Eurobank S.A. · ATHEX:EUROB
Eurobank — EFG Eurobank Ergasias — H1 2010 Earnings Presentation
41 slides from Eurobank's earnings presentation, Aug 30, 2010
Slide 1: First Half 2010 Results
SW-EUB022-2007-03-19-CMD-V7 August 30, 2010 First Half 2010 Results
Slide 2: Macro environment & results highlights
Page 2 Macro environment & results highlights 2
Slide 3: Macro environment – Greece
Macro environment – Greece Page 3 Significant progress in fiscal consolidation Deficit target of 8.1% in 2010 is achievable. State spending reduced by 12.6% vs. a target of a 5.8% reduction. Revenue gathering lags targets but acceleration is expected in 2H10 as measures “kick-in”. Structur
Slide 4: Macro environment – New Europe
Macro environment – New Europe Page 4 Economic conditions are improving - 2011 prospects promising. Current account deficit at single digit. Money and FOREX markets stable with little degree of volatility. GDP expected to grow in most countries in 2010: Turkey and Poland by 6% and 3% respe
Slide 5: 2Q 2010 results highlights
2Q 2010 results highlights Page 5 Net profit of € 34m in 2Q10. Pre-provision income 5.5% down qoq at € 389m but up 6.5%yoy at € 800m. NII down 5% qoq at € 561m but up 2% yoy at € 1,153m. 1H10 OpEx at € 702m down 3%yoy on track to exceed target. Provisions up 3%qoq at € 346m with asset qual
Slide 6: Comfortable liquidity position
Page 6 Comfortable liquidity position ECB exposure at €20bn. Wholesale funding maturities profile Strong contingent liquidity 2,800 reserve of € 5bn. 2,469 2,175 No wholesale obligations remaining for 2010. 983 0 460 GGB portfolio stable compared to Funding 2010 2011 2012 2013 2014 1Q10; sho
Slide 7: Financial Review
Page 7 Financial Review 2Q 2010 Results: Assets & Liabilities actively managed and under control Pre-provision income preserved Capital strength maintained New Europe’s profitability continues 7
Slide 8: Selective loan growth and de-risking – deposit outflows contained
Selective loan growth and de-risking – Page 8 deposit outflows contained Loans – growth & de-risking Deposits – outflows contained 46.8 45.7 1.2 44.8 57.5 58.6 9.7 -1.9 43.5 56.4 9.4 8.7 -1.3 10.3 Rest of New 10.0 -0.2 9.4 +0.2 9.6 Europe 9.6 36.2 5.8 8.5 5.4 +0.6 5.2 +0.6 Poland & Cyprus 4.6 Greece
Slide 9: Asset quality trends: improvement in New Europe, stress in Greece
Asset quality trends: improvement in New Page 9 Europe, stress in Greece Group 90dpd formation 90dpd ratio +80bps +60bps +30bps 8.10% Group 90 dpd +50bps 7.27% 6.40% 6.69% +100bps 5.90% 787 +100bps 4.93% 713 3.90% 693 Greece 4.20% 4.91% 5.77% 6.18% 6.43% 7.06% 8.09% New 3.04% 5.02% 6.32% 7.08% 7.45%
Slide 10: Adequate provision coverage
Page 10 Adequate provision coverage 90dpd provision coverage: 42.0% 4,761 NPL provision coverage: 53.7% Consumer 1,236 Lending 3,722 90dpd NPLs Value of Total NPL NPL provisions provisions collaterals coverage recovery coverage coverage rates Mortgages 773 1,236 Consumer ~70% ~70% ~5% ~75% 35% Lendi
Slide 11: Financial Review
Page 11 Financial Review 2Q 2010 Results: Assets & Liabilities actively managed and under control Pre-provision income preserved Capital strength maintained New Europe’s profitability continues 11
Slide 12: Pre-provision income drops 5.5% qoq on higher funding costs
Pre-provision income drops 5.5% qoq on Page 12 higher funding costs Quarterly pre-provision income Pre-provision income movement -5.5% 0% 414 411 411 409 410 411 404 389 389 389 -31 6 363 -5 8 321* 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 1Q10 NII Fees Non core Costs 2Q10 € m. € m. * excl.
