Eurobank S.a. · ATHEX:EUROB
Eurobank — Eurobank Ergasias Services and Holdings — 9M 2023 Earnings Presentation
65 slides from Eurobank's earnings presentation, Nov 7, 2023
Slide 1: 9M2023 results
9M2023 results 7 November 2023
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
Slide 3: Table of contents
Table of contents 9M23 results highlights 4 Diversified business model 11 Balance sheet 16 Profitability 24 Asset Quality 32 Capital 37 Sustainability commitments and performance 40 Macroeconomic update 45 Appendix I – Supplementary information 54 Appendix II - Glossary 60 3
Slide 4: 9M23 results highlights
9M 2023 Results 9M23 results highlights
Slide 5: 9M23 results highlights: Profitability
9M23 results highlights: Profitability ❑ Adjusted Net Profit €916m in 9M23 P&L (€ m) 3Q23 2Q23 Δ(%) 9M23 9M22 Δ(%) ❑ 9M23 RoTBV1 at 18.0% Net interest income 558.4 540.1 3.4 1,601.0 1,030.6 55.3 Commission income 133.1 140.6 (5.3) 403.1 379.6 6.2 ❑ TBV per share up 20.9% y-o-y at €1.97; up 3.7% q-o-
Slide 6: 9M23 results highlights: Balance sheet
9M23 results highlights: Balance sheet Capital Key Balance sheet ratios ▪ Total CAD at 19.5%1, up 230bps y-o-y ▪ CET1 FLB3 at 16.8%1, up 260bps y-o-y; up 50bps q-o-q Group (%) 3Q23 2Q23 1Q23 4Q22 3Q22 ▪ 1.4% shares buyback from HFSF completed Capital8 Volumes CAD 19.51 19.01,2 18.41,2,3 19.04 17.24
Slide 7: Δ NII and Δ Fees (y-o-y)
9M22 1,031 Δ Loans 489 Δ NII (y-o-y, € m)1 Δ Deposits (173) Core Income Δ Bonds & Derivatives 155 Greece +55.3% 4 Δ Central banks' net funding 2 Δ Gapping & other (114) Δ SEE 209 9M23 1,601 1. Analysis based on gross income. 2. Including MREL, Money Market, Repos and Tier II. 9M22 380 9M22 Mechant a
Slide 8: Profitability
Profitability Core PPI and Provisions (€ m) Core Operating Profit2 (€ m) +71.8% 1,331 +85.1% 1,077 582 775 Core PPI 9M22 9M23 Profit before Tax3 (€ m) Loan Loss (193) (255) Provisions 1,167 (4.7)% 1,112 9M22 9M23 CoR1 67 84 9M23 9M22 (bps) 1. On net loans. 2. Core Operating profit= Core PPI minus lo
Slide 9: Capital & TBV
Capital & TBV CET1 FLB3 TBV per share (€) +20.9% +260bps 16.8%1 +15.9% 1.97 14.2% 1.70 3Q22 3Q23 1.63 CAD +230bps 19.5%1 17.2% 3Q22 4Q22 3Q23 3Q22 3Q23 1. Pro forma for Serbian operations disposal, Synthetic and Solar securitizations. Including period profits, subject to AGM approval. 9
Slide 10: Outperforming 2023 financial goals
Outperforming 2023 financial goals 9M23 FY23E FY23E Actual November July guidance guidance Δ performing loans €0.7bn >€1.0bn c.€2.0bn Core PPI €1,331m c.€1.8bn c.€1.7bn Core Operating Profit1 €1,077m c.€1.4bn >€1.3bn NIM 270bps c.270bps >250bps RoTBV 18.0%2 c.17.0%2 >15.0%2 EPS €0.26 >€0.30 c.€0.28
Slide 11: Diversified business model
9M 2023 Results Diversified business model
Slide 12: Segmental analysis: diversified earnings generation
Segmental analysis: diversified earnings generation Key Metrics (9M23) Net profit1 (€ m) Net 2022 Group (%) Assets RWAs TBV RoTBV2 RoTBV Profit1 € bn € bn €m €m 137 167 208 171 Greek Banking 114 Greek banking 55.9 32.2 4,194 546 17.7% 23.4% operations Operations 3Q22 4Q22 34 1Q23 2Q23 3Q23 Greek Inv
Slide 13: Eurobank Group Investment Real Estate Portfolio
