Slide 1: FY 2018 Results
FY 2018 Results March 28, 2019
Slide 2: Table of Contents
Table of Contents Pages I. Key Highlights 4 II. Macroeconomic Update 7 III. Q4 18 Financial Performance 11 IV. Asset Quality 20 V. Capital 27 VI. Appendix 29 1. Volumes 29 2. PnL 35 9M FY 2013 FY2013 Results 2018Results Results 2
Slide 3: Disclaimer
Disclaimer This presentation has been prepared and issued by Alpha Bank solely for informational purposes. For the purposes of this disclaimer, this presentation shall mean and include materials, including and together with any oral commentary or presentation and any question and answer session. By
Slide 4: I. Key Highlights
I. Key Highlights FY 2018 Results 4
Slide 5: Business Highlights
I Business Highlights Further strengthening of domestic economic activity and improving conditions in labour and real estate markets, Supportive macro supportive of banks’ efforts to clean up balance sheets trends Market confidence manifested by sovereign debt issuance and rating upgrades allow
Slide 6: Financial Highlights
I Financial Highlights Pre Provision Income at €1.4bn, up by 23.1% y-o-y supported by strong trading gains Financial Impairment losses on loans at €1.6bn, materially affected by additional impairment recognized Q4 2018 to account for Performance upcoming NPE sales in 2018 PAT at €53mn for the
Slide 7: II. Macroeconomic Update
II. Macroeconomic Update FY 2018 Results 7
Slide 8: Economic recovery accelerated further in 2018
II Economic recovery accelerated further in 2018 Economy continued to expand… …driven by private consumption and external trade dynamics (pps) 4 105 4 82% 2 100 3 2 80% 0 95 1 78% -2 90 0 -1 -4 85 76% The estimated carry-over -2 effect for 2019 is 0.5 pps -6 80 -3 74% Ι ΙΙ ΙΙΙ ΙV Ι ΙΙ ΙΙΙ ΙV Ι ΙΙ ΙΙ
Slide 9: Strengthening growth prospects on the back of improving conditions in labour and real estate markets
II Strengthening growth prospects on the back of improving conditions in labour and real estate markets Buoyant travel receipts in record-high tourism season Employment increases in the main sectors of the economy (% change) WEF Tourism 28% 24th 27.5% Competitiveness Index : 26.5% 32th /136 2% World
Slide 10: Market confidence is gradually strengthening
II Market confidence is gradually strengthening Retail trade and Consumer Confidence Industrial Confidence Indicator, Manufacturing and PMI 10% 0 5% 15% 120 -20 10% 110 0% 100 5% -5% -40 90 0% 80 -10% -5% 70 -60 60 -15% -10% 50 -15% 40 -20% -80 -20% 30 2010 2011 2012 2013 2014 2015 2016 2017 2018 20
Slide 11: III. Q4 18 Financial Performance
III. Q4 18 Financial Performance FY 2018 Results 11
Slide 12: Q4 2018 Group P&L and Balance Sheet highlights
III Q4 2018 Group P&L and Balance Sheet highlights Balance Sheet yoy 31/12/2018 31/12/2017 change Profit & Loss Q4 Q3 qoq % (€ billion) (€ billion) (€ million) 2018 2018 change Assets 61.0 60.8 0.2 Net Interest Income (NII) 427 427 … Net Loans 40.2 43.3 (3.1) Fees and commissions Income 87 79 10.6%
Slide 13: Q4 2018 Core PPI performance