Slide 13: 1H10 pre-provision income up 6.5%yoy
Page 13 1H10 pre-provision income up 6.5%yoy +2.8% 38 1,406 1,368 -3.2% +6.5% 49 800 725 751 -23 702 -11.5% 108 -12 96 1H09 1H10 1H09 1H10 1H09 1H10 1H09 1H10 Core revenues Non - core OpEx Pre-provision € m. revenues income 13
Slide 14: Funding costs impact NII
Funding costs impact NII Page 14 621 608 608 590 590 599 592 560 566 561 544 517 Total NII 482 600 608 600 616 445 564 580 497 457 404 417 382 342 352 322 Loan margin Interest rate 11 13 17 10 3 7 4 5 gapping -13 -7 -18 -16 -9 -11 45 54 74 72 77 81 73 70 85 79 72 71 67 Capital & bonds 37 Deposit mar
Slide 15: Loan repricing continues, asset mix and higher funding costs impact NIM
Loan repricing continues, asset mix and Page 15 higher funding costs impact NIM Evolution of Greek spreads (%) Evolution of NIM (%) 1Q 09 2Q 09 3Q 09 4Q 09 1Q 10 2Q 10 NIM (%) 1Q 09 2Q 09 3Q 09 4Q 09 1Q 10 2Q 10 Core deposits -0.06 -0.24 -0.46 -0.21 -0.19 -0.17 Greece 2.34 2.54 2.54 2.59 2.48 2.32 N
Slide 16: Commission income gains 8% yoy
Page 16 Commission income gains 8% yoy Commission income evolution New Europe fees up 24%yoy Total commission income 130 133 129 253 120 124 +8% 119 113 234 New +24% 94 Europe 76 53 58 56 Lending Activities 42 44 52 42 5 5 Network & 23 21 22 Other Activities 21 25 22 19 Capital Markets 18 15 22 18 1
Slide 17: Cost containment accelerates - costs drop more than 3%yoy
Cost containment accelerates - costs drop Page 17 more than 3%yoy 2Q10 OpEx drops by 4% yoy 1H10 OpEx drops by 3.2%yoy -4% 725 -3.2% 702 New 383 298 Europe 362 363 364 0% 300 354 348 35 Depr. 33 35 36 31 30 427 -6% 402 Greece Admin. 140 133 132 133 130 125 1H09 1H10 Quarterly Greek OpEx drops by 8%y
Slide 18: Financial Review
Page 18 Financial Review 2Q 2010 Results: Assets & Liabilities actively managed and under control Pre-provision income preserved Capital strength maintained New Europe’s profitability continues 18
Slide 19: Strong capital adequacy
Page 19 Strong capital adequacy Equity movement Capital 2Q 09 FY 09 1Q 10 2Q10 Adequacy (%) 5,743 796 Equity Tier I 8.0% 8.4% 8.4% 8.0% Hybrids ratio €3.8bn €4.0bn €4.1bn €3.9bn (Core Tier 1 less 4,297 95 950 Govt. goodwill) (excludes Government prefs preference shares) -81 -45 3,587 -132 -138 3,997
Slide 20: Financial Review
Page 20 Financial Review 2Q 2010 Results: Assets & Liabilities actively managed and under control Pre-provision income preserved Capital strength maintained New Europe’s profitability continues 20
Slide 21: New Europe performance
Page 21 New Europe performance Total net loans New Europe net profits +0.5 14.4 14.9 13.8 14.0 52 46 9.1 36 3.7 FY06 FY07 FY08 1H09 FY09 1H10 € bn Total deposits +1.3 7 4 2 10. 0 9. 6 9. 7 8. 7 5. 4 -8 -11 -10 2. 9 -15 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 FY06 FY07 FY08 1H09 FY09 1H10 €
Slide 22: New Europe pre-provision income picks up and provision charges decline
