Eurobank S.a. · ATHEX:EUROB
Eurobank — Q1 2019 Earnings Presentation
63 slides from Eurobank's earnings presentation, May 30, 2019
Slide 1: First Quarter 2019 Results
First Quarter 2019 Results 30 May 2019
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 1Q19 results 3 1Q19 results review 11 Asset Quality 18 International operations 28 Appendix I – Acceleration Plan for NPE reduction 37 Appendix II – Supplementary information 42 Appendix III – Macroeconomic update 46 Appendix IV – Glossary 57 Page 2
Slide 4: 1Q 2019 results
Sy eurobank| 1Q 2019 results | Page 3
Slide 5: 2019 Transformational Plan - Execution timetable
2019 Transformational Plan - Execution timetable Action Timetable Boards approvals of merger agreement February Merger with Grivalia EGMs April Merger Completion and new shares trading May Non-Binding Offers January €2bn mortgage NPEs Binding Offers May securitization (Pillar) Closing July Perimeter
Slide 6: 1Q19 results
1Q19 results Highlights Key financials €m 1Q19 1Q18 Δ(%) 1Q19 4Q18 Δ(%) 1 Net profit1 €27m in 1Q19 Net interest income 342.7 354.8 (3.4) 342.7 353.0 (2.9) Core pre-provision income (PPI) down 4.6% y-o-y NII down 3.4% y-o-y at €343m Commission income 65.8 64.0 2.7 65.8 94.3 (30.3) Commission in
Slide 7: Pre-provision income (PPI)
Pre-provision income (PPI) Core PPI and other income (€ m) Δ PPI (q-o-q, € m) 33 31 40 14 14 Other income 213 214 221 200 191 62 63 60 55 Int'l 62 235 Greece (10) 9 205 145 151 151 161 129 (29) (1) 1Q18 2Q18 3Q18 4Q18 1Q19 PPI per region (€ m) 254 244 235 Δ ΝΙΙ 4Q18 PPI 1Q19 PPI Δ other income Δ com
Slide 8: Asset quality
Asset quality NPEs formation1 (€ m) 90dpd formation1 (€ m) 18 (113) Int'l (79) (3) (31) (7) (110) (115) Greece (79) Int'l (86) (199) Greece (210) (322) (400) 1Q18 2Q18 3Q18 4Q18 1Q19 1Q18 2Q18 3Q18 4Q18 1Q19 NPEs ratio and Provisions / NPEs (%) Loan loss provisions (€ m) 1.9% 1.9% 2.0% 1.9% 1.8% Cos
Slide 9: Capital position
Capital position FBL 3 CET11 Phased in CET11 Total CAD1 250bps 18.2% 30bps 200bps 15.7% 13.4% 5bps 5bps 13.4% (8bps) (8bps) 4Q18 FLB3 1Q19 result Debt IFRS 16 FTA Other 1Q19 FLB3 IFRS 9 Other 1Q19 CET1 Tier I & II Total CAD CET1 Securities at CET1 transition transitions FVOCI RWAs 39,369 - - 222 159
Slide 10: Funding and liquidity
Funding and liquidity Eurosystem funding (€ bn) Deposits (€ bn) 32.7 102.2% 99.3% 9.8 95.5% 92.6% 91.7% 7.1 Net Loans / Deposits 1.4 5.1 22.9 1.3 3.2 2.0 5.7 1.2 2.0 3.8 1.3 ECB 2.0 2.0 1.5 0.5 ELA 39.1 39.4 37.6 Jun 15 Mar 18 Jun 18 Sep 18 Dec 18 Mar 19 36.4 35.3 International Interbank repos and e
Slide 11: International Operations
International Operations Core PPI (€ m) Net Profit1 (€ m) 62 63 62 40 40 60 36 55 33 31 1Q18 2Q18 3Q18 4Q18 1Q19 1Q18 2Q18 3Q18 4Q18 1Q19 Loan loss provisions (€ m) Net Loans and Deposits (€ bn) 1.2% 1.1% 1.0% 1.1% 1.2% Cost of Risk 11.22 10.4 19 17 7.02 16 16 14 6.2 4.72 4.9 3.62 3.6 2.8 1.7 1.0 0.
