Eurobank S.A. · ATHEX:EUROB
Eurobank — EFG Eurobank Ergasias — FY2001 Earnings Presentation
34 slides from Eurobank's earnings presentation, 2002
Slide 1: EFG Eurobank Ergasias Group Full-Year 2001 Results
EFG EUROBANK ERGASIAS GROUP FULL-YEAR 2001 RESULTS Bank of the Year 2001 Best e-banking websit The Banker Best Equity Award of Excellence-2001 House 2001 PC Magazine Euromoney 1
Slide 2: Hosts and Table of Contents
Hosts and Table of Contents FY 2001 Mr Nicholas Nanopoulos CEO • Financial Highlights • Business Review Mrs Paula Hadjisotiriou, CFO • Financial Review • IR Contacts 2
Slide 3: FY 2001 - Financial Highlights (IAS)
FY 2001 - Financial Highlights (IAS) • Strong business volume growth: – robust growth of 27% in loans to € 10.6 bn – deposits growth of 14% to € 15 bn – total assets growth of 13% to € 19 bn • Total operating income up 4.5% to € 935 m – Net Interest Income up 21% to € 611 m – Core income up 8.4% to
Slide 4: FY 2001 Business Review
FY 2001 BUSINESS REVIEW
Slide 5: Indisputable Bank of Choice in Retail Banking
Indisputable Bank of Choice in Retail Banking Dominant position Leading Manager of People’s Wealth – No 1 in consumer lending – No 1 in credit cards – No 2 in mortgage lending Mutual Funds (excl.Money Market) – No 1 in mutual fund mgmt Market shares per Banking Group EFG 16,8% Market shares 2001 16.
Slide 6: Capital Markets: Leading Position
Capital Markets: Leading Position – Winner of Best Equity House 2001 Award of Excellence by Euromoney magazine Brokerage Market Share – Leading in IPO underwriting with 19% in 2001 12% 10% – Ranks first in secondary equity with 10% in 10% 2001, from 6% at end-2000 8% –Strong advisory presence (Gover
Slide 7: International Recognition
International Recognition Standard & Poors’ Bank of the Year 2001 BBB+/A-2 The Banker Moody’s A-3/P-2 /C Best Equity House 2001 Award of Euromoney The only Greek Bank to receive a Excellence-2001 ‘C’ rating in financial strength Best Equity House in Greece Fitch IBCA A-/F2/ B/C - 2 Best e-banking we
Slide 8: Current challenges and initiatives
Current challenges and initiatives • Interest Income • Cost Control • Cross-Selling • Branding and Quality • Commission Income • Regional Presence • Risk Management • Sound Corporate Governance 8
Slide 9: Interest income: Sustaining the net interest margin
Interest income: Sustaining the net interest margin • EFG Eurobank Ergasias resists price competition and maintains satisfactory margins in key segments • Competitive advantage based on high quality services, organisational flexibility, superior products and branding • Partial rebound of margins in
Slide 10: Commission income
Commission income • Untapped cross-selling potential –Segmental approach to clientele and matching organisational structure is a solid basis for improving the cross-selling ratio – Unified IT platform in Eurobank and Ergasias branches from summer 2002 leading to full integration of physical networks
Slide 11: Cost containment initiatives bearing fruit
Cost containment initiatives bearing fruit Cost expansion rates 2001 (% - Year-on-year ) 25% 21% 19.5% 20% 15% 10% 7.9% 6.4% 5% 0% Total Personnel & Total Personnel & Administration Administration 2000 2001 11
Slide 12: Efficient network restructuring
Efficient network restructuring 2000 2001 330 branches 304 branches – 190 Retail – 208 Retail – 140 Universal – 96 Universal 431 ATMs 552 ATMs (up 28%) – New Open 24 network (37 points of sale) 12