III Q4 2018 Core PPI performance PPI q-o-q evolution NII stable q-o-q (€ million) (€ million) +€15.9mn 374 +6.6% 427 1 2 64 427 14 257 265 (3) 241 8 (133) (6) (56) (0) Q3 18 Trading1 Q3 18 Δ NII Δ Fees Δ Other Δ OPEX Q4 18 Trading Extraordinary Q4 18 NII Loans Deposits Bonds & NII Reported Core PPI
Slide 14: Loan disbursements in Greece, increased by 38% y-o-y
III Loan disbursements in Greece, increased by 38% y-o-y New disbursements - per category Δ € million FY 2017 FY 2018 Q1 2018 Q2 2018 Q3 2018 Q4 2018 y-o-y Individuals 145 160 +15 33 34 36 58 Business 1,999 2,790 +791 570 701 587 932 Total 2,144 2,950 +806 603 734 622 991 FY 2018 Business disburseme
Slide 15: CAD ratio at 17.4%, comfortably above 2019 SREP
III CAD ratio at 17.4%, comfortably above 2019 SREP CET1 ratio quarterly evolution SREP evolution (€ million) CAD CET1 8,290 FLB3 CET1 8,987 8,803 8,274 capital 14.0% 17.4% Dec-18 18.3% 18.3% 14bps 18.0% 13.75% 17.4% 12.875% 0.25% (36bps) (8bps) (60bps) 1.875% 2.5% O-SII 3% 3% Capital Conservation 8
Slide 16: ELA elimination achieved; deposits and repos the driving forces
III ELA elimination achieved; deposits and repos the driving forces Eurosystem funding evolution Group deposits maintain the positive trend (€ billion) (€ billion) Δ 2016-2018 Δ 2016-2018 -€14.9bn + €5.8bn 18.3 +€3.8bn YoY -€6.8bn 38.7 3.3 0.5 ELA 34.9 10.2 32.9 6.0 13.2 eliminated in Feb-19 5.5 0.9
Slide 17: NPE stock in Greece down by €5.7bn since 2016
III NPE stock in Greece down by €5.7bn since 2016. Negative organic formation in Q4 NPE Reduction – Greece Negative gross formation in Greece based on higher exits (€ billion) (€ billion) -€5.7bn 0.04 Gross (0.08) (0.13) (0.47) -20.7% Formation 27.7 25.0 Entries 0.64 0.66 0.68 0.66 21.9 (2.6) (0.5)
Slide 18: New NPE reduction plan 2018 – end 2021
III New NPE reduction plan 2018 – end 2021 New NPE reduction plan 2018-2021 – Solo perimeter (€ billion) -€5.9bn 27.6 24.8 -€5.5bn 21.7 -€8.7bn 16.2 o/w sales c.70% 7.4 Dec-16 Dec-17 Dec-18 Dec-19 Dec-21 Actual Actual Actual Target Target New NPE reduction plan 2018-2021 New plan mainly focused on
Slide 19: Group NPE cash coverage increased at 48%
III Group NPE cash coverage increased at 48% Group CoR (over Gross loans) Group NPE Coverage 2 Including cost of upcoming transactions 50% 50% 50% 3.02% 48% 2.39% 2.96% 47% 2.26% 2.18% 1.69% 2.47% 1 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 FY 2018 Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 (Cumulative) pf IFRS 9 Group
Slide 20: IV. Asset Quality
IV. Asset Quality FY 2018 Results 20
Slide 21: NPE transactions update
IV NPE transactions update Closed Size Completion Transaction details “Project Jupiter” c. €1.0bn Q4 2018 SMEs loan portfolio secured with real estate assets “Project Mercury” Portfolio of non-performing unsecured consumer and c. €1.1bn Q4 2018 small business loans. “Individual Corporate Loan Sa
Slide 22: Auctions and repossession activity evolution
IV Auctions and repossession activity evolution Auctions conducted per quarter Successfully auctioned properties & breakdown by highest bidder 807 3,489 e-auctions 14% 422 328 86% % of succesful Unsuccesful 3rd parties 54% 131 over conducted Successful 38% Alpha Bank auctions 29% 38% 17% Q1 2018 Q2
