Eurobank S.a. · ATHEX:EUROB
Eurobank — Q2 2016 Earnings Presentation
50 slides from Eurobank's earnings presentation, Aug 31, 2016
Slide 1: Second Quarter 2016 Results
Second Quarter 2016 Results 31 August 2016
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. The material that follows is a presentation of general background information about Euroban
Slide 3: Table of contents
Table of contents Highlights 3 2Q2016 results review 9 Asset Quality 17 International operations 22 Appendix I – Supplementary information 30 Appendix II – Macroeconomic update 35 Appendix III – Glossary 44 Page 2
Slide 4: 2Q16 results highlights
2Q16 results1 Highlights Key financials 1 Net profit of €46m in 2Q16; €106m in 1H16 €m 2Q16 1Q16 Δ(%) NII up 1.3% q-o-q, driven by lower funding cost Net interest income 387.7 382.8 1.3 Commission income up 5.1% to €71m Commission income 71.3 67.8 5.1 Operating expenses down 2.0% y-o-y2, Greec
Slide 5: Pre-provision income (PPI)
Pre-provision income (PPI)1 Core PPI and other income (€ m) Highlights 1 54 (8) 64 67 Other income Core PPI up 5.8% q-o-q at €209m NII up 1.3% q-o-q, driven by lower funding cost 209 Core PPI 198 Commission income up 5.1% to €71m 176 173 151 Operating expenses l-f-l down 2.0% y-o-y, Greece l
Slide 6: Asset quality
Asset quality First quarter of negative 90dpd formation 90dpd, NPEs and respective coverage ratios 90dpd ratio at 34.7%, NPE ratio at 45.1% 64.8% 65.0% 90dpd 65.0% 64.8% 64.3% Coverage Coverage ratios: 90dpd at 65.0%, NPEs at 50.0% NPEs 53.3% 52.7% 52.1% 50.7% 50.0% coverage Write-offs and N
Slide 7: Funding and liquidity
Funding and liquidity Eurosystem funding (€ bn) ELA eligible collateral (€ bn)1 34.0 Other 32.7 Pillar II bonds 0.4 2.0 9.8 25.3 19.0 22.9 5.3 21.5 4.7 18.0 5.7 4.3 ECB 22.9 Credit Claims 20.0 18.3 15.0 15.8 ELA 14.2 13.7 Jun 12 Jun 15 Dec 15 Mar 16 Jun 16 Aug 16 Interbank repos and eurosystem fundi
Slide 8: Capital position
Capital position Phased-in CET1 Fully loaded Basel III CET1 (FLB3) 17.0% 27bps 17.0% 12bps 8bps 16.7% 16.5% 16.0% 33bps 67bps 13.5% 250bps 1Q16 CET1 2Q16 result business sale 2Q16 pro-forma 2Q16 CET1 AFS & other FLB3 incl. pref. 2Q16 pro-forma DTA phase out Minorities and Preference pro-forma FLB3 I
Slide 9: International Operations
International Operations Net Profit before discontinued operations & restructuring Highlights costs1 (€ m) 37 Consistently profitable international operations 30 Operating income up 9.9% q-o-q at €154m, driven by other income 20 Core PPI up 3.2% q-o-q at €65m; PPI up 16.4% q-o-q at €87m 18 15
Slide 10: 2Q 2016 results review
2Q 2016 results review | Pageo
Slide 11: Loans and deposits
Loans and deposits Gross loans (€ bn) Deposits (€ bn) Δ loans l-f-l1 (€m) 83 (163) (141) 134.3% 133.0% 126.9% 125.1% 52.8 119.9% 51.7 51.7 51.3 51.0 Loans/Deposits 7.9 7.6 7.6 7.7 7.5 International 33.0 Greece 31.8 31.4 30.6 30.0 International 10.2 9.3 9.7 22.5 8.9 8.5 22.0 22.1 21.9 21.9 Business 0
Slide 12: Assets
Assets Total assets (€ bn) Gross Loans Consumer 12% Corporate 72.7 38% Mortgages 36% Small Business Net loans and advances to customers 14% 39.5 Securities Trading & other GGBs 6% 11% Securities 15.1 GTBs 3.8 13% PP&E, intangibles and other assets Derivatives 2.3 Held for Sale 2.2 Other Loans and ad
