Eurobank S.a. · ATHEX:EUROB
Eurobank — Eurobank Ergasias Services and Holdings — H1 2022 Earnings Presentation
65 slides from Eurobank's earnings presentation, Jul 29, 2022
Slide 1: 1H2022 results
4 EUROBANK Holdings 1H2022 results 29 July 2022
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
Slide 3: Table of contents
Table of contents 1H22 results highlights 4 Diversified business model 12 Balance sheet 17 Profitability 23 Asset Quality 30 Capital 35 ESG commitments and performance 38 Macroeconomic update 43 Appendix I – Supplementary information 53 Appendix II - Glossary 59 3
Slide 4: 1H22 results highlights
1H 2022 Results 1H22 results highlights
Slide 5: 1H22 results highlights: Profitability
1H22 results highlights: Profitability P&L (€ m) 2Q22 1Q22 Δ(%) 1H22 1H21 Δ(%) Net interest income 360.6 339.4 6.3 700.0 669.7 4.5 Net Income1 €760m in 1H22; €455m in 2Q22 Commission income 132.7 123.0 7.9 255.7 208.9 22.4 Other Income 332.0 240.4 38.1 572.3 45.3 >100 ▪ NII up 4.5% y-o-y at €700m; u
Slide 6: 1H22 results highlights: Balance sheet
1H22 results highlights: Balance sheet Capital Key Balance sheet ratios ▪ Total CAD at 17.0%1, up 140bps y-o-y ▪ CET1 at 14.7%1, up 150bps y-o-y Group (%) 2Q22 1Q22 4Q21 3Q21 2Q21 ▪ FBL3 at 14.0%1, up 190bps y-o-y Asset Quality NPE ratio 5.93 6.05 6.8 7.3 14.0 Volumes NPE coverage 71.5 71.55 69.2 72
Slide 7: Outperforming 2022 goals
Outperforming 2022 goals 1H21 FY21 1H22 FY22 Revised FY22 Initial Actual Actual Actual Business plan Business plan1 Δ performing loans €0.3bn €1.5bn €1.6bn c.2.9bn c.2.3bn Core PPI €446m €900m €506m >€1.0bn c.€865m Core Operating Profit2 €221m €482m €380m c.€750m c.€610m RoTBV 5.7% 8.2% 10.7%3 c.11.
Slide 8: Net interest income and fees y-o-y
1H21 670 Loans NPEs (28) Δ NII (y-o-y, € m) 11 Loans PEs Core Income 7 Deposits Greece Bonds & other 36 +4.5% TLTRO (4) Wholesale & other (10) SEE 18 1H22 700 1H21 209 12 Lending Δ Fees (y-o-y, € m) 30 Network & credit cards 0 Capital Markets +22.4% 4 Bancassurance & Asset mng 1 Rental & other 1H22
Slide 9: Profitability
Profitability Core PPI and Provisions (€ m) Core Operating Profit2 (€ m) +71.7% 380 +13.5% 506 Core PPI 446 221 1H21 1H22 (224) Loan Loss (43.9%) Profit before Tax3 (€ m) Provisions (126) >100% 933 1H22 1H21 263 CoR1 1.2% 0.6% 1H21 1H22 1. On net loans. 2. Core Operating profit= Core PPI minus loan
Slide 10: Asset quality