Slide 23: NPL stock in Greece down by €2.0bn y-o-y
IV NPL stock in Greece down by €2.0bn y-o-y NPL balances evolution - Greece Wholesale Gross NPL formation – Greece 1 (€ billion) (€ million) y-o-y -€2.0bn 16.6 16.4 16.5 14.9 14.6 (2) (14) (21) (43) Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 (675) Q1 18 Q2 18 Q3 18 Jupiter Q4 18 Sale Retail Gross NPL format
Slide 24: NPL Workout Units Analysis and Group forborne loans
IV NPL Workout Units Analysis and Group forborne loans Loans perimeter managed by NPL Units NPL Workout Units balances breakdown by segment (€ billion) (€ billion) 44.9 23.0 21.9 Retail Wholesale €15.6bn €6.3bn 22.4 8.0 30.4 15.6 Performing 0.7 5.3 Performing 8.4 NPLs 10.3 3.3 13.9 6.3 4.1 4.4 14.6
Slide 25: Detailed overview of Alpha Bank's asset quality by portfolio – Greece
IV Detailed overview of Alpha Bank’s asset quality by portfolio – Greece (€ billion) Wholesale SBL Mortgages Consumer Total Gross loans 19.2 5.1 15.3 5.3 44.9 (-) Provisions (4.2) (1.9) (2.3) (1.8) (10.2) Net loans 15.0 3.3 13.0 3.5 34.7 NPLs 3.7 3.3 5.5 2.0 14.6 NPL ratio 19.3% 65.4% 35.9% 38.1% 32
Slide 26: Detailed overview of Alpha Bank's asset quality by portfolio – Group
IV Detailed overview of Alpha Bank’s asset quality by portfolio – Group (€ billion) Wholesale SBL Mortgages Consumer Total Gross loans 22.8 5.2 18.6 5.9 52.5 (-) Provisions (5.2) (1.9) (3.3) (2.0) (12.3) Net loans 17.6 3.3 15.3 3.9 40.1 NPLs 5.0 3.4 6.9 2.2 17.6 NPL ratio 21.9% 65.3% 37.4% 37.9% 33.
Slide 27: V. Capital
FY 2018 Results V. Capital a) ALPHA BANK 27
Slide 28: Group RWA decreased q-o-q
V Group RWA decreased q-o-q Group Risk Weighted Assets (standardized method) Credit Risk Weights (€ billion) -€0.5bn -1.1% 48.2 47.6 (0.4) (0.0) (0.1) 104% 3.9 3.8 0.9 0.9 79% 65% 43.3 42.9 Sep-18 Credit Market Operational Dec-18 Performing NPE Total Loan Portfolio RWAs RWAs RWA Density Credit Marke
Slide 29: VI. Appendix 1. Volumes
VI. Appendix 1. Volumes FY 2018 Results 29
Slide 30: Balance Sheet composition
VI Balance Sheet composition Asset split Liabilities and equity split (€ billion) (€ billion) 61.0 60.8 61.0 60.8 0.3 ELA Cash 1.6 Cash 1.9 7.0 ELA 3.1 ECB Due from Banks 1.7 Due from Banks 2.5 ECB Due to Banks 3.2 7.1 Due to Banks excl. ECB/ELA Securities 5.9 Securities 7.0 excl. ECB/ELA 2.9 Time T
Slide 31: Business Volumes
VI Business Volumes % (€ million) Dec 2018 Sep 2018 Jun 2018 Mar 2018 Dec 2017 Dec 2018 / Dec 2017 Group Gross Loans 52,462 53,242 55,432 55,850 56,612 (7.3%) Mortgages 18,561 18,863 18,955 19,161 19,576 (5.2%) Consumer Loans 4,446 4,492 4,902 4,943 5,010 (11.3%) Credit Cards 1,456 1,385 1,521 1,537
Slide 32: Breakdown of loans portfolio – December 2018
VI Breakdown of loans portfolio – December 2018 Group loans breakdown Loans portfolio structure – Group Electric Supply Other 8% 2% Real Estate 3% Leisure 4% Mortgages 35% Wholesale loans Transportation Households 47% 44% 5% €52.5bn €52.5bn Construction 7% Credit Cards 3% Manufacturing 11% Consumer
Slide 33: Deposits flow per quarter
