Eurobank S.A. · ATHEX:EUROB
Eurobank — EFG Eurobank Ergasias — H1 2007 Earnings Presentation
39 slides from Eurobank's earnings presentation, July 2007
Slide 1: 1H 07 Results
SW-EUB022-2007-03-19-CMD-V7 JULY 2007 1H 07 RESULTS
Slide 2: Cautionary Statement Regarding Forward-Looking Information
Cautionary Statement Page 2 Regarding Forward-Looking Information This presentation may contain projections or other forward – looking statements related to EFG Eurobank Ergasias S.A. that involve risks and uncertainties. Readers are cautioned that these statements represent the Group’s judgments an
Slide 3: Very favourable macro environment
Page 3 Very favourable macro environment Population, Real GDP growth, Total credit expansion, 2006, million 1Q 07, % 1Q 07, % Eurozone 313 3.1 8.2 * Greece 11 4.6 18.7 * 1st Romania 22 8.7 56.0 wave 1st wave Bulgaria 8 5.6 37.8 Serbia 11 5.8 20.8 Poland 38 7.4 27.3 2nd 2wave nd wave Turkey 73 6.8 34
Slide 4: Impressive operating performance in 1H 07
Page 4 Impressive operating performance in 1H 07 Net Profit grows 31% to € 417m Loan growth accelerates to 33.1% - gross Loans at € 40.5bn – Record quarterly loan additions of € 3.2 bn in 2Q 07 – Compared to 2Q 06, loan additions are 42% higher in Greece and 200% higher in NE Robust expansion
Slide 5: Record loan additions both in Greece and NE - loan growth at 33.1% y-o-y
Page 5 Record loan additions both in Greece and NE- loan growth at 33.1% y-o-y Group Household Lending + 29.4% 18.9 Group Lending 14.6 + 32% New Europe Mortgages 9.6 + 33.1% 40.5 7.2 1.0 + 208% 6.2 + 26.9% 1.9 + 128% 170% Consumer credit 9.3 7.4 30.5 1H 06 1H 07 New Europe 2.3 + 22% 34.3 Group Busin
Slide 6: Record growth in Wealth Management
Page 6 Record growth in Wealth Management Total AUM at € 48.9bn, up 23.7% y-o-y Customer Funds – New Europe contributes € 5.4 bn, from € 3.3 bn in 1H 06. +23.7% 48.9 – Deposits (excl. repos) grow 18.6% in Greece– expansion at 26.5% for the Group 40 12.3 + 22.7% Mutual Funds Other investment products
Slide 7: NE network at 900 units – 115 organic new openings y-t-d
Page 7 NE network at 900 units – 115 organic new openings y-t-d Network, 1H 07 200 1st wave 2nd wave Romania Poland 45 242 Serbia Ukraine 102 278 Bulgaria Turkey 33 541 7
Slide 8: NE: loans x2, profits x4
Page 8 NE: loans x2, profits x4 Total gross loans, € bn Operating income, € m +170% +85% +109% 258 organic 6.2 140 2.3 1H 06 1H 07 1H 06 1H 07 Total deposits, € bn Net profits, € m +110% 42 PAT (excl. Poland & Ukraine +331% +58% organic 3.9 1.9 9.7 21.7 Total PAT (-0.1) 1H 06 1H 07 1H 06 1H 07 8
Slide 9: NE loan additions double q-o-q
Page 9 NE loan additions double q-o-q Strong performance in Romania and Poland Loan additions (€ m) NE organic loan additions / Greek loan additions (%) 68% 1.3 bn 33 Ukraine 1.0 bn 48 Turkey 967 Universal: 78 20% DZI: 240 Tekfen: 342 313 Poland 727 669 158 557 541 199 Romania 429 54 19 279 247 219
Slide 10: NE Operating Income jumps 85% to € 258m
Page 10 NE Operating Income jumps 85% to € 258m contributing 19% of total Operating income per country Operating income contribution 19% NE share of group operating income 70.4 + 80% Bulgaria NE operating income, € m 39.2 258 109.1 + 55% Romania 70.5 10% 173 39.7 + 133% Serbia 17.0 140 19 117 Poland
Slide 11: NE profitability reaches € 42m at 10% of total
Page 11 NE profitability reaches € 42m* at 10% of total Net profits per country – 1H 07 Net profits contribution NE share of group net profits, excl. Poland &Ukraine Total NE excl. 42 + 331% Poland & Ukraine NE net profits excl. Poland & Ukraine, € m Serbia 7.9 10.1% Bulgaria 20 25.8 Romania 7.6 16.
