Eurobank S.a. · ATHEX:EUROB
Eurobank — Q1 2016 Earnings Presentation
46 slides from Eurobank's earnings presentation, May 17, 2016
Slide 1: First Quarter 2016 Results
First Quarter 2016 Results 17 May 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 1Q2016 results review 9 Asset Quality 17 International operations 24 Appendix I – Supplementary information 32 Appendix II – Macroeconomic update 37 Page 2
Slide 4: 1Q16 results highlights
1Q16 results1 Highlights Key financials €m 1Q16 4Q15 Δ(%) 1 First profitable quarter since 3Q11, at €60m Net interest income 382.8 375.3 2.0 NII up 2.0% q-o-q, driven by lower funding cost Commission income 67.8 61.7 10.0 Commission income up 10.0% to €68m Other Income 63.5 (7.5) Operating exp
Slide 5: Pre-provision income (PPI)
Pre-provision income (PPI)1 Core PPI and other income (€ m) Highlights 8 1 54 (8) 64 Other income Core PPI l-f-l up 14.3% q-o-q at €198m NII up 2.0% q-o-q, driven by lower funding cost 198 Core PPI 176 173 173 Commission income up 10.0% to €68m 151 Operating expenses l-f-l down 1.4% y-o-y
Slide 6: International Operations
International Operations Net profit before one-offs (€ m) Highlights 37 International operations profitable for fifth consecutive quarter Operating income up 9.3% at €140m Core PPI up 4.7% at €63m 18 20 15 15 PPI up 18.8% at €75m Cost of risk at 2.0% 1Q15 2Q15 3Q15 4Q15 1Q16 Loan loss prov
Slide 7: Asset quality
Asset quality Significant deceleration in 90dpd formation, down 82% q-o-q Coverage ratios 90dpd ratio at 34.8%, NPE ratio at 44.2% 64.8% 65.0% 64.8% 64.3% 90dpd Coverage ratios: 90dpd at 64.3%, NPEs at 50.7% coverage 55.6% Accelerated write-offs in 1Q16 of €350m 53.3% 52.8% 52.1% 50.7% NPEs
Slide 8: Funding and liquidity
Funding and liquidity Eurosystem funding (€ bn) ELA eligible collateral (€ bn)2 GTBs & GGBs 34.0 Other 1.3 32.7 31.6 0.3 9.8 9.4 25.3 Pillar II bonds 19.0 22.9 22.8 4.0 5.3 4.7 4.7 ECB 22.9 22.3 ELA 20.0 18.3 18.1 15.0 Credit Claims 15.4 1 Jun 12 Jun 15 Sep 15 Dec 15 Mar 16 May 16 Interbank repos an
Slide 9: Capital position
Capital position Phased-in CET1 Fully loaded Basel III CET1 (FLB3) 17.0% 16.5% 15bps 16.5% 16.5% (50bps) (15bps) 15.5% (30bps) (70bps) 13.1% (240bps) 4Q15 CET1 1Q16 CET1 post 1Q16 result (DTA, minorities 1Q16 CET1 FLB3 incl. pref. DTA phase out Minorities and FLB3 CET1 Preference FY16 phase-out 1Q16
Slide 10: 1Q 2016 results review
1Q 2016 results review | Pageo
Slide 11: Loans and deposits
Loans and deposits Gross loans (€ bn) Deposits (€ bn) Δ €m before FX effect, write-offs & (683) 83 (163) 134.3% 133.0% Alpha Bulgaria bank 124.2% 126.9% 125.1% Loans/Deposits 52.9 52.8 51.7 51.7 51.31 8.0 7.9 7.6 7.6 7.7 International Greece 34.5 31.4 31.82 30.6 30.0 22.4 22.5 Business 9.3 22.0 22.1
Slide 12: Assets
Assets Total assets (€ bn) Gross Loans Consumer 13% Corporate 72.9 38% Mortgages 35% Small Business Net loans and advances to customers 14% 39.8 Securities Trading & other GGBs 5% 10% Securities 16.0 GTBs 12% PP&E, intangibles and other assets 3.8 Derivatives 2.1 Other Held for Sale 2.0 Loans and ad
