National Bank Of Greece S.a. · ATHEX:ETE
National Bank Of Greece — Debt Investor Presentation (December 2022)
41 slides from National Bank Of Greece's debt investor presentation, December 2022
Slide 1: Fixed Income Investor Presentation Credit Update
Fixed Income Investor Presentation Credit Update December 2022
Slide 2: Disclaimer
Disclaimer Not an Offer for Sale This presentation, which has been prepared by the National Bank of Greece (the Bank), is confidential and is being made available to selected recipients only and solely for the information of such recipients. This presentation may not be published, redistributed, tra
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: Business activity bounced back strongly and corporate profits at an 11-year high
01 Macro Business activity bounced-back strongly and corporate profits at an 11-year high with competitive firms overcoming production cost pressures until mid-2022 Labor income & business profits Business turnover 20 y-o-y 20 28 28 €bn 15 15 24 24 10 10 5 5 20 20 0 0 16 16 -5 -5 12 12 -10 -10 *excl
Slide 6: Tourism revival, fiscal support and resilient labor market cushioned the inflation/energy shock
01 Macro Tourism revival, additional fiscal support and resilient labor market cushioned the inflation/energy shock Unemployment at a 12-year low of 11.8% in September 2022 Tourism revenue heading to a new all-time high 4,5 million persons % 30 4,0 €bn 4,0 3,5 3,5 25 4,0 3,0 3,0 2,5 2,5 20 2,0 2,0 3
Slide 7: Strong cyclical tailwinds bolstered fiscal rebalancing
01 Macro Strong cyclical tailwinds bolstered fiscal rebalancing Fiscal targets are met on the back of strong cyclical support on revenue and lowered primary spending Gen. Gov. Cyclically-adjusted primary balance as as % of GDP % of potential GDP (2022) 120 €bn % GDP 20 105 15 -4,9 MT 90 10 -4,1 ΒΕ 7
Slide 8: Inflation has possibly peaked but remains persistent
01 Macro Inflation has possibly peaked but remains persistent, with increased risks in the euro area. Greece’s energy mix resilient to near-term risks. NG prices based on TTF future contracts down by 60% Greece’s CPI inflation has possibly peaked in 3Q22 in 4Q22 and by 46% for 2023 vs August 2022 pe
Slide 9: Liquidity conditions remained supportive; private sector cash buffers and FDI up
01 Macro Liquidity conditions remained supportive despite the turn in global monetary cycle; private sector’s cash buffers up to pre-crisis levels and FDI heads to a new highs Private sector deposits, cumulative flows of credit and Total FDI inflows per year bond issuance Bank credit to NFCs: €27.2
Slide 10: NBG's view on Greece's economic outlook and consensus estimates
01 Macro NBG’s view on The NBG’s view on Greece’s economic outlook and consensus estimates economic outlook Table: Key macros for the Greek economy GDP growth decomposition by expenditure component Key macroeconomic indicators of the Greek Economy 20 contributions 2019 2020 2021 2022f 2023f 2024f in
Slide 11: Ratings still lag periphery peers, but upside expected
01 Macro Update Ratings still lag compared to periphery peers, but we expect an upside in the short to medium-term Outlook Stable Stable Negative Stable Positive LT Rating Ba3 Baa1 Baa3 Baa2 Ba1 CC LT Foreign Bank Deposits A3 Aa1 Aa3 Aa2 A1 Outlook Stable Stable Stable Stable Stable Foreign Currency
Slide 12: 02 Bank Overview
02 | Bank Overview aa
Slide 13: NBG at a glance
02 Bank Overview NBG at a glance As of 9M22 Trusted brand Balance sheet metrics Attributable 9M22 PAT at with more than continue to improve €652m¹ 100 years of history €652m/ LCR 249% Branches 330 PAT/COP €464m NSFR 142% FTEs 8.6k NIM2 197bps L:D3 56% Total assets €80.9bn Cost to core income 48% NPE
Slide 14: The Bank's Transformation Plan continues to deliver value for its investors
02 Bank Overview The Bank’s Transformation Plan continues to deliver value for its investors Profitability1 Asset Quality, Capital & Liquidity1 2019 2020 2021 9M 2022 3Q 2022 2019 2020 2021 9M 2022 Net Interest 268bps 228bps 206bps 197bps 213bps 82.1% NPE Coverage 53.4% 63.3% 77.2% Margin Fees / Tot
