Eurobank S.a. · ATHEX:EUROB

Eurobank — Eurobank Ergasias Services and Holdings — H1 2021 Earnings Presentation

59 slides from Eurobank's earnings presentation, Aug 31, 2021

  1. Slide 1: 1H 2021 Results

    1H 2021 Results 31 August 2021

  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 1H21 results highlights 3 Diversified business model 11 1H21 results review 17 Asset Quality 29 ESG commitments and performance 33 Appendix I – Supplementary information 38 Appendix II – Macroeconomic update 45 Appendix III – Glossary 53 Page 2

  4. Slide 4: 1H21 results highlights

    1H21 results highlights Page 3

  5. Slide 5: 1H21 results

    1H21 results Highlights Key financials Net profit1 €195m in 1H21; €123m in 2Q21 €m 1H21 1H20 Δ(%) 2Q21 1Q21 Δ(%) 1  Core pre-provision income (PPI) up 2.4% y-o-y at €446m; up 4.5% q-o-q Net interest income 669.7 688.8 (2.8) 335.1 334.7 0.1  NII down 2.8% y-o-y at €670m; flat q-o-q Commission incom

  6. Slide 6: 2021 stress test results

    2021 stress test results Eurobank results Actual Baseline Adverse 2020 2023 2023  Successful completion of the 2021 SSM stress test conducted by ECB  The capital depletion under the adverse scenario key input for SREP FLB3 CET1 12.0% 14.9% 7.6% evaluation Δ vs 2020 (bps) 292 (433)  Eurobank ranks

  7. Slide 7: Mexico securitization

    Mexico securitization Mexico securitization structure Timeline Senior •Tranching € 1.55bn May 2021 •Senior pre-rating Mezzanine Mexico €0.20bn Gross Book Value €3.2bn: €5.15bn •HAPS application nominal value, • c. 90% NPEs June 2021 o/w off balance • c. 10% PEs / PFs sheet €1.95bn Junior €3.40bn •SR

  8. Slide 8: Pre-provision income (PPI)

    Pre-provision income (PPI) Core PPI and other income (€ m) Δ PPI (q-o-q, € m) 63 184 197 13 32 Other income 224 216 228 213 218 57 59 60 60 67 SEE 19 260 231 0 12 (2) 166 Greece 154 157 158 161 2Q20 3Q20 4Q20 1Q21 2Q21 PPI per region (€ m) 397 413 58 63 Δ ΝΙΙ 1Q21 PPI 2Q21 PPI Δ other income Δ commi

  9. Slide 9: Asset quality

    Asset quality NPEs formation1 (€ m) NPEs ratio (%) (6,784) (129) (343) 117 (110) Δ NPEs stock (q-o-q, € m) 15.3% 14.9% 14.0% 14.2% 14.0% 33 72 SEE 23 Greece (66) 7.3% (46) (43) (77) 2Q20 3Q20 4Q20 1Q21 2Q21 2Q21 pro- 2Q20 3Q20 4Q20 1Q21 2Q21 forma for Mexico Loan loss provisions (€ m) Provisions / N

  10. Slide 10: Core operating profit bridge

    Δ Core Operating Profit (y-o-y, €m) 23 13 5 64 1H20 435 (6 ) (6 ) 446 1H21 Core PPI Core PPI (82 ) Greece 2 1 1H21 Δ Fees Δ International Δ staff OPEX Δ admin & RF Δ NII excl. NPEs Δ depreciation Δ NII NPEs 1H20 Loan Loss (224) Loan Loss (271) Provisions Provisions 1H20 1H21 Core Operating 164 +35%

  11. Slide 11: Capital position

    Capital position 1H21 FY20CAD 2Q21 CAD movement 16.3% (55bps) (44bps) (15bps) (16bps) 64bps 15.6% CET1 FLB3: 11.9% 15.5% 40bps 15.6% 0bps FY21 est.2: (15bps) 2.4% Tier II (8bps) (3bps) 13.2% CET 1 CAD 16.4% CET1 FLB3: 12.1% CET1 FLB3 13.2% 1Q21 CAD IFRS 9 & other Regulatory DTC amortization Other 2Q

