Eurobank S.a. · ATHEX:EUROB
Eurobank — Eurobank Ergasias — IPO Roadshow (November 2015)
136 slides from Eurobank's IPO roadshow presentation, November 2015
Slide 1: €2.1bn Share Capital Increase & Investor Update
€2.1bn Share Capital Increase & Investor Update November 2015
Slide 2: Disclaimer
Disclaimer NOT FOR GENERAL DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, CANADA, JAPAN OR AUSTRALIA 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 pr
Slide 3: Table of Contents
Table of Contents Comprehensive Assessment & Transaction Overview 3 Eurobank Investment Highlights 11 Levers to Restore Profitability 15 Eurobank Key Strengths 25 Eurobank’s NPL Unit 34 3Q 2015 Results 52 Appendix 76 Appendix I – Macroeconomic Update 77 Appendix II – 2015 Comprehensive Assessment Re
Slide 4: Comprehensive Assessment & Transaction Overview
Comprehensive Assessment & Transaction Overview Page 3
Slide 5: Shortfall of €2.1bn in Adverse Scenario Against 8.0% CET1 Threshold
Shortfall of €2.1bn in Adverse Scenario Against 8.0% CET1 Threshold and €0.3bn in Baseline Scenario Against 9.5% CET1 Threshold The Comprehensive Assessment (“CA”) consisted of: 1. Asset Quality Review (“AQR”) to assess the carrying value of the banks’ assets and adjust the starting Common Equity
Slide 6: Lowest Post-AQR Implied NPE Ratio Across Greek Peer Banks
Lowest Post-AQR Implied NPE Ratio, Lowest NPE re-classifications Across Greek Peer Banks Lowest post AQR implied NPE ratio across banks Lowest NPE reclassifications from AQR Second lowest AQR adjustment Post-AQR implied NPE ratio* AQR Adjustment (€m) 56.8% 3.3% % of Total Pre AQR 4.1% 3.3% 5.1
Slide 7: Total capital needs for Greek banks according to different stress tests
Total capital needs for Greek banks according to different stress tests 2013-2015 (Adverse scenario) Bank of Greece Stress Test 2013 ECB Stress Test 2014 ECB Stress Test 2015 Surplus / Surplus / Surplus / Rank (Shortfall) Rank (Shortfall) Rank (Shortfall) €bn €bn €bn #1 Peer 1 (0.6) #1 Peer 2 2.0 #1
Slide 8: Eurobank's Recapitalisation Path
Eurobank’s Recapitalisation Path 1 Equity Equity placement of up to €2,122m Placement International private placement to qualified institutional investors 2 Tender offer on €877m(1) of outstanding senior unsecured, Tier 2 and Tier 1 securities, already approved and announced Liability Based
Slide 9: Equity Placement for up to €2,122m
1 Equity Placement for up to €2,122m Share capital increase up to €2,122m (final size depending on the demand) to address capital €2,122m Capital needs as assessed by ECB Comprehensive Assessment Increase − Capital shortfall identified under the adverse scenario of the Stress Test amounts to €2,12
Slide 10: Liability Management Exercise Potentially Covering up to 34% of Total Recap
Liability Management Exercise Potentially Covering up to 34% 2 of Total Recap All existing Tier 1, Tier 2 and Senior unsecured securities were eligible for participation (Eligible Securities) Face Value Purchase Price Tier 1 Securities € 78m 50% Total amount Tier 2 Securities € 267m 80% tender
Slide 11: Cornerstone Investors Commitment
Cornerstone Investors Commitment Eurobank has received subscription commitments from certain institutional investors for a total amount of €353m, which certain of them have the option to increase up to €584m, in relation to its share capital increase of up to €2,122m The Group of Investors include
Slide 12: Tangible Book Value Evolution & CET1
Tangible Book Value Evolution & CET1 15.2% 12.1% 17.7%3 13.8%2 2,122 5,644 €m 658 (2.3)bn DTC 4,460 Effect 3,522 463 (267) 508 (1.9)bn 4,460 CA - AQR 3,522 2,818 Tax effect 2,818due to change of the Tax Rate TBV as of 31/12/2014 9M 2015 PPI AQR Provisions + 1H 15 DTC + tax rate Other (non-recurring)
Slide 13: Eurobank Investment Highlights
Eurobank Investment Highlights Page 12
Slide 14: Eurobank at a Glance