Slide 12: 1Q 2019 results review
1Q 2019 results review Page 11
Slide 13: Loans
Loans Gross loans (€ bn) Performing loans (€ bn) 47.0 46.8 45.4 45.0 45.0 6.4 6.3 6.4 6.4 6.5 International 27.8 28.4 28.5 27.4 27.7 International Greece 5.5 5.7 5.9 5.3 5.6 21.0 21.0 Greece 20.7 20.6 Business 20.6 Business 11.1 11.4 11.1 11.7 11.8 Mortgages Mortgages 15.1 15.1 15.0 14.9 14.8 9.1 9.
Slide 14: Balance Sheet composition
Balance Sheet composition Assets (€ bn) Liabilities and Equity (€ bn) 58.8 58.8 Equity 5.1 Net loans and 36.2 advances to customers • Core 55% 39.4 • Time 45% Trading & Deposits other 12% GGBs Securities 7.6 44% PP&E, intangibles and other assets 3.3 ECB 1.3 Derivatives 2.1 Other Other 3.8 Loans and
Slide 15: Spreads & net interest margin
Spreads & net interest margin Lending spreads (Greece, bps)1 Deposit spreads (Greece, bps) Performing 1Q18 2Q18 3Q18 4Q18 1Q19 Corporate 454 424 410 421 396 1Q18 2Q18 3Q18 4Q18 1Q19 Retail 384 401 379 380 371 Consumer 993 1,022 997 965 967 Savings & Sight (50) (50) (50) (49) (51) SBB 479 533 463 489
Slide 16: Net interest income
Net interest income NII breakdown (€ m) NII evolution (q-o-q, € m) Total NII 355 356 352 353 343 o/w Greece 274 272 266 268 254 o/w International 81 84 86 86 89 15 - (3) 4 353 Loan margin 3 343 (22) 409 407 395 370 397 (7) Bonds & other 58 57 64 50 65 Money market & Repos (30) (27) (33) (26) (27) 1
Slide 17: Commission income
Commission income Commission income breakdown (€ m) Commission income per region (€ m) 94 94 45bps over assets 79 79 74 66 74 23 66 24 64 17 64 18 15 23 23 23 Lending Int’l 18 21 37 33 31 31 70 Network 26 56 16 51 43 Greece 15 43 9 5 5 Capital Markets 13 12 13 12 12 Asset Management 3 6 3 Rental & o
Slide 18: Operating expenses
Operating expenses OpEx per region (€ m) OpEx breakdown (€ m) Greece (2.1%) 219 (0.6%) 218 219 217 226 16 29 217 218 Depreciation 47 45 47 50 50 International 80 69 Administrative 172 172 170 177 168 Greece Staff 123 120 1Q18 2Q18 3Q18 4Q18 1Q19 1Q18 1Q19 Cost-to-income ratio (%) Headcount and netwo
Slide 19: Asset Quality
Sy eurobank| Asset Quality | Page 18
Slide 20: NPE reduction Acceleration plan (FY18-FY21)
NPE reduction Acceleration plan (FY18-FY21) € bn 16.7 (13.3) (2.0) 6.6 (7.0) (1.1) 5.2 (1.4) 3.5 (1.7) FY18 Pillar Cairo FY19 FY20 FY21 Group 37.0% 16.0% 12.6% 8.8% NPE ratio Note: Estimated group NPE ratios assuming loan growth of up to 2.5% per annum and based on current assessment and assuming fu
Slide 21: Δ stock NPEs (€m)
Δ stock NPEs (€m) (151) Δ stock NPEs Group (463) (649) (1,021) (1,319) Δ stock NPEs Solo (309) (471) (108) (872) (1,178) 366 346 NPE inflows 250 287 272 (326) NPE outflows (364) (384) (401) (366) (124) (107) (93) Cash Payments (148) (114) (67) (113) (238) (245) (86) (243) (26) (8) NPE net flow (52)