Eurobank Group Investment Real Estate Portfolio Big boxes & 9M23 Office Mixed use Retail Logistics Special use Total supermarkets No. of assets (#) 60 27 83 33 22 27 252 Book Value (€ m) 438 203 167 341 96 73 1,317 % of total BV 33% 15% 13% 26% 7% 6% 100% BV / GLA (€ /sqm) 1,570 2,552 1,900 1,285 63
Slide 14: Bulgaria key metrics
Bulgaria key metrics1 9M23 Highlights Core PPI and provisions (€ m) Net profit2 €148m, up >100% y-o-y ▪ Core PPI at €168m, up 48.9% y-o-y 67 Core 55 PPI ▪ NII up 50.0% y-o-y at €231m 46 41 42 ▪ Commission income up 2.3% y-o-y at €57m ▪ Cost – to - core income at 41.4% (8) (11) (10) (14) (14) Provisi
Slide 15: Cyprus key metrics
Cyprus key metrics1 9M23 Highlights Core PPI (€ m) Net profit €172m; up 100% y-o-y 69 ▪ Core PPI up >100% y-o-y at €184m 63 53 ▪ NII up >100% y-o-y at €199m 43 ▪ Commission income down 1.4% y-o-y at €28m 31 ▪ Cost – to – core income at 18.9% ▪ Hellenic Bank stake to reach 55.3% from 29.2%, upon regu
Slide 16: Balance sheet
9M 2023 Results Balance sheet
Slide 17: Balance sheet composition
Balance sheet composition Assets (€ bn) Liabilities and Equity (€bn) 80.5 80.5 60 50 Net loans 40.7 Deposits 40 56.5 Investment Securities 13.9 30 Loans & advances to banks 1.6 Wholesale funding 5.1 20 11.7 Tier II 1.3 Cash & Central banks Other3 4.3 Investment property 1.4 Derivatives 1.6 10 DTA1 4
Slide 18: Securities portfolio
Securities portfolio Breakdown per issuer Breakdown per classification Trading & other; 4% FVOCI; 24% CLOs (AAA); Trading & other; 11% 4% € 13.9 bn Financial Institutions; Amortized Cost; 72% 11% Greek Corporate bonds; Government; Amortized cost breakdown € 13.9 bn 38% 10% Corporate bonds; CLOs (AAA
Slide 19: Loans
Loans Gross loans (€ bn) Performing loans (€ bn) Organic1 growth +€0.7bn in 9M23 41.4 41.8 41.7 42.2 42.3 39.4 39.8 39.8 40.1 40.4 8.5 8.7 9.1 9.8 10.0 SEE 8.2 8.4 8.8 9.5 9.7 SEE 4.9 4.9 4.7 4.6 4.5 Senior Notes 4.9 4.9 4.7 4.6 4.5 Senior Notes Greece Greece Business 18.1 18.4 Business 18.3 18.2 18
Slide 20: Deposits
Deposits Breakdown by region (€ bn) Breakdown by type +1.0 29% 32% 34% Group 21% 24% Time/ Greece 55.6 55.1 55.9 56.5 30% 32% 54.1 Total 27% 19% 22% 16.0 16.2 16.9 16.8 3Q22 4Q22 1Q23 2Q23 3Q23 SEE 15.8 Breakdown by customer Greece 39.6 38.9 39.0 39.7 38.3 Individuals & SB; Corporate; 62% € 56.5 bn
Slide 21: Liquidity
Liquidity Net loans / Deposits ratio Net ECB Funding (€ bn) (4.1) (5.6) (5.7) (5.2) (7.5) 73.4% 72.9% 72.6% 72.4% 72.0% 11.6 Funding 8.8 8.3 7.4 4.2 (12.6) (11.7) Cash (15.7) (14.4) (14.0) 3Q22 4Q22 1Q23 2Q23 3Q23 9M22 FY22 1Q23 1H23 9M23 Liquidity coverage ratio (LCR) & Net Stable Funding ratio (NS
Slide 22: MREL position
MREL position MREL (% RWAs) 23.19 23.69 20.55 4.14 5.05 Senior preferred ▪ 3Q23 MREL ratio at 23.69%, exceeding the non-binding January 1st 3.77 liabilities3 2024 MREL target of 23.19%, incl. CBR CBR2 19.05 18.64 Own Funds4 MREL 16.78 target ▪ Final MREL target at 27.77%1 of RWAs; compliance horizon
Slide 23: Wealth Management
Wealth Management Managed Funds (AuM, € bn) Private Banking (CAL1, € bn) +1.6 +0.8 10.6 10.7 4.9 9.8 4.8 4.4 8.9 9.1 4.1 4.1 4.6 4.6 Greece 4.2 3.9 4.1 3.8 3.9 3.5 Cyprus 3.1 3.2 Own Mutual 2.9 3.0 Funds 2.8 2.6 2.6 3rd Party Mutual Luxembourg Funds 0.4 0.4 0.4 0.5 0.5 2.8 3.0 3.0 2.4 2.5 0.6 0.6 0.