Eurobank at a Glance Key Highlights Key Figures One of the four systemic banks in Greece, with over 20% market (€bn, Unless Otherwise Stated) September 2015 share in loans Established in 1990, 65% owned today by private investors Customer loans (net) 40.0 (institutional and retail) and 35% by th
Slide 15: Eurobank Positioning in the Greek Banking Sector
Eurobank Positioning in the Greek Banking Sector Gross Loans Market Share - Greece only Greek Banking Sector in the European Context As of December 2014 Market Share of Top Four Banks (1) Greece as of 2014 97% Other Greek Banks Ireland 90% 3% (2) +38pps Portugal 60% 21% / €44.3bn 30% / €64.3bn Greec
Slide 16: Key Investment Highlights
Key Investment Highlights Well positioned to benefit from the recovery of the economy in the consolidated Greek Banking Sector 1 Positive momentum for the Greek economy Resilient economy expected to grow Political stability, no elections in next 3 years EU support and reform plan on track 2 We
Slide 17: Levers to Restore Profitability
Levers to Restore Profitability Page 16
Slide 18: Pre-provision Income and Asset Quality Evolution
Pre-provision Income and Asset Quality Evolution in 2014 2014 PPI Evolution (€ m) 90dpd Coverage +640bps 56.3% 53.6% 877 +68% 119 835 51.1% 49.9% 50.3% 67 658 142 10 4Q13 1Q14 2Q14 3Q14 4Q14 496 Highlights NII improved by 10% y-o-y, mainly due to lower time deposits spreads (by 100bps) and Eurosys
Slide 19: Robust Plan to Restore Profitability
Robust Plan to Restore Profitability KEY ACTIONS MEDIUM TERM TARGET (€) 1,455m A Further reduction in deposits costs c. 0.5bn > 1.4bn A Liability Normalisation B Deposits repatriation B F C > 1.0bn C ELA reduction D E < (0.4)bn 835m D Fee and Commission income will be enhanced by focusing on Co
Slide 20: Keep on reducing deposits costs
Keep on reducing deposits costs Deposits and Mix (€bn) Time Deposits Spreads (bps) Time as % 65% 74% 68% 72% 69% 71% 68% 64% 58% 54% 44% of total 36.9 37.1 17 33.1 32.9 (41) 30.8 31.0 (79) 23.9 25.6 (165) (161) (153) 25.1 21.6 22.1 21.9 (228) 27.2 (185) 20.1 23.9 22.4 19.8 (204) 14.9 9.7 Core Time 1
Slide 21: Deposits Strategy
Deposits Strategy Deposit Strategy Highlights Currency Outside the Greek Banking System Opportunity to capture leading share from the return of cash in circulation M0 Monetary Aggregate (€bn) and deposits repatriation Over €115bn of reduction in deposits for the Greek banking sector since Greece
Slide 22: Eurosystem Funding Exposure
Eurosystem Funding Exposure Eurosystem Funding Evolution (€ bn) Drivers to Reduce ELA Dependency and Pillar II Guarantees Gradual return of deposits 32.7 31.6 Repos with financial institutions 29.0 29.1 29.6 10.4 7.6 7.3 Pillar II Upon ECB waiver reinstatement €4-5bn of ECB eligible assets 22.
Slide 23: Commission Income
Commission Income Commission Income (€m) (1) Crisis Impact on Domestic Market Activity 1.01% 479 0.74% 0.58% 0.54% Fees/ (73%) 0.51% 0.47% 0.42% 0.45% 0.45% avg. 127 7,140 Athens stock 592 Assets exchange avg. daily 510 turnover (€ m) 435 417 (60%) 387 332 325 341 252 Eurobank AuM 2,882 (€ m) 2007 2
Slide 24: Cost Containment
Cost Containment Track Record of Organic Operating Expense Reduction (€m) Cost-to-Income Ratio (%) 72.7 Costs decreased by 28% over Group Greece the period 2008 – 2013 (1) 59.4 59.9 1,173 (10.1%) (3) 56.0 66.6 57.3 1,054 58.7 54.2 988 55.8 47.9 48.4 48.4 47.7 53.0 741 49.2 44.6 40.0 Acquisitions, in
Slide 25: Cost of Risk Normalization - Greece
Cost of Risk Normalization - Greece 90dpd Coverage Ratio Cost of risk in Greece at 1.0% of net loans pre-crisis, vs. 8.8% 64.7% 65.0% in 9M 2015 (€2.3bn provisions) 55.4% 90dpd coverage in Greece reached 65.0% in 3Q 2015 52.8% 50.1% 51.0% 54.7% For every 100bps change in cost of risk ratio in Gr
Slide 26: Other Earnings Drivers
