Eurobank S.a. · ATHEX:EUROB

Eurobank — Eurobank Ergasias — Debt Investor Presentation (October 2017)

65 slides from Eurobank's debt investor presentation, October 2017

1. Slide 1: Covered Bond Investor Presentation

   Covered Bond Investor Presentation October 2017

2. Slide 2: Table of contents

   Table of contents Eurobank Overview and Financials 2 Capital and Liquidity 13 Asset Quality 18 Eurobank Mortgage Business: Loans Origination and Management 26 Eurobank Global Covered Bond Programme I 38 Appendix I – Macroeconomic Update 51 Appendix II – Legal Framework Comparison 57 Appendix II – Gl

3. Slide 3: Eurobank Overview and Financials

   Eurobank Overview and Financials

4. Slide 4: Eurobank overview

   Eurobank overview Key Highlights Key Figures 1 Most private bank in Greece, 97.62% owned today by private (€bn, Unless Otherwise Stated) June 2017 investors (institutional and retail) and 2.38% by the HFSF Customer loans (net) 38.8 Customer deposits 34.1 2 Market leader in attractive fee generating

5. Slide 5: Eurobank is the most private bank in Greece

   Eurobank is the most private bank in Greece 60% Private Shareholders 74% 89% 98% Hellenic 40% Financial Stability Fund 26% 11% 2% Eurobank Alpha Piraeus NBG Source: Bank’s registry data. Page 4

6. Slide 6: Leading position in fee generating activities

   Leading position in fee generating activities Equity Brokerage Securities Services  The sole provider in Greece (ISO certified) offering a full  Market leader with full service equity brokerage and suite of securities services in line with international research firm standards  Voted best brokera

7. Slide 7: Eurobank receives international recognition – recent awards

   Eurobank receives international recognition – recent awards Banking products and Services Digital Banking  Best SMS/Text Banking in Western Europe, Most Admired Companies #8, 2017 – Greece -Fortune 2017 – Greece Magazine and KPMG Survey  Best Consumer Digital Bank in Greece, 2017 - Greece  Best C

8. Slide 8: International presence

   International presence Total Assets (€ bn) 1.5 Net Loans (€ bn) 0.5 Deposits (€ bn) 1.2 Total Assets (€ bn) 1.3 Net Loans (€ bn) 0.9 Deposits (€ bn) 0.8 Total Assets (€ bn) 2.6 Branches (#) 80 Net Loans (€ bn) 1.7 Deposits (€ bn) 1.9 Branches (#) 147 Total Assets (€ bn) 3.4 Net Loans (€ bn) 2.4 Tota

9. Slide 9: 2Q17 results

   2Q17 results1 Highlights Key financials 1 Net profit €40m in 2Q17 and €76m in 1H17 €m 2Q17 1Q17 Δ(%) 1H17 1H16 Δ(%)  NII up 2.0% q-o-q; stable y-o-y Net interest income 388.9 381.5 2.0 770.4 771.0 (0.1) Banking fee and Commission  Banking fee and Commission income up 4.5% q-o-q; up 19.4% y-o-y 71.

10. Slide 10: Net interest income

    Net interest income NII breakdown (€ m) NII per region (€ m) Total NII 383 388 389 390 381 389 383 388 389 390 381 389 104 106 104 107 108 108 International Greece 282 285 283 274 279 281 Loan margin 496 487 480 470 442 447 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 NII evolution q-o-q (€ m) 3 389 381 1 0 6 0 (3

11. Slide 11: Banking fee and Commission income

    Banking fee and Commission income Banking fee and Commission income breakdown (€ m) Banking fee and Commission income per region (€ m) Fees excl. €m 73 71 70 75 71 75 Govt. guarantees bps 41 40 41 45 44 47 71 72 expense 57 61 66 69 71 72 69 19 66 21 Lending 18 61 24 20 19 57 28 28 25 27 26 Internati

12. Slide 12: Operating expenses

    Operating expenses OpEx per region (€ m) OpEx breakdown (€ m) Greece (3.5%) 502 (2.6%) 489 36 33 Depreciation 251 250 247 243 245 242 194 181 Administrative 66 68 66 61 66 67 International Staff 272 275 1H16 1H17 Headcount and network evolution (#) Branches (#) 915 856 840 839 839 838 186 182 181 18