Slide 12: New Europe business expansion supported by other strategic initiatives
Page 12 New Europe business expansion supported by other strategic initiatives Bulgaria: operational integration of DZI Bank completed within six months Serbia: completed operational and legal merger with NSB in 2Q. Agreement to acquire Prospera Securities. Romania: network expansion and reorg
Slide 13: Financial Review
Page 13 Financial Review 13
Slide 14: Outstanding NII growth at 22.3% – new record quarter at € 482m
Outstanding NII growth at 22.3% Page 14 – new record quarter at € 482 m NII jumps 8.5% q-o-q New Europe NII up 91% y-o-y, + 8.5% at 19% of Group NII 482 445 427 411 Total NII 387 342 322 304 312 99 + 91.2% y-o-y Loan margin 279 79 New Europe 65 58 47 383 + 12.7% y-o-y 366 Greece 362 354 MM mismatch
Slide 15: Robust NIM at 3.22%
Page 15 Robust NIM at 3.22% Spreads in Greece NIM at 3.22% in spite of Asset growth at 28% y-o-y 2Q 06 4Q 06 1Q 07 2Q 07 3.22 3.27 3.29 3.29 3.27 3.24 Deposits (exc. Time) 2.10 2.58 2.63 2.74 Time Deposits 0.11 0.13 0.16 0.16 61.3 Total Deposits & Repos 0.99 1.14 1.17 1.20 56.6 53.8 Wholesale Loans
Slide 16: Fees expand by 21%
Page 16 Fees expand by 21% Record net loan additions in Greece and New Europe drive lending fees up 68% y-o-y and network fees up 53% y-o-y Sοlid contribution from capital markets fees, which rise 17% q-o-q New quarterly record both in banking fees at € 139 and in total fees at €157m Total Fee
Slide 17: Record NII and Fees drive Revenues up 22.6%
Page 17 Record NII and Fees drive Revenues up 22.6% Operating Income Evolution NE expands 85%, contributing 19% to total + 6% 689 650 555 567 574 Total Operating Income -2 3 8 1 2 258 New Europe Other Gains +85% 34 55 140 9 37 Trading & Securities 32 164 147 1,080 Greece 141 Fees, Insurance & 117 13
Slide 18: Efficient operations
Page 18 Efficient operations Cost / Income (%) Cost / Income at 47.4% for the Group, 39% in Greece 47.5 47.4 46.1 Group costs expand 16.7% like-for-like, 39.8 40.7 1H 06 39.0 reflecting 110 new branch openings y-t-d in NE FY 06 1H 07 Group Greece Cost evolution Total Costs per Region 1H 06 1H 07
Slide 19: Highest credit quality ever
Page 19 Highest credit quality ever Group NPL Ratio (% of loans) NPLs at 2.57%, from 3.01% in 1H 06 Greek NPLs at 2.8% in 1H 07 vs. 5.3% for the Greek banking system (March 07) 3.02% 3.02% 3.01% 3.05% 2.76% 2.65% 2.57% Provisioning coverage at 92.43% - Coverage of non-collateralized loans at 1
Slide 20: Segmental Performance
Page 20 Segmental Performance 20
Slide 21: Profits before tax up 24% to € 516m
Page 21 Profits before tax* up 24% to € 516 m PBT* per Segment Group PBT* 06/07 growth +26% + 12% +10% + 31% + 24% 1H 07 223 Delta 516 126 416 99 1H 06 177 62 89 96 1 5 56 8 Retail Corporate Wealth Global & (7) Capital & Other Management Capital Markets New Europe 1H 06 1H 07 Figures in € m. * after
Slide 22: Retail – growing returns
Page 22 Retail – growing returns FY 06 1H 07 06/07 +14% + 11% +4% + 26% – Cost to Income 44.5% 43.6% growth – Return on Equity 40.8% 45.7% 660 – Share of profits 47.5% 43.2% 580 288 223 259 150 Retail: incorporating customer current accounts, savings, deposits, credit and debit cards, consumer loans
Slide 23: Corporate – improved quality
Page 23 Corporate – improved quality FY 06 1H 07 – Cost to Income 32.4% 32.5% 06/7 growth +8% + 8% (17%) + 12% – Return on Equity 22.6% 22.6% – Share of profits 21.1% 19.3% 163 151 99 89 53 Corporate: incorporating direct debit facilities, current 49 accounts, deposits, overdrafts, loan and other cr
Slide 24: Wealth Management – solid contribution
Page 24 Wealth Management – solid contribution FY 06 1H 07 – Cost to Income 33.6% 32.8% 06/7 growth +12% +13% + 10% – Return on Equity 77.2% 100.1% – Share of profits 12.4% 12.0% 93 84 62 56 31 Wealth Management: incorporating private banking services, including total wealth management to medium 27
Slide 25: Global & Capital Markets – outstanding results
