Eurobank S.a. · ATHEX:EUROB
Eurobank — Q2 2018 Earnings Presentation
56 slides from Eurobank's earnings presentation, Aug 30, 2018
Slide 1: Second Quarter 2018 Results
Second Quarter 2018 Results 30 August 2018
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 2Q18 results 3 2Q18 results review 10 Asset Quality 17 International operations 26 Appendix I – Supplementary information 35 Appendix II – Macroeconomic update 39 Appendix III – Glossary 50 Page 2
Slide 4: 2Q 2018 results
Sy eurobank| 2Q 2018 results | Page 3
Slide 5: 2Q18 results
2Q18 results Highlights Key financials Net profit1 €55m in 2Q18; €113m in 1H18 €m 2Q18 1Q18 Δ(%) 1H18 1H17 Δ(%) 1 Core pre-provision income (PPI) up 6.3% q-o-q; up 1.3% y-o-y Net interest income 355.9 354.8 0.3 710.7 721.2 (1.5) NII stable q-o-q; down 1.5% y-o-y Commission income 73.8 64.0 15.3
Slide 6: Pre-provision income (PPI)
Pre-provision income (PPI) Core PPI and other income (€ m) Δ PPI (€ m) 34 28 51 33 31 Other income 208 213 217 213 Core PPI 200 10 2 244 233 1 (1) 2Q17 3Q17 4Q17 1Q18 2Q18 PPI per region (€ m) 267 242 240 244 Δ ΝΙΙ 1Q18 PPI 2Q18 PPI Δ other income Δ commission income 233 Δ opex 61 71 65 59 64 Int'l
Slide 7: Asset quality
Asset quality NPEs formation1 (€ m) 90dpd formation1 (€ m) 85 (186) (111) 26 18 Int'l (12) 4 (194) Greece Int'l (210) (199) (81) Greece (311) (77) (153) 2Q17 3Q17 4Q17 1Q18 2Q18 2Q17 3Q17 4Q17 1Q18 2Q18 NPEs ratio and Provisions / NPEs (%) Loan loss provisions (€ m) 3 56.1% 2.0% 1.9% 2.2% 1.9% 1.9%
Slide 8: Funding and liquidity
Funding and liquidity Eurosystem funding (€ bn) Highlights Current Eurosystem funding at €3.0bn; €7.0bn down from December 2017 32.7 Current ELA funding at €1.8bn; €6.1bn down from December 2017 9.8 Group deposits up by €1.1bn q-o-q; €2.6bn in 1H18 13.8 Greece deposits up €0.9bn q-o-q; €2.2b
Slide 9: Capital position
Capital position FBL 3 CET1 Phased in CET1 Total CAD 260bps 17.4% 14.8% 250bps 40bps 12.0% 11.9% - (10bps) 1Q18 FLB3 CET1 2Q18 result AFS & other 2Q18 FLB3 CET1 IFRS 9 Other 2Q18 CET1 Tier I & II Total CAD transition transitions RWAs 37,080 - 170 37,250 545 - 37,795 - 37,795 (€ m) Capital 4,443 1 (7
Slide 10: International Operations
International Operations Core PPI (€ m) Net Profit1 (€ m) 61 62 62 40 59 37 55 32 33 33 2Q17 3Q17 4Q17 1Q18 2Q18 2Q17 3Q17 4Q17 1Q18 2Q18 Loan loss provisions (€ m) Net Loans and Deposits (€ bn) 1.8% 1.6% 1.4% 1.2% 1.1% Cost of Risk 9.6 24 23 20 17 5.9 16 4.4 3.3 2.6 1.6 1.1 1.0 0.9 0.5 Int'l BUL SE
Slide 11: 2Q 2018 results review
2Q 2018 results review Page 10
Slide 12: Loans and deposits
