Eurobank S.A. · ATHEX:EUROB
Eurobank — EFG Eurobank Ergasias — FY2004 Earnings Presentation
36 slides from Eurobank's earnings presentation, 2005
Slide 1: Full Year 2004 Results
FULL YEAR 2004 RESULTS 1
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: Contents
Contents Page I. Highlights & Key Developments 4 II. Financial Review 12 III. Market Outlook & Financial Targets 27 Appendices – FY 2004 Financial Figures 31 – Contacts 36 3
Slide 4: Highlights & Key Developments
HIGLIGHTS & KEY DEVELOPMENTS 4
Slide 5: Positive domestic environment
Positive domestic environment Although GDP growth is decelerating, it Real GDP growth % should remain well above the European 5.0 4.5 4.3 4.5 average at around 3.9% for ’04 and around 4.5 4.0 3.5 3.4 3.6 3.6 3.9 3% for ‘05 - possibly higher in ’06 * 3.5 3.0 2.4 3.5 2.9 Growth is supported by: 2.5 2.
Slide 6: FY 2004 Highlights
FY 2004 Highlights FY 2004 Net Profit sets new record at € 368m, up 35% Robust 22.1% revenue growth to € 1.5 bn Strong loan expansion continues, at 29.3% for the full year to € 21.7bn – Resilient NIM at 3.4% – Credit quality improves with NPLs at 2.9% from 3.3% in 2003 Cost / Income ratio for the Gr
Slide 7: Outpacing the local market - lending market share up 1.3pp to 15.1%
Outpacing the local market - lending market share up 1.3pp to 15.1% Market vs Eurobank y.o.y. growth per lending category 2004 Market Shares 37.4% Consumer Finance 44.8% Mortgage 27.1% 35.2% Lending 38.8% 30% Business 7.6% Lending 18.6% 16.4% Total 17.8% Lending 16%* 28.2% 15.3% 12.5% 12.9% Eurobank
Slide 8: Robust expansion across all lending segments at Group level
Robust expansion across all lending segments at Group level Group Household Lending* Group Business Lending + 43% 9,848 + 20% 11,858 6,889 9,892 + 57% + 68.3% 333 524 434 SE Europe SE Europe 258 + 33.4% 3,013 SBLs (GR) 2,259 + 38.8% 4,300 Mortgages 3,099 (GR) + 16.2% 4,739 Medium-sized Enterprises (
Slide 9: Preferred Wealth Manager in Greece
Preferred Wealth Manager in Greece Market share in Mutual Funds Mutual Funds (excl. Money Market) Leading market share of 35.2% in mutual funds 35.2% management, excluding money market 10.8% 33.2% market share including MM funds AUM at € 10.5 bn (Eurobank AUM €8.8 bn, up 13%) 24.4% Intertrust funds
Slide 10: Promising SE Europe presence with significant restructuring potential
Promising SE Europe presence with significant restructuring potential Gained full control in Bulgarian Postbank (96.7%) through subsidiary ACBH – # 4 in mortgage lending SE Europe Contribution (% of total) – Leader in credit cards with 40% market share, 23% in acquiring 14.9% Bancpost is ‘Bank of th
Slide 11: Strong volume expansion in Greece matched by maximised efficiency
Strong volume expansion in Greece matched by maximised efficiency Loans double with stable staff number Gross Loans almost doubled in the 602 620.5 OpEx past 3 years (+82%) +11% 580 559 Whereas headcount stayed almost 8,721 8,699 8,626 # of staff stable (+1%) and OpeX expanded by 8,546 +1.2% 11% in
Slide 12: Financial Review
© EFG Eurobank FINANCIAL REVIEW 12
Slide 13: Exceptional asset growth
Exceptional asset growth Credit Growth Rates in Greece Loan growth accelerates further to 29.3% group-wide* Eurobank 28.2% Greek market 16.4% Total AUM rise to € 30 bn, with deposits (net of repos) up 10.6% to € 17bn – consolidating €1.7bn 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% of Intertrust MFs fo
Slide 14: Loan Margin strengthens, driving NII up 22.2% to € 1,038m
Loan Margin strengthens, driving NII up 22.2% y-o-y to € 1,038m Strong Loan Spread* y.t.d. * Greece only 3.87% 3.84% 3.79% 3.79% 3.78% 3.76% 3.65% NII quarterly evolution 3.58% 287 252 265 1Q 03 1H 03 9M 03 FY 03 1Q 04 1Η 04 9M 04 FY 04 +8.5% 234 216 221 208 Total NII per region 188 26 182 161 169 L
Slide 15: Loan spread enhanced in FY 2004
Loan spread enhanced in FY 2004 FY 03 1H 04 9M 04 3Q 04 4Q 04 FY 04 Total Deposits & Repos 0.86% 0.84% 0.85% 0.84% 0.84% 0.84% Loans Wholesale 1.98% 1.92% 1.89% 1.90% 1.95% 1.93% Mortgage 1.89% 2.21% 2.21% 2.23% 2.23% 2.24% Consumer 9.15% 8.79% 8.65% 8.53% 8.66% 8.75% SBLs 5.17% 4.62% 4.52% 4.42% 4.
