National Bank Of Greece S.a. · ATHEX:ETE
National Bank Of Greece — Q3 2022 Earnings Presentation
42 slides from National Bank Of Greece's earnings presentation, Nov 10, 2022
Slide 1: 3Q22 Financial Results
3Q22 Financial Results 10 November 2022
Slide 2: Table of Contents
Table of Contents 1 Key Highlights 2 Financial Results 3 Macro 4 ESG Update 5 Transformation Program Update 6 Appendix
Slide 3: Key Highlights
NATIONAL BANK OF GREECE 1 | Key Highlights
Slide 4: 9M22 Group financial highlights: strong performance continues
9Μ22 Group financial highlights: strong performance continues 9Μ22 PAT cont. ops 9Μ22 COP Core income €652m €464m €1,206m up +8% yoy 9Μ22 attributable PAT up +41% yoy, on core income recovery C:CI €680m 48% -280bps yoy Net NPEs €0.3b CET1 FL 1 2 Performing loans 1 +€1.3b ytd NPEs at €1.8b NPE ratio
Slide 5: 9M Group profitability recovery accelerates on strong core income rebound (+8% yoy)
9M Group profitability recovery accelerates on strong core income rebound (+8% yoy) Profitability “jaws” | € m – 9M22 Profitability “jaws” | € m – 3Q22 COP & core PAT¹ | € m C:CI 57.9% 51.1% 48.3% 51.5% 48.8% 45.2% Core PAT (9M22) 401 NPE NII down TLTRO NII down by €18m 1,206 vs 2Q22 by c€80m vs 9M2
Slide 6: Sustained improvement across financial and operating KPIs leads to significant outperformance
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 2.1 1.8 c1.8 CO
Slide 7: Greece remains resilient to impact from inflation, buoyed by tourism, a strong labor market
Greece remains resilient to impact from inflation, buoyed by tourism, a strong labor market and energy support fiscal measures 3Q19 3Q20 3Q21 3Q22 GDP growth Greece’s economic performance continued to exceed Unemployment momentum expectations, with key growth drivers remaining intact rate (%) 17.5%
Slide 8: Defenses against a worsening balance of near-term risks
Defenses against a worsening balance of near-term risks Persistent Inflation in Greece climbed to 30-year high in 3Q22 and the subsequent cost-of-living and production-cost shocks will take longer to dissipate, due to: inflation • Persistently high energy price forecasts for 2023 and considerable en
Slide 9: Financial Results
NATIONAL BANK OF GREECE 2.| Financial Results
Slide 10: Profitability leads to organic capital creation, increasing the FL CET1 by +20bps qoq
Profitability leads to organic capital creation, increasing the FL CET1 by +20bps qoq P&L Highlights P&L | Group €m 9M22 9Μ21 YoY 3Q22 QoQ 9M22 Group PAT (cont. ops.) reaches €652m, as core income NII 948 904 +5% 348 +11% continues on a recovery trajectory, while credit risk charges and Net fee & co
Slide 11: Negative NPE flows drive the NPE ratio to 5.9%; best in class provision coverage
Negative NPE flows drive the NPE1 ratio to 5.9%; best in class provision coverage and capital buffers maintained Balance sheet Highlights Key P&L Ratios | Group Domestic PE loan book expands by +€2.3b yoy 3Q22 2Q22 1Q22 4Q21 3Q21 • Despite higher repayments in 3Q22, 9M PE expansion stands at NIM (bp
Slide 12: Recurring organic capital generation in 3Q22 continues at +c40bps
Recurring organic capital generation in 3Q22 continues at +c40bps 3Q22 FL capital movement1 +c40bps in organic & recurring capital generation 16.9% pro forma EVO merchant acquiring completion 16.3% CAD FL 16.1% +c0.4% -c0.0% -c0.2% 15.8% pro forma EVO merchant acquiring CET1 Ph-in: 16.0% completion
Slide 13: 9M22 Group COP up by 41% yoy mainly driven by accelerating core income growth
9M22 Group COP up by 41% yoy mainly driven by accelerating core income growth; costs & CoR contained Group core operating profit bridge 9Μ22 (€ m) Group operating profit decomposition 9Μ22 (€ b) COP (€m) 330 464 +41% yoy +41% yoy COP margin (bps) 158 200 +43bps yoy OpEx +2% yoy 234bps in 3Q22 +22% y