Page 25 Global & Capital Markets – outstanding results FY 06 1H 07 06/7 +29% + 22% + 31% – Cost to Income 27.1% 21.2% growth – Return on Equity 78.1% 78.7% – Share of profits 21.4% 24.5% 160 126 124 96 Global & Capital Markets: incorporating investment 34 banking services including corporate finance
Slide 26: NE: Significant revenue delivery
Page 26 NE: Significant revenue delivery FY 06 1H 07 – Cost to Income 83.5% 77.5% 06/7 of NE established operations growth +85% + 74% + 80% – Cost to Income 97.7% 89.3% 258 231 *segmental reporting entails the internal allocation of all revenues and all costs between business units, thereby presenti
Slide 27: Robust Profitability
Page 27 Robust Profitability 27
Slide 28: Creating more value for shareholders
Page 28 Creating more value for shareholders RoE 1H 07 net profit up at € 417 m, up 31% 28.0 y-o-y and 4.5% q-o-q 27.4 23.7 Ordinary Shareholders’ Equity at €3.0bn 21.1 23.0 21.1 22.8 23.5 23.0 20.2 Preferred Equity at € 782 m Tier II capital at € 1.3bn 1Q 05 1H 05 9M 05 FY 05 1Q 06 1H 06 9M
Slide 29: Extending our financial targets to 2010
Page 29 Extending our financial targets to 2010 29
Slide 30: New Europe to contribute at least € 550m of Group earnings in 2010
New Europe to contribute at least € 550m Page 30 i.e at least 35% of Group earnings in 2010 PAT, after minorities, € m >550 >60 2 (3) 05 06 07 10 30
Slide 31: Group Net Profit of at least € 1.55 bn in 2010
Page 31 Group Net Profit of at least € 1.55 bn in 2010 Group Net Profit, € m Group Return on equity by 2010 >25% >1,550 >820 Group Cost/ Income ratio by 2010 < 45% 07 10 31
Slide 32: Appendices
Page 32 Appendices 32
Slide 33: Financial Ratios
Page 33 Financial Ratios Financial Ratios 1H 07 1H 06 Net Interest Margin 3.22% 3.29% Cost-Income 47.4% 46.1% NPLs (% of loans) 2.57% 3.01% NPLs coverage 92.4% 90.1% Provision Charge (% of net loans) 1.01% 1.22% Tier Ι Ratio * 7.1% 10.3% Total Capital Adequacy * 10.6% 12.6% ROA after tax 1.47% 1.39%
Slide 34: Summary Figures
Page 34 Summary Figures Summary Figures (€ m) 1H 07 1H 06 Δ% New Europe Net Interest Income 926.8 758.0 22.3% 177.5 Net fees & Commissions 264.5 220.1 20.2% 65.8 Insurance and Non banking fees 37.0 29.9 23.7% 0.2 Total Operating Income 1,338.8 1,091.9 22.6% 258.4 Operating Expenses 634.1 502.9 26.1%
Slide 35: Balance Sheet Figures
Page 35 Balance Sheet Figures Portfolio of Loans (Gross, € m) 1H 07 1H 06 Δ% Consumer Loans 9,327 7,350 26.9% Mortgages 9,561 7,243 32.0% Loans to Households 18,889 14,593 29.4% Small Business Loans 6,537 4,620 41.5% Loans to Medium enterprises 8,462 6,489 30.4% Loans to Large Corporates 6,648 4,744
Slide 36: Key figures of New Europe operations
Page 36 Key figures of New Europe operations Bulgaria Romania Serbia Poland Turkey Ukraine NE Δ% Total Assets €2.5bn €3.7bn €1.1bn €1.2bn €1.0bn €0.2bn €9.7bn 144% Balance Total Loans €1.9bn €2.5bn €0.6bn €0.7bn €0.4bn €0.1bn €6.2bn 170% Sheet Total Deposits €1.4bn €1.3bn €0.5bn €0.3bn €0.5bn €0.1bn
Slide 37: 1H 2007 – Summary per Segment
Page 37 1H 2007 – Summary per Segment Segmental Results 1H 07 Wealth Global & Capital Capital & Elimination NE excl. Total (€ m) Retail Corporate Management Markets Other Center New Europe Pl & Ukr Interest income 560 119 25 45 0 0 178 162 927 Net fee & commission income 30 19 61 88 0 0 66 64 264 Ne
Slide 38: 1H 2006 – Summary per Segment
Page 38 1H 2006 – Summary per Segment Wealth Global & Capital Capital & Elimination New NE excl. Total Segmental Results 1H 06 (€ m) Retail Corporate Management Markets Other Center Europe Pl & Ukr Interest income 506 98 11 49 2 0 93 92 758 Net fee & commission income 27 18 61 80 -3 0 37 37 220 Net
Slide 39: Contacts
Page 39 Contacts EFG Eurobank Ergasias, 20 Amalias Avenue, 105 57 Athens, Greece Fax: +30 210 3337 160 E-mail: investor_relations@eurobank.gr Internet: www.eurobank.gr Reuters: EFGr.AT Bloomberg: EUROB GA Investor Relations Dimitris Nikolos Tel: +30 210 3337688 E-mail: dnikolos@eurobank.gr Marle
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