Slide 1: Investor Presentation March 2016
I N V E S T O R P R E S E N TA T I O N March 2016
Slide 2: Table of Contents
Table of Contents Pages I. Q4’15 Performance Highlights 3 II. FY 2015 Performance 18 1. Balance Sheet 18 2. Pre Provision Income 20 3. Asset Quality 26 4. Liquidity 33 5. Capital 36 III. Appendix – NPL management legislation 39 IV. Appendix 42 V. Macroeconomic Update 56 This presentation contains fo
Slide 3: I. Q4'15 Performance Highlights
I. Q4’15 Performance Highlights FY 2015 Results 3
Slide 4: H2 2015: Resilience in face of capital controls, but vulnerable to new taxes
I H2 2015: Resilience in face of capital controls, but vulnerable to new taxes GDP components (contribution): yoy changes (s.a.) Deflationary Trends: Declining Oil Prices vs Increasing Tax Rates pps 15 GDP growth 12 7% (% yearly chng) 10 9 6% 6 5% 5 4% 3 3% 0 0 2% -5 -3 1% -6 0% -10 -1% -9 -2% -15 -
Slide 5: 2015 was a year of Significant Structural Adjustment to the Bank's Balance Sheet
I 2015 was a year of Significant Structural Adjustment to the Bank’s Balance Sheet Severe deposit outflows in Greece of €10.6bn during H1’15. Balances have stabilised thereafter with Q4’15 posting an increase of €1.0bn for the group. Deposit base at €31.4bn at the end of 2015 Liquidity & Funding s
Slide 6: Common Equity Tier I at 16.7% following €2.56bn Share Capital Increase
Common Equity Tier I at 16.7% following the successful completion of a €2.56bn I Share Capital Increase with no use of State Aid CET1 ratio of Greek Banks excluding State aid Strong CA performance among Greek banks with the lowest AQR adjustment of €1.7bn and the highest CET1 in the sector post ad
Slide 7: 2015 performance beats ECB's Comprehensive Assessment assumptions
2015 economic and operating performance beats ECB’s Comprehensive I Assessment base and adverse assumptions 2015 GDP evolution milder than expected 2015 GDP forecast and forward projections were milder than initially expected in July , (€ billion) following the 3-week Bank holiday and imposition o
Slide 8: Balance Sheet changes reflect the stressed conditions of 2015
I Balance Sheet changes reflect the stressed conditions of 2015 (€ billion) 31/12/2015 31/12/2014 yoy % change Funding position Assets 69.3 72.9 (5.0%) Deposit outflows contained in H2 2015 Net Loans 46.2 49.6 (6.8%) Eurosystem exposure at €24.4bn by end of December 2015 Deposits 31.4 42.9 (26.7
Slide 9: NIM and operating efficiency improves, bottom line affected by AQR impairments
NIM and operating efficiency improves, whereas bottom line mainly affected by AQR I related impairment losses FY FY yoy % Q4 Q3 qoq % Core PPI up by 8.4% in 2015 supported by cost cuttings and lower retail funding costs Profit & Loss (€ million) 2015 2014 change 2015 2015 change Bottom line post
Slide 10: 2015 recurring PPI increased by €89mn or 8.4% yoy
I 2015 recurring PPI increased by €89mn or 8.4% yoy 2015 Key PPI drivers and one-off elements (€ million) +89mn +8.4% €201mn provision for VSS 1,149 €60mn impairment of fixed assets €13mn integration costs (45 ) 12 96 1,060 (19) (151 ) 953 305 795 (40) Reported Trading income Integration & Core Δ NI
Slide 11: Core Income sustained despite structural changes in the Balance Sheet
I Core Income sustained despite structural changes in the Balance Sheet NII driven by cost of funding (€ million) 276 Deposit repricing and change in mix fully counterbalanced the increased cost of 1,919 72 1,932 wholesale funding and the negative impact from loan deleveraging (267) (68) New tim
Slide 12: Cost to Income down to 50%. Scope for further improvement in 2016
I Cost to Income down to 50%. Scope for further improvement in 2016 Staff costs driven down by 2014 VSS cost savings1 (€ million) (17%) Staff costs (excluding Citi) down by 21% within 2015 (21%) excl. Citi Target further reduction up to 6% in 2016 due to the new VSS 642 26 533 Target €1.1bn re
