Eurobank S.a. · ATHEX:EUROB

Eurobank — Eurobank Ergasias Services and Holdings — Q1 2020 Earnings Presentation

62 slides from Eurobank's earnings presentation, May 29, 2020

  1. Slide 1: First Quarter 2020 Results

    First Quarter 2020 Results 29 May 2020

  2. 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 Ergasias Services and Holdings S.A. (“Eurobank Holdings”) and its 100% subsidiary Eurobank S

  3. Slide 3: Table of contents

    Table of contents Recent developments 3 1Q2020 results 14 1Q2020 results review 22 Asset Quality 29 International operations 34 Appendix I – Supplementary information 43 Appendix II – Macroeconomic update 47 Appendix III – Glossary 56 Page 2

  4. Slide 4: Recent developments

    A) urobank Holdings Recent developments | Page 3

  5. Slide 5: Facing the pandemic challenge

    Facing the pandemic challenge • Protect health and safety with over 70% of employees working remotely Adapting our • Further invest in digitization; actively promoting advanced electronic transaction channels operating model • Support viable and cooperative clients • Performing loans expanded by €0.

  6. Slide 6: Greece and SEE countries least affected

    Greece and SEE countries least affected  Epidemiology statistics: Virus fatality show Greece and SEE countries fare comparatively better, due to early government measures  Gradual lift of lockdowns in Greece and in most EU countries within May 6,042  2020 Greek and Cypriot GDP to be strongly affe

  7. Slide 7: European policy response

    European policy response European level stimulus Additional European Commission measures Next Generation EU Unemployment budget proposal initiative (SURE) • ESM credit line: up to 2% of GDP for each Eurozone country €100bn • Coronavirus Response Investment Initiative (€37 bn) €540bn €750bn • Solidar

  8. Slide 8: Domestic fiscal measures and liquidity support: c.14% of GDP

    Domestic fiscal measures and liquidity support: c.14% of GDP Fiscal measures: €14.5bn Liquidity support: €10.3bn • €2.5bn for income subsidies for affected employees, self employed and unemployed Fiscal • €150m to support primary sector €3.9bn • €2.0bn State guarantees for working capital support •

  9. Slide 9: Payment moratoria in Greece: Eurobank Household (1/2)

    Payment moratoria in Greece: Eurobank Household1 (1/2) • Up to 9-month moratorium on interest & principal payments for household lending (capitalization of installments) • Eligible clients must be up to 90 days past due ~47k applications for payment holiday NPF 9% Performing PF 56% 22% of eligible E

  10. Slide 10: Payment moratoria in Greece: Eurobank Business (2/2)

    Payment moratoria in Greece: Eurobank Business1 (2/2) Corporate • 9-month deferral of principal payments (tenor extension) • 18-month deferral of principal payments (tenor extension) for hotels Financial & • Eligible clients up to 90dpd Insurance, 1.3% Media, 1.3% Other, 7.7% Auto, 2.3% Wholesale Tr

  11. Slide 11: Public moratoria in countries of Eurobank presence

    Public moratoria in countries of Eurobank presence Bulgaria Cyprus Serbia  Up to 6-month moratorium by law on  Up to 9-month moratorium by law  Debt payments suspended by law principal payments (tenor extension) on principal and interest payments up to 3-months or as long as (capitalization of in

  12. Slide 12: Business continuity – Eurobank's response to Covid-19

    Business continuity – Eurobank’s response to Covid-19 Maintain flow of operations and secure Digital channels KPIs health and safety of FTEs  Work at home Δ y-o-y for the period Jan-Apr 20 vs Jan –Apr 19:  83% Central offices FTEs +36% +36 active digital users  40% Branches FTEs +26% +26% new r

  13. Slide 13: Transformation Plan completion

    Transformation Plan completion 2020 milestones Cairo SRT approval Rating & Application for APS for Cairo SPV1, SPV2 & SPV3 1Q20 pro forma Guarantee approval (APS) for Cairo SPV1 & SPV2 NPE ratio 15.6% FPS carve-out NPE coverage 59.6% Antitrust and BoG approval NPE stock €6.1bn Hive down completion C