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 1Q15 1Q16 Core 59% 188 182 183 Core 179 178 42% Time 182 174 178 178 165 58% Time 175 173 41% 153 139 New time deposit spreads (bps) 128 126 114 106 105 111 112 (104) 103 97 (116) (114) (109) (109) 100 9
Slide 14: Net interest income
Net interest income NII breakdown1 (€ m) NII per region (€ m) 362 366 375 383 360 100 104 International 104 103 102 279 258 263 258 276 Greece Loan margin 509 517 497 497 496 1Q15 2Q15 3Q15 4Q15 1Q16 NII evolution q-o-q (€ m) Bonds & other 51 61 48 53 47 (7) 5 Money market & Repos (19) (17) (13) (13
Slide 15: Spreads & net interest margin
Spreads & net interest margin Lending spreads (Greece, bps)1 Deposit spreads (Greece, bps) 525 542 525 Corporate Savings (29) and sight 508 (36) (34) (38) (48) 489 Total 479 480 Total (72) (73) 467 (89) 460 452 455 (107) 446 (110) (108) Time 436 Retail (122) 433 435 (161) (153) (165) 1Q15 2Q15 3Q15
Slide 16: Commission income
Commission income Commission income breakdown (€ m) Commission income per region (€ m) Total fees 0.47% Fees / Assets excl. excluding 0.44% 0.47% 0.42% 0.41% Govt. guarantees expense 79 82 74 83 84 Govt. guarantees Fees / Assets expense 0.36% 0.38% 0.36% 0.34% 0.26% 62 68 68 68 67 67 68 62 12 48 13
Slide 17: Operating expenses
Operating expenses1 OpEx per region (€ m) OpEx breakdown (€ m) 257 (1.4%) 253 257 256 257 264 253 23 20 Depreciation 64 63 65 65 66 International 97 95 Administrative 192 193 192 199 188 Greece Staff 136 138 1Q15 2Q15 3Q15 4Q15 1Q16 1Q15 1Q16 Cost-to-income ratio (%) Headcount and network evolution
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 (%) €3.2bn €4.8bn €4.0bn €5.9bn €17.9bn 37.7 37.5 37.4 36.6 Greece 54.8 36.3 49.5 35.0 35.2 34.3 34.8 34.0 Group 34.8 30.4 26.4 20.9 21.1 20.9 20.7 19.6 International 1Q15 2Q15 3Q15 4Q15 1Q16 Consumer Mortgages Sm
Slide 20: 90dpd formation per segment (Greece)
90dpd formation per segment (Greece) Mortgages (€ m) Consumer (€ m) 245 221 164 216 149 143 205 135 160 171 100 138 129 84 82 83 122 119 115 72 66 103 109 94 54 55 84 84 43 72 72 41 35 35 36 56 17 (11) 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 3Q1
Slide 21: 90dpd formation analysis (Greece)
90dpd formation analysis (Greece) 90dpd formation (€ m) Modifications breakdown 369 10% Short Term 30% Interest rate reduction 207 164 111 Long Term: Tenor Extension 49 38% 90dpd formation 1% 70% Split balance 21% Debt forgiveness 1,101 880 900 745 775 Inflows Reverse ratio (Modifications / Inflows)
Slide 22: Non Performing Exposures (EBA) metrics (Group)
Non Performing Exposures (EBA) metrics (Group) NPEs (€ bn) NPEs per region 1Q16 €371m Formation €350m Write -offs Provisions & Total NPEs NPEs ratio Provisions/ collaterals / NPEs (€ bn) (%)3 NPEs (%) (%) 22.3 22.6 22.7 22.0 21.2 Consumer 3.4 62.6 76.8 81.8 4.5 4.9 5.6 6.2 3.8 1 Mortgages 5.9 36.2 3
Slide 23: Corporate NPE management partnership in Greece
Corporate NPE management partnership in Greece Eurobank and Alpha Bank partnered with KKR and EBRD for large Corporate NPEs turnaround Key points Deal merits KKR, through its specialised turnaround firm “Pillarstone Europe”, will set up a Greek NPE Management Company (“ManCo”), (licensed by BoG)
Slide 24: Eurobank in progress to execute NPL sales