VI Deposits flow per quarter Alpha Bank deposits evolution in Greece Deposits breakdown – December 2018 (€ billion) Q1: Q2: Q3: Q4: €0.9bn €1.2bn €1.2bn (€0.0bn) Time 43% 0.6 32.7 32.7 Core 0.4 31.5 0.6 0.8 (0.0) (0.0) 57% 1.3 30.3 29.3 Δ Time (0.4) Δ Core Dec-17 Core Time Mar-18 Core Time Jun-18 Co
Slide 34: Wealth Management evolution
VI Wealth Management evolution Alpha Private Bank balances Asset Management balances (€ million) (€ million) 4,352 4,341 4,261 1,323 1,274 1,582 1,723 1,612 186 117 1,365 230 1,025 994 2,782 2,739 2,601 927 512 501 208 169 236 248 Dec-16 Dec-17 Dec-18 Dec-16 Dec-17 Dec-18 Discretionary Advisory Exec
Slide 35: VI. Appendix 2. PnL
VI. Appendix 2. PnL FY 2018 Results 35
Slide 36: PPI and NII breakdown
VI PPI and NII breakdown Core PPI breakdown Lower contribution of loans to NII (€ million) (€ million) 573 554 536 536 514 480 444 459 90 427 427 278 282 90 83 70 67 269 257 240 479 439 436 427 428 (268) (272) (274) (280) (55) (51) (295) (54) (54) (53) (31) (17) (17) (6) (36) 1 Q4 17 Q1 18 Q2 18 Q3
Slide 37: Loan and deposit spreads
VI Loan and deposit spreads Net loan balances & spreads Deposit mix & cost evolution (bps) (51) (61) (61) (57) (54) % Total (bps) 433 429 426 423 415 43.3 41.5 41.2 40.8 37.1 38.6 38.7 (€ billion) 40.2 34.9 35.9 (€ billion) 17.0 17.2 17.9 18.0 46% 15.6 End of End of quarter 19.3 18.9 19.9 20.7 20.8
Slide 38: Increase in fee generation by 4% y-o-y in 2018
VI Increase in fee generation by 4% y-o-y in 2018 Net Fees & Commissions Income y-o-y Net Fees & Commission Income evolution y-o-y (€ million) (€ million) +4% y-o-y 323.5 +4% 335.2 335.2 7.2 Investment Banking & 323.5 13.0 2.7 1.6 5.6 7.2 54.4 Brokerage 5.6 55.2 (4.7) (0.9) 54.4 55.2 Asset Gathering
Slide 39: Operating expenses
VI Operating expenses Recurring OPEX Evolution € million FY 17 FY 18 yoy % (€ million) Staff costs (474) (465) (1.9%) 295 272 274 280 268 25 General expenses (544) (526) (3.4%) 26 Depreciation & 25 25 26 amortisation expenses Depreciation and amortisation (100) (102) 2.3% expenses 149 126 129 133 13
Slide 40: SEE Operations
VI SEE Operations 1 (€ million) Cyprus Δ% Romania Δ% Albania Δ% TOTAL Δ% Dec-18 yoy yoy yoy yoy Deposits 2,211 (1.3%) 2,463 23.0% 504 6.2% 5,179 14.6% Gross Loans 4,292 (13.2%) 2,607 2.2% 296 (9.5%) 7,195 (8.0%) Mortgages 2,084 (6.7%) 1,106 5.3% 70 3.5% 3,260 (2.7%) Consumer Credit 258 (4.4%) 247 4.
Slide 41: Alpha Bank Group
VI Alpha Bank Group (€ million) FY 2018 FY 2017 yoy % change Net interest income 1,756.0 1,942.6 (9.6%) Net fee and commission income 335.2 323 3.6% Income from financial operations 462.7 144.7 … Other Income 49.8 52.8 (5.7%) Operating Income 2,603.7 2,463.6 5.7% Staff costs (464.9) (473.6) (1.9%) G
Slide 42: Alpha Bank Group
VI Alpha Bank Group qoq% yoy % (€ million) Q4 2018 Q3 2018 Q2 2018 Q1 2018 Q4 2017 change change Net interest income 426.6 426.6 459.0 443.8 479.6 (0.0%) (11.1%) Net fee and commission income 87.3 78.9 84.6 84.4 82.7 10.6% 5.6% Income from financial operations 64.3 134.8 77.5 186.1 28.8 … … Other In
Slide 43: Group Results by Business Unit
VI 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 2018 2017 2018 2017 2018 2017 2018 2017 2018 2017 2018 2017 2018 2017 Operating Income 987.7 1,069.