  14. Slide 14: 2020 Operating performance outlook

    2020 Operating performance outlook €m 830 ~8.5% ~0.5% ~1.0% ~860 €m ~2.0% (~8.5%) Pre-Covid FY19 Core PPI NPE reduction Δ ΝΙΙ Performing Δ Fees Greece Δ Opex Greece Δ International FY20 Core PPI 1 impact Greece €m 830 ~3.0% ~1.3% ~840 €m ~9.5% ~(4.0%) (~9.0%) Post-Covid FY19 Core PPI NPE reduction Δ

  15. Slide 15: 1Q 2020 results

    Holdings 1Q 2020 results | Page 14

  16. Slide 16: 1Q20 results

    1Q20 results Highlights Key financials €m 1Q20 1Q19 Δ(%) 1Q20 4Q19 Δ(%) 1 Net profit1 €60m in 1Q20 Net interest income 339.4 342.7 (0.9) 339.4 346.7 (2.1)  Core pre-provision income (PPI) up 10.3% y-o-y at €212m; stable q-o-q  NII down 0.9% y-o-y at €339.4m; down 2.1% q-o-q Commission income 92.3

  17. Slide 17: Pre-provision income (PPI)

    Pre-provision income (PPI) Core PPI and other income (€ m) Δ PPI (q-o-q, € m) 14 58 13 28 3 Other income 211 214 213 212 192 69 70 68 65 Int'l 63 241 17 214 (7) Greece (11) 129 143 143 145 147 (26) 1Q19 2Q19 3Q19 4Q19 1Q20 PPI per region (€ m) 269 241 Δ ΝΙΙ 4Q19 PPI 1Q20 PPI Δ other income Δ commiss

  18. Slide 18: Asset quality

    Asset quality NPEs formation1 (€ m) NPEs ratio (%) Greece Int'l 36.7% 6 (10) Greece 32.8% 31.1% (5) 29.2% 28.9% 22 8 (115) (205) (195) (24) Jan 20 Feb 20 Mar 20 15.6% (342) 1Q19 2Q19 3Q19 4Q19 1Q20 1Q20 pro- 1Q19 2Q19 3Q19 4Q19 1Q20 forma for Cairo Loan loss provisions (€ m) Provisions / NPEs (%) 1.

  19. Slide 19: Capital position

    Capital position FBL 3 CET1 Phased in CET1 Total CAD 240bps 17.8% 150bps 20bps 15.4% 14bps 14.6% (40bps) 13.7% (64bps) 4Q19 FLB3 1Q20 result Debt Securities Other 1Q20 FLB3 IFRS 9 Other 1Q20 CET1 Tier I & II Total CAD CET1 at FVOCI CET1 transition transitions RWAs 41,122 - - 1,6031 42,725 228 - 42,9

  20. Slide 20: Capital position pro-forma for Cairo & FPS

    Capital position pro-forma for Cairo & FPS 17.8% 55bps 14.4% (313bps) (53bps) (25bps) 2.3% Tier II 12.1% CET 1 Cairo & FPS total impact: (340bps)2 11.0% 2.7% Tier II 2.1% AT 1 6.2% CET 1 1 1Q20 pro-forma CAD 1Q20 CAD RWAs due to Cairo & FPS Cairo & FPS P&L impact IRB shortfall due to Cairo Requireme

  21. Slide 21: Funding and liquidity

    Funding and liquidity TLTRO (€ bn) Deposits (€ bn)  Loan growth target (excl. mortgages): c.€0.2bn 91.7%  Current LTRO borrowing to be rolled over into TLTRO III borrowing in June (-100bps rate for 1 year special interest rate period, subject to no loan decrease during the 86.5% 87.3% Net Loans /

  22. Slide 22: International Operations

    International Operations Core PPI (€ m) Net Profit1 (€ m) 69 70 68 63 65 62 47 42 38 22 1Q19 2Q19 3Q19 4Q19 1Q20 1Q19 2Q19 3Q19 4Q19 1Q20 Loan loss provisions (€ m) Net Loans and Deposits (€ bn) 1.2% 2.0% 1.0% 1.4% 0.8% Cost of Risk 12.4 33 25 7.4 19 18 5.6 4.7 15 3.7 1.9 1.1 0.9 1.2 0.5 2 Int'l BUL