New Europe pre-provision income picks up Page 22 and provision charges decline Pre- provision income picks up Provisions decline -21% +13% -11% 119 115 116 -8% 231 222 103 102 96 94 200 196 189 174 177 49 76 1H08 1H09 2H09 1H10 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 Pre-provision Profit Provisions
Slide 23: Asset quality in New Europe: continuing encouraging trends
Asset quality in New Europe: continuing Page 23 encouraging trends 13.1% 12.9% 10.8% 12.1% 9.5% 10.5% 9.0% 7.6% 8.5% 6.6% 5.8% 6.9% 90+ over av. 1.3% 1.8% 2.2% 2.4% 2.7% 3.0% loan book 129 105 71 80 63 64 40 39 46 44 32 32 28 36 34 34 14 19 Gross 90+ formation 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 1Q09 2Q09
Slide 24: New Europe profits at € 9.2m in 1H10 vs. losses a year ago
New Europe profits at € 9.2m in 1H10 vs. Page 24 losses € 26m a year ago 10.3 8.6 6.9 3.3 2.8 2.1 1.2 2.0 0.8 Net Profit -4.1 -4.1 -3.5 -4.0 -5.9 -11.1 -10.1 -12.2 -14.4 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 Poland Romania Bulgaria 7.6 8.1 6.5 6.3
Slide 25: Financial Review
Page 25 Financial Review 2Q 2010 Results: Assets & Liabilities actively managed and under control Pre-provision income preserved Capital strength maintained New Europe’s profitability continues 25
Slide 26: Summary performance overview
Page 26 Summary performance overview Resilient pre-provision profit Marginal increase in LLPs 414 404 411 389 389 363 336 346 325 287 303 Pre-provision 263 profit LLPs € m. 1Q 09 2Q 09 3Q 09 4Q 09 1Q 10 2Q 10 € m. 1Q 09 2Q 09 3Q 09 4Q 09 1Q 10 2Q 10 Profitable in every quarter during the crisis Stro
Slide 27: Segmental Performance
Page 27 Segmental Performance 27
Slide 28: Segmental Overview
Page 28 Segmental Overview PBT* per Segment Group PBT* 198 -46% 161 1H 10 108 30 -1 -40 1H09 1H10 -30 Retail Corporate Wealth Global & Capital New Europe Management Markets Figures in € m. * after minority interest 28
Slide 29: Retail Segment
Retail Segment Page 29 Quarterly PBT evolution (€ m) 12 10 3 2Q10/1Q10 growth -1% -3% 6% N/A -14 330 -26 327 2Q 09 3Q 09 4Q 09 1Q10 2Q10 215 228 FY 09 1H 10 129 124 – Cost to Income 44.1% 38.5% – Return on Equity 3.7% -8.9% – Return on RwA 0.34% -0.82% -14 -26 Revenues Expenses Provisions Profits 1Q
Slide 30: Corporate Segment
Page 30 Corporate Segment Quarterly PBT evolution (€ m) 83 84 80 86 75 2Q10/1Q10 -6% -6% 32% -13% growth 132 124 2Q 09 3Q 09 4Q 09 1Q 10 2Q 10 86 75 FY 09 1H 10 – Cost to Income 24.2% 21.0% – Return on Equity 26.2% 23.4% 28 26 23 – Return on RwA 2.03% 1.89% 18 (1) Revenues Expenses Provisions Profit
Slide 31: Wealth Management Segment
Wealth Management Segment Page 31 Quarterly PBT evolution (€ m) 7 4 3 2Q10/1Q10 1 growth -14% 6% N/A -1 2Q 09 3Q 09 4Q 09 1Q 10 2Q 10 17 16 16 15 FY 09 1H 10 – Cost to Income 79.0% 101.7% – Return on Equity 10.9% -1.8% 1 -2 Revenues Expenses Profits 1Q 10 Wealth Management: incorporating private ban
