Piraeus Bank S.A. · ATHEX:TPEIR
Piraeus Bank — Q1 2004 Earnings Presentation
51 slides from Piraeus Bank's earnings presentation, May 2004
Slide 1: Piraeus Bank Group Presentation
PIRAEUS BANK GROUP Presentation May 2004 (1st Quarter 2004 data)
Slide 2: Agenda
Section 1 Executive summary 2 Section Section 22 Greek Greek Economy Economy -- Greek Greek Banking Banking sector sector 88 Section Section 33 Strategy Strategy 12 12 Section Section 44 Piraeus Piraeus Bank Bank Group’s Group’s strengthening strengthening position position 16 16 Section Section 55
Slide 3: Executive summary
Executive summary Piraeus Bank Group ♦ Universal Bank with balanced focus on Retail Banking, SMEs and Corporate Banking / Shipping ♦ Third largest private sector Bank in Greece ♦ Assets of €15.2 bn, loans of €11.3 bn with a market share of 10.4% (in terms of loans) ♦ Strategic Alliance with ING in t
Slide 4: Piraeus Bank Group selected market shares
Piraeus Bank Group selected market shares ♦ One of the most dynamic and innovative Financial Groups in Greece Ranking Loans 10,4% 5th Deposits & Repos 8,6% 5th Assets 8,2% 5th Consumer loans (CLs) 10,9% 3rd CLs excl. credit cards 17,7% 3rd Mortgage loans 7,0% 5th Open & Closed-end Funds 5,2% 6th Bro
Slide 5: Piraeus Bank's diversified shareholder structure
Piraeus Bank’s diversified shareholder structure ♦ The shareholder base presents ING Other Greek State great diversity (237,000 Foreign 4.2% companies institutional 6.4% 2.7% Treasury shareholders as of March 2004), shares investors 0.3% consisting of representatives of the 20.8% business community,
Slide 6: Piraeus Bank has a significant free float
Piraeus Bank has a significant free float 100% 90% 90% 75% 80% 65% Free float 60% 45% 40% 20% Source: MSCI, November 2003 0% Alpha Bank Piraeus Bank National Bank Emporiki Bank EFG Eurobank The 7th largest company in AΤΗΕΧ, in terms of free float-adjusted market capitalisation and 3rd among the pr
Slide 7: Corporate governance
Corporate governance Board of Directors 4 executives Internal Internal Audit Board Audit Operations 12 Non-executives Committee Committees System Code (2 independent) PROTECTION OF STAKEHOLDERS’ INTERESTS ENHANCED TRANSPARENCY Inclusion Detailed Consistent Management Dedicated Application on the
Slide 8: Agenda
Section Section 11 Executive Executive summary summary 22 Section 2 Greek Economy - Greek Banking sector 8 Section Section 33 Strategy Strategy 12 12 Section Section 44 Piraeus Piraeus Bank Bank Group’s Group’s strengthening strengthening position position 16 16 Section Section 55 Financial Financia
Slide 9: Greek Economy - Key indicators
Greek Economy - Key indicators ♦ Euro zone member since January 2001 ♦ Population: 11 million ♦ Sovereign credit rating: A+ (S&P’s), A1 (Moody’s), A+ (Fitch) ♦ Positive prospects (High GDP growth, 3rd & 4th European Community Support Frameworks, 2004 Olympic Games, Historically low interest rate env
Slide 10: The Greek Banking sector
The Greek Banking sector … … is expected to profit from the stable euro zone environment 105.1 Assets / branch (€ mn) 65.8 47.4 Loans / branch (€ mn) 30.8 55.6 Deposits / branch (€ mn) 48.8 121.3 Total credit / GDP (% ) 66.3 72.9 Loans to corporations / GDP (% ) 40.0 48.4 Loans to households / GDP (
Slide 11: The Greek Banking market is dominated by a small number of Banks