Slide 15: 9M Group profitability recovery accelerates on strong core income rebound
02 Bank Overview 9M Group profitability recovery accelerates on strong core income rebound (+8% yoy) Profitability “jaws” | € m – 9M22 Profitability “jaws” | € m – 9M22 COP & PAT1 cont. operations | € m C:CI 57.9% 51.1% 48.3% 51.5% 48.8% 45.2% c10% increase qoq despite Core PAT (9M22) 401 NPE NII do
Slide 16: Sustained improvement across financial and operating KPIs leads to outperformance
02 Bank Overview Sustained improvement across financial and operating KPIs leads to significant outperformance Profitability | € b Asset quality¹ | €b to c10% Coverage% 70.1% 77.5% 82.8% >80% Revised . NPE% 11.9% 6.9% 5.9% c6% RoTE%² 9.2% 9.7% 9.1% c9% 3,7 Revised to c5% . Revised . to €0.6b NPEs €b
Slide 17: Bank and debt ratings on upwards trajectory, facilitating MREL market access
02 Bank Overview Bank and debt ratings on upwards trajectory, will facilitate continuous market access for MREL build-up Highest ratings and positive outlooks in GREEN Lowest ratings and negative outlooks in RED Greece Ba3 / Stable BB+ / Stable BB / Positive Latest Rating Action on Sovereign Date Af
Slide 18: 03 Profitability & Balance Sheet Evolution
03 Profitability & Balance Sheet Evolution 17
Slide 19: 9M22 Group COP up 41% yoy driven by core income growth
03 Profitability & Balance Sheet Evolution 9M22 Group COP up by 41% yoy mainly driven by accelerating core income growth; costs & CoR contained Group core operating profit bridge 9M22 (€ m) Group operating profit decomposition 9M22 (€ b) COP (€m) 330 464 +41% yoy +41% yoy COP margin (bps) 158 200 +4
Slide 20: 3Q22 NII recovery accelerates (+11% qoq)
03 Profitability & Balance Sheet Evolution 3Q22 NII recovery accelerates (+11% qoq), reflecting higher PE NII Domestic NII (€ m), Group NIM & CoR (bps) Domestic NII breakdown (€ m) NIM (Group) Pick up reflects the NII 291 292 270 294 328 216 213 beginning of the 206 194 182 tightening cycle +11% 9M2
Slide 21: Strong 4Q22 corporate pipeline expected to increase domestic performing exposures
03 Profitability & Balance Sheet Evolution Given a strong 4Q22 corporate pipeline, we expected domestic PEs to increase by year-end Greek loan evolution; performing loans (€ b) Loan disbursements1 (€ b) +45% yoy (+36% retail, 25.7 25.5 28.9 28.8 29.8 29.7 Net loans² +48% corporate) 4.0 26,5 26,5 25,
Slide 22: PE lending yields bounce back with the tightening cycle
03 Profitability & Balance Sheet Evolution PE lending yields bounce back reflecting the beginning of the tightening cycle Greek PE lending yields (bps) Greek NPE NII%, forborne & PE yields 5,1% 5,9% Total 309 308 306 307 326 Dom. NPE NII³ 4,4% 4,4% 4 Performing ¹ /Dom. NII % (ytd) 3,1% 9M20 FY20 9M2
Slide 23: Deposit rates remain low given abundant liquidity and rising deposits
03 Profitability & Balance Sheet Evolution Deposit rates remain low in view of the abundance of liquidity and a rising stock of deposits Greek deposit spread¹ (bps) Greek deposits evolution (€ b) 84% 88% Core deposits/total 53,9 +€2.4b 52,6 +4.6% ytd 47 51,6 51,3 Total 49,6 -35 6,6 -53 -55 -51 6,9 -
Slide 24: 9M22 domestic fee growth of +23%
03 Profitability & Balance Sheet Evolution 9M22 domestic fee growth of +23%, driven by strong volume growth in cards and trade finance Domestic fees (€ m) Domestic retail fees decomposition (€ m) Fees/Assets 36bps 42bps YoY YoY 246 +23% 135 +30% 25 -2% 15 +29% 199 Deposits 104 25 34 +23% 86 +23% Pay
Slide 25: OpEx contained, allowing Group C:CI to drop to 45.2% in 3Q22
03 Profitability & Balance Sheet Evolution Despite inflation and IT investment plan roll out, OpEx is contained allowing Group C:CI to drop to 45.2% in 3Q22 Group Cost over Core Income (%) Group headcount2 evolution (# k) Cost/ core 19,8 income % 51.1 48.3 58.9 45.2 56.9 55.2 New VES just launched -
Slide 26: 04 Asset Quality
NATIONAL BANK 04 | Asset Quality 25