Other Earnings Drivers Total Lending Spreads (Greece, bps) Core Deposits Spreads (Greece, bps) 467 460 449 451 452 (29) (34) (36) (42) (42) 3Q14 4Q14 1Q15 2Q15 3Q15 3Q14 4Q14 1Q15 2Q15 3Q15 For every 10bps change in Greece, PPI changes by c. €35m For every 10bps change in Greece, PPI changes by c. €
Slide 27: Eurobank Key Strengths
Eurobank Key Strengths Page 26
Slide 28: Innovative Bank with a Proven Execution Track Record
Innovative Bank with a Proven Execution Track Record Highly Innovative Culture and Model Proven Track Record of Execution Business model innovator creating new segments and market standards Transformation journey well on track… First bank to establish business unit fully dedicated to SB (1) Fi
Slide 29: A Comprehensive Bank Transformation Strategy
A Comprehensive Bank Transformation Strategy Intended to Deliver Sustainable Growth & Profitability… The Bank embarked on a transformation journey in 2013 and is well on track Already completed the first phase of initiatives focused on securing the Bank during the crisis In the second phase, t
Slide 30: Articulated Through Five Key Strategic Pillars
… Articulated Through Five Key Strategic Pillars Focus on segments with sustainable liquidity and profitability potential, aiming to become clients’ primary bank Leverage on current strengths and on segments where we are well-positioned Within segments, manage clients “up or out” based on liquid
Slide 31: Track Record of Outperformance in a Growth Environment
Track Record of Outperformance in a Growth Environment Historical Loan Growth Y-o-Y (Greece)(1) Historical Deposits Growth Y-o-Y (Greece)(2) 43% 39% 32% 23% 23% 22% 20% 21% 16% 16% 20% 19% 17% 16% 15% 12% 9% 13% 9% 4% 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008 Eurobank Market Eurobank Market
Slide 32: Leading Positioning in Fee-Generating Businesses
Leading Positioning in Fee-Generating Businesses Asset Management Equity Brokerage Mutual funds and investment savings products Market leader with full service equity brokerage and research firm As of 1H 2015, ~49% of market share (No.1) by AuM in mutual funds(1) Voted best brokerage firm in
Slide 33: Leading Positioning in Fee-Generating Businesses (Cont.)
Leading Positioning in Fee-Generating Businesses (Cont.) Greek Ranking and Market Share for Selected Business Lines Asset Management Insurance (1) Equity Brokerage By AuM in Mutual Funds Life & Non-life, by GWP By total value of stocks traded #1 #1 #1 #1 #1 #1 #1 #3 #3 #4 #3 #3 #3 #1 #1 #1 49.3% 10.
Slide 34: Consolidation in the Greek Banking Sector
Consolidation in the Greek Banking Sector Eurobank acquired mostly “Good” banks, only c. 15% of current loans acquired during sector consolidation Acquisitions as % (1) of Customer Loans (2) NBG 95% 5% (3) Eurobank 85% 15% (4) Alpha Bank 72% 28% Acquired banks (5) Piraeus 45% 55% CPB Acquired loans
Slide 35: International Presence
International Presence Banking subsidiaries self-funded and fully ring-fenced, with deposit gathering outpacing loan growth Total Assets (€ bn) 1.2 Significant provisioning exercise with cash coverage ratio increased across jurisdictions Net Loans (€ bn) 0.8 Cost base reduction through efficie
Slide 36: Eurobank's NPL Unit
Eurobank’s NPL Unit | Page 35
Slide 37: Traditionally Proactive and Innovative in NPL Management
Traditionally Proactive and Innovative in NPL Management 2014 2008 2010 2016 Denounced loans modifications Modifications for Introduced ML & SB 3rd generation of consumer loans loans modifications Enhanced segmentation for Retail modification solutions and Corporate 2006 2011 2015 2009 1
Slide 38: Fully Operational NPL Unit
Fully Operational NPL Unit Dedicated and independent unit (“Troubled Assets Group – TAG”) with full autonomy, CEO accountability and transparency Centralized top-management monitoring body Troubled Assets Group supervision TAG Units in GM - Member of Strategic Planning New Europe (“Troubled Asse
Slide 39: More than 2,600 Enabling Staff in Greece