  23. Slide 23: 1Q 2020 results review

    1Q 2020 results review Page 22

  24. Slide 24: Loans

    Loans Gross loans (€ bn) Performing loans (€ bn) 45.0 45.0 +€3.4bn 31.8 44.5 44.4 43.6 31.3 International 30.4 6.5 29.0 7.5 7.6 7.7 28.4 7.4 7.1 International 7.0 6.8 1.1 1.1 1.1 Greece 5.9 6.7 1.1 Greece Senior notes 1.1 1.1 Senior notes 20.6 20.5 20.4 21.0 13.3 20.5 +€0.6bn Business 11.9 12.0 12.2

  25. Slide 25: Balance Sheet composition

    Balance Sheet composition Assets (€ bn) Liabilities and Equity (€ bn) 65.8 65.8 Equity 6.6 Net loans and 37.8 advances to customers Trading & • Core 58% Other 45.3 other Deposits • Time 42% issuers 1% 14% Securities 8.8 GGBs Other 57% PP&E, intangibles and other assets 4.8 Derivatives governments 2.

  26. Slide 26: Net interest margin & spreads

    Net interest margin & spreads Net interest margin (bps) Deposit spreads (Greece, bps) 1Q19 2Q19 3Q19 4Q19 1Q20 1Q19 2Q19 3Q19 4Q19 1Q20 Greece 222 211 204 200 194 Savings & Sight (51) (52) (58) (60) (55) International 283 277 266 265 255 Time (77) (74) (76) (71) (66) Group 235 226 219 215 208 Total

  27. Slide 27: Net interest income

    Net interest income NII breakdown (€ m) NII evolution (q-o-q, € m) Total NII 343 342 346 347 339 o/w Greece 254 248 247 247 244 o/w International 89 94 99 100 96 2 3 0 347 339 Loan margin 370 375 388 378 367 (5) (4) (4) Bonds & other 65 61 54 59 58 4Q19 1Q20 Loans Deposits Bonds & other Internationa

  28. Slide 28: Commission income

    Commission income Commission income breakdown (€ m) Commission income per region (€ m) 104 57bps over assets 104 94 92 94 90 21 92 90 28 17 16 Lending 17 29 26 Int’l 26 66 66 39 31 Network 15 40 36 23 76 66 Greece 5 11 Capital Markets 31 66 6 5 64 20 Bancassurance & 13 16 Asset Management 12 43 5 12

  29. Slide 29: Operating expenses

    Operating expenses OpEx per region (€ m) OpEx breakdown (€ m) Greece (2.8%) 217 1.7% 220 217 227 237 221 220 28 26 Depreciation 57 60 49 52 57 International 69 77 Administrative 168 169 169 178 163 Greece 120 Greece staff cost Staff (8.8%) 117 1Q19 2Q19 3Q19 4Q19 1Q20 1Q19 1Q20 Cost-to-income ratio

  30. Slide 30: Asset Quality

    Holdings Asset Quality | Page 29

  31. Slide 31: Δ stock NPEs (€m)

    Δ stock NPEs (€m) 30 Δ stock NPEs Group (459) (151) (883) (2,209) 22 Δ stock NPEs Solo (108) (722) (301) (2,254) 346 NPE inflows 219 182 164 152 (205) NPE outflows (366) (308) (303) (340) (65) (80) (88) Cash Payments (93) (86) (113) (169) (209) (262) (118) (26) (15) (8) (119) (32) (3) NPE net flow (

  32. Slide 32: NPEs formation per segment (Greece)

    NPEs formation per segment (Greece) Mortgages (€ m) Consumer (€ m) 1Q20 7 4 2 1Q20 1 (20) (27) (20) (41) (2) (67) (3) (2) (80) (66) (81) (4) (4) (4) (83) (85) (105) (9) (123) (10) 3Q19 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 4Q19 1Q20 Jan 20 Mar 20 Feb 20 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 Jan 20 Ma

