Piraeus Bank S.A. · ATHEX:TPEIR
Piraeus Bank — H1 2004 Earnings Presentation
52 slides from Piraeus Bank's earnings presentation, September 2004
Slide 1: Piraeus Bank Group Presentation September 2004
PIRAEUS BANK GROUP Presentation September 2004
Slide 2: Table of Contents
Piraeus Bank Group Table of Contents Section 1 Executive Summary 3 Section 2 Greek Economy - Greek Banking Sector 10 Section 3 Strategy 14 Section 4 Piraeus Bank Group Overview 17 Section 5 Risk Management 29 Section 6 Financial Review 33 2
Slide 3: Executive Summary
Piraeus Bank Group Executive Summary • Universal Bank with a balanced focus across business areas (Retail Banking, SMEs and Corporate Banking/Shipping) • Third largest private sector Bank in Greece • Assets of €15.7 bn, 277 branches, 5,103 employees The Piraeus Bank logo represents the front section
Slide 4: Timeline
Piraeus Bank Group Timeline 1916 Piraeus Bank founded in Piraeus port city of Athens 1918 Listing on the Athens Stock Exchange . . . 1991 Piraeus Bank Privatisation 1996 Start-up of the Albanian subsidiary Tirana Bank 1997 Absorption of Chase Manhattan Greek Operations 1998 Acquisition of Macedonia
Slide 5: Selected Market Shares
Piraeus Bank Group Selected Market Shares Ranking Loans 10.7% 5th • Well diversified income streams Deposits & Repos 8.6% 5th • Customer satisfaction of 97% Consumer loans (CLs) 10.1% 4th • Dynamic and innovative CLs excl. credit cards 16.1% 3rd image Mortgage loans 7.1% 5th • Client friendly bank L
Slide 6: Piraeus Bank's Diversified Shareholder Structure
Piraeus Bank Group Piraeus Bank’s Diversified Shareholder Structure • The shareholder base presents great diversity (233,000 shareholders as of June 2004), Other ING Greek State consisting of representatives of Foreign 4.2% companies 6.4% 2.7% institutional the business community, investors institut
Slide 7: Piraeus Bank has a Significant Free Float
Piraeus Bank Group Piraeus Bank has a Significant Free Float • The 10th largest company in AΤΗΕΧ, in terms of market capitalisation and 4th among the private sector enterprises Free Float • The stock participates in the 100% 85% 85% indices: Standard MSCI Greece 75% 80% (weight 5.2%), MSCI Greece 60
Slide 8: Corporate Governance
Piraeus Bank Group Corporate Governance Board of Directors 4 executives Internal Audit Internal Audit Board Operations • Piraeus Bank, aiming at the 12 Non-executives Committee System Committees Code constant reinforcement of its (2 independent) economic value and the protection of its corporate
Slide 9: Greek Economy - Greek Banking Sector
Piraeus Bank Group Greek Economy - Greek Banking Sector 9
Slide 10: Key Indicators
Piraeus Bank Group Key Indicators Euro zone member since January 2001 2002 2003 2004 (e) 2005 (f) Population: 11 million GDP (€ bn) 141.5 152.6 163.9 175.9 Sovereign credit rating: GDP / capita (€) 12,920 13,867 14,911 15,972 A1,A+,A+ (Moodys’, S&P, Fitch) Change in real GDP (%) 3.9 4.3 3.7 3.9 Unem
Slide 11: Comparison with EU
Piraeus Bank Group Comparison with EU 105.1 Assets / branch (€ mn) 65.8 • The Greek Banking Sector 47.4 is still underdeveloped Loans / branch (€ mn) 30.8 compared to other EU 55.6 Deposits / branch (€ mn) countries 48.8 116.0 • The Eurozone environment Total credit / GDP (% ) 66.3 provides Greek Ba
Slide 12: Major Greek Banks
Piraeus Bank Group Major Greek Banks 30.9 30.0 • The Greek Banking Market Five largest Banks control about 80% of the Market is dominated by a small 25.0 number of Banks 21.0 • PBG enjoys good 20.0 18.3 Market share (%) penetration in the promising 16.4 15.7 high – margin retail banking 15.0 13.7 se
Slide 13: Strategy
Piraeus Bank Group Strategy 13
Slide 14: Vision & major goals of the next 4 years
Piraeus Bank Group Vision & major goals of the next 4 years... Market Share 14.0% • Our Vision is to play an 15% Market Share 14% in Loans in 10.7% important role in the banking Greece, with leading position in 10% 8.1% sector of South – Eastern the segments of Retail Banking 5% 3.9% Europe, by sati
