National Bank Of Greece S.a. · ATHEX:ETE
National Bank Of Greece — Debt Investor Presentation (July 2019)
39 slides from National Bank Of Greece's debt investor presentation, July 2019
Slide 1: Roadshow Presentation Tier 2 Capital Issuance
Roadshow Presentation Tier 2 Capital Issuance July 2019
Slide 2: Important Notice
Roadshow Presentation– July 2019 Important Notice Not an Offer to Sale This presentation, which has been prepared by the National Bank of Greece (the Bank), is confidential and is being made available to selected recipients only and solely for the information of such recipients. This presentation ma
Slide 3: Table of Contents
Roadshow Presentation– July 2019 Table of Contents 1 Bank overview & strategic targets 2 Profitability & Capital 3 Asset quality 4 Liquidity & Funding 5 Tier 2 6 Macro 2
Slide 4: Bank overview & strategic targets
1 Bank overview & strategic targets 3
Slide 5: NBG at a glance
Roadshow Presentation– July 2019 NBG at a glance 5.3m active retail Trusted brand customers with more than 100 years in a Greek bankable of history population of ~8.3m1 Well-established, 36% savings deposits Corporate market share relationships in a total market of with increasing market ~€53b2 shar
Slide 6: NBG positioning vs. peers across various metrics
Roadshow Presentation– July 2019 NBG positioning vs. peers across various metrics1 L:D 71% 88% 92% 103% NPE cash 58% 49% 54% Net 1.20x 1.85x 1.51x 1.54x 46% coverage NPE/TBV LCR 151% 67% Not Not 106% disclosed disclosed NSFR 113% 17.0% 15.7% 15.7% 13.5 52% 13.7% 49% 11.7 41% 39% 7.3 5.9 Phased-in NP
Slide 7: NBG has consistently delivered on the majority of the strategic objectives
Roadshow Presentation– July 2019 NBG has consistently delivered on the majority of the strategic objectives - 2019 is expected to be the year of return to meaningful operating profitability 2015 2016 2017 2018 2019-2022 recapitalization completed major disengaged from the continued NPE NPE
Slide 8: The exchange of the IRS on February 2019 is the basis of a strong start
Roadshow Presentation– July 2019 The exchange of the IRS on February 2019 is the basis of a strong start to the Bank’s latest strategic transformation plan The Bank exchanged a legacy Interest Rate Swap with newly issued GGBs, increasing the NII by c. €110m per annum and adding a one-off positive P
Slide 9: NPE disposals and divestments are picking up pace
Roadshow Presentation– July 2019 NPE disposals and divestments are picking up pace Expected Capital neutral +26bps Impact BROM NBG Egypt NBG Cyprus NBG Insurance NBG Pangea Announcement of Announcement of the Expected Expected Divestment from the signing of the signing of the completion of completio
Slide 10: Profitability & Capital
w y NATIONAL BANK OF GREECE 2| Profitability & Capital EONKHI8G: 9
Slide 11: 1Q19 group operating profit reaches €142m
Roadshow Presentation– July 2019 1Q19 group operating profit reaches €142m, reflecting strong operating trends and a positive trading result Group operating margin decomposition1 1Q19 Group operating result bridge 1Q19 (bps) (€m) o/w: €59m due to trading Group operating +148 16 142 income one of
Slide 12: NII up by 6% qoq as the impact of the exchange of the Greek State IRS
Roadshow Presentation– July 2019 NII up by 6% qoq as the impact of the exchange of the Greek State IRS starts to feed through Domestic NIM & CoR Domestic NII breakdown (bps) (€m) 1Q18 2Q18 3Q18 4Q18 1Q19 311 301 299 292 Loans 298 286 283 290 285 286 NIM ex cash 292 262 NIM1 Deposits -39 -37 -38
Slide 13: Cost cutting impact allows costs to drop by 4.5% yoy
Roadshow Presentation– July 2019 Cost cutting impact from personnel reduction and branch closures allows costs to drop by 4.5% yoy OpEx breakdown by category Domestic branch evolution (€m) (#) Greece Group 528 527 1Q19 1Q18 YoY 1Q19 1Q18 YoY 510 Personnel 127 134 -4.9% 132 139 -5.1% 486 461 G&As
Slide 14: CET1 ratio at 15.7% as of Q1 2019
Roadshow Presentation– July 2019 CET1 ratio at 15.7% as of Q1 2019, reflecting IFRS 9 transitional adjustments and IFRS 16 FTA CET 1 ratio CET 1 ratio movement (%) (%) Buffer to OCR ~205bps Buffer to CET1 ~545bps 16.1% CET1 at 15.8% incl. 1Q PAT 15.7% 16.1% 15.7% CET1 FL at 12.8% incl 1Q PAT -0.