Slide 24: Profitability
9M 2023 Results Profitability
Slide 25: Loan spreads
Loan spreads Loan client rates (Greece, bps) Lending spreads (Greece, bps)1 614 579 3Q22 4Q22 1Q23 2Q23 3Q23 528 Performing 307 286 285 281 265 436 591 559 Corporate 262 242 242 244 237 350 509 3M avg Euribor 47 177 263 336 377 6M avg Euribor 96 229 309 366 397 419 Retail 361 340 340 329 302 340 Con
Slide 26: Net Interest margin & deposit spreads
Net Interest margin & deposit spreads Net Interest margin (bps) Deposit spreads (Greece, bps) 3Q22 4Q22 1Q23 2Q23 3Q23 Savings & Sight 17 142 238 318 364 351 SEE Time (8) 66 123 143 149 318 Total 13 129 211 269 301 283 284 Group 272 1M avg Euribor 9 135 235 315 362 249 253 257 261 Greece 224 244 209
Slide 27: Net Interest Income
Net Interest Income NII breakdown (€ m)1 Δ NII (q-o-q, € m)1 9M23 NII up 55.3% y-o-y at €1,601m 2Q23 540 3Q22 4Q22 1Q23 2Q23 3Q23 Δ Loans 22 Loans 329 396 460 516 564 Bonds & Derivatives 70 87 114 126 132 Δ Bonds & Derivatives 4 Greece Central banks’ net 9 34 29 40 55 Δ Central banks' net funding fu
Slide 28: Commission Income
Commission Income Commission income breakdown (€ m) Commission income per region (€ m) 9M23 commission income up 6.2% y-o-y at €403m 68bps over assets 142 141 142 141 134 133 134 133 129 129 30 30 31 31 46 44 31 Lending 29 SEE 36 38 Network transactions 51 51 50 42 48 & credit cards 112 111 103 100
Slide 29: Operating expenses
Operating expenses OpEx per region (€ m) OpEx breakdown (Greece, € m) 482 +0.5% 485 216 222 221 222 229 67 65 Depreciation 54 59 60 61 67 SEE 35 42 IT 162 163 162 161 162 Greece 108 103 Administrative 41 37 Resolution Fund 3Q22 4Q22 1Q23 2Q23 3Q23 Cost –to- core income (%) 231 238 Staff 3Q22 3Q23 9M
Slide 30: Pre-provision income (PPI)
Pre-provision income (PPI) Core PPI and other income (€ m) Δ Core PPI (q-o-q, € m) 44 99 (12) 31 12 Other income 459 462 410 370 127 144 SEE 18 106 459 462 12 474 281 90 74 (7) (8) 279 304 332 318 Greece 207 3Q22 4Q22 1Q23 2Q23 3Q23 PPI per region (€ m) Δ NII Δ opex 2Q23 Core PPI 3Q23 Core PPI 3Q23
Slide 31: Δ Core Operating Profit (y-o-y)
Δ Core Operating Profit (y-o-y, € m) +71.8% 1,331 362 23 2 2 174 Core PPI (6 ) Core PPI 775 Greece (193) 1 Δ SEE Δ Fees Δ admin & RF Δ staff OPEX (255) Loan Loss Δ NII Δ depreciation Loan Loss Provisions Provisions 9M22 9M23 Core Operating 582 +85.1% 1,077 Profit PBT2 1,167 1,112 1. RF: Resolution F
Slide 32: Asset Quality
9M 2023 Results Asset Quality
Slide 33: Asset quality metrics
Asset quality metrics NPEs formation1 (€ m) NPEs ratio (%) Δ NPEs stock (88) (146) (48) 90 (145) (q-o-q, €m) 5.6% 133 5.2% 5.2% Single 5.1% corporate 4.9% SEE 16 33 7 13 27 Greece 3Q22 4Q22 1Q23 2Q23 3Q23 3 3Q22 4Q22 1Q23 2Q23 3Q23 Loan loss provision (€ m) NPE coverage (%) 74 83 75 88 89 Cost of Ri
Slide 34: NPEs formation per segment (Greece)
NPEs formation per segment (Greece) Mortgages (€ m) Consumer (€ m) 17 39 42 12 32 26 21 10 10 16 7 6 13 12 6 3 5 3 (5) (9) (2) (27) 3Q23 3Q21 3Q22 2Q22 4Q22 2Q23 1Q21 2Q21 4Q21 1Q22 1Q23 3Q21 3Q22 3Q23 2Q21 4Q21 1Q21 2Q22 4Q22 1Q23 2Q23 1Q22 Small Business (€ m) Corporate (€ m) 84 1 45 14 25 22 0 16