Slide 13: Liquidity conditions steadily improve
Liquidity conditions steadily improve with inflows of lower cost deposits replacing I expensive part of ELA funding by Pillar II bonds Deposits balances in Greece largely stable, mix reversed (€ billion) % First signs of mild deposit inflows in Q4 2015 driven by business, however, 36.9 Total posit
Slide 14: The full AQR has been accounted for in the books
I The full AQR has been accounted for in the books NPEs evolution (AQR vs business flows) Loan loss provisions 2015 (€ billion) (€ billion) 2.2 31.8 0.3 4 3.0 1.1 3 0.2 0.9 0.1 28.7 1.6 Wholesale Retail 0.9 1 SEE 0.8 2 2014 AQR Non-AQR 2015 related related AQR Non-AQR Coverage Total related related
Slide 15: NPL cash coverage at 69%; Q4 CoR at 143bps excluding AQR
I NPL cash coverage at 69%; Q4 CoR at 143bps excluding AQR NPL formation1 improvement Increased impairment (€ million) (€ million) Normalised 297 271 CoR for the period at 987 220 bps 166 502 143 1,206 554 520 443 214 81mn total one-offs 485 466 425 258 221 60mn Cyprus collateral valuation Q1'15 Q2'
Slide 16: Increased Non Performing Loan Restructurings
I Increased Non Performing Loan Restructurings Quarterly Non Performing Loan modifications by asset class – Retail, Greece (€ million) 448 164 137 245 Total Consumer Retail 152 67 61 21 Q1 ’15 Q2 ’15 Q3 ’15 Q4 ’15 Q1 ’15 Q2 ’15 Q3 ’15 Q4 ’15 158 126 Mortgage Small Business 52 56 42 43 30 10 Q1 ’15 Q
Slide 17: Consistent Delivery of Medium Term Targets
I Consistent Delivery of Medium Term Targets Approval of the amended three-year Restructuring Plan by the European Commission on November 26, 2015 To date, the Bank is fully in-line with Restructuring Plan targets Restructuring Outlook for 2016-2018: Plan RoA >1% Cost to income ratio 40%
Slide 18: II. FY 2015 Performance: 1. Balance Sheet
II. FY 2015 Performance 1. Balance Sheet FY 2015 Results 18
Slide 19: Balance Sheet composition
II Balance Sheet composition Asset split Liabilities and equity split (€ billion) (€ billion) 72.9 72.9 69.3 69.3 Cash 2.0 Cash 1.7 Securities 6.0 ECB 14.8 Securities 5.9 19.6 ELA 4.3 EFSF bonds EFSF bonds 4.3 42.9 4.8 ECB Time 26.1 deposits 31.4 13.1 Time deposits 49.6 46.2 Net loans Net loans Core
Slide 20: II-2. Pre Provision Income
II-2. Pre Provision Income FY 2015 Results 20
Slide 21: Resilient core PPI; NII supported by reduced cost of funding
II Resilient core PPI; NII supported by reduced cost of funding Recurring PPI breakdown 1, 2 Negative contribution of loans to NII counterbalanced by depos & funding (€ million) (€ million) 591 572 576 568 588 475 482 488 487 63 75 80 81 Bonds & other 297 295 9 (15) +2 283 274 3 257 560 572 573 558
Slide 22: Loan and deposit spreads
II Loan and deposit spreads Reduced net loan balances with flattish spreads Deposit outflows change deposit mix & reduced cost supports NII (bps) (bps) 457 452 459 454 Core deposits Time deposits Group deposits spread 450 (63) (61) 49.6 49.7 47.7 47.0 46.2 (82) (92) (105) (€ billion) 42.9 End of qua
Slide 23: Capital controls to underpin fee income and generate cost savings
Imposition of capital controls to underpin fee income and generate cost savings due to II increased efficiencies Cards Issuing Merchant Acquiring Sales Alternative Networks Usage Turnover New Cards % (€ billion) Monthly transactions No of Clients Total (€ million) (thousands) (€ billion) 3.1 617 1.6
Slide 24: Operating expenses down by 7.6% yoy
II Operating expenses down by 7.6% yoy; decrease of 11.3% excluding Citi impact OPEX Evolution1 (€ million) yoy% 334 313 FY FY excl. 281 286 € million yoy % 26 275 2015 2014 Citi 27 impact 26 26 26 148 127 150 116 123 Staff costs 533 642 (17.0%) (21.0%) 159 134 131 132 136 General expenses 516 512 0
