Eurobank S.a. · ATHEX:EUROB
Eurobank — Eurobank Ergasias Services and Holdings — H1 2020 Earnings Presentation
53 slides from Eurobank's earnings presentation, Sep 1, 2020
Slide 1: 1H 2020 Results
1H 2020 Results 1 September 2020
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 1H2020 results 3 1H2020 results review 13 Asset Quality 21 International operations 26 Appendix I – Supplementary information 35 Appendix II – Macroeconomic update 39 Appendix III – Glossary 47 Page 2
Slide 4: 1H 2020 results
Holdings 1H 2020 results | Page 3
Slide 5: Transformation Plan delivered balance sheet de-risking
Transformation Plan delivered balance sheet de-risking Group Figures €10.5bn NPEs stock reduction Texas Ratio1 improved by ~50ppts 116% € bn 16.7 (10.5) 69% 6.2 FY18 1H20 FY18 1H20 NPE ratio down by 21.7ppts; coverage up by 7.4ppts Active capital management contained impact on Total CAD +7.4ppts 60.
Slide 6: Distribution of Cairo Mezz shares
Distribution of Cairo Mezz shares Cairo notes perimeter Holders of notes (%) € bn SPV 1 SPV 2 SPV 3 Total % Shareholders DoValue Bank Total Senior 0.7 1.0 0.7 2.4 Senior - - 100 100 Mezzanine 0.3 0.6 0.6 1.5 Mezzanine 75 20 5 100 Junior 0.8 1.4 1.4 3.6 Junior 44.9 50.1 5 100 Total 1.8 3.0 2.7 7.5 Ca
Slide 7: 1H20 results
1H20 results Highlights Key financials €m 1H20 1H19 Δ(%) 2Q20 1Q20 Δ(%) 1 Net profit1 €176m in 1H20; €117m in 2Q20 Net interest income 688.8 684.8 0.6 349.5 339.4 2.9 Core pre-provision income (PPI) up 8% y-o-y at €435m; up 5.8% q-o-q NII up 0.6% y-o-y at €689m; up 2.9% q-o-q Commission income 1
Slide 8: Pre-provision income (PPI)
Pre-provision income (PPI) Core PPI and other income (€ m) Δ PPI (q-o-q, € m) 58 13 28 3 63 Other income 214 224 211 213 212 57 69 70 68 65 Int'l 7 287 61 166 Greece 143 143 145 147 10 214 (5) 2Q19 3Q19 4Q19 1Q20 2Q20 PPI per region (€ m) 287 269 Δ ΝΙΙ 1Q20 PPI 2Q20 PPI Δ other income Δ commission i
Slide 9: Asset quality
Asset quality NPEs formation1 (€ m) NPEs ratio (%) 32.8% 9 31.1% 29.2% 28.9% (5) (86) Int'l (77) Greece (205) (195) (17.5ppts) 15.3% (342) 2Q19 3Q19 4Q19 1Q20 2Q20 2Q19 3Q19 4Q19 1Q20 2Q20 Loan loss provisions (€ m) Provisions / NPEs (%) 2.0% 1.6% 1.4% 1.3% 1.5% Cost of Risk2 +610bps 60.6% 183 33 14
Slide 10: Debt moratoria
Debt moratoria Payment moratoria in Greece (on PEs and PFs) “Gefyra” (“Bridge”) subsidy programme €4.2bn €5.0bn Bridge programme between moratoria and return to full payment pattern 26% 30% Corporate 9 month installment subsidy for primary residence mortgages impacted by 26% 23% Small Business C
Slide 11: Capital position