Slide 13: New time deposits spreads and client rates (Greece)
New time deposits spreads and client rates (Greece) Time deposit client rates (bps) Deposits mix 2Q15 2Q16 Core 58% Core 178 46% Time 174 165 54% Time 173 42% 153 139 128 126 New time deposit spreads (bps) 114 111 112 106 105 (113) (104) (109) 103 (114) 100 (110) (117) (117) 97 99 97 92 91 89 89 (10
Slide 14: Net interest income
Net interest income NII breakdown (€ m) NII per region (€ m) 375 383 388 366 360 100 104 106 International 103 102 282 263 258 276 279 Greece Loan margin 517 497 497 496 487 2Q15 3Q15 4Q15 1Q16 2Q16 NII evolution q-o-q (€ m) Bonds & other 61 48 53 47 55 Money market & Repos (17) (7) (13) (13) (21) 7
Slide 15: Spreads & net interest margin
Spreads & net interest margin Lending spreads (Greece, bps)1 Deposit spreads (Greece, bps) (4) (7) (13) (24) (32) 1M avg Euribor 525 542 525 508 507 Corporate (36) (34) (38) (48) Savings (56) and sight 480 477 Total Total 479 467 (72) (73) (75) 460 455 460 (89) Time 446 (107) (104) (108) 435 436 Ret
Slide 16: Commission income
Commission income Commission income breakdown (€ m) Commission income per region (€ m) Fees / Assets excl. Total fees 0.44% 0.47% 0.47% 0.46% 0.41% Govt. guarantees expense excluding 82 74 83 84 81 Govt. guarantees 0.38% 0.40% Fees / Assets expense 0.36% 0.34% 0.26% 71 67 62 68 67 68 71 62 12 48 13
Slide 17: Operating expenses
Operating expenses1,2 OpEx per region (€ m) OpEx breakdown (€ m) Greece (4.0%) 257 264 513 (2.0%) 256 253 250 503 43 41 Depreciation 63 65 65 66 67 International 195 188 Administrative 193 192 199 188 183 Greece Staff 275 275 2Q15 3Q15 4Q15 1Q16 2Q16 1H15 1H16 Cost-to-income ratio (%) Headcount and
Slide 18: Asset Quality
Asset Quality | Page 17
Slide 19: Asset quality metrics - 90dpd loans
Asset quality metrics - 90dpd loans 90dpd ratio per segment (%) 90dpd ratio per region (%) €3.0bn €4.8bn €3.9bn €6.0bn €17.7bn 37.4 37.7 37.5 37.6 36.6 Greece 53.9 48.0 35.0 35.2 34.8 34.7 34.3 Group 34.7 30.6 26.7 21.1 20.7 20.9 19.6 17.7 International 2Q15 3Q15 4Q15 1Q16 2Q16 Consumer Mortgages Sm
Slide 20: 90dpd formation per segment (Greece)
90dpd formation per segment (Greece) Mortgages (€ m) Consumer (€ m) 245 221 216 205 164 149 143 135 171 160 138 129 84 82 83 122 119 54 72 66 115 109 55 41 43 35 35 36 94 84 84 17 72 73 56 22 (12) (39) 4Q11 2Q12 4Q12 2Q13 4Q13 2Q14 4Q14 2Q15 4Q15 2Q16 4Q11 2Q12 4Q12 2Q13 4Q13 2Q14 4Q14 2Q15 4Q15 2Q1
Slide 21: 90dpd formation analysis (Greece)
90dpd formation analysis (Greece) 90dpd formation (€ m) 2Q16 Modifications breakdown Short Term 18% 207 164 111 49 Long Term1 (18) 90dpd formation 82% 1,101 900 745 775 788 Inflows Reverse ratio (Modifications / Inflows) Modifications 102% 94% 88% (581) 78% 81% (726) (789) (806) (895) (9) (11) (15)
Slide 22: Non Performing Exposures (EBA) metrics (Group)
Non Performing Exposures (EBA) metrics (Group) NPEs (€ bn) NPEs per region Provisions & 1Q16 2Q16 Total NPEs Provisions/ collaterals / formation formation NPEs ratio3 NPEs NPEs 22.6 22.7 23.0 22.0 22.3 (€ m) (€ m) (€ bn) (%) (%) (%) Consumer 35 38 3.4 63.9 76.6 81.5 4.5 4.9 5.6 6.2 6.7 1 NPF Mortgag
Slide 23: International operations
International operations Page 22
Slide 24: International presence