Slide 22: NPEs formation per segment (Greece)
NPEs formation per segment (Greece) Mortgages (€ m) Consumer (€ m) 315 278 100 22 38 35 38 28 0 7 1 2 (9) (22) (41) (7) (2) (15) (5) (3) (80) (66) (9) (90) (105) (123) 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 Sm
Slide 23: NPEs metrics (Group)
NPEs metrics (Group) 90dpd bridge to NPEs (€ bn) NPEs per region Provisions & Provisions/ Total NPEs NPEs ratio4 collaterals / NPEs NPEs (€ bn) (%) (%) (%) Consumer 1.3 43.8 88.3 98 0.4 Mortgages 5.8 39.0 43.7 112 3.1 16.5 13.0 Small Business 3.5 57.3 51.8 106 Total Retail 10.6 44.2 52.0 102 Corpora
Slide 24: Loans' stage analysis (Group)
Loans’ stage analysis (Group) Loans’ stage breakdown Provisions stock over NPEs Δ 56.1% 55.9% (€ bn) 1Q18 2Q18 3Q18 4Q18 1Q19 q-o-q 53.7% 53.8% Stage 1 19.8 20.3 20.3 21.4 21.5 0.1 53.2% Stage 2 7.6 7.4 7.3 7.0 7.0 - Stage 3 19.6 19.0 17.7 16.7 16.5 (0.2) (NPEs) 1 Total 47.0 46.7 45.3 45.0 45.0 - 1Q
Slide 25: Asset quality metrics - 90dpd loans
Asset quality metrics - 90dpd loans 90dpd ratio per segment (%) 90dpd ratio per region (%) €1.2bn €4.7bn €3.0bn €4.1bn €13.0bn 36.3 36.0 46.7 34.4 33.2 32.5 32.8 32.6 Greece 31.2 29.0 29.0 30.9 22.2 29.3 29.0 13.1 Group 10.0 9.3 8.0 7.4 International 1Q18 2Q18 3Q18 4Q18 1Q19 Consumer Mortgages Small
Slide 26: 90dpd formation per segment (Greece)
90dpd formation per segment (Greece) Mortgages (€ m) Consumer (€ m) 216 83 129 118 101 35 35 36 84 84 82 22 73 16 18 13 6 8 22 31 8 (3) (9) (20) (1) (3) (12) (32) (14) (39) (62) (66) (81) (81) 1Q15 3Q15 1Q16 3Q16 1Q17 3Q17 1Q18 3Q18 1Q19 1Q15 3Q15 1Q16 3Q16 1Q17 3Q17 1Q18 3Q18 1Q19 Small business (€
Slide 27: Repossessed Real Estate Portfolio (Greece)
Repossessed Real Estate Portfolio (Greece) Repossessions Real Estate Portfolio1 Sales Pipeline: 121 properties of €29m value already agreed 4,8k properties of €0.6bn value 273 487 104 456 186 # Properties # Properties 66 68 74 93 28 73 3 REO Portfolios (1,056 properties) to be disposed 50 Residentia
Slide 28: Property Auctions progress
Property Auctions progress Property auctions breakdown Conducted auctions breakdown (1Q19) # of 2,579 3,601 755 properties 10% 3rd parties 28% acquisitions, 25% 41% 15% 48% 213 properties 34% 65% Acquired by the Bank, 25% 24% 85% 2017 2018 1Q19 Suspended/Cancelled Barren Conducted Page 27
Slide 29: International operations
International operations Page 28
Slide 30: International presence
International presence Total Assets (€ bn) 1.3 Net Loans (€ bn) 0.5 Total Assets (€ bn) 1.5 Deposits (€ bn) 1.1 Net Loans (€ bn) 1.0 Deposits (€ bn) 0.9 Branches (#) 80 Total Assets (€ bn) 5.6 Net Loans (€ bn) 1.7 Total Assets (€ bn) 5.71 Net Loans (€ bn) 3.61 Deposits (€ bn) 4.9 Private Banking 8 D
Slide 31: Bulgaria P&L