Asset quality NPEs ratio NPEs stock (€ bn) 14.0% 22.9 7.3% 6.8% 6.7% 5.9%1 (20.4) 2Q21 3Q21 4Q21 1Q22 2Q22 NPE coverage 72.8% 71.5% 70.6% 69.2% 2.5 63.3% 0.7 FY16 FY17 FY18 FY19 FY20 FY21 1H22 1H22 Net NPEs 2Q21 3Q21 4Q21 1Q22 2Q22 1. Pro forma for Solar senior note recognition. 10
Slide 11: Capital & TBV
Capital & TBV CET1 FLB3 TBV per share (€) 14.0%1 1.60 +190bps +€0.20 12.1% 1.40 2Q21 2Q22 CAD 17.0%1 +140bps 15.6% 2Q21 2Q22 2Q21 2Q22 1. Pro forma for Solar securitization held for sale. 11
Slide 12: Diversified business model
1H 2022 Results Diversified business model
Slide 13: Segmental analysis: diversified earnings generation
Segmental analysis: diversified earnings generation Key Metrics (1H22) Net profit1 (q-o-q, € m) Net 2021 Group (%) Assets RWAs TBV RoTBV2 RoTBV Profit1 382 € bn € bn €m €m 226 Greek Banking 73 54 Greek banking 58.5 32.0 3,867 607 35.2% 7.0% 56 Operations operations 2Q21 3Q21 4Q21 34 1Q22 326 2Q22 Gr
Slide 14: Eurobank Group Investment Real Estate Portfolio
Eurobank Group Investment Real Estate Portfolio Big boxes & 2Q22 Office Mixed use Retail Logistics Special use Total supermarkets No. of assets (#) 65 31 81 35 22 27 261 Book Value (€ m) 426 206 162 358 90 70 1,313 % of total MV 32% 16% 12% 27% 7% 5% 100% MV / GLA (€ /sqm) 1,453 2,383 1,871 1,257 58
Slide 15: Bulgaria key metrics
Bulgaria key metrics1 1H22 Highlights PPI and provisions (€ m) Net profit €46m in 1H22, up 20.2% y-o-y ▪ 1H22 Core PPI at €73m, up 12.2% y-o-y ▪ NII up 9.3% y-o-y at €99m 35 33 34 34 36 PPI ▪ Commission income up 21.4% y-o-y at €36m ▪ OpEx up 12.3% y-o-y (10) (11) (11) (9) (9) Provisions ▪ 1H22 CoR
Slide 16: Cyprus key metrics
Cyprus key metrics1 1H22 Highlights PPI and provisions (€ m) Net profit €45m in 1H22; up 29.1% y-o-y ▪ 1H22 Core PPI up 22.7% y-o-y at €54m 26 26 29 23 23 PPI ▪ NII up 15.1% y-o-y at €57m ▪ Commission income up 21.7% y-o-y at €19m (1) (1) (0) (1) (1) Provisions ▪ OpEx up by 4.6% y-o-y ▪ 1H22 CoR at
Slide 17: Balance sheet
1H 2022 Results Balance sheet
Slide 18: Balance sheet composition
Balance sheet composition Assets (€ bn) Liabilities and Equity (€bn) 80.2 80.2 60 Trading & other 50 2% Net loans 40.5 Other issuers • Core 78% 28% Deposits • Time 22% 54.0 40 Investment Securities GGBs 12.9 42% 30 Derivatives 1.9 Other Senior Debt 3.1 Loans & advances to banks 1.1 sovereign Tier II
Slide 19: Loans
Loans Gross loans (€ bn) Performing loans (€ bn) Organic1 growth +€1.6bn in 1H22 42.3 41.1 40.8 41.2 39.8 39.9 SEE 38.2 38.5 8.4 9.5 9.9 37.0 8.6 9.2 35.3 SEE 9.5 8.8 9.1 8.1 3.5 7.9 5.1 5.1 5.0 Senior Notes 5.1 5.0 Senior Notes 5.1 5.1 5.1 3.5 Greece Greece 17.1 Business Business 16.0 16.4 16.6 17.