Slide 13: Successful branding - Service and product quality
Successful branding- Service and product quality Visible and valued brand – Successful advertising campaigns and vendor alliances have led to a direct association of the Eurobank brand name especially with retail loan and investment products Quality in systems and services – Internal organisation in
Slide 14: Regional presence: low-entry strategy expected to pay off
Regional presence: low- entry strategy expected to pay off Banc Post (Romania) – Holds 4% of the market in assets, loans and deposits – Loans up 40%, deposits up 25% in 2001 – Leader in consumer credit with 6.5% market share and over 500k credit/debit cards – Strong presence in the SME market – Netw
Slide 15: Reliable Credit Risk management
Reliable Credit Risk management – Best practice credit process, with full segregation of duties – Defined and centralised approval authorities linked to credit ratings and full financial analysis – Independent credit administration – Independent credit review and follow up – Differentiated credit sc
Slide 16: Efficient monitoring of market, liquidity and operational risk
Efficient monitoring of market, liquidity and operational risk –The Bank applies international best practice in the management of market, liquidity and operational risk, including VAR methodology and stress testing, and is regulated by authorities both in Greece and Switzerland. –Segregation of duti
Slide 17: Sound Corporate Governance
Sound Corporate Governance • Professional management • Transparent, accurate reporting – Reporting in IAS since inception (1991) – Only Greek bank to deliver quarterly IAS accounts • Emphasis on informing and servicing shareholders – Professional IR unit, separate Shareholders’ Registry, separate Un
Slide 18: 2001 Financial Review
2001 FINANCIAL REVIEW
Slide 19: Strong loan growth with further shift to retail banking
Strong loan growth with further shift to retail banking Loan mix n G r owth Loa (% of total) Total y. 27 % y.o. 100% Wholesale: 58 % 90% Wholesale: 62 % 80% 58% 70% 62% 60% 50% 40% 7% 47% 8% Retail: 42 % Retail: 38 % 30% 16% 14% 39% 20% 10% 17% 45% 19% 0% 2000 2001 Consume r lending Mortga ge le ndi
Slide 20: High asset quality maintained despite robust loan growth
High asset quality maintained despite robust loan growth – Quality maintained with NPLs at 3.9% of total loans (organic NPLs at 2.8%) – NPL coverage remains high above 80% 5,0% 4,5% 4,0% 3,5% 1.5% 1.1% 3,0% Organic NPL’s: 2,5% Retail loans: 0.8% - 4.1% 2,0% (avg. 2.2%) 2.8% 2.8% 1,5% Wholesale loans
Slide 21: Substantial growth in customer deposits
Substantial growth in customer deposits Customer Deposits In € mn 14% 14,990 16.000 13,166 14.000 ) 2.318 12.000 (31% 3.381 10.000 8.000 38% 8.237 5.921 6.000 4.000 15% 2.000 3.865 4.434 0 2000 2001 Savings Other Repos 21
Slide 22: AUM up 7.2% despite ASE drop
AUM up 7.2% despite ASE drop Total Assets Under Management up 7% to € 21 bn y.o.y In € mn Assets under Management 25.000 20,868 19,530 20.000 5.854 6.291 15.000 10.000 13.239 15.014 5.000 0 2000 2001 Deposits Investment Products 22
Slide 23: Net Interest Income up 21% with Net Interest Margin over 3%
Net Interest Income up 21% with Net Interest Margin over 3% Strong growth both on a yearly basis …and on a quarterly basis In € mn %NIM NII € mn Loans € bn 700 4,0% 170 12 600 3,5% 165 10 500 3,0% 160 611 2,5% 155 8 400 21 % 2,0% 150 6 300 505 1,5% 145 4 200 1,0% 140 100 135 2 0,5% 0 0,0% 130 0 2000