… with More than 2,600 Enabling Staff in Greece Exposure Under Unit # of Clients Management (June FTEs 2015) General Management 4 Corporate Special Handling Sector 265 groups €2.9bn 34 CLB 621k accounts €3.6bn 536 FPS/ ERS Retail Remedial Gen. Div. MLB 129k accounts €6.4bn 111 SBB 49k accounts €2.9b
Slide 40: Asset Quality
Asset Quality Increased provisioning to align with Comprehensive Assessment (CA) 90dpd coverage projections, bringing coverage at 65.0% Coverage ratio up by 11.4ppts y-o-y after incorporating over 80% of AQR 11.4ppts 65.0% 64.8% 90dpd provisions coverage 3Q15 90dpd formation in Greece containe
Slide 41: Contained 90dpd Gross Formation (Greece)
Contained 90dpd Gross Formation (Greece) Mortgages (€ m) Consumer (€ m) 245 221 216 205 201 171 160 164 138 147 149 143 129 135 122 119 115 109 103 94 100 79 76 84 84 82 83 72 72 66 56 54 43 55 41 35 35 17 1Q11 3Q11 1Q12 3Q12 1Q13 3Q13 1Q14 3Q14 1Q15 3Q15 1Q11 3Q11 1Q12 3Q12 1Q13 3Q13 1Q14 3Q14 1Q15
Slide 42: Asset Quality Metrics
Asset Quality Metrics 90dpd & and coverage per segment Non Performing Exposures (EBA) (2Q 2015) >90dpd NPF Other Total NPEs Provisions & >90dpd ratio 90dpd Coverage >90dpd Provisions 0-89dpd Impaired NPEs ratio collaterals / (%) (€ bn) (%) (€ bn) (€ bn) (€ bn) (€ bn) (%) / NPEs (%) NPEs (%) Consumer
Slide 43: Principles, Strategic Objectives and Targets
Principles, Strategic Objectives and Targets Governing Principles Independent and distinct Troubled Assets Group led by an SPC member Hands on Top Management involvement Independent Troubled Assets Committee providing strategic guidance & monitoring Consistent approach for managing Troubled
Slide 44: Leveraging All Available Levers to Manage NPLs
Leveraging All Available Levers to Manage NPLs Optimum use of capital and provision stock Existing Existing NPL stock NPL stock -60% 37% 15% Medium Term 15% Target % of Gross loans % of Gross loans (Greece) (Greece) Eurobank NPL Strategy In-house Management Strategic Partnerships Portfolio Sales
Slide 45: Linking Portfolio Level Planning With Borrower Level Decision Making
Linking Portfolio Level Planning With Borrower Level Decision Making Portfolio PD & LGD Economic Value Prioritized Solutions Annual budget Segmentation Models Analysis (EVA) Allocation Top-down of provisions/ capital Cohorts of Available Capture Risk-adjusted cash- To cohorts where budgeting for cry
Slide 46: Based on Detail Client Segmentation
Based on Detail Client Segmentation Customer segmentation and Remedial strategy Actions Willing Unwilling Willingness Restructuring High pressure Collections Legal all Short term modifications Viable the way Escalation of Remedial Actions Increase collateralization Operational • New terms for freque
Slide 47: Shifting to Long Term and Viable Solutions
Shifting to Long Term and Viable Solutions Corporate Portfolio Long Term Modifications (Balances) Corporate restructurings 54% ranging from soft Planned Modification Activity for 2016 Split in Short 96% modifications to long Term (ST) and Long Term (LT) Solutions term solutions, including 46% debt
Slide 48: Active Management Of Portfolio Under Law 3869
Active Management Of Portfolio Under Law 3869 Segmentation Actions Medium Term Perimeter 25% of balances Offer tailored modifications to Targets with guarantors or co- guarantors/ co- debtors not protected by Law debtors, exercising 570 M€ all legal rights cured or In 50% of balances ERB leads
Slide 49: Legal Framework Changes To Facilitate NPL Management
Legal Framework Changes To Facilitate NPL Management New Code of Civil Procedure - from 1.1.2016: Authorities to establish the Shortened enforcement period (12 -18 months vs. Debt Information network and Centre, providing legal and 30-36 months today) BoG to revise the Code economic debt adv
Slide 50: Active Management of 90+ Stock (Greece)