Slide 20: Funding and liquidity
Funding and liquidity Net loans / Deposits ratio Deposits (€ bn) +€4.3bn 60 75.4% 75.0% 53.2 52.4 54.0 74.9% 51.1 73.8% 73.2% 49.7 50 16.2 16.6 14.9 16.4 SEE 14.3 2Q21 3Q21 4Q21 1Q22 2Q22 40 Liquidity coverage ratio (LCR) 30 174.3% 166.4% 168.2% 20 37.0 37.4 152.4% 151.3% Greece 35.5 36.2 36.1 10 2Q
Slide 21: MREL requirements
MREL requirements MREL considerations January 1st 2023 MREL target 20.5% 20.7% ▪ Eurobank has issued since May 2021, 3 MREL-eligible senior preferred 3.6% CBR 3.7% bonds of total amount €1,500m ▪ Following the most recent issuance of €500m that took place in May Interim MREL target 2022 with 4.5% yi
Slide 22: Wealth Management
Wealth Management Asset under Management (€ bn) Private Banking CAL1 (€ bn) 8.5 8.7 8.4 4.4 8.0 8.1 4.3 4.2 4.1 3.9 4.1 4.1 3.9 3.8 3.8 Greece 3.3 3.2 3.1 3.1 2.8 Own Mutual Funds Cyprus 2.0 2.3 2.4 2.4 2.1 3rd Party Mutual Funds 0.5 0.5 0.5 0.5 0.4 Luxembourg 2.1 2.2 2.1 2.2 2.1 Discretionary AuM 0
Slide 23: Profitability
1H 2022 Results Profitability
Slide 24: Net Interest margin & spreads
Net Interest margin & spreads Net Interest margin (bps) Deposit spreads (Greece, bps) 2Q21 3Q21 4Q21 1Q22 2Q22 2Q21 3Q21 4Q21 1Q22 2Q22 Greece 185 175 160 167 176 Savings & Sight (59) (58) (58) (55) (49) SEE 215 207 198 197 205 Time (60) (59) (58) (55) (43) Group 192 183 170 175 183 Total (60) (59)
Slide 25: Net Interest Income
Net Interest Income NII breakdown (€ m)1 NII on impaired loans (over total NII) Total NII 335 330 321 339 361 Chart Title 38% 32% 33% o/w Greece 241 235 226 241 257 25% 15% 9% 4% FY16 FY17 FY18 FY19 FY20 FY21 1H22 Loan Margin 297 (PEs) 277 283 284 290 NII evolution (q-o-q, € m) Loan Margin (NPEs) 29
Slide 26: Commission Income
Commission Income Commission income breakdown (€ m) Commission income per region (€ m) 67bps over assets 133 133 130 130 123 123 117 117 30 32 Lending 110 36 SEE 110 23 33 21 33 21 29 29 48 47 Network transactions 48 56 & credit cards 40 5 9 97 97 Greece 7 6 4 Capital Markets 88 90 81 18 17 23 19 Ba
Slide 27: Operating expenses
Operating expenses OpEx per region (€ m) OpEx breakdown (Greece, € m) 320 320 218 226 222 228 218 42 44 Depreciation 56 59 61 64 66 SEE 23 25 IT 162 159 164 158 162 Greece 67 68 Administrative 30 27 Resolution Fund 2Q21 3Q21 4Q21 1Q22 2Q22 Cost –to- core income (%) 158 155 Staff 2Q21 4Q21 2Q22 Greec
Slide 28: Pre-provision income (PPI)
Pre-provision income (PPI) Core PPI and other income (€ m) Δ PPI (q-o-q, € m) 32 20 62 240 332 Other income 597 265 228 229 225 240 92 74 SEE 21 10 67 65 67 68 481 (6) 161 165 158 173 192 Greece 2Q21 3Q21 4Q21 1Q22 2Q22 PPI per region (€ m) 597 1Q22 Δ NII Δ opex 2Q22 Δ other income Δ commission inco
Slide 29: Δ Core Operating Profit (y-o-y)
Δ Core Operating Profit (y-o-y, € m) 33 3 15 40 506 (1 ) (2 ) 1H22 1H21 446 Core PPI Core PPI (28 ) Greece 2 Δ admin & RF Δ SEE Δ Fees 1H21 Δ staff OPEX 1 (126) 1H22 Loan Δ NII NPEs Δ depreciation Loan Loss (224) Δ NII excl. NPEs Loss Provisions Provisions 1H21 1H22 Core Operating 221 +71.7% 380 Pro
Slide 30: Asset Quality
1H 2022 Results Asset Quality
Slide 31: Asset quality metrics
Asset quality metrics NPEs formation1 (€ m) NPEs ratio (%) Δ NPEs stock (110) (2,831) (125) (26) (252) (q-o-q, €m) 14.0% 41 17 SEE 30 7.3% 6.8% 6.7% 5.9% (12) (26) (24) Greece (43) 3 2Q21 3Q21 4Q21 1Q22 2Q22 2Q21 3Q21 4Q21 1Q22 2Q22 Loan loss provision (€ m) NPE coverage (%) 1.0% 1.0% 1.0% 0.6% 0.6%