13. Slide 13: Capital and Liquidity

    ee urobank | Capital and Liquidity

14. Slide 14: Capital position

    Capital position Phased-in CET1 Fully loaded Basel III CET1 (FLB3) 49bps 17.4% 250bps 16.9% 3bps 17.3% 10bps 0 17.4% 5bps 17.4% 14.4% 13.8% 60bps 1 1Q17 CET1 2Q17 result properties sale FLB3 incl. pref. 2Q17 pro-forma DTA phase out 2Q17 pro-forma Preference adjustments 2Q17 CET1 AFS & other 2Q17 pro

15. Slide 15: Redemption of preference shares through issuance of Tier II bonds

    Redemption of preference shares through issuance of Tier II bonds Tier II bonds Total Capital (FLB3)  Eurobank plans to redeem €950m state preference shares through issuance of Tier II bonds in 4Q17 250bps 17.1%  Coupon c.6.4%1 payable in cash, tax deductible 14.6%  Non-convertible 12.25%  Tier

16. Slide 16: Funding and liquidity

    Funding and liquidity Eurosystem funding (€ bn) Comments 34.0 32.7  Current ELA funding at €9.9bn; €2.5bn down from 2017 peak  Outstanding Pillar II bonds €1.0bn1 9.8  Group deposits up by €0.4bn q-o-q; fully offsetting 1Q17 outflows 19.0  TLTRO II €1.3bn 15.7  c75% of Interbank repos with Gree

17. Slide 17: Loans and deposits

    Loans and deposits Gross loans (€ bn) Deposits (€ bn) Δ loans l-f-l1 (€m) 54 (195) 348 119.9% 51.0 50.6 50.7 117.2% 50.2 50.1 114.8% 115.1% 113.8% 7.5 7.4 7.5 International Loans/Deposits 7.5 7.7 34.0 33.7 34.1 Greece 33.0 33.4 Business 10.2 10.6 10.7 10.4 21.9 21.7 21.7 21.4 10.2 International 21.5

18. Slide 18: Asset Quality

    ee urobank | Asset Quality

19. Slide 19: Strong asset quality profile versus domestic peers

    Strong asset quality profile versus domestic peers NPE ratio (Group)1 NPE coverage (Group)1 56% 54% 52% 51% 48% 44% 45% 45% Eurobank Peer 1 Peer 2 Peer 3 Eurobank Peer 1 Peer 2 Peer 3 1. Latest available data Page 18

20. Slide 20: First NPE portfolio sale in the Greek market by a Systemic bank

    First NPE portfolio sale in the Greek market by a Systemic bank First NPE sale in the Greek market  Portfolio of consumer unsecured NPE loans Perimeter 50% 50%  c.€1.5bn unpaid principal balance of which c. €620m on balance sheet exposure 72%  Intrum is the industry-leading provider of Credit Man

21. Slide 21: Asset quality

    Asset quality NPEs formation1 (€ m) 90dpd formation1 (€ m) Coverage (%) 50.7 50.0 50.0 50.7 50.8 51.1 Coverage (%) 64.3 65.0 65.5 66.1 65.5 65.3 Ratio (%) 44.2 45.1 45.6 45.2 45.0 44.1 Ratio (%) 34.8 34.7 34.8 34.7 34.8 34.6 492 154 370 91 6 Int'l 149 Int'l 42 85 Greece Greece (170) (16) (28) (108)

22. Slide 22: NPEs formation per segment (Greece)

    NPEs formation per segment (Greece) Mortgages (€ m) Consumer (€ m) 315 278 35 38 28 100 22 (9) (22) (2) (7) (15) 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 Small business (€ m) Corporate (€ m) 139 71 51 12 14 (15) (24) (27) (36) (73) (67) (60) 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 1Q16 2Q16

23. Slide 23: NPEs analysis (Greece)

    NPEs analysis (Greece) Change of stock NPEs (€ m) Retail portfolio PEs NPEs 512 Performing Non - Performing 109 112 € 9.2 bn € 9.3 bn Δ stock NPEs (155) (254) Non- Performing Forborne 90dpd (395) Performing Forborne € 2.0 bn € 4.2 bn Non- Performing Forborne 0-89dpd € 2.7 bn 513 388 Corporate portfo

