations reaches €591m, +26% yoy P&L Highlights P&L | Group €m FY20 FY19 YoY 4Q20 3Q20 QoQ FY20 PAT (cont. operations) up 26% yoy to €591m absorbs loan NII 1 169 1 190 -2% 314 304 +3% impairments of €1.1b mostly due to the Frontier securitization and Net Fees & Commissions
Slide 20: Frontier transaction pushes the NPE ratio down to 13.6% on a CET1 of 15.7%
Frontier transaction pushes the NPE ratio down to 13.6% on a CET1 of 15.7% Asset Quality, Liquidity & Capital Highlights Key P&L Ratios | Group 4Q20 3Q20 2Q20 1Q20 4Q19 4Q20 domestic NPE stock drops to €4.3b, net NPEs at €1.6b NIM1 (bps) 228 222 216 236 261 • NPEs are down by €5.8b qoq in 4Q20, driv
Slide 21: 4Q20 CET1 and Total capital at 15.7% and 16.7%
4Q20 CET1 and Total capital at 15.7% and 16.7%, absorbing Frontier and Covid-19 provisions 4Q20 Capital movement Zero capital impact from Frontier securitization Frontier & Ethniki CAD FL Insurance completion +1.7% 13.8% 16.9% +1.0% 16.7% -1.1% -0.1% 11.0% 2 CAD 15.9% CET1 FL: 13.0% CET1 FL: 12.8% 1
Slide 22: FY20 COP up by 41% yoy to €328m
FY20 COP1 up by 41% yoy to €328m; Covid-19 and Frontier one off impairments are fully offset by trading gains Group operating profit decomposition semi-annual (€ b) Group operating profit decomposition annual (€ b) 492 146 Operating profit¹(€) 462 637 +38% yoy COP¹ margin (bps) 79 115 +36bps yoy 132
Slide 23: Domestic NII recovers from 2Q20 lows
Domestic NII recovers from 2Q20 lows, on the back of funding cost reduction and lending NII expansion Domestic NIM (€ m) & CoR (bps) Domestic NII breakdown (€ m) NIM¹ 258 Lending NII 277 232 223 214 220 259 +2% qoq 260 255 250 244 247 Reported 153 97 104 CoR 153 100 94 103 103 Underlying Loans (PE)
Slide 24: Corporate PE expansion continues in 4Q20, on loan disbursements of €4.7b
Corporate PE expansion continues in 4Q20, on loan disbursements of €4.7b (+40% yoy) Greek loan evolution: performing loans1 (€ b) Loan disbursements (€ b) 27.8 27.9 27.6 28.0 25.5 Net loans2 FY20 Mortgages Consumer €4.7b SBL Corporate 23.8 +40% yoy 1.6 23.0 23.5 +€1.0b 22.8 22.9 +5% yoy FY19 €3.3b +
Slide 25: PE yield of 3.3% remains at satisfactory levels
PE yield of 3.3% remains at satisfactory levels despite historically low interest rates Greek lending yields1 (bps) Greek new production lending yields1 (bps) 390 320 321 329 Total Book Total 357 344 338 327 326 Performing 1001 992 924 855 Consumer 862 653 618 854 853 611 579 840 832 SBLs Consumer 3
Slide 26: Deposits are up by €4.7b or 11% yoy despite repricing
Driven by expansionary fiscal and monetary policies, deposits are up by €4.7b or 11% yoy despite repricing Greek deposit yields (bps) Greek deposit evolution (€ b) 74% 80% Core deposits/total 64 +€4.7b/+11% yoy 52 41 47.0 31 23 Term 44.0 54 43.3 43.7 53 42.2 New 9.6 production -€1.5b at 15bps 10.5 -
Slide 27: FY20 domestic fees end up slightly higher on strong retail fees
Despite Covid-19 headwinds, FY20 domestic fees end up slightly higher on strong retail fees (+12% yoy) Domestic fees (€ m) Domestic retail fees decomposition (€ m) YoY 35bps 36bps 39bps 36bps Fees/Assets1 140 +12% YoY 125 Intermediation & 43 +14% +25% yoy 242 244 +1% other 37 adjusting for the Banca
Slide 28: Transactions recover to pre Covid-19 levels, aided by digital transformation
Transactions recover to pre Covid-19 levels, aided by digital transformation Transactions per channel (m) Transactions per channel (volume € m) Pre Covid-19 1st Lock-down 2nd FY20/FY19 Pre Covid-19 1st Lock-down 2nd FY20/FY19 yoy ±% yoy ±% yoy% ± yoy% ± 44.7 43.9 47.0 47.6 42.1 46.6 -5% 44.1 42.5 -3
Slide 29: Domestic C:CI at 56.9% (-200bps yoy)
Domestic C:CI at 56.9% (-200bps yoy), on lower personnel (-8%) and G&A expenses (-12%); 4Q20 run rate at 55.2% Group OpEx by category (€ m) Domestic Branch evolution (#) Domestic Group 528 527 FY20 FY19 yoy FY20 FY19 yoy 510 -105 branches 486 Personnel 451 492 -8.2% 476 515 -7.5% 461 G&As 169 192 -1
Slide 30: Organic formation remained negative throughout FY20