Capital position 17.8% 35bps 25bps 15.5% 30bps 25bps 14.4% 2.5% Tier II (340bps) 2.3% Tier II 15.3% 13.0% CET 1 12.1% CET 1 CET1 FBL3: 11.2% 1Q20 CAD Cairo & FPS 1Q20 pro-forma 2Q20 result Debt Scurities at CRR "Quick Other 2 2Q20 CAD impact CAD FVOCI Fixes" 1 RWAs 42,953 (2,022) 40,931 (762) 654 40
Slide 12: Funding and liquidity
Funding and liquidity TLTRO (€ bn) Deposits (€ bn) Rate 86.5% 87.3% 0bps (50bps) (100bps) 83.2% 83.4% 81.6% 8.0 Net Loans / Deposits ratio 45.3 45.2 LTRO 44.8 42.3 41.3 8.0 12.4 12.4 12.4 2.7 TLTRO III 11.8 12.4 International 1.9 0.8 1.9 1.9 4Q19 1Q20 2Q20 32.7 Greece 32.9 Collateral used for Eurosy
Slide 13: International Operations
International Operations Core PPI (€ m) Net Profit1 (€ m) 69 70 68 65 62 57 47 42 40 22 2Q19 3Q19 4Q19 1Q20 2Q20 2Q19 3Q19 4Q19 1Q20 2Q20 Loan loss provisions (€ m) Net Loans and Deposits (€ bn) 2.0% 1.0% 1.4% 0.8% 1.2% Cost of Risk 12.4 33 25 7.5 23 18 5.4 4.7 15 3.7 1.9 1.4 1.2 0.9 0.5 Int'l BUL S
Slide 14: 1H 2020 results review
1H 2020 results review Page 13
Slide 15: Loans
Loans Gross loans (€ bn) Performing loans (€ bn) • +2.4 senior notes • +1.3 organic loans growth • -0.4 PE/PF transfer to Cairo 44.5 44.4 45.0 43.6 +3.3 34.5 7.7 40.6 31.8 7.5 7.6 7.4 31.2 30.4 7.3 1.1 1.1 1.1 7.8 29.0 7.1 International 7.0 6.8 International 6.7 3.5 Greece 3.5 1.1 1.1 1.1 Greece Sen
Slide 16: Business loans growth (Greece)
Business loans growth (Greece) Performing business loans evolution (€ bn) State support financing facilities Eurobank allotment fully utilized Disbursements started from July onwards 1.1 13.6 12.7 (0.2) Development fund & Interest subsidy State €0.4bn €1.1bn guarantee €0.8bn Expected expansion of su
Slide 17: Balance Sheet composition
Balance Sheet composition Assets (€ bn) Liabilities and Equity (€ bn) 67.0 67.0 Equity 5.4 Net loans and 34.4 advances to customers Trading & • Core 61% Other other Tbills Deposits 45.2 • Time 39% issuers 3% 1% 14% Securities 9.9 GGBs 54% Other PP&E, intangibles and other assets1 7.4 governments Der
Slide 18: Net interest margin & spreads
Net interest margin & spreads Net interest margin (bps) Deposit spreads (Greece, bps) 2Q19 3Q19 4Q19 1Q20 2Q20 2Q19 3Q19 4Q19 1Q20 2Q20 Greece 211 204 200 194 204 Savings & Sight (52) (58) (60) (55) (55) International 277 266 265 255 231 Time (74) (76) (71) (66) (59) Group 226 219 215 208 210 Total
Slide 19: Net interest income
Net interest income NII breakdown (€ m) NII evolution (q-o-q, € m) Total NII 342 346 347 339 349 o/w Greece 248 247 247 244 260 o/w International 94 99 100 96 90 2 1 13 349 0 (6) Loan margin 375 388 378 367 364 339 Bonds & other 61 54 59 58 65 1Q20 2Q20 Loans Deposits Bonds & other International Who
Slide 20: Commission income