24. Slide 24: NPEs metrics (Group)

    NPEs metrics (Group) 90dpd bridge to NPEs (€ bn) NPEs per segment and region Provisions & Provisions/ Total NPEs NPEs ratio4 collaterals / 0.8 NPEs NPEs 22.1 (€ bn) (%) (%) (%) 4.0 Consumer 3.4 64.6 80.1 85 17.3 Mortgages 6.3 40.0 34.7 105 Small Business 4.3 66.4 44.2 100 Total Retail 14.0 50.9 48.6

25. Slide 25: Asset quality metrics - 90dpd loans

    Asset quality metrics - 90dpd loans 90dpd ratio per segment (%) 90dpd ratio per region (%) €3.0bn €5.1bn €3.7bn €5.5bn €17.3bn 37.5 37.6 37.7 37.7 38.0 38.0 Greece 52.1 47.9 34.8 34.7 34.8 34.7 34.8 34.6 34.5 29.1 28.7 Group 17.7 17.5 17.3 16.9 15.7 International Consumer Mortgages Small Business Co

26. Slide 26: Eurobank Mortgage Business: Loans Origination and Management

    Eurobank Mortgage Business: Loans Origination and Management

27. Slide 27: Individual banking general division – core functions

    Individual banking general division – core functions CEO Head of Retail Banking Head of Individual Banking Finance & Administrative Services Individual Segment Cards - Loans Business Credit & Business Process Underwriting Business Development & Loyalty Programs Operational Risk Management  Mortgage

28. Slide 28: Residential mortgage commercial strategy

    Residential mortgage commercial strategy  Market Leader in new originations Commercial  Target populations of middle to upper class profile Strategy Key Points  Concentrated in primary geographical locations  Exploit relationship building and cross selling  Product offered is Mortgage loans Eur

29. Slide 29: Mortgage loans underwriting policy

    Mortgage loans underwriting policy Credit Decision Key Components Credit Scoring  The Credit Scoring Models currently in place take into account all aspects of the Credit Profile:  Customer Demographics and Loan Characteristics  Past Credit History & Relationship with the Bank  Financial Status,

30. Slide 30: Origination process - mortgages

    Origination process - mortgages Collateral Valuation Contract Preparation / Sales Channel Sales & Distribution & Loan Approval Disbursement 1  Branch Network 3  Efficient document scanning at 5  Print out contract and obtain sales point customer signature  Selected Real Estate Brokers  Sent leg

31. Slide 31: Property valuation process

    Property valuation process Technical valuation process Eurobank Property Services Valuer Eurobank Property Services  Receive valuation order electronically  Receive valuation order and  Check valuation report documents electronically  Assign valuer.  Obtain required reviewer approvals  Conduct

32. Slide 32: Overview of mortgage new origination

    Overview of mortgage new origination  Strategy for new origination targets high-value / low-risk customers, through low risk channels, mainly in urban areas, resulting in very good credit quality of new vintages  As a result, approval rates remain at high levels, despite strict credit policy frame

33. Slide 33: State of the art structure of Trouble Assets Group & in accordance with regulatory directions

    State of the art structure of Trouble Assets Group & in accordance with regulatory directions Troubled Assets Group structure Strategic Objectives of TAG Eurobank aims to provide the most efficient and effective Troubled CEO Assets Management services in Greece by employing best-in-class strategies,

34. Slide 34: TAG retail remedial key strategic priorities

    TAG retail remedial key strategic priorities 1. Achieve NPE targets and monitoring indicators  Minimize inflow to NPE  Maximize outflow from NPE (curing) 2. Upgrade our operational model in order to:  Increase modification volumes, thus increasing outflows  Reduce re-default rates  Streamline c

35. Slide 35: Eurobank FPS: a unique advantage

    Eurobank FPS: a unique advantage  Eurobank FPS is a fully owned subsidiary established in 2006  Eurobank FPS obtained a servicer license in early 2017 and is regulated by Bank of Greece  Eurobank FPS will manage the first sold portfolio of Eurobank unsecured consumer NPLs, acquired by 3rd party f

36. Slide 36: Retail remedial employs a range of organic strategies to address NPE reduction

    Retail remedial employs a range of organic strategies to address NPE reduction Overview of high-level strategies for Customer Segments Action Type Description  For customers that have missed some payments but still are in early Collections stage arrears or customers under a long-term modification 

