Eurobank S.A. · ATHEX:EUROB
Eurobank — EFG Eurobank Ergasias — FY2002 Earnings Presentation
39 slides from Eurobank's earnings presentation, Apr 30, 2003
Slide 1: FY 2002 Results
EFG By) Eurobank Ergasias FY:2002 RESULTS
Slide 2: Cautionary Statement Regarding Forward-Looking Information
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION This presentation may contain projections or other forward – looking statements related to EFG Eurobank Ergasias S.A. that involve risks and uncertainties. Readers are cautioned that these statements represent the Group’s judgments and futur
Slide 3: Hosts and Contents
Hosts and Contents Nicholas Nanopoulos, CEO • Market Environment • Business Review Byron Ballis, Deputy CEO • Financial Highlights Paula Hadjisotiriou, CFO • Financial Review • Appendices 3
Slide 4: Market Environment
EFG (Zs) Eurobank Ergasias MARKET ENVIRONMENT
Slide 5: Above average growth in Greece
Above average growth in Greece • Greece’ s GDP growth remains robust – EU support transfers – 2004 Olympics – historically low interest rates • Inflation remains high, eroding competitiveness R e a l GD P Gro w t h 4 .3 4 .5 4 .1 4 3 .8 4 .0 3 .5 3 .4 3 .5 3 .0 2 .4 2 .4 2 .5 1.8 2 .0 1.5 1.5 1.5 0
Slide 6: Lending growth to continue at somewhat lower rates
Lending growth to continue at somewhat lower rates Household loans to GDP Total Credit to GDP 96% 50% 45% 100% 40% 90% 80% 30% 70% 22% 61% 20% 60% 50% 10% 40% Greece Europe Greece Europe Industrial Confidence Indicator (Greece vs EU) • Under-penetrated market points to 15 further growth 10 • Despite
Slide 7: Greek Banking Sector
Greek Banking Sector • Competitive pricing pressures easing • Stringent provisioning requirements by the Bank of Greece • Prospective liberalisation of consumer credit • Above average growth in lending , compared to Europe, to be concentrated in the retail segment 7
Slide 8: FY 2002 Business Review
EFG (Zs) Eurobank Ergasias FY 2002 BUSINESS REVIEW
Slide 9: Robust growth in lending - 1% overall market share gain
Robust growth in lending - 1% overall market share gain Consumer Loans Outstanding Balances Leader in Consumer lending & credit cards In € m 3,000 2,726 Market shares of 26% and 32% respectively 2,500 2,061 Mortgage lending – up 33% y.o.y % 32 2,000 11% market share, conservative lending criteria 1,
Slide 10: Leader in Asset Gathering
Leader in Asset Gathering MARKET SHARE IN DEPOSITS 12% 11.1% 10% 10% • Market share gain of 1% in deposits 8% • Market share gain of 2.5% in mutual funds (excl. money market funds) 6% 2001 2002* * Sept 02 • Customer funds at € 23 bn, up 8% MARKET SHARE IN MUTUAL FUNDS excl. MM • First mutual fund ma
Slide 11: Leading investment bank in Greece
Leading investment bank in Greece Equity offerings EQUITY CAPITAL MARKETS MARKET SHARES • EFG TELESIS FINANCE maintained top position in domestic equity capital markets. OTHERS 16.1% • Market share rise to 34% in 2002 from 19% in EFG 33.9% BOP 2001 7.8% Debt offerings NBG 14.6% • Market leader in sy
Slide 12: Leading Greek broker
Leading Greek broker • Most Successful Merger – EFG EUROBANK SECURITIES’ big market share gain is evidence of Market Share in Brokerage the success of the merger of 16 Eurobank, Ergasias and Telesis 13% Securities 12 9.7% • Athens Stock Exchange 8 - First position with 13% of the 4 market in 2002, f
Slide 13: Regional expansion
Regional expansion Acquisition of additional 17% stake in BANC POST, Romania’s 3rd largest bank, raising total stake to 36% (BPI 17% -GE Capital 9%) Consolidated fully since Nov. 2002 43% stake in POST BANK, Bulgaria’ s 4th largest bank, consolidated under the equity method Recent Agreement to acqui
Slide 14: Corporate Framework Redesign