Slide 15: Major Goals of the next 4 years
Piraeus Bank Group … Major goals of the next 4 years 10.0% • Further expansion in South- Achievement of a 10% market 10% Eastern Europe, establishing share in open and closed-end funds Open-end & a critical mass 5.1% Closed-end Achievement of a leading role in 5% Open-end & funds • Effective ris
Slide 16: Piraeus Bank Group Overview
Piraeus Bank Group Piraeus Bank Group Overview 16
Slide 17: Selected Growth Figures
Piraeus Bank Group Selected Growth Figures Total Assets (€ bn) Loans Market share (%) 15.7 12.0 10.7 14.7 • Growth orientation & culture 16 14.7 10.0 10.3 12.3 10.0 10.5 8.1 12 7.6 • Series of highly successful 8.0 6.2 8.1 acquisitions 8 6.0 3.9 3.8 4.0 4 • Strong organic growth 2.0 0.08 0.3 0 0.0 •
Slide 18: A Growing Nationwide Branch Network
Piraeus Bank Group A Growing Nationwide Branch Network • 232 branches in 89 cities, distributed across Greece • 48,000 business customer accounts • 1,32 mn private customer accounts (savings - sight deposits) • More than 80 new branches in the last 5 years with substantial business growth potential
Slide 19: International Presence: Banks & Full Branches
Piraeus Bank Group International Presence: Banks & Full Branches Banks Branches • 45 international branches employing 619 people U.S.A. - U.K. - Piraeus Bank branch • International activities • 10 branches in New York • 1 branch, based in London generate 11.4% of Group’s • Total Assets € 555 mn • To
Slide 20: Electronic Banking
Piraeus Bank Group Electronic Banking • Winbank is widely … the e-banking in considered the best e- banking portal in Greece Greece (1st place in the market) • 14 awards and special distinctions in a four – year period • The only ISO 9001:2000 certified e-banking service • Winbank has more than 123,
Slide 21: Retail Banking: Leadership in Consumer Credit
Piraeus Bank Group Retail Banking: Leadership in Consumer Credit • Retail loans represent 28.3% of the loan portfolio • Notable acceleration of mortgage disbursements (28% H1’04 vs H1‘03 and 57% Q2 vs Q1‘04) • 35% rise of consumer loans Consumer loans Mortgage loans (exc. factoring) 1,800 1,600 • 22
Slide 22: Strong and Well Positioned Presence in SMEs
Piraeus Bank Group Strong and Well Positioned Presence in SMEs • Small & Medium Enterprises represent 35% of the loan Loans to Small - Medium Enterprises (SMEs) portfolio 4,500 • SME’s are served through the branch network, increasing the 4,000 opportunities for cross selling (€ mn) (loans, deposits
Slide 23: Strong Presence in Corporate Banking & Shipping
Piraeus Bank Group Strong Presence in Corporate Banking & Shipping • 36.7% of Loan Portfolio • Central Relation Management through Loans to Medium - Large Enterprises the Corporate Banking Division & Shipping Division 4,500 • More than 800 client names fulfilling 4,000 at least one of the following
Slide 24: Strategic Alliance with ING
Piraeus Bank Group Strategic Alliance with ING • Agreement finalized in end-2002 provides for cross-shareholdings, coordinated cross-selling • ING controls 4.2% of Piraeus efforts and the establishment of two joint ventures in bancassurance and asset management. Bank shares and has one seat on the B
Slide 25: Capital Markets
Piraeus Bank Group Capital Markets • Active in the Greek IPOs, ranking 4th in H1 2004 (9.9% market share). • High market share in Greek IPO advisory services. • Main market participant in the ATHEX - 9% share in H1 2004 (3th place). • Primary Dealer of Greek Government Debt since 1999. • Active in t
Slide 26: Structure
Piraeus Bank Group Structure Piraeus Bank Group • Simple and clear Corporate & Treasury & Retail International Investment Asset Participations Operations structure Banking Banking Banking management • Client driven ♦ Small and ♦ Medium – Large Community Banking ♦ Treasury ♦ Real estate ♦ Finance • S
Slide 27: Latest Awards