Slide 44: Results I Retail Business Unit
VI Results I Retail Business Unit (€ million) Q4 2018 Q3 2018 Q2 2018 Q1 2018 Q4 2017 Operating Income 241.7 238.6 246.7 260.8 263.4 Net Interest Income 202.5 208.5 218.2 218.0 232.2 Net fee and Commission Income 28.2 28.1 27.4 27.6 29.2 Income from Financial Operations 10.4 1.5 0.6 14.7 1.5 Other I
Slide 45: Results I Commercial & Corporate Business Unit
VI Results I Commercial & Corporate Business Unit (€ million) Q4 2018 Q3 2018 Q2 2018 Q1 2018 Q4 2017 Operating Income 163.9 172.8 195.8 177.2 193.9 Net Interest Income 141.8 147.3 153.2 155.0 154.4 Net fee and Commission Income 38.3 32.0 35.9 32.7 34.0 Income from Financial Operations (19.3) (9.5)
Slide 46: Results I Asset Management Business Unit
VI Results I Asset Management Business Unit (€ million) Q4 2018 Q3 2018 Q2 2018 Q1 2018 Q4 2017 Operating Income 12.1 12.9 14.5 15.8 12.2 Net Interest Income 2.2 1.8 2.0 2.1 2.7 Net fee and Commission Income 10.2 9.9 10.7 13.1 10.1 Income from Financial Operations (0.4) 1.4 2.1 1.0 2.7 Other Income
Slide 47: Results I Investment Banking & Treasury Business Unit
VI Results I Investment Banking & Treasury Business Unit (€ million) Q4 2018 Q3 2018 Q2 2018 Q1 2018 Q4 2017 Operating Income 107.3 172.7 125.1 230.2 50.4 Net Interest Income 27.7 26.6 38.4 28.6 35.0 Net fee and Commission Income 2.7 2.1 3.5 3.7 3.0 Income from Financial Operations 75.4 142.5 81.9 1
Slide 48: Results I SE Europe Business Unit
VI Results I SE Europe Business Unit (€ million) Q4 2018 Q3 2018 Q2 2018 Q1 2018 Q4 2017 Operating Income 56.4 60.2 60.4 56.2 68.0 Net Interest Income 51.9 50.6 49.8 46.8 54.9 Net fee and Commission Income 7.7 7.0 7.2 7.1 6.5 Income from Financial Operations (5.5) 1.0 2.3 (0.3) 3.0 Other Income 2.4
Slide 49: Results I Other Business Unit
VI Results I Other Business Unit (€ million) Q4 2018 Q3 2018 Q2 2018 Q1 2018 Q4 2017 Operating Income 19.2 (7.9) (11.2) (17.7) 13.5 Net Interest Income 0.5 (8.2) (2.6) (6.7) 0.4 Net fee and Commission Income 0.2 (0.3) (0.1) 0.1 (0.3) Income from Financial Operations 3.8 (2.1) (12.9) (12.4) 8.7 Other
Slide 50: Glossary
VI Glossary Reconciliation of key Management’s definitions with terms in “Annual report (In accordance with Law 3556/2007)” Terms Definitions Abbreviation Accumulated Provisions or Loan 1 Accumulated Impairment Allowance, as disclosed for credit risk monitoring purposes (note 41) LLR Loss Reserve 2
Slide 51: Glossary
VI Glossary Alternative Performance Measures Definitions Abbreviation Accumulated Provisions (1) including the value of the associated collaterals divided by Non Performing Exposures (NPEs) at the end of the NPE Total Non Performing Exposure Total Coverage reported period coverage Non Performing Loa
Slide 52: Alpha Bank Contacts
Alpha Bank Contacts Lazaros Papagaryfallou General Manager – CFO lap-office@alpha.gr +30 210 326 2261 Dimitrios Kostopoulos Elena Katopodi Manager Assistant Manager Investor Relations Division Investor Relations Division dimitrios.kostopoulos@alpha.gr elena.katopodi@alpha.gr +30 210 326 2271 +30 210