Loans and deposits Gross loans (€ bn) Deposits (€ bn) Δ loans l-f-l1 (€m) 144 104 33 116.4% 112.0% 109.6% 102.2% 48.8 48.3 99.3% 47.2 Loans/Deposits 47.0 46.8 6.3 6.4 International 6.4 6.4 6.3 36.4 35.3 33.8 Greece 32.3 33.2 9.6 9.4 8.9 9.3 International 21.5 21.2 Business 8.6 21.1 21.0 21.0 Mortgag
Slide 13: Assets
Assets Total assets (€ bn) Gross Loans Consumer 11% Business 54% Mortgages 35% 56.8 Securities Net loans and advances to customers 36.2 Trading & other 14% Securities 7.0 GGBs PP&E, intangibles and other assets 45% Derivatives 2.9 1.8 Loans and advances to banks 2.2 Other Deferred tax asset1 4.9 gov
Slide 14: Spreads & net interest margin
Spreads & net interest margin Lending spreads (Greece, bps)1 Deposit spreads (Greece, bps) Performing 2Q17 3Q17 4Q17 1Q18 2Q18 Corporate 471 468 451 454 424 2Q17 3Q17 4Q17 1Q18 2Q18 Retail 397 384 388 384 401 Consumer 1,043 1,006 984 993 1,022 Savings & Sight (49) (50) (51) (50) (50) SBB 542 506 523
Slide 15: Net interest income
Net interest income NII breakdown (€ m) NII evolution (q-o-q, € m) Total NII 364 369 373 355 356 o/w Greece 281 286 289 274 272 o/w International 84 83 84 81 84 1 6 3 355 (2) 356 (1) (3) (3) Loan margin 425 426 426 409 407 Bonds & other 56 55 55 57 58 Money market & Repos (23) (26) (27) (30) (27) 1Q
Slide 16: Commission income
Commission income Commission income breakdown (€ m) Commission income per region (€ m) 52bps over assets 74 74 67 67 70 70 67 67 64 64 18 18 Lending 23 Int’l 17 16 21 18 22 23 21 31 Network 29 32 30 26 49 51 Greece 44 43 43 8 8 9 Capital Markets 9 5 12 13 12 13 Asset Management 10 3 3 Rental & other
Slide 17: Operating expenses
Operating expenses OpEx per region (€ m) OpEx breakdown (€ m) Greece (3.4%) 445 (2.0%) 436 226 30 32 223 223 219 217 Depreciation 45 45 46 47 45 International 161 161 Administrative 178 179 181 172 172 Greece 254 Staff 244 2Q17 3Q17 4Q17 1Q18 2Q18 1H17 1H18 Cost-to-income ratio (%) Headcount and net
Slide 18: Asset Quality
Sy eurobank| Asset Quality | Page 17
Slide 19: NPE stock evolution vs. SSM targets
NPE stock evolution vs. SSM targets 1 Stock evolution vs targets (€ bn) Δ stock NPEs (€ m) Δ stock NPEs (304) (309) (471) Actual Targets (552) (1,346) 20.4 406 457 259 287 NPE inflows 250 19.6 (364) (384) NPE outflows 18.4 (569) (478) (463) 19.8 19.4 18.1 (124) 17.8 (148) Cash Payments (119) (128) (
Slide 20: NPEs formation per segment (Greece)
NPEs formation per segment (Greece) Mortgages (€ m) Consumer (€ m) 315 278 100 38 22 35 38 28 0 7 (9) (22) (7) (2) (5) (15) (9) (90) (80) (105) 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 Small business (€ m) Corporate (€ m) 71 139 51 12 (27) (
Slide 21: NPEs metrics (Group)