Piraeus Bank Group Latest Awards • “Bank of the Year 2003 in Greece” by The Banker • Five Divisions of Piraeus Bank and Exodus SA received the award “Committed to Excellence” from the “European Foundation for Quality Management” (EFQM) in April 2003. • “Straight-Through Processing (STP) Excellence A
Slide 28: Risk Management
Piraeus Bank Group Risk Management 28
Slide 29: High Asset Quality
Piraeus Bank Group High Asset Quality • NPLs ratio stands at 3.85% One of the • Excluding loan portfolio of highest 2.5% excluding ex-ETBAbank ratio falls to coverage ex-ETBAbank ratios in the 2.5% loan portfolio NPLs Coverage market • Net NPL ratio: 0.45% (after NPLs ratio 4.80% cumulative provisio
Slide 30: Loan Portfolio Composition
Piraeus Bank Group Loan Portfolio Composition Loans by Sector (June ’04) • Total Loans : € 11.9 bn Handicraft • Well diversified portfolio Manufacturing 1% Trade 16% • Strong position in SMEs 14% and consumer loans Consumer Shipping • Focus on high margin 13% 5% segments Construction 8% State firms
Slide 31: Effective Risk Management
Piraeus Bank Group Effective Risk Management • Use of Risk-Pro (IRIS) system, covering 95% of consolidated assets Value-at-Risk • Application of modern and well- 4,000 known techniques for analysing 3,500 market risk: Fixed Income 3,000 Interest Rate Risk •Value-at-Risk with 99% 2,500 confidence int
Slide 32: Financial Review
Piraeus Bank Group Financial Review 32
Slide 33: Highlights of H1 2004 Performance
Piraeus Bank Group Highlights of H1 2004 Performance • Best H1 results ever achieved • Strong increase in net profit attributable to shareholders by 45% • Remarkable enhancement of ROE to 16% from 14% last year • Increase in net interest income by 19% and net commissions by 32% (y-o-y) • Rise in net
Slide 34: Consolidated Income Statement
Piraeus Bank Group Consolidated Income Statement • The best first half results (mn euro) H1 2004 H1 2003 ∆% ever achieved Net interest income 217.4 182.8 18.9% Fee and commission income 66.4 50.5 31.5% • Annual and semi-annual Dividend income 17.5 15.5 12.5% accounts are audited by Trading profits 3
Slide 35: Key Figures and Ratios
Piraeus Bank Group Key Figures and Ratios (€ mn) Jun. ‘04 Jun. ‘03 Dec. 2003 Dec. 2002 Total assets 15,747 14,906 14,735 14,725 Gross Loans 11,859 9,712 10,681 9,083 Bonds 1,518 2,899 1,975 3,608 Customer’s deposits & bonds issued (ETBA) 10,406 8,700 9,145 7,873 Repos 770 1,989 1,249 2,463 Total equ
Slide 36: Remarkable Improvement of Operating Profitability
Piraeus Bank Group Remarkable Improvement of Operating Profitability • Improvement of profitability mainly due to the increase 80 79.1 of net revenues by 20.7% +45.3% +60.9% 69.9 and the containment of PBG Change in Profit before Tax & Minorities (yoy) 60 operating expenses 60% 54.4 (mn euro) +10.3%
Slide 37: Substantial Enhancement of Net Revenues
Piraeus Bank Group Substantial Enhancement of Net Revenues • Profitability arising mainly 347.0 350 +20.7% from interest and commission income, which 63.2 300 287.6 +16.5% Other income constitute 81.8% of net 251.2 54.3 revenues 250 66.4 34.5 +31.5% (mn euros) • This significant 50.5 200 44.0 Commis
Slide 38: Continuous Improvement of Net Interest Margin
Piraeus Bank Group Continuous Improvement of Net Interest Margin (*) • 38 bps enhancement of 3 .2 % NIM (on avg interest 3.07% earning assets) in H1 2004 to 3.07%, the highest 2.98% 3 .0 % performance of the last four 2.88% years • The increase in NIM is due 2 .8 % 2.76% to the Group’s policy of 2.6
Slide 39: Spreads (Bank Level)
Piraeus Bank Group Spreads (Bank Level *) Household lending Spreads Business lending Spreads (*) 4.0% 7.0% SMEs • In 2003 ECB decreased its 6.98% 7.14% central rate to historic low 6.61% 6.0% 6.28% Consumer 3.37% 3.34% 3.32% levels of 2.0% (June 2003) 3.0% 3.15% 5.0% 4.0% Medium–Large Corporates Mor
Slide 40: Steady Enhancement of Net Commission Income
Piraeus Bank Group Steady Enhancement of Net Commission Income • Commissions are mainly from commercial banking 70 +31.5% 66.4 activities (78% of net commission income) 60 9.3 Investment +11.9% Banking • Net commission revenues +14.8% 50.5 5.1 50 +8.6% from commercial banking 44.0 8.3 Asset (mn euro