Slide 16: Fee income at € 362m on 17% upward trend
Fee income at € 362m on 17% upward trend Fee income composition 96 92 94.4 84 88 78 Total 32.3 Fees from Mutual Funds and Lending 32.2 AUM up 96% y-o-y 27.8 28.6 27.1 29.6 Activities Insurance fees increase 34.2% y-o-y to € 18 m Network Activities 31.9 31.6 Solid capital markets’ fees on & Other 25.
Slide 17: Total Operating Income rises 22% driven by Core Income
Total Operating Income rises 22% driven by Core Income of € 1,400 m Total Operating income at € 1,484m in 2004 from € 1,215m in 2003 Core Income up 8.3% q.o.q., at 94.4% of Total Operating Income SE Europe contributes 10% +19% +4% 316 324 348 379 385 Total 283 293 372 22 30 31 19 13 11 10 3.4 Non Co
Slide 18: Acceleration of income growth across all segments
Acceleration of income growth across all segments 2003/4 Growth +23% +11% +42% +22% -33% +87% N/C 813 SEGMENT REVENUES 660 251 226 165 149 135 75 61 80 53 41 2003 2004 2003 2004 2003 2004 2003 2004 2003 2004 2003 2004 Retail Corporate AM, PB & INS Capital Markets Other SE Europe & Treasury figures i
Slide 19: Tight control of local costs is the key to greater efficiency
Tight control of local costs is the key to greater efficiency at Group level Operating Expenses in Greece up 5.2% like – for –like at € 620.5m in 2004 SE Europe entities at 15% of FY 04 group-wide costs, vs. 9.3% in FY 03, adding €109m, as Bulgarian Postbank is fully consolidated from 1Q 04 On a com
Slide 20: All segments: Stringent discipline on costs and man power
All segments: Stringent discipline on costs and man power – improved efficiency 2003/4 Expenses Change +5.7% +1.3% +7.8% +5.6% -24.8% +79.9% Increase N/C 83.1 80.2 61.2 60.8 COST TO INCOME RATIO 58.0 Group 52.6 51.6 46.3 2003 36.3 35.1 2004 33.1 30.4 2003Re t a 2004 il Co rp o ra2004 2003 te As s e
Slide 21: Strong Risk Management and vigilance pay off
Strong Risk Management and vigilance pay off Group NPL Ratio (% of avg. loans) Organic NPLs improving to 2.5%, reflecting successful Risk 3.3% 2.9%* Management systems Legacy NPLs 0.5% 0.4% NPL Coverage at 87%; provisions cover 127% of non-collateralized part of NPLs 2.8% 2.5% Organic NPLs Increasin
Slide 22: Core profit expands 35.4% y-o-y to € 458m
Core profit expands 35.4% y-o-y to € 458m Dynamic rise of NII and Fee Income with effective cost containment SE Europe contributes 6.4% of Core Profit New quarterly high of € 132 m, up 6.9% q.o.q. Core Profit = NII + Fees – Cost - Provisions ‘Positive jaws’ drive core profit growth + 6.9% 350 Core R
Slide 23: Retail, Asset Management & SE Europe drive earnings up 38%
Retail, Asset Management & SE Europe drive earnings* up 38% y-o-y Growth + 52% + 29% + 79% + 32% -75% +191% NC 221 145 126 114 98 86 38 21 20 5 3 9 2003 1 2004 2003 2 2004 2003 3 2004 2003 4 2004 2003 5 2004 2003 6 2004 Retail Corporate AM, PB & INS Capital markets Other SE Europe & Treasury *EARNIN
Slide 24: FY 2004 Net Profit climbs 35% y-o-y to € 368m
FY 2004 Net Profit climbs 35% y-o-y to € 368m Group Net Profit q-o-q evolution 94 95 91 88 New record profit of € 95m 82 in 4Q ’04, up 15% from 4Q ‘03 SE Europe contribution 74 rising to 4.1% of Net Profit in 2004 versus 2.4% in 2003 59 57 1Q 03 2Q 03 3Q 03 4Q 03 1Q 04 2Q 04 3Q 04 4Q 04 figures in €
Slide 25: Solid improvement of Returns for our shareholders