Organic formation remained negative throughout FY20, pushing the NPE balance low, down by €6.5b including Frontier Domestic NPE stock per category – 4Q20 (€ b) NPE balance change (€ m, Bank) 5.9 FNPE & other 1.7 impaired <90dpd o/w: €0.8b 90+dpd o/w: €0.8b <30dpd <30dpd 2.7 289 NPE inflows (+) 254 2
Slide 31: The Frontier securitization affects all NPE books substantially
The Frontier securitization affects all NPE books substantially Mortgages (€ m) Consumer (€ m) NPE change1 (€ m) 16 -33 -3 -26 -7 -294 -173 -184 -205 -52 -161 -242 -158 -468 -70 Organic -2 -57 -62 -16 -4,326 -316 -313 4Q19 1Q20 2Q20 3Q20 4Q20 4Q19 1Q20 2Q20 3Q20 4Q20 SBLs (€ m) Corporate (€ m) 1 -5,
Slide 32: Post Frontier coverage at 63%
Post Frontier coverage at 63%, with FNPEs <30dpd comprising c40% of residual NPEs Domestic 90dpd ratios and coverage | 4Q20 Domestic 90dpd – NPE bridge (€ b) | 4Q20 Collateral 69% 14% 68% 64% 60% coverage1 26% Mortgage LTV post Frontier at 108% vs 120% 99% pre transaction 15% 90dpd ratio 106% 3 3 7%
Slide 33: Loan portfolio mix changes, reflecting Frontier impact
Loan portfolio mix changes, reflecting Frontier impact and ongoing PE expansion Group loan stage evolution (€ b) Group S2 ratio and coverage (%) Group S3 ratio and coverage (%) Δ qoq Stage 3 10.9 10.4 10.2 4.4 -5.8 o/w: €2.4b FPEs 31.2% €1.8b SICR 29.9% €0.3b +30dpd 29.2% Stage 2 4.8 5.2 4.9 4.5 -0.
Slide 34: Funding cost drops to near zero levels
Funding cost drops to near zero levels, reflecting deposit repricing and ECB’s TLTRO funding facility Eurosystem funding (€ b) NBG Funding Cost (bps) 41 31 19 12 7 0 Blended -17 24.0 -50 -67 -67 ECB² ELA¹ 11.5 4Q19 1Q20 2Q20 3Q20 4Q20 LCR: 232% NSFR: 121% 12.3 Repo position : €0.3b Funding structure
Slide 35: Domestic deposits are up by €4.7b or +11% yoy
Domestic deposits are up by €4.7b or +11% yoy Deposit evolution by geography (€ b) NBG domestic deposit flows (€ b) YoY Group 43.7 45.5 44.8 45.2 48.5 +10.9% 4.7 3.4 SEE & 1.5 1.5 1.5 1.5 1.5 +1.2% 1.5 1.1 Other 0.2 0.5 47.0 +11.2% 44.0 43.3 43.7 42.2 Greece +€11.5b Core: +€6.1b Time: -€1.4b Premium
Slide 36: ESG Framework
NATIONAL BANK OF GREECE 4| ESG Framework
Slide 37: NBG has a long history of ESG action and leadership
NBG has a long history of ESG action and leadership in Greece and abroad Selected ESG milestones NBG Cultural First NBG CSR report NBG NBG NBG Green Bond Foundation recapitalization Crowdfunding Framework & (MIET) by ESG-focused Platform 1st Green Bond in shareholders Greece 1966 2007 2008 2010 2014
Slide 38: We have clear priorities and achievements across all ESG areas
We have clear priorities and achievements across all ESG areas Key ESG actions and achievements Selected ESG metrics • Strong commitment to green energy with €0.5b disbursements in 2020 RES Corporate PEs (€ BN)1 • Issuance of first green bond in Greece (€500m) in 2020 1.0 • Offering of retail green
Slide 39: NBG registers continuous improvement in ESG ratings
NBG registers continuous improvement in ESG ratings and has been awarded for CSR & governance ESG ratings ESG awards ESG rating 2018 2019 2020 ‘Best Corporate Governance ESG rating BB BBB BBB Bank - Greece’ (2016) Environment score 1 1 1 Social score 1 2 1 ‘Diamond award’ (2017-18, 2018-19) Governan
Slide 40: Transformation Program Update
5 Transformation Program Update
Slide 41: Transformation Program acts as a competitive advantage supporting change
Transformation Program acts as a competitive advantage supporting change PURPOSE, VALUES & BRAND (PVB) Our Transformation Program (launched ~2.5 years ahead of peers) has evolved HEALTHY EFFICIENCY BEST BANK into a competitive advantage BALANCE SHEET & AGILITY FOR OUR CLIENTS (HBS) (ENA) (BBC) 1 p
Slide 42: Transformation Program: Balance Sheet and P&L
Transformation Program supports move towards a new business and operating model – Balance Sheet and P&L Selected achievements in 2020 Key metrics 2018 2019 2020 YoY HEALTHY • Frontloaded inorganic actions with Projects Icon, GBV inorganic transactions 2.0 2.4 8.1 +238% BALANCE Marina & Danube and Fr
Slide 43: Transformation Program: Digital