Slide 41: Results on Financial Operations
Piraeus Bank Group Results on Financial Operations • Results from financial operations increased by 39.9 40 19.5%, due to the increased trading gains of the closed- 35 33.4 14.7 Shares (closed- end fund company, in which 4.2 end fund's 30 minority interest) PB controls 48%, while last 5.6 25 year’s
Slide 42: Focused on Cost Containment
Piraeus Bank Group Focused on Cost Containment • Total operating cost rose 10.3% in H1 ‘04 (y-o-y), slightly highter than the half-yearly average of Total cost between ‘01 – ‘03 2003 (only 2%). The increase in remained almost stable, despite the opening 40 new branches H1 ’04 is mainly due to: durin
Slide 43: Focused on Cost Containment (cont'd)
Piraeus Bank Group Focused on Cost Containment (cont’ed) • 16.3% increase in administrative & other expenses compared to H1 ‘03, only 2.1% higher than Administrative & other expenses 80 H ‘03 avg : 76.0 the half-yearly average of ’03. 30 Dep reciation The H1 ‘04 increase is mainly 60 25 due to the e
Slide 44: Steep Improvement of the Efficiency Ratio
Piraeus Bank Group Steep Improvement of the Efficiency Ratio • Improvement of cost to income 70% ratio to 55.2%, a decrease from 60.4% in H1 2003 65% 60% 66.5% 55% 60.4% 50% 55.2% 45% H1' 02 H1 '03 H1 '04 44
Slide 45: Constant Improvement of Profitability Ratios
Piraeus Bank Group Constant Improvement of Profitability Ratios ROavE (After tax & Minorities) ROavA (After tax) 15.9% 1.30% 16.0% 1.3% 1.19% 13.9% 14.0% 1.1% 12.5% 12.0% 0.9% 0.84% 11.1% 10.0% 0.7% 8.8% 0.55% 0.51% 8.0% 0.5% 2001 2002 2003 Q1 '04 H1 '04 2001 2002 2003 Q1 '04 H1 '04 45
Slide 46: Composition of Consolidated Balance Sheet
Piraeus Bank Group Composition of Consolidated Balance Sheet • Loans to customers Assets Liabilities & Equity constitute 73% of total June ’04: € 15,747 mn Assets • High proportion of 100% 100% 6.8% Cash & Central customer deposits, repos 90% 1.7% Bank 13.5% 90% Interbank and ECP (75% of total 3.8%
Slide 47: Evolution of Total Gross Loans
Piraeus Bank Group Evolution of Total Gross Loans 12,000 11,859 Other Claims 10,681 1,782 10,000 9,712 1,572 Mortgage 9,083 Loans 1,533 1,446 8,163 1,270 1,481 8,000 963 Consumer 1,279 1,322 Loans (mn euro) 1,209 4,103 6,000 3,411 SMEs 3,059 2,787 2,640 4,000 Medium-Large Enterprises 2,000 4,066 4,3
Slide 48: Development of Funding
Piraeus Bank Group Development of Funding 13,898 • Customer deposits 14,000 13,143 12,900 12,739 increase steadily year by 12,286 2,128 Interbank year, due to the gradual 12,000 2,454 2,283 2,403 594 maturing of the branch 2,322 770 network 223 ECP 10,000 1,989 1,249 • A € 1.5 bn ECP program 2,463 2
Slide 49: Customer Deposits & Funds
Piraeus Bank Group Customer Deposits & Funds • Savings & current deposits account for 47.4% of the total deposits & retail bonds issued Deposits break-down as of 30.6.2004: Growth of Deposits in H1 2004 (yoy) • 1,32 mn private customer € 10,406 mn accounts (savings – current accounts) High growth ra
Slide 50: Latest Developments
Piraeus Bank Group Latest Developments • September 1, 2004 - S&P’s upgraded its outlook on Piraeus Bank to positive With the merger of Sigma-Devletoglou : • June 22, 2004 - Signed agreement between Piraeus Bank, shareholder of Sigma ¾the client base is broadened Securities and the shareholders of De
Slide 51: Communication
Piraeus Bank Group Communication Investor Relations - George Poulopoulos, Director - George Marinopoulos, Assistant Manager - Chrysanthi Bermpati, Officer 20, Amalias Ave. & 5, Souri St. 105 57, Athens Tel. : (+30 ) 210 333 5198 - 5027 - 5062 Fax : (+30 ) 210 333 5079 investor_relations@piraeusbank.
Slide 52: Disclaimer
Piraeus Bank Group Disclaimer This presentation has been prepared solely for informational purposes. Any projections or other estimates in this presentation, including estimates of returns or performance, comments with respect to our objectives and strategies, or the results of our operations and bu