Active Management of 90+ Stock (Greece) -60% Basic assumptions: 90+% ratio: 90+% ratio: 37% 39% 1. 90+ Stock Evolution based on Loss Budget Model projection (incl. Law 3869) and bottom up substantiation 17.4 5.0 2. 90+ ratio projected to peak in 2016 by 16.4 1.0 2p.p. No credit growth assumed 3. R
Slide 51: Key Differentiating Factors
Key Differentiating Factors Experience Early focus on Remedial Management, since 2006, with Top Management investment on people, systems and tools Extensive expertise and management depth throughout the TAG hierarchy Autonomous TAG Units, established in Greece and key International Subsidiarie
Slide 52: Analytics Key Enabler To Achieve Our Vision
Analytics Key Enabler To Achieve Our Vision Volumes & Movements “Reduce NPE” Financials • Inflow of NPE from the Business units “Return to profitability” metrics • How quickly is TAG reducing the NPEs’ • Value created by TAG stock • Number of borrowers returning to 1 • Efficiency of operations stand
Slide 53: TAG is being converted into a P&L Unit
TAG is being converted into a P&L Unit with clear value creation goals Eurobank assets Preliminary breakdown H1 2015, €BN TAG assets Preliminary breakdown H1 2015, €BN 44 44 21.1 18.8 3.4 1.0 5.4 TAG 18.8 6.4 21.1 15.7 12.4 BUs2 25.3 22.9 Ownership Corporate troubled Retail Assets Under specialized
Slide 54: 3Q 2015 Results
3Q 2015 Results | Page 53
Slide 55: 3Q15 Results
3Q15 Results1 Highlights Key financials €m 3Q15 2Q15 1 Pre-provision income (PPI) up 8.4% q-o-q at €230.2m Core PPI down 15.2% q-o-q, mainly due to commission income, down by Net interest income 371.1 377.9 32.2% q-o-q clearly affected from the 21 days bank holiday in July Commission income 49.1 7
Slide 56: Pre-provision Income (PPI)
Pre-provision Income (PPI) Core and non-core PPI (€ m) Highlights 25 (9) 14 8 57 Non-core PPI up 8.4% q-o-q at €230.2m Core PPI down 15.2% q-o-q, mainly due to commission income, 211 down by 32.2% q-o-q clearly affected from the 21 days bank holiday 202 204 192 173 Core PPI in July Resilient N
Slide 57: Asset Quality
Asset Quality Increased provisioning to align with Comprehensive Assessment (CA) 90dpd coverage projections, bringing coverage at 65.0% Coverage ratio up by 11.4ppts y-o-y after incorporating over 80% of AQR 11.4ppts 65.0% 64.8% 90dpd provisions coverage 3Q15 90dpd formation in Greece containe
Slide 58: International Operations
International Operations Net income (€ m) Highlights International operations profits increased for third consecutive quarter, with 15 19 20 €20m net profit in 3Q15 and €54m in 9M15 All international subsidiaries profitable in 3Q15 (48) On-going substantial rightsizing efforts, result in lower
Slide 59: Funding and Liquidity
Funding and Liquidity Eurosystem funding (€ bn) ELA eligible collateral (€ bn)1 34.0 32.7 Other GTBs & GGBs 32.6 31.6 1.0 29.6 1.2 5.2 9.8 9.4 ECB 7.2 19.0 Pillar II bonds 7.7 27.4 12.5 22.9 22.3 22.5 ELA Credit Claims 15.0 12.5 14.6 Jun 12 Sep 12 Dec 14 Jun 15 Sep 15 Oct 15 Interbank repos and Euro
Slide 60: Capital Position
Capital Position Phased-in CET1 ratio 14.2% 78bps 12.1% 113bps 92bps 10.4% 1, 2 (36bps) (21bps) 1 (436bps) 1 1Q15 2Q15 result 3Q15 2Q15 PBT 2Q15 Tax and other and other Tax rate Valuation Valuation 3Q15 CET1 CET1 change RWAs 39,595 - 250 (879) 38,966 550 (634) 38,882 (€ m) Capital 5,606 (1,727) 410
Slide 61: Capital Position and Tangible Book Value
Capital Position and Tangible Book Value Fully loaded Basel III CET11 (FLB3) Tangible book value evolution (€ m) 4,346 245 13 3,522 508 12.1% 8 2,839 10.7% (1,318) 54bps (195) (2) 86bps (83) 7.9% 280bps 1Q15 2Q15 3Q15 FLB3 incl. pref. Intangibles Preference FLB3 Other Other DTA phase out Bonds and 2
Slide 62: Loans and Deposits
Loans and Deposits Gross loans (€ bn) Deposits (€ bn) Δ €m before FX effect, write-offs 40 (41) (683) 132.4% 131.2% 122.7% Loans/Deposits 99.8% 103.1% 52.9 52.8 51.8 51.9 51.7 8.0 7.9 7.6 7.6 7.6 International 42.7 Greece 40.9 9.2 9.9 35.0 21.8 22.1 22.4 22.5 22.0 Business 2.3 31.0 30.5 1.2 9.4 8.9