Slide 14: 3Q22 NII recovery accelerates (+11% qoq), reflecting higher PE NII
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% 9M22 at 69bps 96 +9% 71 73 63 71 CoR (Group) 2
Slide 15: Strong 4Q22 corporate pipeline: YE22 domestic PEs expected near €27b
Given a strong 4Q22 corporate pipeline, YE22 domestic PEs are expected near €27b, up by >€1.5b yoy 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 25.2 25.5 +€1.3b 24.2 24.2 +5% ytd
Slide 16: PE lending yields bounce back reflecting the beginning of the tightening cycle
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 9M21 FY21 9M22 798 770 771 772 772 Consumer² 3
Slide 17: Deposit rates remain low in view of abundance of liquidity and rising deposits
Deposit rates remain low in view of the abundance of liquidity and a rising stock of deposits Greek deposit spread¹ (bps) Greek deposit evolution (€ b) 84% 88% Core deposits/total +€2.4b 53.9 +4.6% ytd 52.6 51.6 51.3 47 49.6 6.6 Total 6.9 Time -35 7.3 7.1 -53 -55 -51 -€0.8b 8.0 -10.7% ytd 16.9 16.0
Slide 18: 9M22 domestic fee growth of +23% beats expectations
9M22 domestic fee growth of +23% beats expectations, 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% Payments 12 70 28 20 Invest
Slide 19: OpEx is contained allowing Group C:CI to drop to 45.2% in 3Q22
Despite inflation and IT investment plan roll out, OpEx is contained allowing Group C:CI to drop to 45.2% in 3Q22 Group Cost to 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 -280bps yoy 7.8 7.1K at Bank level Personnel c
Slide 20: Organic NPE flows remain negative, with no signs of pick up in NPE inflows
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 or 0.4 0.4 c60% <3
Slide 21: High mortgage cure rates of c90%, sizable portion of likely-to-cure FNPEs
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% 1.1 2% 90dpd 136% 1
Slide 22: Organic growth of S1 loans offers increasing support to NII
Organic growth of S1 loans offers increasing support to NII Group gross loan stage evolution (€ b) Group S2 ratio and coverage (%) Group S3 ratio 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 +30dpd 11.8% 4.6 4.7 4.7 4.6 -0
Slide 23: Domestic deposit stock and private cash buffers continue to increase
Domestic deposit stock and private cash buffers continue to increase Deposit evolution by geography (€ b) NBG domestic deposit flows (€ b) YoY Group 51.6 53.5 53.1 54.3 55.7 +8.0% 4.7 4.6 3.4 1.5 1.1 1.3 1.4 0.2 0.5 SEE & 1.9 1.8 1.7 1.7 -12.6% 2.0 Other 53.9 +8.8% -0.3 52.6 51.5 51.3 -2.2 49.6 -3.6
Slide 24: ECB TLTRO policy decision hits future NII but excess liquidity is a competitive advantage
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 12 11.6 11.6 11.6 11.6 7 4 2 1 0 -2 -2 1 Blended -67 -67 -65 -65 -64 -64 -64 -64 -64 ECB¹ 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q2
Slide 25: Macro
NATIONAL BANK OF GREECE 3| Macro
Slide 26: Tourism revenue bounced back at pre-Covid levels supporting employment and business activity
Tourism revenue bounced back at pre-Covid levels supporting employment and business activity, whereas additional fiscal measures cushioned the impact of new spikes in energy and food prices in 3Q22 The pace of economic recovery exceeded expectations Tourism revenue heading to a new all-time high 50
Slide 27: Businesses successfully dealt with rapidly rising input costs on solid demand
Businesses successfully dealt with rapidly rising input costs on solid demand and pricing power; high frequency indicators of business activity remained in expansion territory until September Business turnover* up by 30% y-o-y in Aug22, c. €40 b Synchronized rebound in labor income and profits above