Slide 25: Staff costs reduced as a result of the 2014 VSS
Staff costs reduced as a result of the 2014 VSS; platform is rationalising partly due to II the SEE disposals Staff costs evolution1 General expenses evolution1 (€ million) (€ million) +Citi 164 162 +Citi 157 159 148 150 122 120 123 123 126 Remedial 115 136 management / 134 131 132 crisis driven cos
Slide 26: II-3. Asset Quality
II-3. Asset Quality FY 2015 Results 26
Slide 27: NPL formation per segment improving
II NPL formation per segment improving Total NPL formation1 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 (€ million) (€ million) 987 652 Business1 502 502 171 178 162 199 221 134 44 150 554 520 260 485 228 214 158 116 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Mortgages1 Group NPLs and NPL r
Slide 28: Cash coverage increases to 69%
II Cash coverage increases to 69% Loan Loss Provisions Cash Coverage Evolution (€ million) Cost of Risk Q4’15: 143bps excl.AQR impact of 285 bps 69% FY’15: 220bps excl. AQR impact of 265 bps 67% 67% 63% 62% Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Provisions stock over Gross loans 1,206 25.5% 23.8% 24.4%
Slide 29: Coverage of Non performing Loans
II Coverage of Non performing Loans 57% 136% Business 71% 76% 75% 79% Coverage for the Group 73% 126% Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Collateral Total NPL 57% Coverage Coverage 67% 67% 69% 62% 63% 117% 70% Mortgages 39% 47% 46% 47% 39% Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Collateral Total NPL Cover
Slide 30: Non-performing exposures also include performing forborne loans
II Non-performing exposures (NPEs) also include performing forborne loans NPE perimeter includes NPLs and performing restructured loans ECB methodology separates the 90 days past due, IFRS non- (€ billion) NPL NPL NPE NPE performing loans from non-performing exposures (NPE) Ratio Coverage Ratio Co
Slide 31: Detailed overview of asset quality by portfolio
II Detailed overview of Alpha Bank’s asset quality by portfolio (€ billion) Wholesale SBL Mortgages Consumer Total Gross loans 27.2 6.7 20.8 7.3 62.0 (-) Provisions (6.9) (2.9) (3.3) (2.7) (15.8) Net loans 20.2 3.8 17.5 4.6 46.2 NPLs 7.4 5.0 7.1 3.4 22.8 NPL ratio 27.4% 74.3% 33.9% 46.1% 36.8% NPEs
Slide 32: NPL Management Units Analysis
II NPL Management Units Analysis Loans perimeter managed by NPL Units NPL Management Units balances breakdown by segment (€ billion) (€ billion) 26.3 52.5 26.2 Retail Wholesale €18.5bn €7.8bn 6.9 25.8 32.7 18.5 Performing 0.4 Performing 4.6 8.9 19.4 13.9 7.8 3.1 5.6 5.6 NPLs NPLs 4.0 19.8 0.6 2.3 1.
Slide 33: II-4. Liquidity
II-4. Liquidity FY 2015 Results 33
Slide 34: Deposit outflows of c.€10.9bn in first 9 months of 2015, turned to inflows
Deposit outflows of c.€10.9bn in the first 9 months of 2015, turned to inflows of €0.7bn II in Q4, however trend is not continuing Alpha Bank deposits in Greece (€ billion) The first quarter of 2015 the Bank Q1: Q2: Q3: Q4: Ytd: experienced outflows of €6.6bn coming (€6.6bn) (€4.0bn) (€0.2bn) +0.7
Slide 35: Contained liquidity pressures due to capital controls
Contained liquidity pressures due to capital controls; Collateral pool affected by the II increase in haircuts Alpha Bank’s Eurosystem funding evolution (€ billion) 27.8 27.1 23.6 24.4 24.2 (1.6) (0.8) (0.3) ELA 14.8 23.0 22.2 18.8 19.6 19.7 ECB 14.8 4.8 4.8 4.9 4.8 4.5 Dec-14 Mar-15 Jun-15 Sep-15 S
Slide 36: II-5. Capital
II-5. Capital FY 2015 Results 36
Slide 37: Common Equity Tier I Ratio of 16.7%; Fully Loaded 16.0%