Slide 63: New Time Deposits Spreads And Client Rates (Greece)
New Time Deposits Spreads And Client Rates (Greece) New time deposit spreads (bps) Deposits mix Core 56% (113) (115) Time 44% (116) (129) Core deposits share in the mix increased by 20ppt since 31/12/2014 (173) (167)(174) (176) (184) (190) (193) (177) (173) (172) Time deposit client rates (bps) (2
Slide 64: Assets
Assets Total assets (€ bn) Gross Loans Consumer 13% Corporate 73.8 38% Mortgages 35% Small Business Net loans and advances to customers 40.0 14% Securities Trading & other GGBs 6% 10% Securities 18.0 GTBs 13% PP&E, intangibles and other assets 5.8 Loans and advances to banks Other 3.2 EFSF governmen
Slide 65: Net Interest Income
Net Interest Income NII breakdown (€ m) NII per region (€ m) 394 379 373 378 371 103 106 104 International 105 103 275 288 269 268 274 Greece Loan margin 525 521 517 509 497 3Q14 4Q14 1Q15 2Q15 3Q15 NII evolution q-o-q (€ m) 20 22 16 32 24 7 Capital & bonds 12 378 Market & Eurosystem (10) (7) 371 (5
Slide 66: Spreads & Net Interest Margin
Spreads & Net Interest Margin Lending spreads (Greece, bps) Deposit spreads (Greece, bps) 525 Savings (29) (36) (34) 509 (42) (42) and sight 508 501 489 Total Corporate (89) 467 (110) (107) 460 449 451 452 Total (151) (138) Time (153) 433 435 436 (165) (161) 425 Retail (202) (185) 418 3Q14 4Q14 1Q15
Slide 67: Commission Income
Commission Income Commission income breakdown (€ m) Commission income per region (€ m) 0.42% Total fees excluding 0.38% 0.40% 0.38% 85 90 88 88 76 Govt. guarantees expense 0.27% Fees / Assets 79 77 79 21 days bank holiday 72 77 72 71 71 in July 14 12 26 21 days bank holiday 12 13 49 23 in July 11 7
Slide 68: Operating Expenses
Operating Expenses OpEx per region (€ m) OpEx breakdown (€ m) 792 (6.4%) 258 262 741 248 247 247 75 63 Depreciation 68 68 65 63 65 International 286 271 Administrative Greece 190 194 183 183 182 430 407 Staff 3Q14 4Q14 1Q15 2Q15 3Q15 9M14 9M15 Cost-to-income ratio (%) Headcount and network evolution
Slide 69: Summary Performance
Summary Performance Balance sheet – key figures Income statement – key figures €m 3Q15 2Q15 €m 3Q15 2Q15 Gross customer loans 51,693 52,792 Net interest income 371.1 377.9 Provisions (11,739) (11,722) Commission income 49.1 72.4 Net customer loans 39,955 41,070 Operating income 477.5 458.7 Customer
Slide 70: International operations
International operations Page 69
Slide 71: Income statement highlights
Income statement highlights Core PPI (€ m) Pre Provision Income (€ m) 3Q14 14 69 4Q14 13 3 65 ROM 62 1 61 61 2 LUX 1Q15 14 4 5 15 13 2Q15 14 14 15 13 CYP 3Q15 13 10 9 9 9 10 SER 3Q14 22 25 26 22 4Q14 23 24 22 BUL BUL 1Q15 22 2Q15 25 15 11 15 15 ROM 10 3Q15 26 3Q14 4Q14 1Q15 2Q15 3Q15 3Q14 9 4Q14 9 N
Slide 72: Net profit
Net profit Total (€ m) Romania (€ m) Bulgaria (€ m) 15.2 18.5 20.1 4.6 6.9 6.3 2.3 2.5 1.9 (5.4) (27.7) (46.3) -47.6 (78.0) -101.7 3Q14 4Q14 1Q15 2Q15 3Q15 3Q14 4Q14 1Q15 2Q15 3Q15 3Q14 4Q14 1Q15 2Q15 3Q15 Serbia (€ m) Cyprus (€ m) Luxembourg (€ m) 9.3 8.0 7.3 7.3 7.4 4.3 4.2 2.9 1.7 1.6 0.9 (1.8) (
Slide 73: Operating expenses
Operating expenses OpEx per Country (€ m) OpEx breakdown (€ m) 206 (6.5%) 68 68 193 4 4 65 63 65 26 5 4 5 23 6 4 LUX 6 6 12 13 6 Depreciation 11 11 11 CYP 89 87 20 19 19 18 19 SER Administrative 27 28 BUL 25 25 24 91 82 ROM Staff 3Q14 4Q14 1Q15 2Q15 3Q15 9M14 9M15 Cost-to-income ratio (%) Cost-to-av
Slide 74: Gross Loans
Gross Loans Romania (€ m) Bulgaria (€ m) 2,575 2,547 2,595 2,546 2,516 2,542 2,534 2,516 2,489 2,340 606 400 395 389 389 387 Consumer 631 606 585 16% Consumer 560 24% 43% 54% 792 784 785 779 765 Mortgage 30% 779 772 826 Mortgage 817 765 33% 9M15 9M15 1,169 Business 1,354 1,337 1,368 1,366 1,363 Busi
Slide 75: Deposits