Slide 28: Inflation has possibly peaked but remains highly persistent
Inflation has possibly peaked but remains highly persistent, with increasing risks of an energy-induced recession in the euro area. Fiscal rebalancing on track, despite higher-than-expected spending on energy-related support. Impressive reduction in public debt as % of GDP and a primary fiscal surpl
Slide 29: ESG Update
NATIONAL BANK OF GREECE 4| ESG Update
Slide 30: We are pushing forward with our environment and climate strategy and broader ESG agenda
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 green bond at
Slide 31: Transformation Program Update
5 Transformation Program Update
Slide 32: Our key achievements across the Bank in 2022 underpin the transformation of our business
Our key achievements across the Bank in 2022 underpin the transformation of our business and operating model BEST BANK FOR EFFICIENCY & HEALTHY BALANCE OUR CLIENTS (BBC) AGILITY (ENA) SHEET (HBS) • Portfolio build-up in Corporate (incl. RRF) • New targeted exit scheme • Rollout of new operating mode
Slide 33: NBG is widely recognised for its digital offering
NBG is widely recognised for its digital offering, as our digital strategy continues to deliver impressive results ONBOARD ENGAGE CROSS-SELL ONBOA RD Digital subscribers (m) Digital active users (m) Digital cumulative sales (m) YoY YoY YoY Registered +9% subscribers 3.6 3.5 3.5 Active 3.5 0.7 +55% u
Slide 34: Appendix
NATIONAL BANK OF GREECE 6| Appendix
Slide 35: Group Balance Sheet & P&L
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 Securities 13
Slide 36: Geographical segment P&L: Greece & International
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 Income 23 23
Slide 37: ESMA Alternative Performance Measures (APMs), definition of financial data and ratios used
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 December 202
Slide 38: Definition of financial data, ratios used and alternative performance measures
Definition of financial data, ratios used and alternative performance measures Name Abbreviation Definition Assets held for sale -- Non-current assets held for sale Balance Sheet B/S Statement of Financial Position Combined Buffer Requirement CBR Total CET1 capital required to meet the requirements
Slide 39: Definition of financial data, ratios used and alternative performance measures
Definition of financial data, ratios used and alternative performance measures Loan / Lending Yield Annualized (or annual) loan interest income over gross performing exposures Loans and advances to customers over due to customers at year/period end, excluding the short term reverse repo facility of
Slide 40: Important Notice – Disclaimer
Important Notice – Disclaimer The information, statements and opinions set out in the 3Q22 Results Press Release and accompanying discussion (the “Press Release”) have been provided by National Bank of Greece S.A. (the “Bank”) (together with its consolidated subsidiaries (the “Group”)). They serve i
Slide 41: Important Notice – Forward Looking Information
Important Notice – Forward Looking Information Forward Looking Statements reflect knowledge and information available at the date of the Press Release and are subject to inherent uncertainties and qualifications and are based on numerous assumptions, in each case whether or not identified in the Pre
Slide 42: Contact details
Contact details Christos Christodoulou +30 210 334 3051 cchristodoulou@nbg.gr Group CFO Greg Papagrigoris +30 210 334 2310 papagrigoris.gr@nbg.gr Group Head of IR Maria Kanellopoulou +30 210 334 1537 mkanellopoulou@nbg.gr Panagiotis Alevras +30 210 772 7292 Alevras.Pan@nbg.gr George Panagopoulos, CF
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