Slide 35: NPE metrics (Group)
NPE metrics (Group) 90dpd bridge to NPEs (€ bn) NPEs per region Provisions & NPE 2.1 Total NPEs NPE ratio collaterals / 0.3 coverage 0.6 NPEs (€ bn) (%) (%) (%) 1.2 (1.5) Consumer 0.1 8.1 135.8 137 Mortgages 0.5 6.5 72.7 163 Small Business 0.4 12.8 68.2 138 0.5 Corporate 0.8 3.9 59.3 127 2 90dpd NPF
Slide 36: Loans’ stage analysis (Group)
Loans’ stage analysis (Group) Loans’ stage breakdown Provisions stock over NPEs (€ bn) 3Q22 4Q22 1Q23 2Q23 3Q23 73.7% 75.5% 76.0% 73.2% 75.0% Stage 1 33.6 34.2 34.4 34.9 35.2 Stage 2 5.4 5.4 5.1 5.1 5.0 Stage 3 2.3 2.2 2.1 2.2 2.1 (NPEs) 1 Total 41.3 41.7 41.6 42.2 42.2 3Q22 4Q22 1Q23 2Q23 3Q23 Stag
Slide 37: Capital
9M 2023 Results & EUROBANK Holdings Capital
Slide 38: Capital ratios (CET1 FLB3, q-o-q)
Capital ratios (CET1 FLB3, q-o-q) 16.8% 91bps 16.4% 35bps 16.1%2 (21bps) (9bps) (16bps) (15bps) Organic growth 2023 OCR c.50bps 9.9%6 1 Asset Growth 1 3Q23 PBT securitization 3Q23 Pro Other amortisation Share Buy- 2Q23 3Q23 forma Synthetic back DTC RWAs 42,234 (48) 3923 (43)4 0 0 42,535 (€ m) Capita
Slide 39: Capital ratios (CAD, q-o-q)
Capital ratios (CAD, q-o-q) 19.5% 18.8%2 19.1% 91bps (21bps) 40bps 2.7% (9bps) (16bps) (15bps) 2.7% Tier II Tier II 16.4% CET1 CET1 16.1% 2023 CAD OCR 14.6% 1 Asset Growth 1 3Q23 PBT securitization 3Q23 Pro Other amortisation Share Buy- 2Q23 3Q23 forma Synthetic back DTC RWAs 42,234 (48) 3923 (43)4
Slide 40: Sustainability commitments and performance
9M 2023 Results Sustainability commitments and performance https://www.eurobankholdings.gr/en/esg-environment-society-governance
Slide 41: Eurobank’s Climate–related & Environmental Risk Report
Eurobank’s Climate–related & Environmental Risk Report [1/2] Eurobank’s Climate - related & Environmental Risk Report, published in July, outlines the Bank’s approach and effort to climate action. It aims to give a balanced overview of Bank’s commitments, initiatives, impacts and other relevant upda
Slide 42: Operational Impact
Operational Impact Environment Social Governance Energy consumption & Resilience & Recovery Training with ESG impact Electric Energy certification (2023 vs 2022 – 9mo) Participation to the Hellenic Bank Natural Disaster “Familiarity with disabilities” training program was Association initiative to r
Slide 43: Financed Impact
Financed Impact Our Tangible Outcomes Our Ambitious Financed Impact Transition Roadmap In line with our target for green corporate disbursements More than 23% of our gross corporate ~€420m disbursements have been classified as ✓ Comprehensive ESG Risk Management supported by New corporate disburseme
Slide 44: ESG ratings & Distinctions
ESG ratings & Distinctions ESG ratings MSCI - Significant score improvement in September 2023 (rated at “A“ vs “BBB“ in 2022). S&P – Score improvement (Oct 2023) – Rated at 52 with data availability “Very High” (vs 50 with the 2022 methodology) ISS ESG – Attained highest score “1“ for Environmental