Slide 27: Organic NPE flows remain negative, with no signs of pick up in inflows
04 Asset Quality Organic NPE flows remain negative, with no signs of pick up in NPE inflows Domestic NPE stock per category | 3Q22 (€ b) NPE balance change (€ m, Bank) o/w: €0.3b or FNPE & other c30% <30dpd impaired <90dpd Affected by 90+dpd 1,1 finalization 1,1 of Frontier II perimeter o/w: €0.2b o
Slide 28: High mortgage cure rates of c90% and likely-to-cure FNPEs
04 Asset Quality High mortgage cure rates of c90%, combine with a sizable portion of likely-to- cure FNPEs <30dpd Domestic 90dpd ratios and coverage | 3Q22 Domestic 90dpd – NPE bridge (€ b) | 3Q22 Collateral 86% 5% 84% 73% 68% coverage1 11% 8% 145% 90dpd ratio 1,8 140% +0,6 +0,05 +0,1 3% 3,5% 3,7% 1
Slide 29: Organic growth of S1 loans offers increasing support to NII
04 Asset Quality Organic growth of S1 loans offers increasing support to NII Group gross loan stage evolution (€ b) Group Stage 2 ratios and coverage (%) Group Stage 3 ratios and coverage (%) Stage 3 Δ yoy 3,8 2,2 2,1 -1.8 2,0 14,9% o/w: 14,2% 14,4% €2.1b FPEs 14,1% Ratio €2.3b SICR Stage 2 €0.2b +3
Slide 30: 05 Capital, MREL, Liquidity & Funding
05 Capital, MREL, Liquidity & Funding 29
Slide 31: Recurring organic capital generation in 3Q22 continues at +c40bps
05 Capital, MREL, Liquidity & Funding Recurring organic capital generation in 3Q22 continues at +c40bps 3Q22 FL capital movement1 Regulatory capital requirements +c40bps in organic & recurring capital generation 16.9% pro forma EVO merchant acquiring completion 16.3% CAD FL 16.1% +c0,4% 14,25% -c0,0
Slide 32: ECB TLTRO decision hits future NII but excess liquidity is an advantage
05 Capital, MREL, Liquidity & Funding ECB TLTRO policy decision hits future NII but excess liquidity is a competitive advantage TLTRO, Cash & reserves (€ b) NBG Funding Cost (bps) 17,6 15,8 15,3 14,5 11,6 11,6 11,6 11,6 1 0 1 4 -2 -2 Blended -65 -64 -64 -64 -64 -64 ECB¹ 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22
Slide 33: Interim MREL Target
05 Capital, MREL, Liquidity & Funding NBG is comfortably meeting the binding interim target – capital trajectory, additional issuance and complimentary initiatives will support a linear build- up until the end of the compliance period All figures as % of RWAs ▪ Single point of entry and issuance fro
Slide 34: 06 Appendix
NATIONAL BANK 06 | Appendix 33
Slide 35: Pushing forward with environment and climate strategy and broader ESG agenda
06 Appendix We are pushing forward with our environment and climate strategy and broader ESG agenda Environment strategic themes and recent efforts Examples of impact achieved to-date 1 Lead the market in sustainable energy financing Corporate PE renewable energy portfolio (9M22) • Utilisation of gr
Slide 36: Group Balance Sheet & P&L
06 Appendix Group Balance Sheet & P&L Balance Sheet¹ | Group P&L¹ | Group €m 3Q22 2Q22 1Q22 4Q21 3Q21 €m 3Q22 2Q22 1Q22 4Q21 3Q21 Cash & Reserves 17,572 15,261 14,530 15,827 11,587 NII 348 312 288 308 308 Interbank placements 3,143 2,711 3,715 3,639 3,152 Net fee & commission income 88 86 85 74 74 S
Slide 37: Geographical segment P&L: Greece & International
06 Appendix Geographical segment P&L: Greece & International Greece International1 €m 3Q22 2Q22 1Q22 4Q21 3Q21 €m 3Q22 2Q22 1Q22 4Q21 3Q21 NII 328 294 270 292 291 NII 20 18 18 16 18 Net fee & commission income 85 80 80 70 69 Net fee & commission income 3 5 5 4 5 Core Income 413 375 350 362 360 Core
Slide 38: ESMA Alternative Performance Measures, definition of financial data and ratios
06 Appendix ESMA Alternative Performance Measures (APMs), definition of financial data and ratios used The 9M22 Financial Results Press Release contains financial information and measures as derived from the Group financial statements for the period ended 30 September 2022 and for the year ended 31
Slide 39: 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 40: 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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