Transformation Program supports move towards a new business and operating model – Digital Selected achievements in 2020 Key metrics 2018 2019 2020 YoY DIGITAL LAYER • Increased level of new registrations and app Registered subscribers (m) 2.0 2.4 3.0 +26% downloads by individuals and businesses • In
Slide 44: Transformation Program: Enablers
Transformation Program supports move towards a new business and operating model – Enablers Selected achievements in 2020 TECHNOLOGY • Completion of new wave of back-office centralisation (covering Corporate loan administration and Trade Finance operations) & PROCESSES • Continuation of efforts for c
Slide 45: Macro
NATIONAL BANK OF GREECE 6| Macro
Slide 46: Pandemic recessionary impact cushioned by sizeable fiscal support
The recessionary impact of the pandemic has been cushioned by sizeable fiscal support, resilient goods exports and increasing adaptability of businesses and households Composition of GDP growth by expenditure component Annual change in turnover of Greek enterprises by sector (y-o-y) 8 -100 -80 -60 -
Slide 47: Fiscal policy helped mitigate the recession by 6ppts in FY20
Fiscal policy helped mitigate the recession by 6ppts in FY20 and will remain highly supportive in 2021, compounded by improving liquidity conditions and tailwinds from the previous year’s credit impulse Breakdown of fiscal support in 2021 State budget primary balance & GDP growth 2 8 Liquidity measu
Slide 48: Success of the vaccination program is key
Success of the vaccination program is key to leveraging the significant supportive factors, with latent household and corporate spending and tourism envisaged to provide strong impetus to economic growth Covid-19 vaccinations in Greece PMI & main sectoral confidence indicators 50 vaccinations per da
Slide 49: Appendix
NATIONAL BANK OF GREECE 7 | Appendix
Slide 50: Group Balance Sheet & P&L
Group Balance Sheet & P&L Balance Sheet¹ | Group P&L¹ | Group €m 4Q20 3Q20 2Q20 1Q20 4Q19 €m 4Q20 3Q20 2Q20 1Q20 4Q19 Cash & Reserves 9,175 6,750 6,705 5,650 3,519 NII 314 304 273 278 289 Interbank placements 3,440 3,899 3,562 3,794 3,008 Net fees & commissions 68 65 57 66 71 Securities 15,596 14,90
Slide 51: Geographical segment P&L: Greece & Other International
Geographical segment P&L: Greece & Other International Greece International¹ €m 4Q20 3Q20 2Q20 1Q20 4Q19 €m 4Q20 3Q20 2Q20 1Q20 4Q19 NII 296 290 259 262 272 NII 18 15 14 16 17 Net fees & commissions 65 61 54 63 68 Net fees & commissions 3 3 3 3 3 Core Income 360 351 313 325 340 Core Income 21 18 16
Slide 52: ESMA Alternative Performance Measures (APMs)
ESMA Alternative Performance Measures (APMs), definition of financial data and ratios used The 4Q20 Financial Results Press Release contains financial information and measures as derived from the Group and the Bank financial statements for the year ended 31 December 2020 and for the year ended 31 De
Slide 53: Definition of financial data, ratios used and alternative performance measures
Definition of financial data, ratios used and alternative performance measures Name Abbreviation Definition Assets held for sale -- Non-current assets held for sale Balance Sheet B/S Statement of financial position Cash & Reserves -- Cash and balances with central banks Common Equity Tier 1 Ratio CE
Slide 54: 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 Net Interest Margin NIM earning assets at
Slide 55: Important Notice – Disclaimer
Important Notice – Disclaimer The information, statements and opinions set out in the 4Q20 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 56: 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 57: Contact details
Contact details Christos Christodoulou Greg Papagrigoris Group CFO Head of IR +30210 334 3051 +30210 334 2310 cchristodoulou@nbg.gr papagrigoris.gr@nbg.gr Maria Kanellopoulou Panagiotis Alevras Maria Constantinou Investor Relations Officer Investor Relations Officer Investor Relations Officer +30210
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