Solid improvement of Returns for our shareholders RoE (after tax & minority interests) 19.7% Shareholders’ Equity at € 1.9bn Tier II capital at €400m 18.9% 18.7% RoA at 1.26% Return on Equity at 19.7% 15.1% Return on Required Equity at 23% 13.3% (@ 8% of RWA) 12.4% 1Η 03 9M 03 FY 03 1Η 04 9Μ 04 FY 0
Slide 26: Return on Equity on the rise across segments
Return on Equity* on the rise across segments 30% Record ROE for Retail and Treasury 25% 27.50% Corporate ROE improving 93.0 20% 20.60% 15% 14.80% 69.6 *RETURN ON EQUITY BEFORE TAX 10% 62.1 62.7 5% 2002 2003 2004 32.3 27.3 19.9 17.7 Hurdle rate 12.1 9.1 3.9 1.7 2003 2004 2003 2004 2003 2004 2003 200
Slide 27: Market Outlook & Financial Targets
MARKET OUTLOOK & FINANCIAL TARGETS 27
Slide 28: Positive business outlook
Positive business outlook Lending outlook remains strong, particularly in the Household and Small Business segments Credit quality protected by healthy margins combined with our vigilant provisioning policy Asset gathering efforts to continue and support expansion of fees No substantial change expec
Slide 29: Setting higher Financial Targets
Setting higher Financial Targets Targets New Targets 2004 2004 - 2005 2005 - 2006 Revenue growth 22.1% >14% p.a. >15% p.a. Cost/ Income (Group) 49.1% <53% in 2005 < 48% in 2006 Cost/ Income (Greece) 46.5% <50% in 2005 < 46% in 2006 Return on Equity 19.7% >18% in 2005 >20% in 2006 EPS Growth 33% >20%
Slide 30: Appendices
© EFG Eurobank APPENDICES 30
Slide 31: FY 2004 – Summary figures
FY 2004 – Summary figures Summary Figures (€ m.) 2004 2003 ∆% SE Europe 2004 Net Interest Income 1,037.6 848.9 22.2% 90.1 Net fees & Commissions 362.4 310.0 16.9% 53.5 Core Revenues 1,400 1,159 20.8% 143.6 Non Core Revenues 83.8 56 48.7% 5.0 Total Revenues 1,484 1,215 22.1% 148.7 Operating Expenses
Slide 32: Balance Sheet Figures
Balance Sheet Figures Loan Portfolio (€ m) * 2004 2003 ∆% Consumer Loans 5,455 3,747 45.6% Mortgages 4,393 3,142 39.8% Loans to Households 9,848 6,889 43.0% Small Business Loans 3,049 2,259 35.0% Loans to Medium enterprises 4,835 4,162 16.2% Loans to Corporates 3,975 3,472 14.5% Business Loans 11,85
Slide 33: Financial Ratios
Financial Ratios Financial Ratios 2004 2003 Net Interest Margin 3.4% 3.2% Cost-Income 49.1% 54.6% NPLs (% of loans) 2.9% 3.3% NPLs coverage 87.0% 85.0% Provision Charge (% of loans) 1.05% 0.96% Tier1 Ratio 8.8% 10.4% Total Capital Adequacy 10.6% 10.4% ROA after tax 1.3% 1.1% ROE after tax and minori
Slide 34: FY 2004 - Summary per segment
FY 2004 - Summary per segment Elimin. Segmental Results 2004 Retail Corporate Capital Markets Asset Mgmt Capital & Other SE Europe Centre Total (€ m) &Treasury Interest income 690 169 79 15 -5 89 1038 Non-interest income 92 54 110 90 40 60 446 Fees Received/Paid 31 27 -24 -31 6 0 -10 0 Gross Market
Slide 35: FY 2003 - Summary per segment
FY 2003 - Summary per segment Elimin. Segmental Results 2003 Retail Corporate Capital Markets Asset Mgmt Capital & Other SE Europe Centre Total (€ m) &Treasury Interest income 559 154 84 10 1 42 849 Non-interest income 87 49 70 64 58 38 366 Fees Received/Paid 15 23 -19 -21 2 0 0 Gross Market Revenue
Slide 36: Contacts
Contacts EFG Eurobank Ergasias, 8 Othonos Str., 10557 Athens, Greece Fax: +30 210 3337 337 E-mail: investor_relations@eurobank.gr Internet: www.eurobank.gr Reuters: EFGr.AT Bloomberg: EUROB GA Investor Relations Dimitris Nikolos Tel: +30 210 33371162 E-mail: dnikolos@eurobank.gr Marlen Miliadi Tel: