Eurobank S.a. · ATHEX:EUROB
Eurobank — Q4 2016 Earnings Presentation
50 slides from Eurobank's earnings presentation, Mar 29, 2017
Slide 1: Fourth Quarter 2016 Results
Fourth Quarter 2016 Results 29 March 2017
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 Highlights 3 4Q2016 results review 9 Asset Quality 17 International operations 23 Appendix I – Supplementary information 30 Appendix II – Macroeconomic update 35 Appendix III – Glossary 44 Page 2
Slide 4: 4Q16 results highlights
4Q16 results Highlights Key financials €m 4Q16 3Q16 Δ(%) FY16 FY15 Δ(%) 1 Net profit of €38m in 4Q16; €230m in FY16 Net interest income 388.7 388.9 (0.1) 1,548.1 1,462.8 5.8 Core pre-provision income (PPI) up 5.0% q-o-q; 26.8%1 y-o-y Commission income 82.2 76.4 7.6 297.8 243.7 22.2 NII stable q-
Slide 5: Pre-provision income (PPI)
Pre-provision income (PPI)1 Core PPI and other income (€ m) Highlights (8) 64 67 31 55 Other income Core PPI up 5.0% q-o-q at €229m; up 26.8%1 y-o-y 229 Core PPI 209 218 NII stable q-o-q at €389m; up 5.8% y-o-y 198 173 Commission income up 7.6% q-o-q; up 22.2% y-o-y Operating expenses1 down
Slide 6: Asset quality
Asset quality NPEs formation1 (€ m) 90dpd formation1 (€ m) 50.7 50.0 50.0 50.7 Coverage (% ) 64.3 65.0 65.5 66.1 Coverage (% ) 44.2 45.1 45.6 45.2 Ratio (% ) 34.8 34.7 34.8 34.7 Ratio (% ) 492 42 371 49 Int'l 506 149 2 384 (7) (18) (17) Greece (16) (11) 154 (28) (82) (14) (14) (5) Int'l (68) (40) Gr
Slide 7: Funding and liquidity
Funding and liquidity Eurosystem funding (€ bn) ELA eligible collateral (€ bn)2 Other Pillar II bonds 3 34.0 32.7 0.4 1.1 9.8 25.3 19.0 5.3 16.8 13.9 14.7 3.7 2.4 2.1 ECB 22.9 Credit Claims 20.0 15.0 13.1 ELA 13.7 11.9 12.2 Jun 12 Jun 15 Dec 15 Sep 16 Dec 16 Mar 17 1 Interbank repos and eurosystem f
Slide 8: Capital position
Capital position Phased-in CET1 Fully loaded Basel III CET1 (FLB3) 10bps 10bps 17.6% 65bps 17.6% 17.4% 65bps 250bps 16.3% 13.8% 13.1% 70bps 8.75% 1 3Q16 CET1 4Q16 result 2017 CET1 SREP 4Q16 CET1 2016 FLB3 FLB3 incl. pref. Minorities and DTA phase out Preference 4Q16 CET1 AFS & other 2015 FLB3 adjust
Slide 9: International Operations
International Operations Core PPI (€ m) Net Profit1 (€ m) 74 65 65 123 63 60 67 37 30 30 26 15 4Q15 1Q16 2Q16 3Q16 4Q16 4Q15 1Q16 2Q16 3Q16 4Q16 FY15 FY16 Loan loss provisions (€ m) Net Loans and Deposits (€ bn) 2.7% 2.0% 3.1% 1.9% 1.9% Cost of Risk 10.6 52 45 6.6 33 31 31 3.9 2.8 1.7 1.9 2.2 1.5 1.