NPEs metrics (Group) 90dpd bridge to NPEs (€ bn) NPEs per region Provisions & Provisions/ Total NPEs NPEs ratio4 collaterals / NPEs NPEs (€ bn) (%) (%) (%) 0.6 Consumer 2.5 58.2 87.9 94 3.2 19.0 Mortgages 6.0 39.7 41.8 112 15.2 Small Business 4.0 61.7 55.9 106 Total Retail 12.4 48.3 55.5 106 Corpora
Slide 22: Loans' stage analysis (Group)
Loans’ stage analysis (Group) Loans’ stage breakdown Provisions stock over NPEs 56.1% (€ bn) 4Q17 1Q18 2Q18 Δ q-o-q 55.9% 55.5% Stage 1 19.5 19.8 20.3 0.5 Stage 2 7.6 7.6 7.4 (0.2) 50.4% Stage 3 (NPEs) 20.0 19.6 19.0 (0.6) Total 47.1 47.0 46.7 (0.3) 4Q17 4Q17 post IFRS9 1Q18 2Q18 Stage 2 loans cover
Slide 23: Asset quality metrics - 90dpd loans
Asset quality metrics - 90dpd loans 90dpd ratio per segment (%) 90dpd ratio per region (%) €2.2bn €4.8bn €3.5bn €4.6bn €15.2bn 37.9 38.0 50.8 36.3 36.3 44.4 36.0 Greece 35.3 35.2 32.5 29.4 33.4 25.1 33.2 Group 17.7 16.7 32.5 14.4 13.1 10.0 International 2Q17 3Q17 4Q17 1Q18 2Q18 Consumer Mortgages Sm
Slide 24: 90dpd formation per segment (Greece)
90dpd formation per segment (Greece) Mortgages (€ m) Consumer (€ m) 245 221 216 83 72 66 129 55 41 109 118 35 35 36 94 101 72 84 84 73 82 17 22 6 8 16 22 31 8 (1) (3) (12) (9) (20) (39) (32) (62) (66) 4Q13 2Q14 4Q14 2Q15 4Q15 2Q16 4Q16 2Q17 4Q17 2Q18 4Q13 2Q14 4Q14 2Q15 4Q15 2Q16 4Q16 2Q17 4Q17 2Q18
Slide 25: Real Estate Portfolio (Greece)
Real Estate Portfolio (Greece) Repossessions Real Estate Portfolio1 Sales Pipeline: 260 properties of €54m value already agreed 4,3k properties of €0.5bn value 53 157 50 273 487 # Properties # Properties 66 78 106 66 68 73 61 41 33 17 8 10 11 8 4 2Q17 3Q17 4Q17 1Q18 2Q18 2Q17 3Q17 4Q17 1Q18 2Q18 Pro
Slide 26: Property Auctions progress
Property Auctions progress Property auctions breakdown Conducted auctions breakdown (Jan-Jul 2018) # of 2,579 406 1,711 properties 10% 15% 3rd parties 1% acquisitions, 12% 25% 50% 913 properties 84% 65% 34% Aquired by the Bank, 88% 16% 2017 1/1-21/02/18 28/02-31/07/18 Suspended/Cancelled Barren Cond
Slide 27: International operations
International operations Page 26
Slide 28: International presence
International presence Total Assets (€ bn) 1.3 Net Loans (€ bn) 0.5 Total Assets (€ bn) 1.4 Deposits (€ bn) 1.1 Net Loans (€ bn) 1.0 Deposits (€ bn) 0.9 Branches (#) 80 Total Assets (€ bn) 5.0 Net Loans (€ bn) 1.6 Total Assets (€ bn) 3.8 Net Loans (€ bn) 2.6 Deposits (€ bn) 4.4 Private Banking 8 Dep
Slide 29: Bulgaria P&L
Bulgaria P&L PPI (€ m) OpEx (€ m) 29 30 30 29 27 21 21 21 22 21 2Q17 3Q17 4Q17 1Q18 2Q18 2Q17 3Q17 4Q17 1Q18 2Q18 Loan loss provisions (€ m) Net Profit (€ m) 17 15 15 13 13 14 12 11 10 9 2Q17 3Q17 4Q17 1Q18 2Q18 2Q17 3Q17 4Q17 1Q18 2Q18 Page 28