The Greek Banking market… … is dominated by a small number of Banks 30.0 29.2 Top 5 banks control about 80% of the Market 25.0 20.5 Market share (%) 20.0 18.6 16.1 16.0 15.3 15.0 12.5 11.3 10.4 10.0 8.6 5.0 3.2 3.7 2.5 2.2 0.0 National Alpha EFG Emporiki Piraeus Cyprus General Loans Deposits & Repos
Slide 12: Agenda
Section Section 11 Executive Executive summary summary 22 Section Section 22 Greek Greek Economy Economy -- Greek Greek Banking Banking sector sector 88 Section 3 Strategy 12 Section Section 33 Piraeus Piraeus Bank Bank Group’s Group’s strengthening strengthening position position 16 16 Section Sect
Slide 13: Our Vision
Our Vision To be an “identifiable” Universal Banking Group, playing an important role in South - Eastern Europe, by satisfying its customers’ needs, possessing devoted and competent personnel and offering high Shareholder returns 12
Slide 14: Major goals of the next 4 years
Major goals of the next 4 years... 15% 14.0% Market Share 14% in Loans in 10.4% Greece, with leading position 10% Market in the segments of Retail Market Share 5% Banking and Leasing Share 0% March '04 Next 4 years Further expansion in South- Eastern Europe, establishing a critical mass Hous ehold H
Slide 15: Major goals of the next 4 years (continued)
… Major goals of the next 4 years 10.0% 10% Achievement of a 10% market share in open and 5.2% closed-end funds 5% Open-end & Closed-end Open-end & funds Achievement of a leading role Closed-end in pension/ insurance funds 0% funds mgt, through strategic Mar. '04 Next 4 years alliance with ING 60% 5
Slide 16: Agenda
Section Section 11 Executive Executive summary summary 22 Section Section 22 Greek Greek Economy Economy -- Greek Greek Banking Banking sector sector 88 Section Section 33 Strategy Strategy 12 12 Section 4 Piraeus Bank Group’s strengthening position 16 Section Section 55 Financial Financial Review R
Slide 17: One of the fastest growing Banking Groups
One of the fastest growing Banking Groups Total Assets (€ bn) Loans Market share (%) 10.3 10.4 10.5 10.0 14.7 15.2 16 14.7 12.3 9.0 8.1 14 7.6 10.5 7.5 12 6.2 10 8.1 6.0 8 3.9 4.5 6 3.8 3.0 4 2 0.08 1.5 0.3 0 0.0 1991 1998 1999 2000 2001 2002 2003 Mar.'04 1991 1998 1999 2000 2001 2002 2003 Mar.'04 B
Slide 18: Nation-wide branch network
Nation-wide branch network 228 branches in 89 cities, well spread around the country 80 new branches in the last 4 years with substantial business growth potential 20 - 25 new branches will be created in Athens region in the next 12 months, where there is scope for higher revenues (38% of PB’s
Slide 19: International presence in 5 countries
International presence in 5 countries U.S.A. - Marathon Bank 44 branches (June ’04) 11 branches in New York 579 employees Total Assets € 542 mn ROE (before tax) : 25.4% U.K. - Piraeus Bank branch 1 branch, based in London Total Assets € 1,220 mn Romania - Piraeus Bank Romania 7
Slide 20: Electronic Banking
Electronic Banking … the e-banking in Greece (1st place in the market) ♦ the only ISO 9001:2000 certified e-banking service in Greece ♦ 14 awards and special distinctions in a 4-year period ♦ has more than 118,000 unique customers (internet, mobile, phone) ♦ The value of the banking & equity trading
Slide 21: Leadership in Consumer Credit
Leadership in Consumer Credit Mortgage loans Loans to individuals represent 28.5% of 1,700 the loan portfolio (20% growth y-o-y) Dynamic expansion in mortgage credit (+22% y-o-y), increasing the cross-selling (€ mn) 1,200 1,656 opportunities 1,362 26% rise of consumer credit excluding factorin