Bulgaria P&L PPI (€ m) OpEx (€ m) 29 30 30 27 27 24 22 21 21 22 1Q18 2Q18 3Q18 4Q18 1Q19 1Q18 2Q18 3Q18 4Q18 1Q19 Loan loss provisions (€ m) Net Profit (€ m) 18 18 17 15 10 14 9 8 8 8 1Q18 2Q18 3Q18 4Q18 1Q19 1Q18 2Q18 3Q18 4Q18 1Q19 Page 30
Slide 32: Bulgaria B/S and Asset quality
Bulgaria B/S and Asset quality Gross Loans (€ m) NPE ratio and Provisions / NPEs 2,905 2,919 2,912 2,985 2,843 379 402 423 Consumer 373 405 57.6% 58.2% 56.0% Provisions / 50.6% 52.3% NPEs 877 876 890 907 918 Mortgage 18.9% 17.7% NPE ratio 15.1% 11.2% 12.2% 1,593 1,650 1,627 1,600 1,644 Business 1Q18
Slide 33: Cyprus P&L
Cyprus P&L PPI (€ m) OpEx (€ m) 24 23 22 21 20 8 9 7 7 7 1Q18 2Q18 3Q18 4Q18 1Q19 1Q18 2Q18 3Q18 4Q18 1Q19 Loan loss provisions (€ m) Net Profit (€ m) 16 16 15 14 14 3 3 3 3 2 1Q18 2Q18 3Q18 4Q18 1Q19 1Q18 2Q18 3Q18 4Q18 1Q19 Page 32
Slide 34: Cyprus B/S and Asset quality
Cyprus B/S and Asset quality Gross Loans (€ m) NPE ratio and Provisions / NPEs 1,739 1,611 1,629 1,639 1,632 136 122 124 132 132 Other 79.0% Provisions / 72.7% 74.3% NPEs 62.2% 61.6% 1,490 1,505 1,507 1,603 1,500 Business 6.1% 5.5% 5.0% 5.5% 5.4% NPE ratio 1Q18 2Q18 3Q18 4Q18 1Q19 1Q18 2Q18 3Q18 4Q1
Slide 35: Serbia P&L
Serbia P&L PPI (€ m) OpEx (€ m) 12 12 12 11 11 8 8 8 7 7 1Q18 2Q18 3Q18 4Q18 1Q19 1Q18 2Q18 3Q18 4Q18 1Q19 Loan loss provisions (€ m) Net Profit (€ m) 6 5 4 4 3 2 3 2 2 1 1Q18 2Q18 3Q18 4Q18 1Q19 1Q18 2Q18 3Q18 4Q18 1Q19 Page 34
Slide 36: Serbia B/S and Asset quality
Serbia B/S and Asset quality Gross Loans (€ m) NPE ratio and Provisions / NPEs 1,058 1,079 1,056 1,008 1,031 363 371 Consumer 57.0% 59.1% 330 347 381 57.9% 54.2% 55.9% Provisions / NPEs 156 154 155 152 150 Mortgage 522 529 541 556 525 Business 11.0% 10.1% 8.5% 7.5% 7.8% NPE ratio 1Q18 2Q18 3Q18 4Q18
Slide 37: Key figures – 1Q19
Key figures – 1Q19 Bulgaria Cyprus Serbia Lux Sum Assets 4,167 5,601 1,470 1,271 12,509 Gross loans 2,985 1,739 1,056 477 6,257 Net loans 2,809 1,681 1,010 477 5,977 Balance Sheet (€m) 90dpd Loans 257 61 59 1 378 Balance Sheet NPE loans 336 95 79 1 511 Deposits 3,576 4,909 861 1,067 10,413 Core Inco
Slide 38: Appendix I – Acceleration Plan for NPE reduction
Appendix I – Acceleration Plan for NPE reduction Page 37
Slide 39: Corporate Transformation and Acceleration Plan for NPE reduction
Corporate Transformation and Acceleration Plan for NPE reduction The Corporate Transformation and Acceleration Plan includes: The execution of the NPE reduction plan for 2019 as submitted to the SSM in September 2018 The securitization of circa €7bn of NPEs, the management of which reflects a
Slide 40: Step 1: Cairo Securitization
Step 1: Cairo Securitization SPV (L.3156/03) (As of Mar-19) Assets Liabilities & Equity €58.8bn €58.8bn Liabilities Assets Other assets (incl. Equity Performing Loans Class A and DTC) (Senior) Cairo to be Step 1 managed by Liabilities independent Class B1 Class B2 servicer (Mezz.) (Mezz.) Other NPEs