  33. Slide 33: NPEs metrics (Group)

    NPEs metrics (Group) 90dpd bridge to NPEs (€ bn) NPEs per region Provisions & Provisions/ Total NPEs NPEs ratio collaterals / NPEs NPEs (€ bn) (%) (%) (%) Consumer 1.1 39.5 94.4 105 Mortgages 3.7 29.4 45.8 112 0.3 1.9 Small Business 3.2 53.7 51.5 109 13.0 10.8 Total Retail 7.9 37.6 54.7 105 Corporat

  34. Slide 34: Loans' stage analysis (Group)

    Loans’ stage analysis (Group) Loans’ stage breakdown Provisions stock over NPEs Δ 53.8% 54.5% 55.1% 55.3% 55.6% (€ bn) 1Q19 2Q19 3Q19 4Q19 1Q20 q-o-q Stage 1 21.5 22.4 23.7 25.2 25.7 0.5 Stage 2 7.0 6.9 6.9 6.3 6.2 (0.1) Stage 3 16.5 14.3 13.8 13.0 13.0 - (NPEs) 1 Total 45.0 43.6 44.5 44.5 44.9 0.4

  35. Slide 35: International operations

    International operations Page 34

  36. Slide 36: International presence

    International presence Total Assets (€ bn) 1.5 Net Loans (€ bn) 0.5 Total Assets (€ bn) 1.5 Deposits (€ bn) 1.2 Net Loans (€ bn) 1.1 Deposits (€ bn) 0.9 Branches (#) 80 Total Assets (€ bn) 6.3 Net Loans (€ bn) 1.9 Total Assets (€ bn) 5.4 Net Loans (€ bn) 3.7 Deposits (€ bn) 5.6 Private Banking 8 Dep

  37. Slide 37: Bulgaria P&L

    Bulgaria P&L PPI (€ m) OpEx (€ m) 63 31 29 29 24 22 39 31 32 24 1Q19 2Q19 3Q19 4Q19 1Q20 1Q19 2Q19 3Q19 4Q19 1Q20 Loan loss provisions (€ m) Net Profit (€ m) 32 16 26 20 20 10 8 9 8 8 1Q19 2Q19 3Q19 4Q19 1Q20 1Q19 2Q19 3Q19 4Q19 1Q20 Page 36

  38. Slide 38: Bulgaria B/S and Asset quality

    Bulgaria B/S and Asset quality Gross Loans (€ m) NPE ratio and Provisions / NPEs 3,779 3,828 3,801 3,856 523 530 528 547 2,985 Consumer Provisions / 52.3% 48.6% 50.6% NPEs 423 1053 1074 1075 1089 47.1% 42.9% Mortgage 918 Business NPE ratio 2,203 2,224 2,198 2,220 11.2% 11.0% 10.6% 7.8% 8.5% 1,644 1Q

  39. Slide 39: Cyprus P&L

    Cyprus P&L PPI (€ m) OpEx (€ m) 26 25 26 22 23 9 9 10 9 11 1Q19 2Q19 3Q19 4Q19 1Q20 1Q19 2Q19 3Q19 4Q19 1Q20 Loan loss provisions (€ m) Net Profit (€ m) 20 19 16 16 15 4 3 3 2 2 1Q19 2Q19 3Q19 4Q19 1Q20 1Q19 2Q19 3Q19 4Q19 1Q20 Page 38

  40. Slide 40: Cyprus B/S and Asset quality

    Cyprus B/S and Asset quality Gross Loans (€ m) NPE ratio and Provisions / NPEs Other 1,874 1,910 65.0% 69.6% 66.7% 68.3% 1,739 1,769 1,804 61.6% Provisions / 149 151 136 143 141 NPEs 1,603 1,627 1,663 1,725 1,759 Business 5.4% 5.3% 4.7% 3.9% 3.8% NPE ratio 1Q19 2Q19 3Q19 4Q19 1Q20 1Q19 2Q19 3Q19 4Q1