Commission income Commission income breakdown (€ m) Commission income per region (€ m) 104 104 53bps over assets 94 92 94 92 90 21 90 88 28 88 17 16 17 29 19 Lending 26 Int’l 26 23 39 31 40 36 29 Network 64 Greece 76 66 5 11 6 Capital Markets 6 5 66 Bancassurance & 64 20 13 13 16 Asset Management 12
Slide 21: Operating expenses
Operating expenses OpEx per region (€ m) OpEx breakdown (€ m) Greece (4.7%) 437 (0.8%) 434 221 227 237 54 53 220 213 Depreciation 57 60 52 57 56 International 144 154 Administrative 169 169 178 163 158 Greece 239 Greece staff cost Staff (10.5%) 228 2Q19 3Q19 4Q19 1Q20 2Q20 1H19 1H20 Cost-to-income r
Slide 22: Asset Quality
Holdings Asset Quality | Page 21
Slide 23: Δ stock NPEs (€m)
Δ stock NPEs (€m) 30 (883) Δ stock NPEs Group (459) (2,209) (6,784) 22 (2,254) (301) (722) Δ stock NPEs Solo (6,805) NPE inflows 219 182 164 152 132 (205) (117) NPE outflows (308) (303) (340) (53) (65) (80) (88) Cash Payments (86) (169) (209) (262) (118) (45)(38) (119) (32) (3)(15) (64) NPE net flow
Slide 24: NPEs formation per segment (Greece)
NPEs formation per segment (Greece) Mortgages (€ m) Consumer (€ m) 22 (17) 7 2 4 (41) 1 (67) (80) (66) (81) (83) (85) (2) (4) (105) (3) (123) (9) (10) 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 Small business (€ m) Corporate (€ m) 80 3 (6) (26
Slide 25: NPEs metrics (Group)
NPEs metrics (Group) 90dpd bridge to NPEs (€ bn) NPEs per region Provisions & Provisions/ Total NPEs NPEs ratio collaterals / NPEs NPEs 0.2 (€ bn) (%) (%) (%) 1.2 6.2 Consumer 0.8 33.5 101.0 116 4.8 Mortgages 1.8 17.3 45.9 125 Small Business 1.1 29.1 60.1 123 Total Retail 3.6 22.3 62.1 122 Corporate
Slide 26: Loans' stage analysis (Group)
Loans’ stage analysis (Group) Loans’ stage breakdown Provisions stock over NPEs Δ 60.6% (€ bn) 2Q19 3Q19 4Q19 1Q20 2Q20 54.5% 55.1% 55.3% 55.6% q-o-q Stage 1 22.4 23.7 25.2 25.7 28.3 2.6 Stage 2 6.9 6.9 6.3 6.2 6.1 (0.1) Stage 3 14.3 13.8 13.0 13.0 6.2 (6.8) (NPEs) 1 Total 43.6 44.5 44.5 44.9 40.5 (
Slide 27: International operations
International operations Page 26
Slide 28: International presence
International presence Total Assets (€ bn) 1.8 Net Loans (€ bn) 0.5 Total Assets (€ bn) 1.6 Deposits (€ bn) 1.4 Net Loans (€ bn) 1.2 Deposits (€ bn) 0.9 Branches (#) 80 Total Assets (€ bn) 6.8 Net Loans (€ bn) 1.9 Total Assets (€ bn) 5.4 Net Loans (€ bn) 3.7 Deposits (€ bn) 5.4 Private Banking 8 Dep
Slide 29: Bulgaria P&L
Bulgaria P&L PPI (€ m) OpEx (€ m) 63 31 29 29 28 24 39 32 29 24 2Q19 3Q19 4Q19 1Q20 2Q20 2Q19 3Q19 4Q19 1Q20 2Q20 Loan loss provisions (€ m) Net Profit (€ m) 19 32 16 26 20 10 16 9 8 8 2Q19 3Q19 4Q19 1Q20 2Q20 2Q19 3Q19 4Q19 1Q20 2Q20 Page 28