Slide 10: 4Q 2016 results review
4Q 2016 results review | Pageo
Slide 11: Loans and deposits
Loans and deposits Gross loans (€ bn) Deposits (€ bn) Δ loans l-f-l1 (€m) (141) (328) 54 126.9% 125.1% 119.9% 117.2% 114.8% 51.7 51.3 51.0 50.6 50.7 Loans/Deposits 7.6 7.7 7.5 International 7.4 7.5 Greece 33.4 34.0 33.0 31.4 31.8 22.1 21.9 21.9 Business 10.6 21.7 21.7 10.2 10.2 9.3 9.7 International
Slide 12: Assets
Assets Total assets (€ bn) Gross Loans Consumer 13% Corporate 38% Mortgages 66.4 35% Small Business Net loans and advances to customers 14% 39.1 Securities Trading & other GGBs 5% 16% Securities 12.5 GTBs PP&E, intangibles and other assets 10% 3.6 Derivatives 2.0 Loans and advances to banks 2.8 EFSF
Slide 13: New time deposits spreads and client rates (Greece)
New time deposits spreads and client rates (Greece) Time deposit client rates (bps) Deposits mix 139 Core 57% 126 Time 43% 114 106 105 103 97 100 99 92 97 New time deposit spreads (bps) 91 89 92 89 88 86 87 88 88 82 85 86 80 80 77 75 (99) (100) (101) (104) (107) 76 75 74 (112) (109) (110) 74 (113) (
Slide 14: Net interest income
Net interest income NII breakdown (€ m) NII per region (€ m) 1,463 1,548 375 383 388 389 389 421 Int’l 410 100 104 106 104 107 1,053 1,128 282 Greece 276 279 282 285 Loan margin 497 496 487 480 470 4Q15 1Q16 2Q16 3Q16 4Q16 FY15 FY16 NII evolution q-o-q (€ m) Bonds & other 53 47 55 49 51 1 1 5 4 389
Slide 15: Spreads & net interest margin
Spreads & net interest margin Lending spreads (Greece, bps)1 Deposit spreads (Greece, bps) 4Q15 1Q16 2Q16 3Q16 4Q16 4Q15 1Q16 2Q16 3Q16 4Q16 Corporate 542 525 507 511 524 Savings & Sight (38) (48) (56) (53) (53) Retail 446 455 460 447 435 Time (122) (108) (104) (103) (96) Total 479 480 477 470 467 T
Slide 16: Commission income
Commission income Commission income breakdown (€ m) Commission income per region (€ m) Fees / Assets excl. Total fees excl. Govt. 83 0.47% 0.47% 0.47% 0.51% Govt. guarantees 84 81 81 85 319 331 0.46% expense guarantees 0.49% Fees / Assets expense 0.44% 298 0.38% 0.40% 82 0.34% 76 71 244 Int’l 106 68
Slide 17: Operating expenses
Operating expenses1 OpEx per region (€ m) OpEx breakdown (€ m) Greece (5.5%) 1,034 264 (4.0%) 992 253 250 247 83 80 242 65 Depreciation 66 67 66 61 International 400 367 Administrative 199 188 183 182 181 Greece Staff 551 545 4Q15 1Q16 2Q16 3Q16 4Q16 FY15 FY16 Cost-to-income ratio (%) Headcount and
Slide 18: Asset Quality
Asset Quality | Page 17
Slide 19: NPEs formation per segment (Greece)
NPEs formation per segment (Greece) Mortgages (€ m) Consumer (€ m) 315 278 100 35 38 28 (7) (9) 1Q16 2Q16 3Q16 4Q16 1Q16 2Q16 3Q16 Small business (€ m) 4Q16 Corporate (€ m) 139 71 51 12 14 (27) (24) (36) 1Q16 2Q16 3Q16 4Q16 1Q16 2Q16 3Q16 4Q16 Page 18
Slide 20: NPEs analysis (Greece)
NPEs analysis (Greece) Δ stock NPEs (€ m) Retail portfolio 512 PEs NPEs Performing Non - Performing € 9.8 bn € 9.2 bn 109 112 Non- Performing Forborne 90dpd Performing Forborne € 2.0 bn (155) Δ stock NPEs € 4.0 bn Non- Performing Forborne 0-89dpd € 3.0 bn 513 Corporate portfolio 388 NPE formation 19
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 0.8 22.9 (€ bn) (%) (%) (%) 4.6 Consumer 3.4 63.9 78.5 83.3 17.6 Mortgages 6.4 39.5 33.7 105.2 Small Business 4.4 67.7 43.5 98.8 Total Retail 14.2 50.7 47.5 97.9 C
Slide 22: Asset quality metrics - 90dpd loans
Asset quality metrics - 90dpd loans 90dpd ratio per segment (%) 90dpd ratio per region (%) €3.0bn €5.0bn €3.7bn €5.9bn €17.6bn 37.7 37.5 37.6 37.7 37.7 Greece 51.9 47.2 35.2 34.8 34.7 34.8 34.7 Group 34.7 30.6 27.7 20.9 19.6 17.7 International 17.5 17.3 4Q15 1Q16 2Q16 3Q16 4Q16 Consumer Mortgages Sm