  41. Slide 41: Serbia P&L

    Serbia P&L PPI (€ m) OpEx (€ m) 12 12 12 12 11 7 7 7 5 6 1Q19 2Q19 3Q19 4Q19 1Q20 1Q19 2Q19 3Q19 4Q19 1Q20 Loan loss provisions (€ m) Net Profit (€ m) 4 4 3 3 20 (10) 2 2 1 1 1Q19 2Q19 3Q19 4Q19 1Q20 1Q19 2Q19 3Q19 4Q19 1Q20 Page 40

  42. Slide 42: Serbia B/S and Asset quality

    Serbia B/S and Asset quality Gross Loans (€ m) NPE ratio and Provisions / NPEs 1,093 1,134 1,056 1,068 1,092 64.9% 68.0% 416 62.2% 393 407 413 Consumer 59.1% 60.6% 381 Provisions / NPEs 116 116 116 150 117 Mortgage 525 558 568 565 603 Business 7.5% 7.0% 6.4% 5.7% 5.3% NPE ratio 1Q19 2Q19 3Q19 4Q19 1

  43. Slide 43: Key figures – 1Q20

    Key figures – 1Q20 Bulgaria Cyprus Serbia Lux Sum Assets 5,428 6,303 1,545 1,451 14,727 Gross loans 3,856 1,910 1,134 517 7,417 Net loans 3,704 1,861 1,094 517 7,176 Balance Sheet (€m) 90dpd Loans 199 40 45 1 285 Balance NPE loans 301 73 60 1 435 Sheet Deposits 4,684 5,578 923 1,242 12,427 CAD1 19.3

  44. Slide 44: Appendix I – Supplementary information

    Appendix I – Supplementary information Page 43

  45. Slide 45: Summary performance

    Summary performance Balance sheet – key figures Income statement – key figures €m 1Q20 4Q19 €m 1Q20 4Q19 Gross customer loans 44,920 44,406 Net interest income 339.4 346.7 Provisions (7,157) (7,099) Commission income 92.3 103.8 Loans FVTPL 51 58 Operating income 434.4 478.7 Net customer loans 37,814

  46. Slide 46: Consolidated quarterly financials

    Consolidated quarterly financials Income Statement (€ m) 1Q20 4Q19 3Q19 2Q19 1Q19 Net Interest Income 339.4 346.7 345.9 342.1 342.7 Commission income 92.3 103.8 94.2 89.9 65.8 Other Income 2.7 28.2 13.3 57.5 13.8 Operating Income 434.4 478.7 453.5 489.5 422.5 Operating Expenses (220.2) (237.4) (226.

  47. Slide 47: Consolidated financials

    Consolidated financials Income Statement (€ m) 1Q20 1Q19 Δ y-o-y (%) Net Interest Income 339.4 342.7 (0.9) Commission income 92.3 65.8 40.4 Other Income 2.7 13.8 (80.7) Operating Income 434.4 422.5 2.9 Operating Expenses (220.2) (216.6) 1.7 Pre-Provision Income 214.2 205.6 4.2 Loan Loss Provisions (

  48. Slide 48: Appendix II – Macroeconomic update

    Appendix II – Macroeconomic update Page 47

  49. Slide 49: Recent macro & market developments and FY-2020 outlook

    Recent macro & market developments and FY-2020 outlook  According to EC’s spring forecasts (May-20), real GDP is estimated to drop by -9.7% in 2020 and then recover by 7.9% in 2021, cumulative GDP drop 2020-2021 at -1.8%  Covid-19 outbreak will have a major negative impact in Q1-Q3 2020 GDP, recov

  50. Slide 50: Greece: Key macro indicators - Realizations & forecasts

    Greece: Key macro indicators - Realizations & forecasts 2019, €bn* 2019* 2020** 2021*** (nominal) Real (% YoY) Real (% YoY) Real (% YoY) GDP 187.5 1.9 -9.7 7.9 Private Consumption 127.4 0.8 -9.0 7.5 Government Consumption 36.5 2.1 4.9 -2.4 Gross Fixed Capital Formation 21.4 4.7 -30.0 33.0 Exports 69