II Common Equity Tier I Ratio of 16.7%; Fully Loaded ratio at 16.0% Common Equity Tier I (CET1) ratio build up CET1 capital 6,583 8,699 8,384 (€ million) 491bps 22 bps 16.7% 16.0% (102bps) (3bps) 12.6% CET1 Capital Period AFS Reserve Other/ CET1 Fully loaded CET1 Sep-15 increase Losses RWA impact De
Slide 38: Risk weighted assets at €52.2bn; Tangible Equity at €8.7bn
II Risk weighted assets at €52.2bn; Tangible Equity at €8.7bn Group RWAs development Equity to regulatory capital bridge (€ billion) (€ million) RWAs/ 103% Net Loans excl.DTA/TC 9,015 8,673 26 8,699 64 8,763 (342) 52.3 52.2 1.9 1.5 Market Risk 3.2 3.9 Ordinary Intangibles Tangible Regulatory CET1 Lo
Slide 39: III. Appendix – NPL management legislation
III. Appendix – NPL management legislation FY 2015 Results 39
Slide 40: NPL management legislation changes during 2015
III NPL management legislation changes during 2015 Main amendments Impact Holistic borrower credit Non-cooperative borrowers are not protected by Households insolvency law appraisal BoG Code of Conduct Delinquent borrowers are obliged to provide a comprehensive set of updated financial informa
Slide 41: NPL management legislation implemented and expected within 2016
III NPL management legislation implemented and expected within 2016 Main amendments Impact NPLs servicing Bank of Greece issued act allowing interested parties to incorporate licensing companies New servicing companies to & sales Still pending discussions between the Hellenic Republic and Euro
Slide 42: IV. Appendix
IV. Appendix FY 2015 Results 42
Slide 43: Business Volumes
IV Business Volumes % (€ million) Dec 2015 Sep 2015 Jun 2015 Mar 2015 Dec 2014 Dec 2015 / Dec 2014 Group Gross Loans 62,015 62,133 62,634 63,116 62,337 (0.5%) Mortgages 20,840 20,859 20,974 21,170 20,985 (0.7%) Consumer Loans 5,872 5,835 5,773 5,828 5,746 2.2% Credit Cards 1,425 1,402 1,475 1,485 1,
Slide 44: Diversified business book and shipping portfolio
IV Diversified business book and shipping portfolio Group loans breakdown Wholesale loans portfolio structure – Group Other 14% Industry 22% Wholesale loans Services 6% 44% Mortgages 34% €62.0bn Real Estate 7% €27.2bn Shipping 7% Trade 20% Credit Cards 2% Tourism 7% Consumer loans SBLs Transportatio
Slide 45: Wealth Management evolution
IV Wealth Management evolution Alpha Private Bank balance increased with Citi acquisition Asset Management impacted by the adverse operating environment (€ million) (€ million) 4,107 3,465 3,484 2,219 1,638 253 2,123 2,085 1,296 1,231 189 157 938 893 1,789 916 1,254 1,296 447 214 158 89 103 98 Dec-1
Slide 46: SEE Operations
IV SEE Operations (€ million) Cyprus Δ% Romania Δ% Serbia Δ% Albania Δ% TOTAL Δ% Dec-15 yoy yoy yoy yoy yoy Deposits 1,685 (25.6%) 1,383 (18.6%) 394 (8.2%) 405 (13.8%) 3,866 (28.7%) Gross Loans 5,287 4.4% 2,792 (4.6%) 718 (0.3%) 367 (1.2%) 9,164 (6.5%) Loan Market Share 4.5% 5.5% 4.5% 8.4% Mortgages
Slide 47: Alpha Bank Group
IV Alpha Bank Group (€ million) FY 2015 FY 2014 yoy % change Net interest income 1,931.7 1,919.4 0.6% Net fee and commission income 314.7 334.2 (5.8%) Income from financial operations (45.0) 40.4 … Other Income 56.7 55.2 2.6% Operating Income 2,258.1 2,349.2 (3.9%) Staff costs (533.2) (642.4) (17.0%
Slide 48: Alpha Bank Group quarterly
IV Alpha Bank Group (€ million) Q4 2015 Q3 2015 Q2 2015 Q1 2015 Q4 2014 Q3 2014 Q2 2014 Q1 2014 Net interest income 486.5 488.3 481.9 475.0 493.2 486.5 475.2 464.6 Net fee and commission income 83.0 69.1 78.0 84.6 86.1 84.8 82.2 81.0 Income from financial operations (90.1) 9.1 10.0 26.0 (45.0) 16.5
Slide 49: Group Results by Business Unit
IV Group Results by Business Unit Commercial & Investment Banking & Asset Retail SE Europe Other Group Corporate Treasury Management (€ million) Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Dec 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 Operating Income 1,141.2 950.