Slide 23: 90dpd formation per segment (Greece)
90dpd formation per segment (Greece) Mortgages (€ m) Consumer (€ m) 245 221 143 216 135 205 84 160 171 83 82 138 54 43 72 66 119 129 55 41 115 109 36 17 35 35 94 84 82 84 73 72 (12) (9) (20) 22 (39) 8 2Q12 4Q12 2Q13 4Q13 2Q14 4Q14 2Q15 4Q15 2Q16 4Q16 2Q12 4Q12 2Q13 4Q13 2Q14 4Q14 2Q15 4Q15 2Q16 4Q16
Slide 24: International operations
International operations Page 23
Slide 25: International presence
International presence Total Assets (€ bn) 1.5 Net Loans (€ bn) 0.4 Deposits (€ bn) 1.2 Total Assets (€ bn) 1.3 Net Loans (€ bn) 0.8 Deposits (€ bn) 0.7 Total Assets (€ bn) 2.9 Branches (#) 80 Net Loans (€ bn) 1.7 Deposits (€ bn) 1.9 Branches (#) 147 Total Assets (€ bn) 3.4 Net Loans (€ bn) 2.2 Tota
Slide 26: Income statement highlights
Income statement highlights Core PPI (€ m) Pre Provision Income (€ m) 87 4Q15 8 3 1Q16 12 75 75 18 ROM 2 67 3 LUX 2Q16 8 63 16 3 3Q16 7 3 8 23 10 7 19 CYP 4Q16 17 8 33 7 SER 8 4Q15 24 32 1Q16 25 30 31 BUL 24 BUL 2Q16 29 25 3Q16 30 16 ROM 10 8 11 4Q16 31 4Q15 1Q16 2Q16 3Q16 4Q16 4Q15 8 Net Profit bef
Slide 27: Gross Loans
Gross Loans Romania (€ m) Bulgaria (€ m) 2,654 2,604 2,558 2,494 2,530 2,307 368 361 2,244 383 357 354 Consumer 14% 2,046 2,093 2,080 18% 536 528 359 370 366 Consumer 871 868 52% 48% 764 862 862 Mortgage 34% 753 733 716 716 Mortgage 34% 725 FY16 1,415 FY16 1,348 1,375 1,311 1,341 Business 1,019 983
Slide 28: Deposits
Deposits Romania (€ m) Bulgaria (€ m) 2,675 2,716 2,813 2,623 2,351 901 920 969 937 1,850 1,893 1,887 1,939 Time 1,794 850 33% 1,128 1,110 1,074 45% 1,092 1,117 Time 55% 67% 1,737 1,814 1,893 Core 1,501 1,654 702 733 765 777 865 Core FY16 FY16 FY15 3M16 6M16 9M16 FY16 FY15 3M16 6M16 9M16 FY16 Serbia
Slide 29: Asset quality
Asset quality Romania Bulgaria 72.0% 73.4% 73.9% 64.8% 62.8% Coverage 66.9% 67.2% 59.7% 60.3% 60.4% Coverage 32.0% 31.7% 90dpd 26.6% 25.7% 25.8% 23.4% 20.1% 19.5% 19.9% 20.1% 90dpd 90dpd gross 90dpd gross formation 10 1 9 formation (€ m) - 2 (€ m) (4) (2) (4) (1) (5) 4Q15 1Q16 2Q16 3Q16 4Q16 4Q15 1Q
Slide 30: Key figures – 4Q16
Key figures – 4Q16 Romania Bulgaria Serbia Cyprus Lux Sum Assets 2,901 3,366 1,306 4,461 1,458 13,492 Gross loans 2,081 2,558 931 1,540 372 7,482 Balance Sheet (€m) Net loans 1,684 2,244 825 1,461 371 6,585 Balance 90dpd Loans 537 499 150 104 2 1,292 Sheet Deposits 1,939 2,813 747 3,917 1,222 10,638
Slide 31: Appendix I – Supplementary information
Appendix I – Supplementary information Page 30
Slide 32: Income statement highlights (Greece)
Income statement highlights (Greece) Operating income (€ m) Operating expenses (€ m) 390 374 372 364 301 226 188 183 182 181 4Q15 1Q16 2Q16 3Q16 4Q16 4Q15 1Q16 2Q16 3Q16 4Q16 Net Profit before discontinued operations, restructuring Provision charge (€ m) costs & tax adj.1 (€ m) 90 226 171 23 160 155
Slide 33: Summary performance
Summary performance Balance sheet – key figures Income statement – key figures €m 4Q16 3Q16 €m 4Q16 3Q16 Gross customer loans 50,655 50,645 Net interest income 388.7 388.9 Provisions (11,598) (11,527) Commission income 82.2 76.4 Net customer loans 39,058 39,117 Operating income 526.0 496.6 Customer
Slide 34: Consolidated quarterly financials
Consolidated quarterly financials Income Statement (€ m) 4Q16 3Q16 2Q16 1Q16 4Q15 Net Interest Income 388.7 388.9 387.7 382.8 375.3 Commission income 82.2 76.4 71.3 67.8 61.7 Other Income 55.1 31.3 67.4 63.5 (7.5) Operating Income 526.0 496.6 526.5 514.1 429.5 Operating Expenses (242.0) (247.3) (249
Slide 35: Consolidated financials