Deposits Romania (€ m) Bulgaria (€ m) 2,542 2,572 2,454 2,260 2,262 876 842 775 1,875 1,879 1,820 711 807 Time 1,700 1,608 34% 36% 1,303 1,248 1,224 Time 64% 1,103 1,058 66% 1,666 1,731 1,679 Core 1,549 1,455 573 631 595 597 550 Core 9M15 9M15 9M14 FY14 3M15 6M15 9M15 9M14 FY14 3M15 6M15 9M15 Serbia
Slide 76: Asset quality
Asset quality Romania Bulgaria 63.0% 63.6% 64.5% Coverage 65.5% 69.2% 67.5% 68.1% 59.5% 62.9% Coverage 66.5% 31.4% 31.8% 32.6% 31.9% 31.6% 90dpd 23.4% 23.2% 23.0% 23.2% 23.1% 90dpd 90dpd gross 90dpd gross formation 5 7 formation (€ m) 16 12 2 (€ m) (9) (3) (1) (7) (7) 3Q14 4Q14 1Q15 2Q15 3Q15 3Q14 4
Slide 77: Key figures
Key figures Romania Bulgaria Serbia Cyprus Lux Sum Assets 3,123 3,075 1,245 3,330 1,307 12,080 Gross loans 2,340 2,516 886 1,547 330 7,619 Balance Sheet (€m) Net loans 1,851 2,141 792 1,485 329 6,598 Balance Sheet 90dpd Loans 738 581 145 105 7 1,576 Deposits 1,608 2,262 683 2,948 1,042 8,543 Operati
Slide 78: Appendix
Appendix | Page 77
Slide 79: Appendix I – Macroeconomic Update
Appendix I – Macroeconomic Update Page 78
Slide 80: Greek Macroeconomic Outlook and Themes
Greek Macroeconomic Outlook and Themes Significant progress in recent years in correcting acute macro imbalances and restructuring the Greek economy 18pps improvement in structural fiscal balance since 2009 (vs. 3.6pps for the Euro Area) Surplus current account balances in 2013-2015(f) for the
Slide 81: Pre-crisis Macro Imbalances Correction and Economic Restructuring
Pre-crisis Macro Imbalances Correction and Economic Restructuring Unprecedented Fiscal Adjustment Surplus Current Account in 2013, 2014 and 2015 (% GDP) c. 18pps Improvement in Structural Fiscal Balance Since 2009 (% Potential GDP) First current account surpluses on record (since 1947) Cyclically ad
Slide 82: Economy Resilient in 1H2015; Full-year GDP Contraction May Prove Milder
Economy Resilient in 1H2015; Full-year GDP Contraction May Prove Milder than Expected Positive output growth in 1H, despite tightened liquidity conditions and heightened frictions with official creditors Real GDP up 1.1% YoY, mainly on the back of strengthened private consumption (c. 70% of GDP)
Slide 83: New Program Fully Covers Projected Borrowing Needs Over a 3-year Horizon
New Program Fully Covers Projected Borrowing Needs Over a 3-year Horizon; Debt Relief to be Considered after First Review New financing envelope aims to fully cover government borrowing needs over a 3-year period (Aug. 2015 – Aug. 2018) Committed/agreed financing sources include: up to €85.5bn i
Slide 84: Untapped Potential for Medium – Term Growth
Untapped Potential for Medium – Term Growth Potential Growth Drivers Sizeable financing committed from EU structural funds and the new bailout program (c. €70bn until 2020) Strong implementation of reforms agenda to boost medium-term GDP by c. 10pp (IMF, 2013) ‒ Emphasis in new program on fiscal
Slide 85: Selected Macroeconomic Forecasts for Greece
Selected Macroeconomic Forecasts for Greece Key Macroeconomic Variables: Realizations & Forecasts 2014 2015F 2016F 2017F Nominal GDP (€ bn) 178 174 172 178 Nominal GDP growth (1.5%) (2.5%) (0.7%) 3.40% EC forecasts (Nov 2015) Real GDP (€ bn) 186 184 181 186 Real GDP growth 0.7% (1.4%) (1.3%) 2.7% Un
Slide 86: ECB to Support Greek Liquidity and Economic Activity
ECB to Support Greek Liquidity and Economic Activity A successful 1st Programme Review May Lead to: Economic Impact ECB waiver on Greek sovereign debt reinstatement ECB quantitative easing (QE) programme: ECB’s capacity to hold Greek debt to increase by c. €7bn Lower sovereign rates Positive
Slide 87: Impact and Implications of Capital Controls
Impact and Implications of Capital Controls Early delinquency increased in July as customer contacts, cash deposits in bank branches or loan modifications were forbidden during the bank holiday Right after the reopening of branches, payments recovered at a quick pace, indicating this was a one-o