International presence Total Assets (€ bn) 1.6 Net Loans (€ bn) 0.3 Deposits (€ bn) 1.2 Total Assets (€ bn) 1.3 Net Loans (€ bn) 0.8 Deposits (€ bn) 0.7 Total Assets (€ bn) 3.0 Branches (#) 80 Net Loans (€ bn) 1.7 Deposits (€ bn) 1.9 Branches (#) 147 Total Assets (€ bn) 3.2 Net Loans (€ bn) 2.3 Tota
Slide 25: Income statement highlights
Income statement highlights Core PPI (€ m) Pre Provision Income (€ m) 87 2Q15 14 3 3Q15 13 75 18 ROM 69 2 LUX 4Q15 8 3 65 63 2 16 8 1Q16 12 15 3 8 13 CYP 2Q16 17 7 10 9 33 SER 8 2Q15 25 32 3Q15 26 25 26 24 BUL BUL 4Q15 24 25 1Q16 25 15 14 16 ROM 10 2Q16 29 2Q15 3Q15 4Q15 1Q16 2Q16 2Q15 9 Net Profit
Slide 26: Operating expenses
Operating expenses OpEx per Country (€ m) OpEx breakdown (€ m) 128 133 15 66 67 17 Depreciation 63 65 65 4 5 5 4 5 LUX 5 7 7 6 6 11 11 11 59 11 11 CYP 57 Administrative 20 21 20 18 19 SER BUL 24 24 26 25 23 58 Staff 54 ROM 2Q15 3Q15 4Q15 1Q16 2Q16 1H15 1H16 Cost-to-income ratio (%) Cost-to-average a
Slide 27: Gross Loans
Gross Loans Romania (€ m) Bulgaria (€ m) 2,654 2,604 2,489 2,534 2,516 2,340 2,494 2,307 368 361 2,244 389 387 383 Consumer 14% 585 2,046 18% 560 536 528 Consumer 359 871 47% 779 765 868 53% 764 33% Mortgage 817 765 753 733 Mortgage 35% 725 6M16 1,415 6M16 1,366 1,363 1,348 1,375 Business 1,087 1,01
Slide 28: Deposits
Deposits Romania (€ m) Bulgaria (€ m) 2,623 2,675 2,260 2,262 2,351 969 937 1,850 1,893 Time 1,794 711 807 850 1,684 1,600 35% 40% 1,092 1,117 1,128 1,087 Time 65% 1,050 60% 1,549 1,654 1,737 Core 1,455 1,501 597 702 733 765 Core 6M16 550 6M16 6M15 9M15 FY15 3M16 6M16 6M15 9M15 FY15 3M16 6M16 Serbia
Slide 29: Asset quality
Asset quality Romania Bulgaria 72.0% 63.6% 64.5% 64.8% Coverage 68.1% 66.9% 59.7% 60.3% 66.3% 67.2% Coverage 32.6% 31.6% 32.0% 31.7% 90dpd 26.6% 23.2% 23.1% 23.4% 19.9% 20.1% 90dpd 90dpd gross 90dpd gross formation 7 2 10 1 9 formation (€ m) - (€ m) (9) (3) (4) (2) 2Q15 3Q15 4Q15 1Q16 2Q16 2Q15 3Q15
Slide 30: Key figures – 2Q16
Key figures – 2Q16 Romania Bulgaria Serbia Cyprus Lux Sum Assets 2,969 3,248 1,257 4,092 1,582 13,148 Gross loans 2,046 2,604 891 1,582 348 7,471 Balance Sheet (€m) Net loans 1,654 2,293 789 1,510 347 6,593 Balance 90dpd Loans 544 517 149 109 2 1,321 Sheet Deposits 1,893 2,675 713 3,646 1,226 10,153
Slide 31: Appendix I – Supplementary information
Appendix I – Supplementary information Page 30
Slide 32: Income statement highlights (Greece)
Income statement highlights (Greece) Operating income (€ m) Operating expenses (€ m) 374 372 332 302 301 226 178 177 188 183 2Q15 3Q15 4Q15 1Q16 2Q16 2Q15 3Q15 4Q15 1Q16 2Q16 Net Profit before discontinued operations, restructuring Provision charge (€ m) costs & tax adj.1 (€ m) 1,794 10 23 1 (112) 2
Slide 33: Summary performance
Summary performance Balance sheet – key figures Income statement – key figures €m 2Q16 1Q16 €m 2Q16 1Q16 Gross customer loans 51,039 51,323 Net interest income 387.7 382.8 Provisions (11,495) (11,504) Commission income 71.3 67.8 Net customer loans 39,544 39,819 Operating income 526.5 514.1 Customer
Slide 34: Consolidated quarterly financials
Consolidated quarterly financials Income Statement (€ m) 2Q16 1Q16 4Q15 3Q15 2Q15 Net Interest Income 387.7 382.8 375.3 359.9 365.9 Commission income 71.3 67.8 61.7 47.7 66.8 Other Income 67.4 63.5 (7.5) 53.6 0.6 Operating Income 526.5 514.1 429.5 461.2 433.2 Operating Expenses (249.9) (253.0) (291.