Slide 32: Global & Capital Markets Segment
Page 32 Global & Capital Markets Segment Quarterly PBT evolution (€ m) 32 25 23 2Q10/1Q10 19 -39% -3% -68% growth 7 42 2Q 09 3Q 09 4Q 09 1Q 10 2Q 10 25 FY 09 1H 10 23 19 18 – Cost to Income 41.2% 54.9% – Return on Equity 23.7% 15.7% 7 Revenues Expenses Profits Global & Capital Markets: incorporating
Slide 33: New Europe Segment
Page 33 New Europe Segment Quarterly PBT evolution (€ m) -11 -18 2Q10/1Q10 -1% -1% -8% N/A growth -34 -37 -37 241 239 2Q 09 3Q 09 4Q 09 1Q 10 2Q 10 157 156 FY 09 1H 10 102 94 – Cost to Income 68.4% 65.1% – Return on RwA 0.75% -0.41% -18 -11 Revenues (5) Expenses Provisions Profits 1Q 10 2Q 10 Figure
Slide 34: Appendices
a NS Page 34 Appendices
Slide 35: Financial Ratios
Page 35 Financial Ratios Financial Ratios 1H10 1H09 Net Interest Margin 2.69% 2.72% Cost-Income 46.7% 49.1% NPLs (% of loans) 6.3% 4.1% NPLs coverage 54% 66% Provision Charge (% of net loans) 2.42% 1.98% Tier Ι Ratio 10.6% 10.2% Total Capital Adequacy 11.8% 12.1% ROA after tax 0.2%* 0.4% ROE after t
Slide 36: Summary Figures
Summary Figures Page 36 Summary Figures (€ m) 1H 10 1H 09 Δ% New Europe Net Interest Income 1,152.7 1,133.9 1.7% 388.4 Net fees & Commissions 215.3 196.6 9.5% 89.8 Insurance and non banking fees 37.8 36.9 2.4% 4.2 Total Operating Income 1,501.6 1,475.8 1.8% 499.4 Operating Expenses 701.7 724.5 -3.2%
Slide 37: Key figures of New Europe operations
Key figures of New Europe operations Page 37 Romania Bulgaria Serbia Cyprus Poland Turkey Ukraine NE Δ yoy% Total Assets 5,814 3,927 1,736 2,171 5,683 2,599 903 22,849 +8.0% Balance Sheet Total Loans 3,406 3,066 1,114 733 5,076 1,347 672 15,415 +8.6% Total Deposits 1,809 1,870 731 1,745 2,602 886 35
Slide 38: 1H 2010 – Summary per Segment
Page 38 1H 2010 – Summary per Segment Wealth Global & Capital Capital & Elimination Total (€ m) Retail Corporate Management Markets Other Center New Europe Interest income 559.8 228.6 1.0 16.4 -25.2 0.0 372.1 1,152.7 Net fee & commission income 32.5 32.7 24.2 35.0 1.08 0.0 89.8 215.3 Net Insurance i
Slide 39: 1H 2009 – Summary per Segment
Page 39 1H 2009 – Summary per Segment Wealth Global & Capital Capital & Elimination Total (€ m) Retail Corporate Management Markets Other Center New Europe Interest income 543.4 197.2 -2.1 25.4 -2.6 0.0 372.6 1,133.9 Net fee & commission income 23.5 23.1 21.5 55.9 -0.76 0.0 73.4 196.6 Net Insurance
Slide 40: Contacts
Page 40 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 Yanni
Slide 41: Disclaimer
Page 41 Disclaimer This communication has been prepared by and is the sole responsibility of EFG. It has not been reviewed, approved or endorsed by any third party retained by EFG. This communication is provided for information purposes only. The contents of this communication do not constitute or f
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