Slide 15: Asset quality
7 y NATIONAL BANK OF GREECE 3| Asset quality EONKHI8G: 14
Slide 16: Write-offs and curings have been the major driver of NPE reduction so far
Roadshow Presentation– July 2019 Write-offs and curings have been the major driver of NPE reduction so far NPEs (Domestic, €b) Net curings Write- 2.7b offs 3.3b Sales 1.5b -€6,4b -€1,1b 22.0 New operational targets call for a reduction of -1.6 19.2 NPEs by an additional c€10.4b from Q1 2019 -1.2 -
Slide 17: Improvements in the legal framework and interbank coordination support NPE reduction
Roadshow Presentation– July 2019 Improvements in the legal framework and interbank coordination are supportive of accelerated NPE CLEAN-UP THE BALANCE SHEET reduction Creditor friendly legal framework Specialised support from the branch network Legal framework improvements support NPE resolution
Slide 18: High cash coverage facilitates a more aggressive and frontloaded NPE reduction strategy
Roadshow Presentation– July 2019 High cash coverage facilitates a more aggressive and frontloaded NPE reduction strategy Domestic 90dpd ratios Domestic 90dpd – NPE bridge (€b) Collateral 69% 12% 54% 56% 58% coverage1 SEE & other: 90dpd ratio: 35% 51% Coverage: 66% 14.5 0.9 0.3 39% 2.9 35% 93% 10.3
Slide 19: NPE reduction strategy has been designed to maximise portfolio value
Roadshow Presentation– July 2019 NPE reduction strategy has been designed to maximise portfolio value NPEs & Provisions Strategies Overview (Bank, €b) Restructurings Sales/Securitizations Liquidations NPEs Provisions • Restructuring of retail exposures Q1 2019 Q1 2019 involving deep debt forgiveness
Slide 20: More aggressive restructuring solutions will support the curing of mortgages
Roadshow Presentation– July 2019 CLEAN-UP THE BALANCE SHEET More aggressive restructuring solutions will support the curing of mortgages New restructuring solution: split & settle Highlights Illustrative example • Newly implemented restructuring solution Mortgage Exposure : €140k Term : 25yrs – mos
Slide 21: Front-loaded NPE sales in 2019 will be followed by a large-scale securitisation in 2021
Roadshow Presentation– July 2019 CLEAN-UP THE BALANCE SHEET Front-loaded NPE sales in 2019 will be followed by a large-scale securitisation in 2021 Targeted sales and securitisations 2018 2019 2020 - 21 Project Earth Project Symbol Project Mirror Sale of a Project Solar Securitisation of Sale of co
Slide 22: Liquidity & Funding
7 y NATIONAL BANK OF GREECE 4| Liquidity & Funding EONKHI8G: 21
Slide 23: The Bank's liquidity position continues to improve
Roadshow Presentation– July 2019 The Bank’s liquidity position continues to improve with LCR and NSFR comfortably above minimum thresholds Liquidity Coverage Ratio Loans to Deposits (Bank, %) (Bank, %) 160% 80% 151% 75% 71% 70% 120% 65% 60% Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 80% Ne
Slide 24: Further optimization of the funding profile has pushed interbank exposures lower
Roadshow Presentation– July 2019 Further optimization of the funding profile has pushed interbank exposures and related costs to lower levels Eurosystem funding Interbank funding (Bank, €b) (Bank, net, €b) ECB ELA Cost (%) 1.11 1.12 1.17 1.13 1.11 0.50 22.8 Mainly due to HR IRS swap and the subs
Slide 25: Deposits keep recovering while overall cost remains stable
Roadshow Presentation– July 2019 Deposits keep recovering while overall cost remains stable Domestic deposit yields Domestic deposits evolution (bps) (€b) Core deposits/ Savings Sight & other Time 70% total 82 83 81 79 79 Term +7.2%/ 41.7 41.2 +€2.8b yoy 40.0 39.3 38.4 63 64 Sight 58 12.9 12.2 5
Slide 26: Deposit base currently accounts for 87% of total funding