Slide 50: Results: Retail Business Unit
IV Results I Retail Business Unit (€ million) Q4’15 Q3’15 Q2’15 Q1’15 Q4’14 Q3’14 Q2’14 Q1’14 Operating Income 296.0 298.9 287.9 258.4 250.8 237.2 232.6 229.6 Net Interest Income 266.9 273.6 256.6 230.1 221.9 210.7 205.5 202.0 Net fee and Commission Income 27.9 23.5 29.6 26.4 27.0 25.1 25.6 26.2 Inc
Slide 51: Results: Commercial & Corporate Business Unit
IV Results I Commercial & Corporate Business Unit (€ million) Q4’15 Q3’15 Q2’15 Q1’15 Q4’14 Q3’14 Q2’14 Q1’14 Operating Income 221.5 222.5 216.7 207.8 220.7 220.0 218.3 218.2 Net Interest Income 182.8 187.1 180.5 171.8 179.2 177.8 177.8 179.6 Net fee and Commission Income 35.7 33.0 31.8 33.5 38.3 39
Slide 52: Results: Asset Management Business Unit
IV Results I Asset Management Business Unit (€ million) Q4’15 Q3’15 Q2’15 Q1’15 Q4’14 Q3’14 Q2’14 Q1’14 Operating Income 14.6 10.6 16.5 19.2 16.0 13.6 13.0 12.7 Net Interest Income 4.1 4.1 4.1 4.0 4.2 4.1 3.6 3.5 Net fee and Commission Income 8.8 7.2 12.1 15.3 11.8 9.4 8.4 8.4 Income from Financial
Slide 53: Results: Investment Banking & Treasury Business Unit
IV Results I Investment Banking & Treasury Business Unit (€ million) Q4’15 Q3’15 Q2’15 Q1’15 Q4’14 Q3’14 Q2’14 Q1’14 Operating Income (12.0) (47.9) (19.5) 11.0 21.3 22.9 19.0 33.0 Net Interest Income (44.3) (54.5) (38.6) (9.7) 6.9 8.3 6.1 0.1 Net fee and Commission Income 1.9 (2.7) (3.4) 0.9 0.5 2.2
Slide 54: Results: SE Europe Business Unit
IV Results I SE Europe Business Unit (€ million) Q4’15 Q3’15 Q2’15 Q1’15 Q4’14 Q3’14 Q2’14 Q1’14 Operating Income 86.1 96.6 89.8 71.1 93.6 101.4 102.9 95.1 Net Interest Income 77.1 77.6 79.1 78.7 80.9 85.2 81.8 78.8 Net fee and Commission Income 8.0 8.0 7.5 8.4 8.3 8.8 8.4 8.4 Income from Financial
Slide 55: Results: Other Business Unit
IV Results I Other Business Unit (€ million) Q4’15 Q3’15 Q2’15 Q1’15 Q4’14 Q3’14 Q2’14 Q1’14 Operating Income (108.7) (3.6) (5.6) 30.1 (56.9) 7.8 14.3 12.1 Net Interest Income (0.2) 0.4 0.2 0.1 0.1 0.3 0.3 0.5 Net fee and Commission Income 0.7 0.1 0.3 0.2 0.2 0.1 0.2 0.2 Income from Financial Operat
Slide 56: V. Macroeconomic Update
V. Macroeconomic Update FY 2015 Results 56
Slide 57: Strong tourism activity and gains in competitiveness
V Strong tourism activity and gains in competitiveness Fully recouped competitiveness in Greece Strong tourist arrivals in 2015 (excluding cruises) Competitiveness (REER)¹; 2005=100 In thousands 120 5,000 2015 Improvement / Annual ‘000 115 (deterioration) 4,500 vs. Jan-10 4,000 2012 15,518 2014 110
Slide 58: Economic Sentiment Rebound In H2 2015
Economic Sentiment Rebound In H2 2015 But Still Remains At Low Levels, V Compared to 2014 Rebound in Business Confidence in Industry Consumer Confidence Indicator 110 0 105 -10 100 -20 95 Feb.2016: -30 Feb.2016: 89.2 -66.8 90 -40 85 -50 80 -60 75 -70 70 -80 65 -90 60 -100 2010 2011 2012 2013 2014 20
Slide 59: Alpha Bank Contacts
Alpha Bank Contacts Vassilios Psaltis Lazaros Papagaryfallou General Manager – CFO Executive General Manager vep-office@alpha.gr lap-office@alpha.gr +30 210 326 2181 +30 210 326 4017 Dimitrios Kostopoulos Elena Katopodi Manager Assistant Manager Investor Relations Division Investor Relations Divisio