37. Slide 37: Forced liquidation process

    Forced liquidation process Code Collection of Extrajudicial Payment Foreclosure Auction of Auction Statement Order Conduct Proceeds After the Code Issuance of Foreclosure process The auction date is Ranking list of of Conduct payment executed by a lawyer mandatory within 7 claims is being applied, o

38. Slide 38: Eurobank Global Covered Bond Programme I

    Eurobank Global Covered Bond Programme I

39. Slide 39: Summary of the programme

    Summary of the programme Issuer/Originator/Servicer Eurobank Ergasias S.A. Issuer Ratings RD/Caa3/CCC+ (Fitch/Moody’s/S&P) Covered Bond Rating B3 [Expected] (Moody’s) Programme Size EUR 5.0bn Cover Pool Prime Greek residential mortgage loans (100%) Max. LTV 80%, to be applied for calculations on tes

40. Slide 40: Covered bond structure

    Covered bond structure 4 Oversight 2 Interest Rate Swap1 Swap Counterparty Covered Bond Swap1 Covered 1 Bonds (Issuer/ Originator/Servicer) Covered Bond Investors 3 Monitoring Covered Bond Proceeds Asset Monitor Cover Pool 1 Issuance and Segregation of Assets 2 Hedging  Eurobank’s Global Covered Bo

41. Slide 41: Issuer events and events of default

    Issuer events and events of default Issuer event Events of default 1. An Issuer Insolvency Event 1. On the Extended Final Maturity Date, failure to pay any amount of 2. Failure to pay any amount of principal (including the Final Redemption principal due, which is not remedied within a period of 7 da

42. Slide 42: Statutory tests and amortisation test

    Statutory tests and amortisation test  The Euro Equivalent of the Principal Amount Outstanding of all Series of Covered Bonds, together with all accrued interest, is not greater than 80% of the Nominal value of the Cover Pool as at the last Nominal Value Test calendar day of the immediately precedi

43. Slide 43: Other structural features

    Other structural features Description Trigger  This is sized to cover interest payments due on the Covered Fully funded on day one Bonds, all amounts to be paid to a Covered Bond Swap Reserve Ledger Provider and all amounts paid to other Secured Creditors for the immediately following 12 month peri

44. Slide 44: Conditional pass-through mechanism

    Conditional pass-through mechanism Eurobank’s CPT structure is akin to the Dutch CPT structures Issue Date Timely payment of principal and interest by the Issuer Original Tenor Any non payment by the Trigger of cross default Yes No Issuer is a payment default provisions for the Issuer Full Redemptio

45. Slide 45: Greek covered bond legislative framework

    Greek covered bond legislative framework Article 152 of Law 4261/2014 and Bank of Greece Act nr. 2620/28.8.2009 Factors Greece  Universal credit institution or Special Purpose Entities (SPE)  Having Greece or another EEA country as home member state Eligible Issuers  Satisfying certain minimum ri

46. Slide 46: Covered bond eligibility criteria

    Covered bond eligibility criteria Certain Individual Eligibility Criteria 1. Existing Loans, denominated in Euro and owned by individual borrowers 2. Governed by Greek law 3. Secured by a valid and enforceable first ranking mortgage and / or mortgage pre-notation over completed residential property

47. Slide 47: CBPP3 eligibility criteria

    CBPP3 eligibility criteria Eligibility Criteria General CBPP3 Criteria Additional Criteria (Greece & Cyprus) Eurobank To be eligible for the CBPP3 covered bonds must be ECB repo eligible including the acceptance of the covered bonds as own-used collateral (i.e. “self-repo”) Currency Only EUR-denomin

48. Slide 48: Cover pool characteristics (1/3)

    Cover pool characteristics (1/3) Preliminary Mortgage Pool Summary Seasoning(1) in months As of 30.09.2017 Currency: EUR W.A. Seasoning: 8.2 years Aggregate Original Principal Outstanding Balance (mn) 1,015.5 Aggregate Current Principal Outstanding Balance (mn) 694.5 44.2% Average Current Principal

49. Slide 49: Cover pool characteristics (2/3)

    Cover pool characteristics (2/3) Original Loan to Value(1) Current Loan to Value(1) W.A. Original Loan to Value: 60.3% W.A. Current Loan to Value: 65.1% 20.2% 28.4% 18.4% 18.5% 13.7% 12.1% 9.8% 14.0% 13.2% 12.5% 11.4% 10.1% 5.2% 6.9% 2.1% 3.6% 0.00% - 20.01% - 30.01% - 40.01% - 50.01% - 60.01% - 70.