Eurobank in progress to execute NPL sales International NPL disposals Bulgaria Romania Total unsecured consumer 50% NPL loans 50% of gross book Unsecured consumer NPL loans of gross book Perimeter value of €72m value of €170m 72% A consortium of investors including a supra-national Buyer EOS
Slide 25: International operations
International operations Page 24
Slide 26: International presence
International presence Total Assets (€ bn) 1.4 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) 3.0 Branches (#) 80 Net Loans (€ bn) 1.8 Deposits (€ bn) 1.9 Branches (#) 147 Total Assets (€ bn) 3.2 Net Loans (€ bn) 2.3 Tota
Slide 27: Income statement highlights
Income statement highlights Core PPI (€ m) Pre Provision Income (€ m) 1Q15 13 75 2Q15 14 69 2 ROM 65 63 3Q15 13 61 3 16 LUX 2 3 4Q15 8 5 15 13 12 17 7 CYP 1Q16 13 10 9 10 8 SER 1Q15 22 32 25 26 2Q15 25 22 24 BUL BUL 3Q15 26 4Q15 24 15 14 16 ROM 11 10 1Q16 25 1Q15 2Q15 3Q15 4Q15 1Q16 1Q15 10 2Q15 9 N
Slide 28: Operating expenses
Operating expenses OpEx per Country (€ m) OpEx breakdown (€ m) 64 66 64 66 63 65 65 4 5 4 5 8 8 Depreciation 4 5 LUX 6 6 6 7 11 11 11 11 11 CYP 29 29 19 20 21 Administrative 18 19 SER BUL 25 24 24 26 23 Staff 27 29 ROM 1Q15 2Q15 3Q15 4Q15 1Q16 1Q15 1Q16 Cost-to-income ratio (%) Cost-to-average asset
Slide 29: Gross Loans
Gross Loans Romania (€ m) Bulgaria (€ m) 2,595 2,542 2,534 2,654 2,489 2,516 2,494 2,340 2,244 368 2,307 389 389 387 606 383 Consumer 14% 585 Consumer 560 536 24% 528 43% 871 53% 785 779 765 764 33% 826 Mortgage 817 Mortgage 765 753 733 33% 3M16 1,415 3M16 Business 1,368 1,366 1,363 1,348 Business 1
Slide 30: Deposits
Deposits Romania (€ m) Bulgaria (€ m) 2,623 2,454 2,260 2,262 2,351 775 969 1,803 1,794 1,850 711 850 Time 1,684 1,600 807 37% 40% 1,208 1,092 1,117 Time 63% 1,087 1,050 60% 1,679 1,549 1,654 Core 1,455 1,501 595 597 550 702 733 Core 3M16 3M16 3M15 6M15 9M15 FY15 3M16 3M15 6M15 9M15 FY15 3M16 Serbia
Slide 31: Asset quality
Asset quality Romania Bulgaria 63.0% 64.5% 64.8% Coverage 67.5% 68.1% 63.6% 59.7% 66.4% 66.9% 67.2% Coverage 31.8% 32.6% 31.6% 32.0% 31.7% 90dpd 23.0% 23.2% 23.1% 23.4% 20.1% 90dpd 90dpd gross 90dpd gross formation 12 9 7 10 5 2 formation (€ m) 1 (€ m) (9) (3) (3) 1Q15 2Q15 3Q15 4Q15 1Q16 1Q15 2Q15
Slide 32: Key figures – 1Q16
Key figures – 1Q16 Romania Bulgaria Serbia Cyprus Lux Sum Assets 2,986 3,210 1,238 3,786 1,437 12,657 Gross loans 2,244 2,654 865 1,577 326 7,667 Balance Sheet (€m) Net loans 1,765 2,335 766 1,508 325 6,700 Balance Sheet 90dpd Loans 712 535 145 109 2 1,502 Deposits 1,850 2,624 695 3,360 1,155 9,683
Slide 33: Appendix I – Supplementary information
Appendix I – Supplementary information Page 32
Slide 34: Income statement highlights (Greece)
Income statement highlights (Greece) Operating income (€ m) Operating expenses (€ m) 374 332 313 302 301 226 178 178 177 188 1Q15 2Q15 3Q15 4Q15 1Q16 1Q15 2Q15 3Q15 4Q15 1Q16 Provision charge (€ m) Net profit before one-offs (€ m) 1,794 10 23 (116) (112) 260 221 226 142 (1,301) 1Q15 2Q15 3Q15 4Q15 1
Slide 35: Summary performance
Summary performance Balance sheet – key figures Income statement – key figures €m 1Q16 4Q15 €m 1Q16 4Q15 Gross customer loans 51,323 51,683 Net interest income 382.8 375.3 Provisions (11,505) (11,790) Commission income 67.8 61.7 Net customer loans 39,819 39,893 Operating income 514.1 429.5 Customer