Slide 30: Bulgaria B/S and Asset quality
Bulgaria B/S and Asset quality Gross Loans (€ m) 90dpd ratio and Provisions / 90dpd 2,905 77.2% 78.9% 2,778 2,770 2,843 Provisions / 2,671 Consumer 66.5% 69.1% 64.7% 90dpd 373 379 362 365 359 877 876 863 870 Mortgage 860 17.7% 16.5% 14.6% 13.1% 90dpd 14.1% 1,553 1,534 1593 1,650 Business 1,452 2Q17
Slide 31: Cyprus P&L
Cyprus P&L PPI (€ m) OpEx (€ m) 28 23 20 20 19 8 7 7 8 7 2Q17 3Q17 4Q17 1Q18 2Q18 2Q17 3Q17 4Q17 1Q18 2Q18 Loan loss provisions (€ m) Net Profit (€ m) 20 16 14 14 11 5 5 3 3 2 2Q17 3Q17 4Q17 1Q18 2Q18 2Q17 3Q17 4Q17 1Q18 2Q18 Page 30
Slide 32: Cyprus B/S and Asset quality
Cyprus B/S and Asset quality Gross Loans (€ m) 90dpd ratio and Provisions / 90dpd 1,551 1,584 1,611 1,629 95.2% 1,525 Other 89.2% 17 122 124 87.5% Provisions / 18 120 75.7% 90dpd 75.2% 1,533 1,507 1,490 1,505 Business 1,464 5.9% 6.1% 5.1% 5.0% 4.3% 90dpd 2Q17 3Q17 4Q17 1Q18 2Q18 2Q17 3Q17 4Q17 1Q18
Slide 33: Serbia P&L
Serbia P&L PPI (€ m) OpEx (€ m) 11 11 12 11 12 9 8 8 7 7 2Q17 3Q17 4Q17 1Q18 2Q18 2Q17 3Q17 4Q17 1Q18 2Q18 Loan loss provisions (€ m) Net Profit (€ m) 6 5 4 4 4 3 3 2 2 1 2Q17 3Q17 4Q17 1Q18 2Q18 2Q17 3Q17 4Q17 1Q18 2Q18 Page 32
Slide 34: Serbia B/S and Asset quality
Serbia B/S and Asset quality Gross Loans (€ m) 90dpd ratio and Provisions / 90dpd 1,031 75.0% 74.7% Provisions / 963 997 1,015 1,008 68.8% 65.6% 62.5% 90dpd Consumer 279 301 317 330 347 171 165 158 156 154 Mortgage 16.4% Business 12.0% 10.0% 513 531 540 522 529 8.3% 7.8% 90dpd 2Q17 3Q17 4Q17 1Q18 2Q
Slide 35: Key figures – 2Q18
Key figures – 2Q18 Bulgaria Cyprus Serbia Lux Sum Assets 3,779 4,965 1,407 1,332 11,483 Gross loans 2,905 1,629 1,031 454 6,019 Net loans 2,606 1,563 972 453 5,594 Balance Sheet (€m) 90dpd Loans 380 70 80 2 532 Balance Sheet NPE loans 514 90 103 2 709 Deposits 3,254 4,365 871 1,102 9,592 Operating I
Slide 36: Appendix I – Supplementary information
Appendix I – Supplementary information Page 35
Slide 37: Summary performance
Summary performance Balance sheet – key figures Income statement – key figures €m 2Q18 1Q18 €m 2Q18 1Q18 Gross customer loans 46,760 47,046 Net interest income 355.9 354.8 Provisions (10,555) (10,952) Commission income 73.8 64.0 Net customer loans 36,206 36,094 Operating income 461.0 451.5 Customer
Slide 38: Consolidated quarterly financials
Consolidated quarterly financials Income Statement (€ m) 2Q18 1Q18 4Q17 3Q17 2Q17 Net Interest Income 355.9 354.8 372.9 369.3 364.4 Commission income 73.8 64.0 69.9 66.8 66.5 Other Income 31.3 32.6 50.7 27.5 34.4 Operating Income 461.0 451.5 493.6 463.6 465.3 Operating Expenses (217.1) (218.9) (226.