50. Slide 50: Cover pool characteristics (3/3)

    Cover pool characteristics (3/3) Loan Purpose and Delinquencies(1) Loan Interest Rate(1) Re- Weighted average Interest Rate: 3.2% mortgage Perfoming - Repair 1.2% 0-29 dpd 12.7% 33.6% 9.9% 26.1% Construction 23.0% 18.2% 16.4% 5.4% Purchase 63.1% 0.4% 0.0% Performing - Current 1.01% - 2.00% 2.01% - 3

51. Slide 51: Appendix I – Macroeconomic Update

    Appendix I – Macroeconomic Update Page 50

52. Slide 52: Key points and summary of views

    Key points and summary of views Recent macro & market developments  Real output grew by 0.6% YoY in H1 2017, after remaining broadly stagnant in the last couple of years  Private consumption currently the main growth driver; investment has yet to record a meaningful recovery  Jobless rate at a 67

53. Slide 53: Economic activity is recovering after the mid-2015 crisis

    Economic activity is recovering after the mid-2015 crisis Gross Domestic Product Private Consumption Government Consumption Investment Exports of Goods & Services Imports of Goods & Services Source: ELSTAT, Eurobank Research Page 52

54. Slide 54: Progress on Economy and Labor Market

    Progress on Economy and Labor Market Employment Improving and Record Tourism Revenue Unemployment rate: still elevated despite recent declines Employment: positive contribution to GDP growth 27.9% in July 2013 21.2% in June 2017 -2.3 ppts Annual Change International arrivals and receipts, Jan-Jul 20

55. Slide 55: Greek Real Estate Prices Evolution

    Greek Real Estate Prices Evolution  Continuous decline of Real Estate prices over the last 8 years.  Yet, there is a clear evidence of a declining pace in prices drop. Apartments Prices by Geographical Area Apartments Prices by Age Index 2007 = 100 Index 2007 = 100 * Provisional Data Source: Bank

56. Slide 56: Greek Residential Mortgage Market Evolution

    Greek Residential Mortgage Market Evolution Greek Mortgage Lending Market Outstanding Balances (€bn)  At December 2016, the Greek residential mortgage % of GDP loan outstanding balances reached €61.0bn, or 35% of GDP, compared to €68 bn and 38% of GDP as of EOY2015.  As new loan production remains

57. Slide 57: Appendix II – Legal Framework Comparison

    Appendix II – Legal Framework Comparison Page 56

58. Slide 58: Comparison Legal Frameworks

    Comparison Legal Frameworks Factors Greece Portugal Italy Netherlands Name of Instrument Greek Covered Bonds Obrigações Obrigações sector Obbligazioni Bancariae Dutch Covered Bonds Hipotecárias público Garantite (OBG) Special Banking Provision No Optional No No Supervision Bank of Greece Bank of Por

59. Slide 59: Appendix III – Glossary

    ee urobank | Appendix III — Glossary

60. Slide 60: 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

61. Slide 61: Glossary – Definition of Financial measures / ratios

    Glossary – Definition of Financial measures / ratios Banking Fee and 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 se

62. Slide 62: Glossary – Definition of Financial measures / ratios

    Glossary – Definition of Financial measures / ratios Provision/Gross Loans: Impairment Allowance for Loans and Advances to Customers divided by Gross Loans and Advances to Customers at the end of the reported period. 90dpd ratio: Gross Loans more than 90 days past due divided by Gross Loans and Adva

63. Slide 63: Glossary – Definition of Financial measures / ratios

    Glossary – Definition of Financial measures / ratios Loans to Deposits: 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 exposures

64. Slide 64: Contacts

    Contacts Anastasios Ioannidis +30 210 3718 935 General Manager Global Markets & Treasury E-mail: AIoannidis@eurobank.gr Christina Theofilidi +30 210 4849 893 General Manager Individual Banking E-mail: chtheofilidi@eurobank.gr Dimitris Psichogios +30 210 3718 938 Assistant General Manager Group Treas

65. Slide 65: Disclaimer

    Disclaimer Important Notice –Forward Looking Information This document has been prepared by Eurobank Ergasias S.A. (Eurobank) and is being provided to you for information purposes only and on the basis of your acceptance of this disclaimer. No representation or warranty, express or implied, is or wi

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