Slide 36: Consolidated quarterly financials
Consolidated quarterly financials Income Statement (€ m) 1Q16 4Q15 3Q15 2Q15 1Q15 Net Interest Income 382.8 375.3 359.9 365.9 361.8 Commission income 67.8 61.7 47.7 66.8 67.6 Other Income 63.5 (7.5) 53.6 0.6 8.1 Operating Income 514.1 429.5 461.2 433.2 437.5 Operating Expenses (253.0) (291.0) (241.9
Slide 37: Consolidated financials
Consolidated financials Income Statement (€ m) 3M16 3M15 Δ y-o-y (%) Net Interest Income 382.8 361.8 5.8 Commission income 67.8 67.6 0.4 Other Income 63.5 8.1 >100 Operating Income 514.1 437.5 17.5 Operating Expenses (253.0) (242.7) 4.3 Pre-Provision Income 261.1 194.7 34.1 Loan Loss Provisions (175
Slide 38: Appendix II – Macroeconomic update
Appendix II – Macroeconomic update Page 37
Slide 39: Short-term macroeconomic outlook improves
Short-term macroeconomic outlook improves Strengthened prospects for successful completion of 1st program review Milder than anticipated recession in 2015; GDP drop mainly due to drawdown in inventories after imposition of CCs Contributors: private consumption (+0.2ppts); net exports (+1.1ppts); g
Slide 40: Domestic economic activity
Domestic economic activity Gradual stabilization after last summer’s turbulence Economic sentiment Purchases managers’ index (PMI) 110.0 53.0 51.1 104.6 105.0 Correlation with Real GDP 48.0 47.3 49.7 100.0 46.9 Growth: +0.88 95.0 91.2 43.0 PMI > 50 Expansion 90.3 90.0 87.1 PMI < 50 Contraction 38.0
Slide 41: Domestic financial conditions
Domestic financial conditions Notable improvement expected upon completion of 1 st review 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 in Sept. 2014-Jun. 2015 (total outflow
Slide 42: First program review
First program review Final agreement expected at the May 24th Eurogroup Prior actions Measures to secure savings/revenues of €5.4bn in 2016-2018 — Income tax reform (€1.8bn); approved by Parliament on May 8th — Social security pension reform: (€ 1.8bn); approved by Parliament on May 8th — Fiscal p
Slide 43: Progress in implementing program deliverables
Progress in implementing program deliverables Around half of total # of prior actions to be fulfilled upon completion of 1 st review Prior actions completed by end-2015 25% Remaining prior actions to Total number of prior be completed by the end of actions to be fulfilled upon the current program co
Slide 44: Medium-term growth drivers
Medium-term growth drivers Real GDP (Index 2007 = 100) 105 Tourism (focus on promising sub-sectors: home-porting EC Spring for cruises, health tourism, city breaks, other) 100 Forecasts -0.3% Transportation and Logistics 95 2016 (positive externalities to other important sectors of the economy e.g.
Slide 45: Greece outlook 2016
Greece outlook 2016 Macro indicators: realizations & forecasts 2015, €bn 2015 2016 2017 (nominal) Real YoY% Real YoY% Real YoY% GDP 176.0 -0.2 -0.3 2.7 Private Consumption 123.8 0.3 -0.4 1.8 Government Consumption 35.2 0.0 -0.5 -0.1 Gross Capital Formation 17.3 -13.1 -1.0 12.7 Gross Fixed Capital Fo
Slide 46: 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