Corporate Framework Redesign • Creation of 2 integrated market-oriented divisions • Retail Banking • Wholesale Banking • Across-the-bank client segmentation based on a cut-off-line at €2.5 m • Clients with a turnover below €2.5M serviced by Retail • Clients with a turnover above €2.5M serviced by Wh
Slide 15: Acquisition of EPER, EPAN closed-end funds
Acquisition of EPER, EPAN closed-end funds • Take advantage of large discounts to NAV that characterize Greek closed-end funds (negative goodwill to be booked in 2003) • Reduce tax rate by 5 percentage points in 2003 and 2004 • Streamline institutional asset management operations to reduce cost and
Slide 16: FY 2002 Financial Highlights
FY 2002 FINANCIAL HIGHLIGHTS
Slide 17: FY 2002 - Key Points (IAS)
FY 2002 - Key Points (IAS) • Healthy growth in Core Income (NII+Fees) of 13% to € 972m • Operating cost running at 5% y.o.y on a comparable basis • Core Profit (NΙI+Fees-Cost-Provisions) up 7% to € 263 m • Group Net Profit at €184m, down 10% y.o.y. • Strong Capital Base at € 1.9 bn - Tier 1 RAR at 1
Slide 18: FY 2002 Financial Review
EFG (Zs) Eurobank Ergasias FY 2002 FINANCIAL REVIEW
Slide 19: Retail clients drive lending growth
Retail clients drive lending growth Loan mix (% of total) 2001 2002 % y.o.y. growth 100% Wholesale: 55 % Wholesale: 59 % 90% 23% 25% 80% +15% 70% 60% 32% 34% 50% 40% 8% 7% +38% Retail: 45% Retail: 41 % 30% 17% 15% 20% +33% 10% 18% 20% +32% 0% 2001 2002 Corporate SMEs SBLs Mortgages Consumer 19
Slide 20: Loan Book and Spreads
Loan Book and Spreads Loans & Interest Spreads In € m 6 13,341 5.5 12,476 12000 5 11,919 4.5 11,359 10,953 4 10000 10,266 3.5 9,852 3 2.5 2 8000 1.5 1 0.5 6000 0 1H 2001 9M 2001 2001 1Q 2002 1H 2002 9M 2002 2002 Loans Wholesale Spread Retail Spread 20
Slide 21: Prudent provisioning
Prudent provisioning • Strict provisioning policy in view of uncertainty and weakening business confidence • Provision charge at 0.8% of avg. loans vs. 0.7% in 2001 • Organic NPLs below 3% of total loan book • Total NPLs at 3.6% of total loans • NPL coverage at 84% Bad debt provisions (% of avg. loa
Slide 22: Deposits & repos +11%, market share gain of 1%
Deposits & repos +11%, market share gain of 1% Deposits Breakdown* In € m 11% 16,948 18,000 15,287 2,054 15,000 2,318 12,000 24% 10,584 9,000 8,536 6,000 (2.8) 3,000 % 4,433 4,310 0 2001 2002 Savings Other Deposits Repos *excluding settlement balances 22
Slide 23: Customer Funds up 8% despite drop in value of equities
Customer Funds up 8% despite drop in value of equities Customer Funds In € m 25,000 8% 23,085 21,312 (13)% 3,102 20,000 3,567 2,418 1,933 25.1% 15,000 10,000 17,564 15,812 5,000 11.1% 0 2001 2002 Liquid Funds Mutual Funds Other investm ent products 23
Slide 24: Robust 17% growth in NII
Robust 17% growth in NII… Net Interest Income NIM 3.37% 3.21% In € m 800 721* 700 17 % * € 716 m. excl. Banc Post 614 54 600 94 45 92 500 143 Money market mismatch 128 Earnings on capital and bonds 400 Margin on deposits Margin on loans 300 200 430 350 100 0 2001 2002 24
Slide 25: Small rise in fee income in a challenging environment
…and small rise in fee income in a challenging environment… Fee Income Composition Increase in fees from In € m 1% credit cards, insurance, 247 250 property, internet 180 banking and other 112 160 110 network services 140 120 43 34 100 32 80 43 Pressure on fees 60 related to equity 40 72 brokerage,
Slide 26: Good growth in Core Income
..contribute to good growth in Core Income NII & Fees +13% 862 972 In € m 250 700 247 13 % 600 500 721 400 614 300 200 100 0 2001 2002 Net Interest Income Commissions & Fees 26
Slide 27: Recurring income