Slide 22: Strong and well positioned presence in SMEs
Strong and well positioned presence in SMEs SMEs represent 34.3% of the loan Loans to Small Medium portfolio (32% growth y-o-y). They are Enterprises (SMEs) served through the branch network, 4,000 increasing the opportunities for cross selling 3,500 (loans, deposits, leasing, company cards, (€ mn
Slide 23: Strong presence in Corporate Banking & Shipping
Strong presence in Corporate Banking & Shipping Medium - Large Enterprises represent 37.2% of the loan portfolio (15% growth y-o-y) and their servicing is provided through central Loans to Medium - operations (Corporate Banking & Shipping Large Enterprises Divisions) 4,500 More than 800 corporat
Slide 24: Well-positioned in Investment Banking
Well-positioned in Investment Banking ♦ 10.7% market share in IPOs (hard underwriting) in 2003 (3rd place) ♦ High market share in IPOs consulting services ♦ SMEs focusing gives room for the sale of investment services ♦ 6.4% in brokerage transactions in Q1 ‘04 (5th place) ♦ Business development in t
Slide 25: Strategic Alliance with ING
Strategic Alliance with … the two Groups have a complementary presence in Greece 4.2% stake ING Life SA, ING Gen. Insur. SA, Piraeus Bank 20% stake Greece 50.1% 49.9% stake ING-Piraeus ING-Piraeus Asset stake Bancassurance Management JV JV ♦ Combination of 2 powerful sales forces (228 branches & 1,5
Slide 26: Asset gathering focus
Asset gathering focus ♦ Increased presence in Asset Management & Bancassurance, through the two joint ventures in cooperation with ING ( PIRAEUS Life and P PIRAEUS Asset Management) Greece ‘02 EU ‘01 Insurance premium / GDP (%) 2.1 8.6 Funds Under Management/GDP (%) 18 37 Source : Merill Lynch, Swis
Slide 27: Effective Risk Management
Effective Risk Management Value-at-Risk 4.000 3.500 Fixed Income ('000 euros) 3.000 Interest Rate Risk 2.500 Banking Book 2.000 Interest Rate Risk 1.500 1.000 FX Risk 500 0 1/4/2003 1/5/2003 1/6/2003 1/7/2003 1/8/2003 1/9/2003 1/10/2003 1/11/2003 1/12/2003 1/1/2004 1/2/2004 1/3/2004 1/4/2004 ♦ Use o
Slide 28: Organisational structure
Organisational structure Piraeus Bank Group Companies Structure Commercial Investment Asset Non-financial Bancassurance Banking Banking Management companies ♦ Piraeus Bank ♦ Sigma Securities ♦ ING Piraeus Asset ♦ ING Piraeus Life Technology ♦ Piraeus Leasing ♦ Piraeus Equities Management Co Insuranc
Slide 29: Awards
Awards ♦ “Bank of the Year 2003 in Greece” by The Banker. The international banking magazine highlighted Piraeus Bank's good turn-around in profits in ‘02, acquisitions and alliances with other banks and technological side of business operations. ♦ Five Divisions of Piraeus Bank and its affiliate Ex
Slide 30: Agenda
Section Section 11 Executive Executive summary summary 22 Section Section 22 Greek Greek Economy Economy -- Greek Greek Banking Banking sector sector 88 Section Section 33 Strategy Strategy 12 12 Section Section 44 Piraeus Piraeus Bank Bank Group’s Group’s strengthening strengthening position positi
Slide 31: Highlights of Q1 2004 performance
Highlights of Q1 2004 performance ♦ The highest quarterly performance of the last three years ♦ Strong increase in net profit attributable to shareholders by 37% ♦ Rise of net interest income by 16% and net commissions by 41% (y-o-y) ♦ Rise of net revenues by 21%, while operating cost grew modestly