Slide 24: Commission and Fee Income weakened
Commission and Fee Income weakened….. In € mn 300 283 250 243 109 200 110 150 45 43 100 69 40 50 60 50 0 2000 2001 Other services Capital Markets Mutual Funds and AUM Lending activities •ASE average daily turnover fell 58% in 2001 •ASE- related commissions less than 15% of total 24
Slide 25: But recovered in Q3 & Q4
….but recovered in Q3 & Q4 Significant recovery of 36% & 12% in the last two quarters Quarterly Evolution of Net Fee and Commission Income in 2001 In € mn 80 70 60 50 40 30 20 10 0 Q1 Q2 Q3 Q4 25
Slide 26: Trading and Other Securities Income
Trading and Other Securities Income Trading Income Gains less Losses from Other Securities In € mn 16 In € mn 30 3 9 80 74 20 70 26 60 10 23 43 50 0 40 35 -10 -21 -16 30 8 20 -20 31 -2 10 27 -30 2000 2001 0 2000 2001 Bond Gains Equity Gains FX and Derivatives Bonds Equities 26
Slide 27: Commissions and Trading affected by the ASE correction
Commissions and Trading affected by the ASE correction – The ASE Composite lost 39% in 2000 and a further 25% in 2001, bringing total Mkt. Cap to 75% of GDP – ASE turnover as well as funds raised through IPOs and rights issues have returned to pre-1999 levels ASE Average Yearly Turnover Funds raised
Slide 28: Operating Income growth at 4.5% driven by rise in Net Interest Income
Operating Income growth at 4.5% driven by rise in Net Interest Income Operating Income Composition In € mn 4.5% 935 1000 894 900 (24)% 81 106 800 700 (14)% 243 91 % of total income 88 % of total income 600 283 500 400 21% 300 611 200 505 100 0 2000 2001 Net Interest Income Fees and Commissions Other
Slide 29: Operating Expenses: decelerating
Operating Expenses: decelerating Personnel and Other Administrative Depreciation In € mn Expenses In € mn 500 70 450 6.4% 400 60 .4% 17 350 476 50 300 65 447 40 250 56 200 30 150 20 100 50 10 0 0 2000 2001 2000 2001 29
Slide 30: Cost to assets ratio improving
Cost to assets ratio improving 2000 2001 Cost/ATA 3.15% 3.02% In € mn 600 4,00% 550 3,50% 500 3,00% 450 2,50% 7.9% 541 400 2,00% 501 350 1,50% 300 1,00% 250 0,50% 200 0,00% 2000 2001 Operating Expenses Cost to avg Assets 30
Slide 31: Increase in net profits
Increase in net profits 2000 2001 RoE (1) 10.5% 11.2% RoA (2) 1.42% 1.20% Group Net Profit In € mn 210 2.8% 206 200 160 110 2000 2001 (1)After tax and minorities (2)After tax incl. minorities 31
Slide 32: 2001 - Financial Highlights (IAS)
2001 - Financial Highlights (IAS) • Net Interest Income up 21% to €611m, generated mainly from loans • Net interest Margin above 3% • Commissions recovering in Q3 (by 36%) and Q4 (by 12%), accounting for 26% of total income in 2001 • Operating costs expansion containment continues – personnel and ot
Slide 33: Our medium-term goals
Our medium-term goals 2000 2001 Target Net interest margin 3.2% 3.4% > 3% Commissions 31.6% 26% ~ 35% (% of operating income) Cost-to-income 56.2% 57.9% < 50% Return on Assets 1.4% 1.2% > 1.5% (after-tax) Capital Adequacy 16.3% 14% 7-8% (Tier 1 only) Optimisation of Return on average Equity to a sus
Slide 34: Investor Relations Contacts
Investor Relations Contacts EFG Eurobank Ergasias 8, Othonos Str, GR 105 57 Athens Τel: +30-10 333-7688 Fax:+30-10-333-7150 investor_relations@eurobank.gr Internet: www.eurobank.gr Reuters: EFGr.AT Bloomberg: EUROB GA Datastream: G:EFG 34