  51. Slide 51: Selected indicators of domestic economic activity

    Selected indicators of domestic economic activity Economic Sentiment: the deterioration of the Greek ESI in Apr-20 was PMI Manufacturing: sharp decline in Apr-20 milder than in the Euro Area Retail Trade Volume: solid % YoY growth in Feb-20 Manufacturing production index: +1.9% YoY (+2.5% MoM) in Ma

  52. Slide 52: Domestic Labour Market

    Domestic Labour Market Unemployment rate: drops to 16.1% in Feb-20; a major Employment: growth decelerated in recent months increase expected in the coming months Long Term Unemployment: a drain of human capital stock Labour Productivity Growth: weak performance continued in 2019 Source: ELSTAT, Eur

  53. Slide 53: Real Estate prices increase in FY 2019 after a multi-year decline

    Real Estate prices increase in FY 2019 after a multi-year decline  Between 2008 and 2017, apartment prices declined cumulatively by 42.0 per cent due to the contraction of disposable incomes, increase of unemployment, limited access to credit and excess supply of residential properties  Residentia

  54. Slide 54: Fiscal policy

    Fiscal policy  2019 marked the 6th year in the past 7 years with a significant primary surplus in programme terms  2019 primary balance at 4.4% of GDP in ESA2010 terms and 3.5% of GDP in Enhanced Surveillance Terms; primary balances targets over-performed in previous years but with a toll on growt

  55. Slide 55: Budget Execution

    Budget Execution  January to March 2020 Budget execution: fiscal primary balance was at €0.60 billion, overshooting the respective 2020 Budget target by €0.17 billion (January-March 2019: €1.44 billion)  The COVID-19 lockdown started gradually from March 10th onwards; the supplementary budget of €

  56. Slide 56: Bulgaria-Cyprus-Serbia current macro-trajectory 2020-2021

    Bulgaria-Cyprus-Serbia current macro-trajectory 2020-2021 COVID-19 induces recession in our economies of focus  Strong growth momentum ahead of crisis: Bulgaria, Cyprus, Serbia expanded on average by 3.6%, 4.4%, 3.1% respectively between 2015-2019  Covid19 pandemic pushes regional economies in dee

  57. Slide 57: Appendix III – Glossary

    Appendix III – Glossary Page 56

  58. Slide 58: Glossary – Definition of Alternative Performance Measures (APMs)

    Glossary – Definition of Alternative Performance Measures (APMs) & other selected financial measures/ ratios This document contains financial data and measures as published or derived from the published consolidated financial statements which have been prepared in accordance with International Finan

  59. Slide 59: Glossary – Definition of Alternative Performance Measures (APMs)

    Glossary – Definition of Alternative Performance Measures (APMs) & other selected financial measures/ ratios Commission income: The total of Net banking fee and commission income and Income from non-banking services of the reported period. Other Income: The total of net trading income, gains less lo

  60. Slide 60: Glossary – Definition of Alternative Performance Measures (APMs)

    Glossary – Definition of Alternative Performance Measures (APMs) & other selected financial measures/ ratios Provisions (charge) to average Net Loans ratio (Cost of Risk): Impairment losses relating to Loans and Advances charged in the reported period, annualized and divided by the average balance o

  61. Slide 61: Glossary – Definition of Alternative Performance Measures (APMs)

    Glossary – Definition of Alternative Performance Measures (APMs) & other selected financial measures/ ratios Risk-weighted assets (RWAs): Risk-weighted assets are the Group's assets and off-balance-sheet exposures, weighted according to risk factors based on Regulation (EU) No 575/2013, taking into

  62. Slide 62: Investor Relations contacts

    Investor Relations contacts Dimitris Nikolos +30 214 4058 834 E-mail: dnikolos@eurobankholdings.gr Yannis Chalaris +30 214 4058 832 E-mail: ychalaris@eurobankholdings.gr Christos Stylios +30 214 4058 833 E-mail: cstylios@eurobankholdings.gr E-mail: investor_relations@eurobankholdings.gr Fax: +30 210

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