Roadshow Presentation– July 2019 Deposit base currently accounts for 87% of total funding Funding Structure (average, %) Funding Cost Evolution (bps) 110 102 100 90 80 70 6% 3% 60 45 5% 50 Current & Sight Deposits 40 Time Deposits 30 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 1
Slide 27: Sovereign, bank and debt ratings on upwards trajectory
Roadshow Presentation– July 2019 Sovereign, bank and debt ratings on upwards trajectory Current Ratings Key drivers that could lead to a rating upgrade of Hellenic Hellenic Republic: B- BB- B+ Republic • Achieve further primary surpluses and greater confidence that the economic recovery National Ban
Slide 28: Tier 2
= NATIONAL BANK OF GREECE 5| Tier 2 EONKHI8G: 27
Slide 29: Transaction Overview
Roadshow Presentation– July 2019 Transaction Overview Offering Rationale Investment Highlights Improve Bank’s overall Best in class liquidity position, 10NC5 Tier 2 Instrument capital position and asset quality and NPE coverage liquidity ratios in Greece • Increase Bank’s amount of Eligible Liabilit
Slide 30: Tier 2 Indicative Termsheet
Roadshow Presentation– July 2019 Tier 2 Indicative Termsheet* Issuer National Bank of Greece S.A. Issuer Rating Caa1 (Moody’s, Stable) / B- (S&P’s, Stable) / CCC+ (Fitch) Instrument Dated and subordinated notes (“the Notes”), intended to qualify as Tier II capital Structure 10 Non-Call 5 Subordinate
Slide 31: Macro
= NATIONAL BANK OF GREECE 6| Macro EONKHI8G: 30
Slide 32: Economic growth maintains its momentum in the first months of 2019
Roadshow Presentation– July 2019 Economic growth maintains its momentum in the first months of 2019, on the back of competitive business activity, positive sentiment and strengthened domestic demand Unemployment rate GDP growth (%) (%) average GDP growth of 1.8% y-o-y in 2019-2022 4 y-o-y 30 % 2 2
Slide 33: Greece's real estate market recovery picks up pace
Roadshow Presentation– July 2019 Greece’s real estate market recovery picks-up pace, with house prices posting in Q1 2019 the strongest increase in 11½ years Residential & commercial real estate prices (%, y-o-y) Consumer confidence & components 8 y-o-y 8 -60 Consumer -60 survey data 4 4 -70 -70 0 0
Slide 34: Greece's primary surplus at a new all-time high of 4.3% of GDP in 2018
Roadshow Presentation– July 2019 Greece’s primary surplus at a new all-time high of 4.3% of GDP in 2018, bolstering credibility and paving the way for a fiscal expansion in 2019 (c. 1.0% of GDP), the first in 10 years General government primary balance & drivers Annual change in Gen. Gov. Primary ba
Slide 35: The relative attractiveness of Greek assets increases
Roadshow Presentation– July 2019 The relative attractiveness of Greek assets increases and the demand for credit in the corporate sector has been picking-up, setting the stage for a faster improvement in liquidity conditions Government bond prices & HDAT turnover Greek government & corporate bond yi
Slide 36: Appendix
7 y NATIONAL BANK OF GREECE Appendix EONKHI8G: 35
Slide 37: Group Balance Sheet & P&L
Roadshow Presentation– July 2019 Group Balance Sheet & P&L Balance Sheet | Group P&L | Group €m 1Q19 4Q18 3Q18 2Q18 1Q18 €m 1Q19 4Q18 3Q18 2Q18 1Q18 Cash & Reserves 2 570 5 138 4 875 4 330 3 239 NII 290 275 275 276 290 Interbank placements 3 072 2 546 1 793 1 850 1 764 Net fees 59 66 58 57 60 Secu
Slide 38: Regional P&L: Greece, SEE & other
Roadshow Presentation– July 2019 Regional P&L: Greece, SEE & other Greece SEE & Other €m 1Q19 4Q18 3Q18 2Q18 1Q18 €m 1Q19 4Q18 3Q18 2Q18 1Q18 NII 274 259 258 260 274 NII 16 16 17 16 16 Net fees 56 63 54 54 57 Net fees 3 3 3 3 3 Core Income 330 322 313 313 331 Trading & other income 102 (48) (5) (3
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