Slide 35: Consolidated financials
Consolidated financials Income Statement (€ m) 6M16 6M15 Δ y-o-y (%) Net Interest Income 770.5 727.6 5.9 Commission income 139.2 134.4 3.6 Other Income 130.9 8.6 Operating Income 1,040.6 870.6 19.5 Operating Expenses (503.0) (484.0) 3.9 Pre-Provision Income 537.6 386.6 39.1 Loan Loss Provisions (397
Slide 36: Appendix II – Macroeconomic update
Appendix II – Macroeconomic update Page 35
Slide 37: Short-term macroeconomic outlook improves
Short-term macroeconomic outlook improves Following successful completion of 1st program review Successful completion of 1st program review opened the door for: Release of ESM loan tranche (€7.5bn in Jun. 2016 + €2.8bn by early Oct.) to service external debt & clear arrears Re-introduction of
Slide 38: Domestic economic activity
Domestic economic activity Gradual stabilization following last summer’s turbulence Economic Sentiment: gradual recovery continues PMI manufacturing: struggling to surpass the boom-bust threshold Retail Sales Volume: negative trajectory continues Industrial Production : positive signs in recent mont
Slide 39: Economic slowdown milder than expected
Economic slowdown milder than expected Gradual recovery expected from H2 2016 onwards Real GDP s.a.: -1.0% YoY in H1-16 vs. – 1.2% YoY in H2-15 Inflation rate: recent uptick due to increased taxation Why the recession post-CCs has proved milder than expected? Domestic drivers: agreement on 3rd econo
Slide 40: Progressive improvement in domestic financial conditions
Progressive improvement in domestic financial conditions Following completion of 1 st program review, reinstatement of waiver Stabilization of macro environment & gradual relaxation of CCs to facilitate return of bank deposits Deposit outflows by private-sector residents amounted to c. €42.5bn i
Slide 41: Greece outlook 2016
Greece outlook 2016 Macro indicators: realizations & forecasts 2015, €bn 2015 2016 2017 (nominal) Real YoY% Real YoY% Real YoY% GDP 176.0 -0.2 -0.5 2.3 Private Consumption 123.8 0.3 -0.9 1.3 Government Consumption 35.2 0.0 -1.7 -0.1 Gross Capital Formation 17.3 -13.1 3.2 12.7 Gross Fixed Capital For
Slide 42: Medium-term growth drivers
Medium-term growth drivers Real GDP (Index 2007 = 100) Tourism (focus on promising sub-sectors: home-porting EC Spring for cruises, health tourism, city breaks, other) Forecasts Transportation and Logistics (positive externalities to other important -0.3% sectors of the economy e.g. manufacturing) 2
Slide 43: Milestones for disbursement of €2.8bn ESM loan sub-tranche
Milestones for disbursement of €2.8bn ESM loan sub-tranche To be completed by late Sep. 2016 Pension reform Completion of pending issues for the harmonisation of social security contributions - pending Bank Governance Assessment of the four systemic banks' BoD members (key deliverable)- completed Fu
Slide 44: 2nd program review: key items in the agenda
2nd program review: key items in the agenda Expected to commence in October 2016 Policy areas Key deliverable Alignment of collective dismissals, industrial action framework & collective bargaining with EU best practices Labour Market & Human Capital Adoption of an integrated action plan for fightin
Slide 45: Appendix III – Glossary
Appendix III – Glossary Page 44
Slide 46: Glossary - Methodology
Glossary - Methodology 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 Financial Reporting Standards (IFRS). Additional sources used, include information derived
Slide 47: Glossary – Definition of Financial measures / ratios
Glossary – Definition of 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 Dividend income, Net trading income, Gains less losses from investment securities and net
Slide 48: Glossary – Definition of Financial measures / ratios
Glossary – Definition of Financial measures / ratios Cost of Risk: Impairment losses on Loans and Advances charged in the reported period, annualized and divided by the average balance of Loans and Advances to Customers. The average balance of Loans and Advances to Customers is calculated as the ari
Slide 49: Glossary – Definition of Financial measures / ratios
Glossary – Definition of Financial measures / ratios Loans to Deposits: Net Loans and Advances to Customers (net of Impairment Allowance) divided by Due to Customers at the end of the reported period. Risk-weighted assets (RWAs): Risk-weighted assets are the bank's assets and off-balance-sheet expos
Slide 50: Investor Relations contacts
Investor Relations contacts Dimitris Nikolos +30 210 3704 754 E-mail: dnikolos@eurobank.gr Yannis Chalaris +30 210 3704 744 E-mail: ychalaris@eurobank.gr Christos Stylios +30 210 3704 745 E-mail: cstylios@eurobank.gr E-mail: investor_relations@eurobank.gr Fax: +30 210 3704 774 Internet: www.eurobank