Slide 32: NPEs formation per segment (Greece)
NPEs formation per segment (Greece) Mortgages (€ m) Consumer (€ m) 39 32 13 12 22 17 12 (5) 7 7 10 1 2 4 (17) (24) (27) 3 (41) (57) (66) (67) (3) (2) (2) (2) (80) (83)(85) (81) (4) (5) (105) (9) (10) (123) 3Q20 1Q18 1Q19 3Q19 3Q21 3Q18 2Q20 4Q20 2Q22 1Q21 2Q21 4Q21 2Q18 4Q18 2Q19 4Q19 1Q20 1Q22 1Q18
Slide 33: NPE metrics (Group)
NPE metrics (Group) 90dpd bridge to NPEs (€ bn) NPEs per region NPE Provisions & Total NPEs NPE ratio 0.2 2.5 coverage collaterals / NPEs 0.6 (€ bn) (%) (%) (%) 1.6 Consumer 0.3 15.3 103.1 104 (1.8) Mortgages 0.5 5.5 63.9 148 Small Business 0.4 13.1 69.5 133 0.7 Corporate 1.0 5.1 65.3 121 2 Greece 2
Slide 34: Loans’ stage analysis (Group)
Loans’ stage analysis (Group) Loans’ stage breakdown Provisions stock over NPEs (€ bn) 2Q21 3Q21 4Q21 1Q22 2Q22 72.8% 69.2% 70.6% 71.5% Stage 1 29.1 29.6 32.6 33.1 34.0 63.3% Stage 2 6.2 5.7 5.5 5.3 5.7 Stage 3 5.7 2.9 2.8 2.7 2.5 (NPEs) 1 Total 41.1 38.1 40.8 41.2 42.2 2Q21 3Q21 4Q21 1Q22 2Q22 Stag
Slide 35: Capital
1H 2022 Results & EUROBANK Holdings Capital
Slide 36: Capital ratios (CET1 FLB3, q-o-q)
Capital ratios (CET1 FLB3, q-o-q) 14.0%5 80bps 48bps 12.7% 97bps 4bps (8bps) (32bps) (58bps) 1Q22 CET1 DTC Asset growth other Debt securities 2Q22 trading 2Q22 PBT Triangle 2Q22 CET1 FLB3 amortisation at FVOCI income excl. trading income FLB3 1 & FX recyclement RWAs 40,500 (36) 1,0532 1113 0 0 0 0 4
Slide 37: Capital ratios (CAD, q-o-q)
Capital ratios (CAD, q-o-q) 80bps 17.0%2 48bps (20bps) 2.3% Tier II 15.8% 97bps 21bps (8bps) (40bps) Tier II 2.5% (58bps) 14.7% CET1 13.3% CET1 1 1Q22 CAD1 DTC Asset growth Other Debt 2Q22 2Q22 PBT Triangle Solar 2Q22 CAD amortisation securities at trading excl. trading income FVOCI income & FX recy
Slide 38: ESG commitments and performance
1H 2022 Results ESG commitments and performance https://www.eurobankholdings.gr/en/esg-environment-society-governance
Slide 39: Our ESG approach
Our ESG approach ▪ The bank-wide project for updating the ESG Strategy is in progress, due for completion at the end of 2022, while the systematic operationalization of ESG frameworks is progressing with the development of tools that will support the green transition of our clients ▪ We redefine sus
Slide 40: Q2 2022 Highlights of ESG actions, initiatives and achievements
Q2 2022 Highlights of ESG actions, initiatives and achievements ESG Risks & Opportunities ▪ Adopting a strategic approach for the management of risks and the identification of opportunities in relation to Integration of sustainability and climate change, the Bank follows, and accelerates where possi
Slide 41: Q2 2022 Highlights of ESG actions, initiatives and achievements
Q2 2022 Highlights of ESG actions, initiatives and achievements Environment: Minimizing operational footprint ▪ Hellenic Responsible Business Awards 2022: Gold Award for the reconstruction of Piraeus Port Plaza office Energy complex Consumption Reduction ▪ Energy Awareness Plan for employees initiat
Slide 42: Q2 2022 Highlights of ESG actions, initiatives and achievements
Q2 2022 Highlights of ESG actions, initiatives and achievements Socio-Economic Impact (cont.) ▪ Human Resources Policies: Committed to cultivating and fostering an inclusive culture, Eurobank developed and published the Diversity, Equity & Inclusion Policy, which outlines its corporate values, princ