Slide 41: Step 2: Hive-down of core banking operations
Step 2: Hive-down of core banking operations Structure after Step 1 Structure after Step 2 Shareholders Shareholders Eurobank Ergasias Listed in ASE, becomes HoldCo Eurobank Ergasias Hive-down 100% Assets Liabilities & Step 2 DTC Equity New Eurobank Senior Notes retained by New SPV Assets Liabilitie
Slide 42: Step 3: De-recognition of NPEs
Step 3: De-recognition of NPEs Shareholders Eurobank Ergasias Listed in ASE, becomes HoldCo 100% SPV Senior Notes retained by New Eurobank New Eurobank A (Senior) Assets Liabilities & DTC Equity B2 B1 Cairo (Mezz.) (Mezz.) FPS (servicer) B1 and C1 junior notes C2 C1 distributed to shareholders (Juni
Slide 43: Appendix II – Supplementary information
Appendix II – Supplementary information Page 42
Slide 44: Summary performance
Summary performance Balance sheet – key figures Income statement – key figures €m 1Q19 4Q18 €m 1Q19 4Q18 Gross customer loans 44,976 44,973 Net interest income 342.7 353.0 Provisions (8,822) (8,800) Commission income 65.8 94.3 Loans FVTPL 60 59 Operating income 422.5 461.8 Net customer loans 36,214
Slide 45: Consolidated quarterly financials
Consolidated quarterly financials Income Statement (€ m) 1Q19 4Q18 3Q18 2Q18 1Q18 Net Interest Income 342.7 353.0 352.0 355.9 354.8 Commission income 65.8 94.3 79.1 73.8 64.0 Other Income 13.8 14.5 40.1 31.3 32.6 Operating Income 422.5 461.8 471.2 461.0 451.5 Operating Expenses (217.6) (226.2) (216.
Slide 46: Consolidated financials
Consolidated financials Income Statement (€ m) 1Q19 1Q18 Δ y-o-y (%) Net Interest Income 342.7 354.8 (3.4) Commission income 65.8 64.0 2.7 Other Income 13.8 32.6 (57.8) Operating Income 422.5 451.5 (6.5) Operating Expenses (217.6) (218.9) (0.6) Pre-Provision Income 204.6 232.6 (12.0) Loan Loss Provi
Slide 47: Appendix III – Macroeconomic update
Appendix III – Macroeconomic update Page 46
Slide 48: Recent macro & market developments and FY-2019 outlook
Recent macro & market developments and FY-2019 outlook Recent macro & market developments Mild recovery continued in 2018 with real GDP growth accelerating to 1.9%, from 1.5% in 2017; exports and private consumption the main drivers; 2018Q4: 1.6 YoY% and -0.1 QoQ%, from 2.1 YoY% and 1.0 QoQ% in 20
Slide 49: Greece: Key macro indicators - Realizations & forecasts
Greece: Key macro indicators - Realizations & forecasts 2018, €bn* 2018* 2019** 2020** Real Real (nominal) Real (YoY%) (YoY%) (YoY%) GDP 184.7 1.9 2.2 2.2 Private Consumption 125.6 1.1 1.3 1.2 Government Consumption 35.4 -2.5 3.1 0.4 Gross Fixed Capital Formation 20.5 -12.2 10.1 10.8 Exports 66.7 8.