Slide 30: Bulgaria B/S and Asset quality
Bulgaria B/S and Asset quality Gross Loans (€ m) NPE ratio and Provisions / NPEs 3,779 3,828 3,801 3,856 3,898 523 530 528 547 575 Consumer Provisions / 54.8% 48.6% 50.6% NPEs 1053 1074 1075 1089 1114 47.1% 42.9% Mortgage Business NPE ratio 2,203 2,224 2,198 2,220 2,209 11.0% 10.6% 8.5% 7.7% 7.8% 2Q
Slide 31: Cyprus P&L
Cyprus P&L PPI (€ m) OpEx (€ m) 26 25 26 23 23 10 9 11 10 9 2Q19 3Q19 4Q19 1Q20 2Q20 2Q19 3Q19 4Q19 1Q20 2Q20 Loan loss provisions (€ m) Net Profit (€ m) 20 19 19 16 16 4 3 2 2 1 2Q19 3Q19 4Q19 1Q20 2Q20 2Q19 3Q19 4Q19 1Q20 2Q20 Page 30
Slide 32: Cyprus B/S and Asset quality
Cyprus B/S and Asset quality Gross Loans (€ m) NPE ratio and Provisions / NPEs 1,953 Other 69.6% 70.0% 1,874 1,910 66.7% 68.3% 1,769 1,804 151 155 65.0% Provisions / 141 149 143 NPEs 1,627 1,663 1,725 1,759 1,798 Business 5.3% 4.7% 3.9% 3.8% 3.7% NPE ratio 2Q19 3Q19 4Q19 1Q20 2Q20 2Q19 3Q19 4Q19 1Q2
Slide 33: Serbia P&L
Serbia P&L PPI (€ m) OpEx (€ m) 12 12 12 11 11 7 7 5 6 6 2Q19 3Q19 4Q19 1Q20 2Q20 2Q19 3Q19 4Q19 1Q20 2Q20 Loan loss provisions (€ m) Net Profit (€ m) 4 3 3 4 20 (10) 2 1 1 1 2Q19 3Q19 4Q19 1Q20 2Q20 2Q19 3Q19 4Q19 1Q20 2Q20 Page 32
Slide 34: Serbia B/S and Asset quality
Serbia B/S and Asset quality Gross Loans (€ m) NPE ratio and Provisions / NPEs 1,134 1,188 1,068 1,092 1,093 64.9% 68.0% 66.8% 427 416 Consumer 60.6% 62.2% 393 407 413 Provisions / NPEs 116 116 116 116 117 Mortgage 568 603 645 Business 558 565 7.0% 6.4% 5.7% 5.3% 5.0% NPE ratio 2Q19 3Q19 4Q19 1Q20 2
Slide 35: Key figures – 2Q20
Key figures – 2Q20 Bulgaria Cyprus Serbia Lux Sum Assets 5,443 6,771 1,578 1,809 15,601 Gross loans 3,898 1,953 1,188 523 7,562 Net loans 3,734 1,903 1,150 523 7,310 Balance Sheet (€m) 90dpd Loans 195 40 42 1 278 Balance NPE loans 300 73 58 1 432 Sheet Deposits 4,696 5,438 922 1,383 12,439 CAD1 20.2
Slide 36: Appendix I – Supplementary information
Appendix I – Supplementary information Page 35
Slide 37: Summary performance
Summary performance Balance sheet – key figures Income statement – key figures €m 2Q20 1Q20 €m 2Q20 1Q20 Gross customer loans 40,557 44,920 Net interest income 349.5 339.4 Provisions (3,700) (7,157) Commission income 87.8 92.3 Loans FVTPL 25 51 Operating income 500.6 434.4 Net customer loans 36,882
Slide 38: Consolidated quarterly financials
Consolidated quarterly financials Income Statement (€ m) 2Q20 1Q20 4Q19 3Q19 2Q19 Net Interest Income 349.5 339.4 346.7 345.9 342.1 Commission income 87.8 92.3 103.8 94.2 89.9 Other Income 63.4 2.7 28.2 13.3 57.5 Operating Income 500.6 434.4 478.7 453.5 489.5 Operating Expenses (213.5) (220.2) (237.