Slide 43: ESG Ratings / Indices & Partnerships
ESG Ratings / Indices & Partnerships Continuing improvement in ESG Ratings & Indices vs Q1 2022: Initiatives & partnerships ESG Ratings & Indices Q2 2022 Member of ICMA since BBB UNEP FI participant since 2005; 2020. Participant in the Eco-Management and signatory to PRBs since 2019. Audit Scheme re
Slide 44: Macroeconomic update
1H 2022 Results Macroeconomic update
Slide 45: Recent macro & market developments and FY22 outlook
Recent macro & market developments and FY22 outlook ▪ According to EC’s Summer Interim Forecasts (Jul-22), real GDP growth is forecasted at 4.0% and 2.4% for 2022 and 2023 respectively (from 3.5% and 3.1% in the Spring Forecasts, May-22). The inflation rate is forecasted at 8.9% for 2022 and 3.5% fo
Slide 46: Domestic Labour Market
Domestic Labour Market Support measures and the reopening of the economy led to drop of unemployment Employment returns to pre-pandemic trend growth path Long term unemployment decline since end of 2019, yet still well above Recovery of productivity requires continued implementation of the pre-debt
Slide 47: Selected indicators of domestic economic activity
Selected indicators of domestic economic activity ESI: steep drop in 2Q22 due to the war in Ukraine and the energy crisis PMI manufacturing: 16-months low in Jun-22, still above 50 Retail trade volume: resilience despite inflationary pressures Manufacturing production: growth decelerates Source: ELS
Slide 48: Significant boost to growth from RRF funds
Significant boost to growth from RRF funds With RRF grants and loans at 16.7% of its 2021 GDP, Greece is the largest beneficiary in the EU relative to the size of its economy • Greece to receive €30.5bn (€17.8bn in grants, €12.7bn in loans) through RRF in the next 5 years to finance its National Rec
Slide 49: Real estate prices: growth remained strong in Q1 2022
Real estate prices: growth remained strong in Q1 2022 Index of Apartment Prices Index of Retail and Office Prices 1Q10 – 1Q22 2H10 – 2H21 Source: BoG 49
Slide 50: Fiscal and current account balances
Fiscal and current account balances ▪ European Commission 2022 Spring Forecasts (May-22) for 2022 & 2023 (in ESA2010 terms): ▪ General Government (GG) balance at -4.3% and -1.0% of GDP respectively (from 1.1%, -10.2% and -7.4% of GDP in 2019, 2020 and 2021 respectively) ▪ GG Primary balance at -1.9%
Slide 51: Sovereign debt profile
Sovereign debt profile General Government gross public debt Net Debt5 (% of GDP, ESA terms) at c171.3% ▪ According to latest Eurobank Research DSA, the Greek Gross Public Debt is of GDP expected at 176.9% and 165.7% of GDP for 2022 and 2023 respectively vs a peak of 206.3% of GDP in 2020. ▪ Over 77%
Slide 52: Bulgaria: Solid GDP growth footing in Q1, challenges lie ahead
Bulgaria Solid GDP growth footing in Q1, challenges lie ahead ▪ The EC (2022 Summer Forecasts) foresees a FY22 growth of 2.8% y-o-y with the geopolitical upheaval and inflationary pressures taking their toll ▪ 1Q22 GDP growth print came in at 4.0% y-o-y, above the 3.1% market consensus, although bel
Slide 53: Cyprus: Soothing signals from the tourist sector
Cyprus Soothing signals from the tourist sector but challenges remain ▪ EC (2022 Summer Forecasts) foresees a FY22 growth of 3.2% y-o-y ▪ Solid economic momentum in 1Q22 with GDP growth coming in at 5.6% y-o-y, after a -5.2% contraction in 2020 and a rebound of 5.5% in 2021; the firm momentum is bro