  12. Slide 12: Diversified business model

    Diversified business model Page 11

  13. Slide 13: Eurobank Group segmental analysis

    Eurobank Group segmental analysis: Earnings generation diversified in different segments in Greece and regionally Key metrics (1H21) Net profit1 (q-o-q, € m) Net Assets RWAs TBV 2020 171 Profit1 RoTBV2 135 (€ bn) (€ bn) (€ m) RoTBV (€ m) 73 61 Greek 31 Greek banking Banking 51.5 32.1 3,014 103 7.0%

  14. Slide 14: Eurobank Group Investment Real Estate Portfolio

    Eurobank Group Investment Real Estate Portfolio Big boxes & 1H21 Office Mixed use Retail Logistics Special use Total supermarkets No. of assets (#) 42 18 70 45 6 16 197 Market Value (€ m) 419 198 159 433 82 70 1,362 % of total MV 31% 15% 12% 32% 6% 5% 100% MV / GLA (€ /sqm) 1,371 2,132 1,665 1,123 6

  15. Slide 15: Bulgaria key metrics

    Bulgaria key metrics1 1H21 Highlights PPI and provisions (€ m)  Net profit €39m in 1H21; €21m in 2Q21  Core pre-provision income (PPI) up 6.6% y-o-y at €65m; up 14.6% q-o-q 31 35 PPI 29 30  NII down 1.1% y-o-y at €91m; up 3.0% q-o-q 26  Commission income up 15.7% y-o-y at €30m; up 11.5% q-o-q (1

  16. Slide 16: Cyprus key metrics

    Cyprus key metrics1 1H21 Highlights PPI and provisions (€ m)  Net profit €35m in 1H21; €19m in 2Q21  Core pre-provision income (PPI) down 1.9% y-o-y at €44m; up 5.7% q-o-q  NII down 3.7% y-o-y at €50m; up 2.1% q-o-q 26 23 22 22 23 PPI  Commission income up 14.2% y-o-y at €16m; up 8.8% q-o-q (1)

  17. Slide 17: Serbia: Merger of Eurobank a.d. Beograd with Direktna Banka

    Serbia: Merger of Eurobank a.d. Beograd with Direktna Banka Highlights Key Figures  Eurobank’s subsidiary in Serbia, Eurobank a.d. Beograd to merge with Eurobank a.d. Direktna 1H21 Combined Beograd Banka Direktna Banka1 Gross Loans (€ bn) 1.3 0.3 1.6  Combined market share ~6.5% in terms of total

  18. Slide 18: 1H21 results review

    A) urobank Holdings 1H21 results review | Page 17

  19. Slide 19: Balance Sheet composition

    Balance Sheet composition Assets (€ bn) Liabilities and Equity (€ bn) 70.9 70.9 5.5 Equity Net loans and 37.5 advances to customers Trading & • Core 72% Deposits 49.7 • Time 28% Other other Tbills issuers 1% 1% 21% Securities 9.5 GGBs 50% PP&E, intangibles and other assets 5.0 Derivatives Other 2.1

  20. Slide 20: Loans

    Loans Gross loans (€ bn) Performing loans (€ bn) 34.6 34.9 35.4 35.5 35.6 PE including Greek corporate bonds 0.2 0.2 0.2 0.2 0.3 Corporate bonds 40.7 40.9 41.1 41.1 (Greece) 40.6 SEE 35.2 35.3 35.3 8.1 8.3 8.4 34.4 34.7 SEE 7.8 8.0 7.4 7.5 7.7 7.9 7.3 3.5 3.5 3.5 3.5 3.5 Senior notes Senior notes Gr

  21. Slide 21: National Recovery and Resilience Fund (RRF)

    National Recovery and Resilience Fund (RRF) RRF characteristics Grants Budget Pillars Eligible Investments  More than 170 categories of reforms and investments (€ bn) • Upgrading energy efficiency of buildings  Spanning from 2021-2026 • Investments in energy storage, electric charge points, batter

  22. Slide 22: RRF Loans

    RRF Loans Eligibility criteria for RRF loans Potential investment perimeter driven by RRF loans Green transition Cost of funding: ~€32.0bn c. 0.25% Digital transformation RRF ~40% (~€12.7bn) Exports Banking sector & supranational banks ~40% R&D innovation (~€12.7bn) Own Funds ~20% (~€6.4bn) Mergers,