Slide 39: Consolidated financials
Consolidated financials Income Statement (€ m) 1H20 1H19 Δ y-o-y (%) Net Interest Income 688.8 684.8 0.6 Commission income 180.1 155.6 15.7 Other Income 66.1 71.3 (7.3) Operating Income 935.0 911.7 2.6 Operating Expenses (433.7) (437.3) (0.8) Pre-Provision Income 501.3 474.4 5.7 Loan Loss Provisions
Slide 40: Appendix II – Macroeconomic update
Appendix II – Macroeconomic update Page 39
Slide 41: Recent macro & market developments and FY-2020 outlook
Recent macro & market developments and FY-2020 outlook According to EC’s summer forecasts (July-20), real GDP is estimated to drop by -9.0% in 2020 and then recover by 6.0% in 2021 2019, €bn1 20191 20202 20212 (nominal) Real (% YoY) Real (% YoY) Real (% YoY) GDP 187.5 1.9 -9.0 6.0 Sharp decline
Slide 42: Selected indicators of domestic economic activity
Selected indicators of domestic economic activity Economic Sentiment: marginal improvement in Jul-20 PMI Manufacturing: below the 50 units no-change threshold Retail Trade Volume: a major drop on a YoY basis in Apr-May 2020 Manufacturing production index: steep decrease in 2020Q2 Source: ELSTAT, IOB
Slide 43: Domestic Labour Market
Domestic Labour Market Unemployment rate: 17.0% in May-20; further increase Employment growth in negative territory expected in the coming months Long Term Unemployment: a drain of human capital stock Labour Productivity: major challenge for potential growth Source: ELSTAT, Eurostat Page 42
Slide 44: Real Estate prices increased in FY 2019 after a multi-year decline
Real Estate prices increased in FY 2019 after a multi-year decline Index of Apartment Prices Index of Retail and Office Prices 2007Q1 – 2020Q1 2010H2 – 2019H2 Source: BoG Page 43
Slide 45: Domestic fiscal measures and liquidity support: c.14% of GDP
Domestic fiscal measures and liquidity support: c.14% of GDP Fiscal measures: €14.5bn (planned as of mid-August 2020) Liquidity support: €10.3bn • €2.5bn for income subsidies for affected employees, self employed and unemployed Fiscal • €150m to support primary sector €3.9bn • €2.0bn State guarantee
Slide 46: European policy response
European policy response European level stimulus Additional European Commission measures Next Generation EU Unemployment Multi Year Financial fund • ESM credit line: up to 2% of GDP for each Eurozone country initiative (SURE) Grants Framework 2021-27 €100bn €390 bn • Coronavirus Response Investment
Slide 47: Bulgaria-Cyprus-Serbia macro-trajectory for 2020-2021
Bulgaria-Cyprus-Serbia macro-trajectory for 2020-2021 COVID-19 induces recession in our economies of focus Strong growth momentum ahead of crisis: Bulgaria, Cyprus, Serbia expanded on average by 3.6%, 4.4%, 3.1% respectively between 2015-2019 Covid19 pandemic pushes regional economies in deeply
Slide 48: Appendix III – Glossary
Appendix III – Glossary Page 47
Slide 49: Glossary – Definition of Alternative Performance Measures (APMs)
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 Finan
Slide 50: Glossary – Definition of Alternative Performance Measures (APMs)
Glossary – Definition of Alternative Performance Measures (APMs) & other selected financial measures/ ratios Commission income: The total of Net banking fee and commission income and Income from non-banking services of the reported period. Other Income: The total of net trading income, gains less lo
Slide 51: Glossary – Definition of Alternative Performance Measures (APMs)
Glossary – Definition of Alternative Performance Measures (APMs) & other selected financial measures/ ratios Provisions (charge) to average Net Loans ratio (Cost of Risk): Impairment losses relating to Loans and Advances charged in the reported period, annualized and divided by the average balance o
Slide 52: Glossary – Definition of Alternative Performance Measures (APMs)
Glossary – Definition of Alternative Performance Measures (APMs) & other selected financial measures/ ratios Risk-weighted assets (RWAs): Risk-weighted assets are the Group's assets and off-balance-sheet exposures, weighted according to risk factors based on Regulation (EU) No 575/2013, taking into
Slide 53: Investor Relations contacts
Investor Relations contacts Dimitris Nikolos +30 214 4058 834 E-mail: dnikolos@eurobankholdings.gr Yannis Chalaris +30 214 4058 832 E-mail: ychalaris@eurobankholdings.gr Christos Stylios +30 214 4058 833 E-mail: cstylios@eurobankholdings.gr E-mail: investor_relations@eurobankholdings.gr Fax: +30 210
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