Slide 39: Consolidated financials
Consolidated financials Income Statement (€ m) 1H18 1H17 Δ y-o-y (%) Net Interest Income 710.7 721.2 (1.5) Commission income 137.9 130.8 5.5 Other Income 63.9 72.3 (11.6) Operating Income 912.5 924.2 (1.3) Operating Expenses (436.1) (444.8) (2.0) Pre-Provision Income 476.5 479.4 (0.6) Loan Loss Prov
Slide 40: Appendix II – Macroeconomic update
Appendix II – Macroeconomic update Page 39
Slide 41: Recent Developments
Recent Developments • Completion of ESM programme and strong tourism season (Jan-Jun travel receipts up 18.9% YoY) support expectations for a further improvement in domestic economic activity in H2 2018; • Budget execution, positive carry over and fiscal measures agreed in the context of the 1st rev
Slide 42: Key macro indicators Realizations & forecasts
Key macro indicators Realizations & forecasts 2017, €bn* 2017* 2018** 2019** (nominal) Real (YoY%) Real (YoY%) Real (YoY%) GDP 177.7 1.4 1.9 2.3 Private Consumption 123.3 0.1 0.5 0.9 Government Consumption 35.5 -1.1 1.2 0.4 Gross Fixed Capital Formation 22.5 9.6 10.3 12.1 Exports 59.0 6.8 5.7 4.6 Im
Slide 43: Selected indicators of domestic economic activity
Selected indicators of domestic economic activity The overall trend remains positive Economic Sentiment Indicator: on an upward trend despite the recent variability PMI manufacturing: above the recession/expansion threshold for 14 months in a row Industrial production: growth improves in 2018Q2 Reta
Slide 44: Domestic labour market
Domestic labour market Conditions improving lately, but serious challenges remain Unemployment rate: still elevated despite recent declines Long term unemployment: a drain on human capital stock Jul-13 27.9% 4 Months Moving Average Long Term Unemployment: > 12 Months May-18 19.5% Labour productivity
Slide 45: Real Estate prices: Increase in H1 2018 after a multi-year decline
Real Estate prices: Increase in H1 2018 after a multi-year decline According to the Bank of Greece, residential prices followed a decreasing path from 2009 to end 2017; real estate prices increased in Q1 and Q2 2018 respectively. 1. Downward index trend mainly due to the contraction of disposable
Slide 46: Domestic financial conditions
Domestic financial conditions Gradual improvement underway Further stabilization of macro environment to facilitate return of bank deposits and relaxation of Capital Controls 1. Private-sector deposits recorded a 2.4% increase year to date; July 2018 increase at 7.5% yoy. 2. Cash outside the Greek
Slide 47: 2018 Budget Attainability of 2018 primary balance
2018 Budget Attainability of 2018 primary balance 2017 marks the 4th year out of 5 consecutive years of with a surplus position in the general government primary balance (in 2014 the primary balance was zero). FY-2017 primary surplus at 4.2% of GDP vs. a 1.75% target and FY-2017 gross public deb
Slide 48: Fiscal accounts
Fiscal accounts Expectations for fulfilling 2018 Budget execution & arrears clearance Year-to-July 2018 budget execution data compatible with the achievement of the 2018 fiscal targets: o Primary surplus at €2.0 bn against a target €0.9 bn (revenues and expenditures were above target by €0.5 bn an
Slide 49: 21 June Eurogroup agreement Main elements
21 June Eurogroup agreement Main elements Fourth (final) programme review •All agreed prior actions were deemed complete Primary surplus targets •3.5% of GDP until 2022 •2.2% of GDP on average from 2023 to 2060 Medium-term debt relief measures •Abolition of step-up interest rate margin related to de
Slide 50: Post-programme commitments (excl. privatisations)
Post-programme commitments (excl. privatisations) Page 49
Slide 51: Appendix III – Glossary
Appendix III – Glossary Page 50
Slide 52: 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 53: 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 oth
Slide 54: 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 55: 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. Phased in C
Slide 56: 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