Slide 50: Exports and private consumption the main engines of growth in 2018
Exports and private consumption the main engines of growth in 2018 2018Q4: 7th quarter in a row of positive YoY growth • Good news: exports remained strong (+8.7 YoY% in 2018 vs +6.8 YoY% in 2017), private consumption on a path of mild recovery (+1.1 YoY% in 2018 vs 0.9 YoY% in 2017) • Bad news: fix
Slide 51: Selected indicators of domestic economic activity
Selected indicators of domestic economic activity Economic Sentiment: on an upward trend trajectory, however it PMI Manufacturing: stable and well above the 50 units no-change threshold deteriorates in recent months Industrial Production: growth decelerates slightly in 2019Q1 Retail Trade Volume: gr
Slide 52: Domestic Labour Market
Domestic Labour Market Improving but major challenges remain; reversion of disinvestment critical Unemployment rate: still elevated despite recent declines Employment: growth remains close to 2.0% 27.8% in Sep-13 18.5% in Feb-19 Long Term Unemployment: a drain of human capital stock Labour Productiv
Slide 53: Real Estate prices increase in FY 2018 after a multi-year decline
Real Estate prices increase in FY 2018 after a multi-year decline Between Q4 2007 and Q4 2017, apartment prices declined cumulatively by 42.3 per cent Downward index trend mainly due to the contraction of disposable income, the increase of unemployment, limited access to credit and the excess su
Slide 54: Domestic financial conditions gradually improve
Domestic financial conditions gradually improve Further stabilization of macro environment to facilitate return of bank deposits and relaxation of CCs 1. Private-sector deposits increase by €8.1bn or 6.4% in 2018; 5.9% yoy increase in March 2019 2. Cash outside the Greek banking system in March 20
Slide 55: Fiscal Deficit Corrected
Fiscal Deficit Corrected Primary balances targets over-performed but with a toll on growth: 2018 marks the 5th year in the past 6 years with a significant primary surplus in programme terms ELSTAT 2019 (1st Notification): FY-2018 primary surplus at 4.4% of GDP (4.3% of GDP in EPPS terms, Ministr
Slide 56: 2019 Budget Execution inline with targets
2019 Budget Execution inline with targets Expectations for fulfilling 2019 Budget target: Jan.-Apr. 2019 Budget execution: primary balance stood at a surplus of €1.4 bn, ca €2.1 bn higher relative to the respective budget target. Stock of arrears: €2.2 bn at end of March 2019 (increased on a mon
Slide 57: Privatizations
Privatizations PRIVATISATION STATUS COMMENTS 14 Regional Airports Concession Complete - EUR2,150 mn - OLP Complete - EUR368.5 mn - Astir Palace Vouliagmeni Complete - EUR95 mn - TRAINOSE Complete - EUR45 mn - OTE sale of 5% Complete - EUR284 mn - OLTH Complete - EUR231.9 mn - EESSTY (ROSCO) Complete
Slide 58: Appendix IV – Glossary
Appendix IV – Glossary Page 57
Slide 59: Glossary – Definition of Financial measures / ratios
Glossary – Definition of 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 Financial Reporting Standards (IFRS). Additional sources used
Slide 60: 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 net trading income, gains less losses from investment securities and other income/ (expen
Slide 61: 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 at amortized cost(the arithmetic average of Loans and Advances to Customers at a
Slide 62: Glossary – Definition of Financial measures / ratios
Glossary – Definition of 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 account credit, market and operational risk. Total Capit
Slide 63: Investor Relations contacts
Investor Relations contacts Dimitris Nikolos +30 210 3704 764 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