Slide 32: Snapshot of consolidated P&L
Snapshot of consolidated P&L (mn euro) Q1 2004 Q1 2003 ∆% Net interest income 102.8 88.6 16.0% Fee and commission income 32.7 23.3 40.5% Dividend income 9.1 10.2 -11.0% Trading profits 17.3 8.5 102.6% Other operating income 3.8 3.3 13.7% Industrial Areas Operating Income - 2.4 - Total operating inco
Slide 33: Key figures and ratios
Key figures and ratios (€ mn) Mar. ‘04 Mar. ‘03 Dec. 2003 Dec. 2002 Total assets 15,187 14,275 14,735 14,725 Gross Loans 11,284 9,288 10,681 9,083 Bonds 1,938 3,011 1,975 3,608 Customer’s deposits & bonds issued (ETBA) 9,251 8,135 9,145 7,873 Repos 1,345 2,058 1,249 2,463 Total equity 1,336 1,239 1,
Slide 34: Improvement of operating profitability
Improvement of operating profitability 40 +30.3% +36.7% ♦ Improvement of profitability mainly 35.1 35.0 30 due to the increase of net revenues 26.9 25.6 (mn euro) 20 by 21.5%, while operating expenses grew by a much lower pace (+7.3%) 10 0 ♦ Rise of core pre-tax profit (excl. Core Operating profit P
Slide 35: Substantial growth of net revenues
Substantial growth of net revenues 180 +21.5% 165.6 Other income 150 136.3 18.1% +23.4% 17.9% 120 19.8% +40.5% Commission (mn euros) 17.1% income 90 60 +16.0% 62.1% 65.0% Net interest income 30 0 Q1 '03 Q1 '04 Profitability arising mainly from interest and commission income that constitute 82% of ne
Slide 36: Steady Improvement of Net Interest Margin
Steady Improvement of Net Interest Margin 3.0% 2.98% 2.88% 2.8% 2.76% 2.68% 2.69% 2.61% 2.60% 2.61% 2.6% 2.55% 2.4% Q1 '02 H1 '02 9m '02 12m Q1 '03 H1 '03 9m '03 12m Q1 '04 '02 '03 30 bps enhancement of NIM (on avg interest earning assets) in Q1’04 to 2.98% 35
Slide 37: Spreads (Bank level)
Spreads (Bank level *) Deposit Spreads (*) 2.0% 1.69% Savings & Sight ♦ In 2003 ECB Total deposit’s 1.5% 1.31% spread remained decreased its 1.15% unchanged in Q1’04 to 56 bp as the central rate to 1.0% contribution of low historic low Time cost funding 0.5% 0.04% 0.04% 0.00% increased to 49% vs lev
Slide 38: Steady enhancement of net commission income
Steady enhancement of net commission income 35 32.7 ♦ Net commission +40.5% revenues from 30 21.0% +107.3% Investment commercial banking 23.3 Banking 25 8.1% activities increased +14.6% 14.2% by 31.3% due to the (mn euros) 20 10.0% Asset Management increase of Piraeus 15 +31.3% 70.9% Bank’s penetrat
Slide 39: Focused on cost containment
Focused on cost containment... Total Operating Cost 100 ‘03 Q avg : 93.9 Total operating cost rose 7.3% in Q1 ‘04 -4.5% (y-o-y), although below the per quarter 80 average of 2003 (-4.5%). The increase in (mn euro) Q1 ’04 is mainly due to: 7.3% 89.6 60 83.5 ¾ the expansion of the branch network by 11
Slide 40: Focused on cost containment (continued)
... Focused on cost containment Administrative & other expenses 14.5% increase in administrative & other 40 ‘03 Q avg : 38.0 -7.9% expenses compared to Q1 ‘03, however 30 7.9% below the per quarter average of ‘03. (mn euro) 20 14.5% 35.0 30.6 The Q1 ‘04 increase is mainly due to the 10 promotion of
Slide 41: Steep downward trend in the efficiency ratio
Steep downward trend in the efficiency ratio 70% Improvement of 65% cost to income ratio to 54.1%, 60% decreased from 55% 65.5% 61.3% in Q1 ‘03, 61.3% approaching the 50% 54.1% target of < 55% 45% Q1' 02 Q1 '03 Q1 '04 40