Consolidated financials Income Statement (€ m) FY16 FY15 Δ y-o-y (%) Net Interest Income 1,548.1 1,462.9 5.8 Commission income 297.8 243.7 22.2 Other Income 217.3 54.8 >100% Operating Income 2.063.2 1,761.4 17.1 Operating Expenses (992.3) (1,017.0) (2.4) Pre-Provision Income 1,070.9 744.4 43.8 Loan
Slide 36: Appendix II – Macroeconomic update
Appendix II – Macroeconomic update Page 35
Slide 37: Greece macroeconomic outlook
Greece macroeconomic outlook Summary of views Economic developments Notwithstanding the weaker than expected GDP reading in Q4-2016 (-1.2 QoQ / -1.1 YoY), full-year real output growth slightly outperformed the 2017 Budget’s projection (-0.3%). Growth was exclusively driven by private consumption,
Slide 38: Greece: macroeconomic developments following the summer 2015 upheaval
Greece: macroeconomic developments following the summer 2015 upheaval Concrete stabilization trends, but uncertainty about the 2 nd review is having an impact Economic Sentiment Indicator: significant improvement in recent PMI manufacturing: below the boom bust threshold for months, though not suppo
Slide 39: Domestic labour market conditions improving
Domestic labour market conditions improving But significant challenges remain Unemployment rate: still at elevated levels despite recent decline Long term unemployment: a drain on human capital stock 27.9% in Jul-2013 72.6% in Q3 2016 23.0% in Nov-2016 Labour productivity growth: turned positive in
Slide 40: Activity in tourism and shipping industries held back growth in 2016
Activity in tourism and shipping industries held back growth in 2016 Upbeat expectation for the new tourism season supportive for the growth outlook in H2 2017 Revenues from main services exports components (% of GDP) Tourism revenue: increasingly significant driver of growth Transportation revenue:
Slide 41: Gradual improvement in domestic financial conditions
Gradual improvement in domestic financial conditions To be reinforced further following the conclusion of the 2 nd review Further stabilization of macro environment & relaxation/lift of CCs to facilitate return of bank deposits Net private-sector deposit inflow (Jul. 2015 – Jan. 2017): c. €5.2bn
Slide 42: Greece outlook 2017
Greece outlook 2017 Macro indicators: realizations & forecasts 2015, €bn 2015 2016 2017 (*) Real GDP growth in 2016 was exclusively driven by Real Real Real private consumption. On the other hand, public (nominal) (YoY%) (YoY%) (YoY%) consumption, investment and net exports had a GDP 175.7 -0.2 0.
Slide 43: Progress made so far on the 2nd program review agenda
Progress made so far on the 2 nd program review agenda Items already agreed in blue highlight; open issues in red 2017-18 fiscal performance No additional measures are needed to meet primary surplus target in 2017 & 2018 (1.75% of GDP & 3.50% of GDP, respectively) €20k minimum debt a corporate entit
Slide 44: Timeline towards reaching a SLA on the 2nd review & inclusion in QE
Timeline towards reaching a SLA on the 2 nd review & inclusion in QE Required steps Legislation of 2nd review conditionality & package of measures/countermeasures for post-program period Staff Level Agreement (SLA) on 2nd program review Political approval of SLA (Eurogroup) Determination of
Slide 45: Appendix III – Glossary
Appendix III – Glossary Page 44
Slide 46: 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
Slide 47: 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 net
Slide 48: 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. The average balance of Loans and Advances to Customers is calculated as the ari
Slide 49: 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
Slide 50: 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