Recurring income Core Income (NII + Fees) In € m 266** 246* 238 239 250 229 215 74 75 57 59 200 61 64 192 181 180 150 171 168 152 100 50 0 3Q 2001 4Q 2001 1Q 2002 2Q 2002 3Q 2002 4Q 2002 * Telesis first included in Q4 2001 ** € 257 m deducting Banc Post 27
Slide 28: Non-Core Income: Equity losses outweigh bond & real estate gains
Non-Core Income: Equity losses outweigh bond & real estate gains In € m 2001 2002 62.3 70 15 60 9 0.5 Lower Bond gains 50 40 23.6 30 Negative results on equity positions 50 (ASE down 33%) 20 29 10 Measurement adjustments for 0 reductions in market value of isolated -12 -10 equities -20 -50 -30 -40 -
Slide 29: Total Operating income up 7%
Total Operating income up 7% In € m 1150 7% 1,005 944 950 34 82 250 750 247 550 350 721 614 150 -50 2001 2002 Net Interest Income Fees and Commissions Other income 29
Slide 30: Underlying cost growth down to 5%
Underlying cost growth down to 5% • 2002 reported costs include Comparable Operating expenses Banc Post (Nov 02) In € m • 2001 reported cost figures 5.2% 601 only include Telesis in 4Q 600 572 550 74 68 9.7% • Comparable cost up 5.2% 500 450 (3.2%) 198 400 205 • GR Personnel up 1.8% at 8,700 350 300
Slide 31: Core profit up 7%
Core profit up 7% Core Profit in 2001-2 In € m 263 250 246 7% 200 150 151 100 50 0 2001 2002 Core Profit: (NII + Fees and Commissions) - (Operating Expenses + Provisions) 31
Slide 32: Strong capitalisation with RAR at 11.7%
Strong capitalisation with RAR at 11.7% 13% • Shareholders’ Equity at € 1.9 bn 12.5% 13% • Tier 1 capital € 1.8 bn 12% 11.7% 12% • RWAs at € 15.2 bn 11% 11% •Capital Adequacy ratio enhanced by 11% the consolidation of Banc Post 10% 2002 2002e 2003f •Merger with EPER & EPAN expected to boost RAR by a
Slide 33: Dividend & Share buyback
Dividend & Share buyback • Dividend Payout Policy & Share buy back Program reflect: – Strong capitalization Tier 1 at 11.7% – Underlying capacity to generate recurring earnings Core profit up 7% despite aggressive provisioning • Dividend Yield at 4.7% compares favorably with peers • Share Buy back P
Slide 34: Appendices
EFG Eurobank Ergasias \ { APPENDICES
Slide 35: Major Balance Sheet Items
Major Balance Sheet Items amounts in € million 2002 2001 % change Total Assets * 24,723 19,199 28.8% Loans and advances to customers * 13,341 10,953 21.8% Due to customers * 16,948 15,287 10.9% Shareholders´Equity 1,899 2,010 -5.5% Risk-Weighted Assets 15,153 12,734 19.0% Tier 1 Capital 1,779 1,934
Slide 36: Summary of financial results
Summary of financial results amounts in € million 2002 2001 % change Net Interest Income 721 614 17.4% Net Fee & Commission Income 250 247 1.2% Core Operating Income 972 862 12.8% Total Operating Income 1005 944 6.6% Operating Expenses 611 548 11.5% Provisions 98 68 44.1% Core Operating Profit 263 2
Slide 37: Key ratios
Key ratios Key Ratios 2002 2001 Loans to Deposits (excl. SB) 78.7% 71.6% Loans to ATA (excl. SB) 52.7% 55.8% Provisions to average total loans (excl SB) 0.8% 0.7% Tier 1 ratio 11.7% 15.2% Net Interest Margin 3.2% 3.3% NII & Commissions to total operating income 96.7% 91.3% Cost to average assets 2.7
Slide 38: Outperformed Greek Banks again in 2002
Outperformed Greek Banks again in 2002 Greek Banks vs the Banking Index 1.30 1.20 1.10 1.00 0.90 0.80 0.70 0.60 0.50 December-01 November-02 December-02 March-02 January-02 February-02 May-02 June-02 July-02 September-02 October-02 April-02 BANKING INDEX EFG NBG August-02 CBG ALPHA 38
Slide 39: Investor Relations Contacts
Investor Relations Contacts EFG Eurobank Ergasias, 8 Othonos Str., 10557 Athens, Greece Fax: +30 210 3337150 E-mail: investor_relations@eurobank.gr Internet: www.eurobank.gr Reuters: EFGr.AT Bloomberg: EUROB GA Investor Relations Yannis Tegopoulos Tel: +30 210 3371222 E-mail: itegopoulos@eurobank.gr