Slide 45: Macroeconomic update
9M 2023 Results Macroeconomic update
Slide 46: Macro developments and outlook
Macro developments and outlook ▪ 2Q23 growth at +2.7% y-o-y / +1.3% q-o-q, still over-performing the Euro Area (+0.5% y-o-y / +0.1% q-o-q); growth expected at 2.3% in 2023 and 3.0% in 2024 according to the 2024 draft budget (October 2023) ▪ Inflation rate continues to decline on the back of decreasi
Slide 47: Domestic Labour Market
Domestic Labour Market The unemployment rate continues to decline, still the 2nd Employment remains on an upward trajectory highest in the Euro Area despite reported labor shortages Long term unemployment decreases, yet it remains far above the Recovery of productivity requires continued implementat
Slide 48: Selected indicators of domestic economic activity
Selected indicators of domestic economic activity ESI deteriorates at the start of Q4-2023; higher relative to the EA Operating conditions in manufacturing decelerate Turnover increases in retail trade, however real volume drops Manufacturing production increases YoY but at a decelerating rate Sourc
Slide 49: Real estate prices: strong growth continues in Q2 2023
Real estate prices: strong growth continues in Q2 2023 Index of Apartment Prices Index of Retail and Office Prices 2Q10 – 2Q23 2H10 – 2H22 Source: BoG 49
Slide 50: Fiscal and current account balances
Fiscal and current account balances ▪ 2024 Draft Budget fiscal forecasts for 2023 & 2024 (in ESA2010 terms): ▪ 2023 & 2024 GG primary balance expected at +1.1% & 2.1% of GDP ▪ Current account deficit expected to improve at -7.0% in 2023 and -6.7% of GDP in 2024 from -9.7% of GDP in 2022 (Bank of Gre
Slide 51: Sovereign debt profile
Sovereign debt profile General Government gross public debt ▪ According to the 2024 Draft Budget, the Greek GG Gross Public Debt is (% of GDP, ESA terms) expected at 159.3% and 152.2% of GDP in 2023 and 2024 respectively vs 172.6% in 2022 and a peak of 207.0% in 2020 ▪ 75.8% of the debt stock is hel
Slide 52: Bulgaria
Bulgaria ▪ The economy expanded by 2.1% y-o-y in 2Q23, below the 2.5% y-o-y growth reading in 1Q23 and the 3.9% performance of FY22 ▪ Still, 2Q23 growth reading ranked among the highest in the region, with only Romania and Croatia faring slightly better ▪ World Bank (October 2023) expects real GDP g
Slide 53: Cyprus
Cyprus ▪ 2Q23 growth at 2.3% y-o-y; +2.8% y-o-y in 1H23 ▪ 2Q23: decline in fixed capital formation (-25.5% y-o-y), growth supported by household consumption (+4.7% y-o-y), on the back of weakening inflation; external balance improved by imports’ decline (-3.0% y-o-y) surpassing exports’ (-2.7% y-o-y
Slide 54: Appendix I – Supplementary information
9M 2023 Results Appendix I – Supplementary information
Slide 55: Summary performance
Summary performance Balance sheet – key figures Income statement – key figures €m 3Q23 2Q23 €m 3Q23 2Q23 Gross customer loans 42,222 42,156 Net interest income 558.4 540.1 Provisions (1,488) (1,552) Commission income 133.1 140.6 Loans FVTPL 16 15 Operating income 703.2 711.6 Net customer loans 40,65
