Eurobank S.a. · ATHEX:EUROB
Eurobank — Merger or Acquisition (November 2018)
26 slides from Eurobank's merger presentation, Nov 26, 2018
Slide 1: Eurobank's transformational plan
Eurobank’s transformational plan Merger with Grivalia NPE reduction Acceleration Plan 26 November 2018
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. The material that follows is a presentation of general background information about Euroban
Slide 3: Highlights of the transformational plan
Highlights of the transformational plan 1 Creates strongest Greek bank poised for broader economic growth ▪ Bank with highest total capital ratio in Greece, at 19% ▪ Ready to serve clients, return to growth and support economic activity in Greece and Southeastern Europe 2 De-risking balance sheet ▪
Slide 4: Eurobank execution track record
Eurobank execution track record ✓ Sale of Bancpost (Romania) ✓ Acquisition of Hellenic Postbank ✓ Merger with Grivalia ✓ Sale of €1.5 bn NPE portfolio (1st ✓ €2.9bn re-IPO ✓ Acceleration Plan Targets NPE portfolio sold in Greece) ✓ RoTE >10% by 2020 2013-2014 2015 2016-2017 2018 By YE’19 ✓ FL CET1 >
Slide 5: Merger of Eurobank and Grivalia
Section 1 Merger of Eurobank and Grivalia
Slide 6: Transaction summary
Transaction summary ▪ 15.81 new ordinary Eurobank shares per ordinary Grivalia share Exchange Ratio ▪ Grivalia to distribute €40.5m to shareholders prior to the completion of the Merger ▪ Eurobank shareholders will own 59% and Grivalia shareholders will own 41% shareholding in the combined entity Pr
Slide 7: Overview of Grivalia (1/2)
Overview of Grivalia (1/2) Key facts Investment property value split (€m, Sep-18) ▪ Grivalia is the 2nd largest Greek REIC1 with a €999m diversified portfolio of 117 commercial assets By Country By Property type ▪ Operates in Greece, Romania, Serbia and other international markets ▪ Growing presence
Slide 8: Overview of Grivalia (2/2)
Overview of Grivalia (2/2) Portfolio overview (as of Sep-18) Grivalia Hospitality Office Retail Mixed use Logistics Special use1 Total2 (25% stake & management) Properties (#) 29 54 23 5 5 116 Stakes in 5 hotel properties GLA (k sqm) 266 322 128 86 84 887 n/a Rent (annual, €m) 26.3 24.1 15.8 4.5 4.5
Slide 9: Pro-forma income statement
Pro-forma income statement (in €m) Eurobank Grivalia Adjustments3 Combined P&L Net interest income 1,417 1,417 Banking fee and Commission 289 72 361 income Other income 139 139 Operating income 1,845 72 1,917 Staff costs (485) (6) 6 (485) Other OpEx1 (385) (16) (8) (409) Total OpEx (870) (22) (2) (8
Slide 10: Pro-forma balance sheet
Pro-forma balance sheet (in €m) Eurobank Grivalia Adjustments3 Combined A ▪ Combined real estate portfolio of c.€2.2bn to be managed by a real Balance sheet estate management company Shareholders' equity 5,017 907 (50) 5,874 B Tangible book value 4,848 907 (50) 5,705 ▪ The merger is capital and earn
Slide 11: Pro-forma capital position
Pro-forma capital position Fully loaded CET1 Phased in CET1 Total CAD 1.9% 19.0% 17.1% 2.0% 16.6% 14.6% 2.1% 13.8% 11.7% 3Q18 FLB3 CET1 Transaction PF 3Q18 FLB3 3Q18 CET1 Transaction PF 3Q18 CET1 3Q18 Total CAD Transaction PF 3Q18 Total impact CET1 impact impact CAD Note: 2018 CET1 SREP requirement
Slide 12: Indicative timeline
Indicative timeline 26/11 ▪ Announcement of the Merger 22/02 ▪ Approval of draft merger agreement and merger balance sheet 08/04 ▪ Approval of the Merger by General Meetings ▪ Approval of the Merger by Ministry of Economy, Development and Tourism 15/04 ▪ Completion of the Merger 24/04 ▪ Trading of n
Slide 13: Acceleration Plan for NPEs reduction
Section 2 Acceleration Plan for NPEs reduction
Slide 14: Acceleration Plan for NPE reduction
Acceleration Plan for NPE reduction ▪ The Acceleration Plan includes: ▪ The execution of the NPE reduction plan for 2019 as submitted to the SSM in September 2018 ▪ The securitization of circa €7bn of NPEs and the corporate transformation of the bank ▪ The entry of a strategic investor into Financia
Slide 15: Step 1: Securitization of NPEs
Step 1: Securitization of NPEs SPV (L.3156/03) (As of Sep-18) Assets Liabilities & Equity €57.3bn €57.3bn Liabilities Assets Other assets (incl. Equity Performing Loans Class A and DTC) (Senior) NPEs to be Step 1 managed by Liabilities independent Class B1 Class B2 servicer (Mezz.) (Mezz.) Other NPE
Slide 16: Step 2: Hive-down of core banking operations
Step 2: Hive-down of core banking operations Structure after Step 1 Structure after Step 2 Shareholders Shareholders Eurobank Ergasias Listed in ASE, becomes HoldCo Eurobank Ergasias Hive-down 100% Assets Step 2 Liabilities DTC New Eurobank Senior Notes retained by New SPV Assets Eurobank Liabilitie
Slide 17: Step 3: De-recognition of NPEs
Step 3: De-recognition of NPEs Shareholders B1 and junior notes distributed to shareholders Eurobank Ergasias Listed in ASE, becomes HoldCo 100% SPV New Eurobank Senior Notes retained by A New Eurobank (Senior) Assets Liabilities DTC B1 B2 NPEs (Mezz.) (Mezz.) FPS (servicer) C (Junior) Acquisition o
Slide 18: Acceleration Plan will allow the Group to reach planned NPE ratio two years earlier
Acceleration Plan will allow the Group to reach planned NPE ratio two years earlier 39% Group NPE ratio down to Group NPE ratio reduced ~15% within ca. 12 months, below 10% by YE’2021 2 years ahead of plan ~30% ~20% ~15% ~15% ~12% <10% Sep-18 actual Dec-19 estimate Dec-20 estimate Dec-21 estimate NP
Slide 19: Appendix I
Appendix I
Slide 20: Overview of FPS
Overview of FPS Key services Key metrics Service Description ~700 ~€19bn employees AuM Includes all debt recovery activities ▪ debt collection, including legal recovery activities External Debt Servicing ▪ restructuring activities >900k ~20% ▪ collateral work-out management customers AuM split Inclu
Slide 21: Relationship with Grivalia Management Company
Relationship with Grivalia Management Company ▪ Prior to the completion of the merger, key members of Grivalia’s management team will establish a real estate management company (“Grivalia Management Company”) ▪ Mr. George Chryssikos will be one of the key founding partners of Grivalia Management Com
Slide 22: Appendix II - Glossary
Appendix II - Glossary
Slide 23: Glossary – Definition of Financial measures / ratios
Glossary – Definition of 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 losses from investment securities and other income/ (expen
Slide 24: Glossary – Definition of Financial measures / ratios
Glossary – Definition of Financial measures / ratios Cost of Risk: Impairment losses on Loans and Advances charged in the reported period, annualized and divided by the average balance of Loans and Advances to Customers at amortized cost(the arithmetic average of Loans and Advances to Customers at a
Slide 25: Glossary – Definition of Financial measures / ratios
Glossary – Definition of 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 account credit, market and operational risk. Phased in C
Slide 26: Investor Relations contacts
Investor Relations contacts Dimitris Nikolos +30 210 3704 764 E-mail: dnikolos@eurobank.gr Yannis Chalaris +30 210 3704 744 E-mail: ychalaris@eurobank.gr Christos Stylios +30 210 3704 745 E-mail: cstylios@eurobank.gr E-mail: investor_relations@eurobank.gr Fax: +30 210 3704 774 Internet: www.eurobank