Slide 42: Strong recovery of the profitability ratios
Strong recovery of the profitability ratios ROavE (After tax & Minorities) ROavA (After tax) 14% 1.2% 1.19% 13.9% 1.1% 12.5% 1.0% 12% 11.1% 0.9% 0.84% 0.8% 10% 0.7% 8.8% 0.6% 0.56% 0.55% 8% 0.5% 2001 2002 2003 Q1 '04 2001 2002 2003 Q1 '04 41
Slide 43: Composition of consolidated Balance Sheet
Composition of consolidated Balance Sheet Assets Liabilities & Equity March ’04 : € 15.2 bn 100% 2.2% Cash & 100% 2.6% 90% Central Bank 14.3% Interbank 90% 80% 3.8% 80% Interbank 70% ECP 70% 60% 71.6% 60% Net loans Deposits 50% 50% 60.9% 40% 40% Repos 30% Bonds 30% 20% 12.8% 20% Equity 8.9% 10% Othe
Slide 44: Evolution of total gross loans
Evolution of total gross loans +21.5% 12,000 Other Claims 11,284 10,681 9,712 1,656 10,000 9,288 1,572 Mortgage 9,083 Loans 1,446 1,523 8,163 1,270 1,362 8,000 1,481 963 Consumer 1,279 1,322 1,296 Loans (mn euro) 1,209 6,000 3,825 3,411 SMEs 3,059 3,054 2,892 2,640 4,000 Medium-Large Enterprises 2,0
Slide 45: Solid lending and asset quality
Solid lending and asset quality Loans by sector Loans 31.3.04: € 11.3 bn Manufacturing Handicraft 16% 1% Trade 15% ♦ Strong position in SMEs Consumer 14% Shipping and consumer loans 7% ♦ Focus on high margin Construction segments 8% ♦ 10.7% of total loan State firms Mortgage 0% portfolio has been 15
Slide 46: High asset quality
High asset quality Piraeus Bank Group has : ♦ NPLs ratio of 3.97% in March 2004 and 2.5% excluding the loan portfolio of ex- ETBAbank ♦ Net NPLs ratio (after cumulative provisions) is only 0.28% ♦ Expertise in dealing with “problem” loans. NPLs ratio declined from 4.6% to 2.0% during the period ‘99
Slide 47: Development of funding
Development of funding +8.3% 14,000 13,353 13,143 12,900 11,286 12,739 Interbank 12,330 12,000 2,174 2,454 2,283 2,403 2,138 2,322 584 223 ECP 10,000 1,989 1,249 1,345 2,463 2,058 2,330 (mn euros) 8,000 Repos 6,000 9,145 9,251 Customer 8,135 8,700 deposits 4,000 7,634 7,873 2,000 0 June '02 Dec. '02
Slide 48: Enhanced participation of low-cost funding
Enhanced participation of low-cost funding Deposits break-down as of Growth of deposits in Q12004 (yoy) 31.3.2004 : € 9,251 mn Bonds High growth 21.2% Bonds issued rates in low cost Other Sight issued funding sources 1% 21% 5% Sight 37.2% Savings 18.0% Time Savings Time 2.1% 45% 28% -20% -10% 0% 10%
Slide 49: Strong capital base
Strong capital base Piraeus Bank Group Mar.’04 Dec.’03 Dec. ‘02 Total equity (€ mn) 1,336 (*) 1,342 1,335 Total capital ratio (BIS) 10.5%(*) 10.8% 11.7% Risk-weighted assets (€ mn) 12,259 11,912 10,974 (*) Not including profit of the period ♦ Total equity reaches €1,336 mn and it is only core capita
Slide 50: Communication
Communication Business Planning Division & Investor Relations : - George Poulopoulos, Director - George Marinopoulos, Assistant Manager - Chrysanthi Bermpati, Officer 20, Amalias Ave. & 5, Souri St. 105 57, Athens Tel. : (0030 ) 210 333 5198 - 5027 - 5062 Fax : (0030 ) 210 333 5079 Internet site www
Slide 51: Disclaimer
Disclaimer This presentation contains forward-looking statements, which include comments with respect to our objectives and strategies, and the results of our operations and our business, considering environmental and risk conditions. However, by their nature, these forward-looking statements involv