Slide 56: Consolidated quarterly financials – Income statement
Consolidated quarterly financials – Income statement (€ m) 3Q23 2Q23 1Q23 4Q22 3Q22 Net Interest Income 558.4 540.1 502.5 449.2 363.2 Commission income 133.1 140.6 129.3 142.4 133.9 Other Income 11.7 30.9 (12.2) 99.4 43.5 Operating Income 703.2 711.6 619.6 690.9 540.7 Operating Expenses (229.4) (221
Slide 57: Consolidated quarterly financials – Balance sheet
Consolidated quarterly financials – Balance sheet (€ m) 3Q23 2Q23 1Q23 4Q22 3Q22 Consumer Loans 3,429 3,355 2,803 2,752 2,743 Mortgages 10,009 10,033 10,015 10,039 10,100 Household Loans 13,438 13,388 12,818 12,791 12,843 Small Business Loans 3,580 3,701 3,716 3,720 3,700 Corporate Loans 20,731 20,4
Slide 58: Consolidated financials
Consolidated financials Income Statement (€ m) 9M23 9M22 Δ y-o-y (%) Net Interest Income 1,601.0 1,030.6 55.3 Commission income 403.1 379.6 6.2 Other Income 30.4 614.7 (95.1) Operating Income 2,034.4 2,024.8 0.5 Operating Expenses (672.7) (635.1) 5.9 Pre-Provision Income 1,361.7 1,389.7 (2.0) Loan L
Slide 59: SEE operations key figures – 3Q23
SEE operations key figures – 3Q231 Bulgaria Cyprus Lux Sum Assets 9,342 8,608 2,469 20,419 Gross loans 6,538 2,672 819 10,029 Balance Sheet Net loans 6,348 2,618 819 9,785 (€m) NPE loans 171 73 0 244 Deposits 7,514 7,165 2,155 16,834 CAD2 21.9% 34.0% 24.4% Core Income 110.0 83.2 17.4 210.6 Operating
Slide 60: Appendix II – Glossary
9M 2023 Results Appendix II – Glossary
Slide 61: Glossary – Definition of Alternative Performance Measures
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 Fina
Slide 62: Glossary – Definition of Alternative Performance Measures
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 / gain on acquisition, gains/losses related to the transformation pla
Slide 63: Glossary – Definition of Alternative Performance Measures
Glossary – Definition of Alternative Performance Measures (APMs) & other selected financial measures / ratios Forborne: Forborne exposures (in compliance with EBA Guidelines) are debt contracts in respect of which forbearance measures have been extended. Forbearance measures consist of concessions t
Slide 64: Glossary – Definition of Alternative Performance Measures
Glossary – Definition of Alternative Performance Measures (APMs) & other selected financial measures / ratios NPE ratio: Non Performing Exposures (NPEs) at amortized cost divided by Gross Loans & Advances to Customers at amortized cost at the end of the reported period. NPEs formation: Net increase/
Slide 65: Investor Relations contacts
Investor Relations contacts Dimitris Nikolos +30 214 4058 834 dnikolos@eurobankholdings.gr Yannis Chalaris +30 214 4058 832 ychalaris@eurobankholdings.gr Christos Stylios, CFA +30 214 4058 833 cstylios@eurobankholdings.gr Investor Relations Division +30 214 4058 834 investor_relations@eurobankholdin
Eurobank Ergasias Services and Holdings — 9M 2023 Earnings Presentation on 6ix