  23. Slide 23: Funding and liquidity

    Funding and liquidity Net Loans / Deposits ratio Deposits (€ bn) 81.6% 80.1% 79.1% 77.7% 75.4% 49.7 48.3 47.3 46.2 45.2 14.3 2Q20 3Q20 4Q20 1Q21 2Q21 13.4 13.1 12.7 12.4 SEE Liquidity coverage ratio 166.4% 35.5 140.6% Greece 34.9 34.2 122.5% 123.7% 32.7 33.5 107.4% 2Q20 3Q20 4Q20 1Q21 2Q21 2Q20 3Q20

  24. Slide 24: MREL strategy

    MREL strategy Resolution considerations & issuance strategy Interim MREL target (Jan 22)  SRB has determined the OpCo (Eurobank) as the Resolution Entity and a Interim MREL target (incl. CBR) Distance to interim MREL target (as % of RWAs) (as % of RWAs, 1H21 data2) Single Point of Entry (SPE) strat

  25. Slide 25: Net interest margin & spreads

    Net interest margin & spreads Net interest margin (bps) Deposit spreads (Greece, bps) 2Q20 3Q20 4Q20 1Q21 2Q21 2Q20 3Q20 4Q20 1Q21 2Q21 Greece 204 188 187 190 185 Savings & Sight (55) (59) (62) (61) (59) SEE 231 226 219 216 215 Time (59) (55) (58) (61) (60) Group 210 197 195 196 192 Total (56) (58)

  26. Slide 26: Net interest income

    Net interest income NII breakdown (€ m) NII on impaired loans (over total NII) Total NII 349 331 329 335 335 o/w Greece 260 240 239 244 241 38% 37% o/w SEE 90 91 90 91 94 32% 33% 25% 15% 9% 3% FY18 FY15 FY16 FY17 FY19 FY20 1H21 estimate FY23 Loan margin (PEs) 303 317 310 309 292 NII evolution (q-o-q

  27. Slide 27: Commission income

    Commission income Commission income breakdown (€ m) Commission income per region (€ m) 63bps over assets 109 110 110 109 99 21 99 95 22 Lending 95 26 29 SEE 88 88 15 22 26 24 19 23 34 40 Network transactions & credit cards 37 33 81 Greece 29 7 Capital Markets 83 72 17 7 6 6 Bancassurance & 71 14 18

  28. Slide 28: Wealth management

    Wealth management Asset Management (€ bn) Private Banking CAL1 (€ bn) +16% 8.0 7.8 7.4 6.9 7.0 3.8 Greece +32% 4.1 3.6 3.7 3.3 3.6 3.1 3.2 2.8 Own Mutual Funds 3.3 3.4 ~30% market 2.6 share 2.2 2.1 2.2 2.2 2.1 Cyprus 2.0 2.0 2.0 0.7 3rd party Mutual 0.6 0.7 0.6 0.6 Funds Luxembourg 2.0 2.1 1.6 1.7 1

  29. Slide 29: Operating expenses

    Operating expenses OpEx per region (€ m) OpEx breakdown (€ m) Cost-to-Income 46.4% 46.9% Greece 46.2% 46.8% 213 213 222 216 218 SEE 47.0% 47.2% 56 56 57 57 56 SEE Greece (0.4%) 434 (0.1%) 433 158 157 165 158 162 Greece 53 58 Depreciation 38 39 Resolution Fund 2Q20 3Q20 4Q20 1Q21 2Q21 Headcount & bra

  30. Slide 30: Asset Quality

    Holdings Asset Quality | Page 29

  31. Slide 31: NPEs formation per segment (Greece)

    NPEs formation per segment (Greece) Mortgages (€ m) Consumer (€ m) (17) (5) (24) (27) 7 2 4 22 12 17 (41) 1 (67) (57) (80) (66) (9) (3) (2) (4) (10) (2) (5) (83) (85) (81) (105) (123) 3Q18 1Q18 2Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2

  32. Slide 32: NPEs metrics (Group)

    NPEs metrics (Group) 90dpd bridge to NPEs (€ bn) NPEs per region Provisions & Provisions/ Total NPEs NPEs ratio collaterals / NPEs NPEs (€ bn) (%) (%) (%) 0.3 5.7 Consumer 0.7 32.5 98.7 110 1.0 Mortgages 1.6 16.3 52.0 135 4.4 Small Business 1.1 26.6 61.4 128 Total Retail 3.4 21.1 64.8 128 Corporate

  33. Slide 33: Loans' stage analysis (Group)

    Loans’ stage analysis (Group) Loans’ stage breakdown Provisions stock over NPEs 60.6% 62.5% 61.9% 61.9% 63.3% (€ bn) 2Q20 3Q20 4Q20 1Q21 2Q21 Stage 1 28.3 28.8 28.7 29.1 29.1 Stage 2 6.1 5.8 6.4 6.2 6.2 Stage 3 (NPEs) 6.2 6.1 5.7 5.8 5.7 1 Total 40.5 40.7 40.9 41.1 41.1 2Q20 3Q20 4Q20 1Q21 2Q21 Stag

  34. Slide 34: ESG commitments and performance

    ESG commitments and performance https://www.eurobank.gr/en/group/esg-environment-society-governance Page 33

  35. Slide 35: ESG: Environment

    Environment Promoting ESG financing,  Participation in the issuance of PPC’s sustainability-linked notes, linked to Greenhouse Gas reduction targets funding and investment  Integrating ESG criteria in financing and investing activities (Clean Energy Projects & Other Environment-Friendly Energy Sou

  36. Slide 36: ESG: Society

    Society Corporate Social  Ongoing COVID-19 pandemic support to businesses and society (incl. COVID-19 Guarantee Fund; Greek Tourism pandemic support Responsibility totaling €750m; agreement with ETEAN through Business Financing – Entrepreneurship Fund - TEPIX II)  New initiative for addressing the

  37. Slide 37: ESG: Governance

    Governance ESG Reporting  Annual Business and Sustainability Report (2020). Issued in July 2021 Market orientation ESG ratings & indices /  Inclusion in major ESG indices and ratings (MSCI; Sustainalytics; S&P Global; FTSE4Good; ISS ESG; CDP Partnerships etc.)  Participating in major sustainabili

  38. Slide 38: Partnerships and distinctions

    Partnerships and distinctions Ratings & Indices Latest Active supporter of the UN Signatory to the 10 Principles of UN Global Asset Management subsidiary a signatory BBB SDGs. Compact since 2008. to the UN PRIs since 2018. 28.5 Ratings & indices 32 UNEP FI participant since 2005; Member of the EC’s

  39. Slide 39: Appendix I – Supplementary information

    Appendix I – Supplementary information Page 38

  40. Slide 40: Summary performance

    Summary performance Balance sheet – key figures Income statement – key figures €m 2Q21 1Q21 €m 2Q21 1Q21 Gross customer loans 41,061 41,073 Net interest income 335.1 334.7 Provisions (3,572) (3,551) Commission income 110.3 98.7 Loans FVTPL 22 25 Operating income 477.5 446.5 Net customer loans 37,511

  41. Slide 41: Consolidated quarterly financials

    Consolidated quarterly financials Income Statement (€ m) 2Q21 1Q21 4Q20 3Q20 2Q20 Net Interest Income 335.1 334.7 329.3 331.3 349.5 Commission income 110.3 98.7 108.8 95.1 87.8 Other Income 32.2 13.1 197.0 184.3 63.4 Operating Income 477.5 446.5 635.1 610.8 500.6 Operating Expenses (217.5) (215.5) (

  42. Slide 42: Consolidated financials

    Consolidated financials Income Statement (€ m) 1H21 1H20 Δ y-o-y (%) Net Interest Income 669.7 688.8 (2.8) Commission income 208.9 180.1 16.0 Other Income 45.3 66.1 (31.4) Operating Income 924.0 935.0 (1.2) Operating Expenses (433.1) (433.7) (0.1) Pre-Provision Income 490.9 501.3 (2.1) Loan Loss Pro

  43. Slide 43: SEE operations key figures – 2Q21

    SEE operations key figures – 2Q211 Bulgaria Cyprus Serbia Lux Sum Assets 6,518 7,351 1,812 2,103 17,784 Gross loans 4,424 2,213 1,262 637 8,536 Balance Sheet Net loans 4,286 2,165 1,216 637 8,304 (€m) NPE loans 257 73 89 0 419 Balance Deposits 5,685 5,912 1,020 1,647 14,264 Sheet CAD2 21.3% 25.2% 18

  44. Slide 44: Gross loans (SEE, € m)

    Gross loans (SEE, € m) Bulgaria Cyprus 2,213 2,019 2,083 183 4,424 1,953 1,983 176 4,053 4,138 155 164 168 Other 3,898 3,988 702 Consumer 617 632 662 575 1,223 1,798 1,150 1,167 1,197 Mortgage 1,819 1,851 1,906 2,031 1,114 Business Business 2,209 2,221 2,254 2,278 2,500 2Q20 3Q20 4Q20 1Q21 2Q21 2Q20

  45. Slide 45: Deposits (SEE, € m)

    Deposits (SEE, € m) Bulgaria Cyprus 5,685 5,912 5,411 5,438 5,418 5,462 5,553 5,228 4,696 4,897 1,713 1,895 1,636 1,685 1,930 1,955 Time Time 2,190 2,034 1,601 1,628 3,593 3,726 3,972 Core 4,017 3,096 3,269 3,248 3,384 3,532 3,598 Core 2Q20 3Q20 4Q20 1Q21 2Q21 2Q20 3Q20 4Q20 1Q21 2Q21 Serbia Luxembo

  46. Slide 46: Appendix II – Macroeconomic update

    Appendix II – Macroeconomic update Page 45

  47. Slide 47: Recent macro & market developments and FY-2021 outlook

    Recent macro & market developments and FY-2021 outlook  GDP improved substantially in 2021 versus 2020: according to EC’s summer forecasts (Jul-21), real GDP growth is expected at 4.3% and 6.0% in 2021 and 2022 respectively. Latest trends in tourism, industrial turnover and FDI point to an even hig

  48. Slide 48: Selected indicators of domestic economic activity

    Selected indicators of domestic economic activity ESI: significant improvement since Mar-21, close to pre-pandemic levels PMI manufacturing: recovery continues, well above the 50 units no- change threshold for a 4th month in a row Retail trade volume index: the reopening of the Manufacturing product

  49. Slide 49: Domestic Labour Market

    Domestic Labour Market The unemployment rate dropped to 15.0% in Jun-21 from Strong rebound in employment since Apr-21, high variability 15.8% (17.8%) in May-21 (Jun-20) from the beginning of the health crisis Long term unemployment on a declining path since the end of Recovery of productivity requi

  50. Slide 50: Real Estate prices continued to increase despite 2020 recession

    Real Estate prices continued to increase despite 2020 recession Index of Apartment Prices Index of Retail and Office Prices 2009Q1 – 2021Q1 2010H2 – 2020H2 Source: BoG Page 49

  51. Slide 51: Pandemic fiscal measures and liquidity support in 2021 at 9.2% of GDP

    Pandemic fiscal measures and liquidity support in 2021 at 9.2% of GDP * Total package announced currently amounts to ca €41bn: €23.1bn, €15.8bn and €2.1bn in 2020, 2021 and 2022 respectively (fiscal cost of €11.6bn, €14.6 and € 2.1 in 2020, 2021 and 2022) 2021: budget foresaw support measures of €7.

  52. Slide 52: European policy response

    European policy response European level stimulus* Supervisory actions Next Generation EU Multi Year Financial • €1,850bn Pandemic Emergency Purchase Programme & €120bn QE (APP) Unemployment initiative (SURE) fund Framework 2021–27 Loans • PEPP eligibility waiver for GGBs (available amount at €37 bn)

  53. Slide 53: Bulgaria-Cyprus-Serbia macro-trajectory for 2021-2022

    Bulgaria-Cyprus-Serbia macro-trajectory for 2021-2022 Strong growth rebound on the cards after the end of the pandemic-induced recession  Covid-19 induced recession turned out milder in 2020 for regional economies than initially expected. EU forecasts envisage a strong growth momentum in Bulgaria,

  54. Slide 54: Appendix III – Glossary

    Appendix III – Glossary Page 53

  55. Slide 55: 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

  56. Slide 56: Glossary – Definition of Alternative Performance Measures (APMs)

    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 adjust

  57. Slide 57: Glossary – Definition of Alternative Performance Measures (APMs)

    Glossary – Definition of Alternative Performance Measures (APMs) & other selected financial measures/ ratios Liquidity Coverage Ratio (LCR): The total amount of high quality liquid assets over net liquidity outflows for a 30-day stress period. Loans to Deposits: Loans and Advances to Customers at am

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

    Glossary – Definition of Alternative Performance Measures (APMs) & other selected financial measures/ ratios Provisions/NPEs ratio: Impairment Allowance for Loans and Advances to Customers, including impairment allowance for credit related commitments (off balance sheet items) divided by NPEs at the

  59. Slide 59: 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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