Slide 54: Appendix I – Supplementary information
1H 2022 Results Appendix I – Supplementary information
Slide 55: Summary performance
Summary performance Balance sheet – key figures Income statement – key figures €m 2Q22 1Q22 €m 2Q22 1Q22 Gross customer loans 42,246 41,164 Net interest income 360.6 339.4 Provisions (1,733) (1,895) Commission income 132.7 123.0 Loans FVTPL 20 23 Operating income 825.3 702.7 Net customer loans 40,53
Slide 56: Consolidated quarterly financials – Income statement
Consolidated quarterly financials – Income statement (€ m) 2Q22 1Q22 4Q21 3Q21 2Q21 Net Interest Income 360.6 339.4 320.9 329.9 335.1 Commission income 132.7 123.0 129.9 117.0 110.3 Other Income 332.0 240.4 62.2 20.3 32.2 Operating Income 825.3 702.7 513.0 467.2 477.5 Operating Expenses (228.1) (221
Slide 57: Consolidated quarterly financials – Balance sheet
Consolidated quarterly financials – Balance sheet (€ m) 2Q22 1Q22 4Q21 3Q21 2Q21 Consumer Loans 3,372 3,281 3,241 3,053 3,421 Mortgages 10,173 10,091 10,097 10,006 11,488 Household Loans 13,544 13,372 13,337 13,059 14,910 Small Business Loans 3,858 3,765 3,752 3,764 4,501 Corporate Loans 19,896 18,9
Slide 58: Consolidated financials
Consolidated financials Income Statement (€ m) 1H22 1H21 Δ y-o-y (%) Net Interest Income 700.0 669.7 4.5 Commission income 255.7 208.9 22.4 Other Income 572.3 45.3 >100 Operating Income 1,528.0 924.0 65.4 Operating Expenses (450.0) (433.1) 3.9 Pre-Provision Income 1,078.0 490.9 >100 Loan Loss Provis
Slide 59: SEE operations key figures – 2Q22
SEE operations key figures – 2Q221 Bulgaria Cyprus Serbia Lux Sum Assets 7,252 8,476 2,396 2,181 20,305 Gross loans 5,109 2,549 1,648 745 10,051 Balance Sheet Net loans 4,941 2,501 1,599 745 9,786 (€m) NPE loans 211 55 108 0 374 Deposits 6,373 6,976 1,517 1,739 16,605 CAD2 20.9% 26.0% 24.2% 20.2% Co
Slide 60: Appendix II – Glossary
1H 2022 Results Appendix II – Glossary
Slide 61: Glossary – Definition of Alternative Performance Measures
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 Fina
Slide 62: Glossary – Definition of Alternative Performance Measures
Glossary – Definition of Alternative Performance Measures (APMs) & other selected financial measures / ratios Adjusted net profit: Net profit/loss from continuing operations after deducting restructuring costs, goodwill impairment, gains/losses related to the transformation plan and income tax adjus
Slide 63: Glossary – Definition of Alternative Performance Measures
Glossary – Definition of Alternative Performance Measures (APMs) & other selected financial measures / ratios Forborne Non-performing Exposures (NPF): Forborne Non-performing Exposures (in compliance with EBA Guidelines) are the Bank’s Forborne exposures that meet the criteria to be classified as No
Slide 64: Glossary – Definition of Alternative Performance Measures
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
Slide 65: Investor Relations contacts
Investor Relations contacts Dimitris Nikolos +30 214 4058 834 dnikolos@eurobankholdings.gr Yannis Chalaris +30 214 4058 832 ychalaris@eurobankholdings.gr Christos Stylios +30 214 4058 833 cstylios@eurobankholdings.gr Investor Relations Division +30 214 4058 834 investor_relations@eurobankholdings.gr
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