Slide 88: Expected Benefits to Greek Banks from 3rd Support Programme
Expected Benefits to Greek Banks from 3 rd Support Programme Actions from MoU divided into four pillars: 1 Restoring fiscal 2 Safeguarding 3 Enhancing growth, 4 Strengthening a sustainability financial stability competitiveness and modern state and investment public administration Target a primary
Slide 89: Greek Political Elections Outcome
Greek Political Elections Outcome Parliamentary Elections of May-2012 Parliamentary Elections of Jun-2012 Election’s outcome point to a stable coalition government Newly elected government has 41 108 33 129 19 17 clear mandate to implement recently agreed 3rd Support 52 71 33 Programme, vs. nego
Slide 90: Appendix II – 2015 Comprehensive Assessment Results
Appendix II – 2015 Comprehensive Assessment Results Page 89
Slide 91: Comprehensive Assessment Executive Summary
Executive Summary Shortfall of €2.1bn in Adverse scenario against 8.0% CET1 threshold and €0.3bn in Baseline scenario against 9.5% CET1 threshold Lowest shortfall in Adverse scenario and lowest NPE reclassifications across Greek peer banks* 2015 Comprehensive Assessment more conservative than
Slide 92: Shortfall of €2.1bn in Adverse scenario against 8.0% CET1 threshold
Shortfall of €2.1bn in Adverse scenario against 8.0% CET1 threshold and €0.3bn in Baseline scenario against 9.5% CET1 threshold The Comprehensive Assessment (“CA”) consisted of: 1. Asset Quality Review (“AQR”) to assess the carrying value of the banks’ assets and adjust the starting Common Equity
Slide 93: Lowest Shortfall in Adverse Scenario Across Greek Peer Banks
Lowest Shortfall in Adverse Scenario Across Greek Peer Banks Smallest shortfall in Adverse scenario, compared to largest shortfall in 2014 CA Second lowest shortfall in Baseline scenario, driven by AQR impact as of June 2015 No negative impact from Baseline Stress Test post AQR The only Gree
Slide 94: Lowest Post-AQR Implied NPE Ratio Across Greek Peer Banks
Lowest Post-AQR Implied NPE Ratio, Lowest NPE Re-Classifications Across Greek Peer Banks Lowest post AQR implied NPE ratio across banks Lowest NPE reclassifications from AQR Second lowest EUR AQR adjustment Post-AQR implied NPE ratio* AQR Adjustment (€m) 56.8% 3.3% % of Greek Loan Pre AQR Book
Slide 95: Total capital needs for Greek banks according to different stress tests
Total capital needs for Greek banks according to different stress tests 2013-2015 (Adverse scenario) 2015 ECB Stress Test (€bn) – Adverse scenario (2.1) (2.7) (4.6) (4.9) Eurobank Peer 1 Peer 2 Peer 3 2013 Bank of Greece Stress Test (€bn) – Adverse scenario 2014 ECB Stress Test (€bn) – Dynamic Adver
Slide 96: 2015 Comprehensive Assessment more conservative than 2014 exercise
2015 Comprehensive Assessment more conservative than 2014 exercise Higher CET1 thresholds used to determine shortfalls – 150bps increase for Baseline (9.5% vs. 8.0%) and 250bps increase for Adverse (8.0% vs. 5.5%) Asset Quality Review Examples Stress Test Examples Increased forced sale discount fr
Slide 97: Asset Quality Review
ey Eurobank | Asset Quality Review
Slide 98: Bottom-up Asset Quality Review in line with 2014 ECB assessment
Bottom-up Asset Quality Review in line with 2014 ECB assessment Detailed Asset Quality Review included loan level data analysis, credit file review and collateral re-valuation Workstream Description In scope portfolios covered 98% of the Greek loan book Data Integrity Data integrity verification
Slide 99: AQR impact of €1.9bn mainly driven by RRE Collective Provisioning
AQR impact of €1.9bn mainly driven by RRE Collective Provisioning and Corporates Credit File Review AQR Adjustments by Workstream and Portfolio (1.0%) (0.7%) (3.0%) (0.1%) (0.3%) 13.7% 8.6% Starting CET1 Credit Files Review Projection of Collective CVA and Fair Other Capital AQR-Adjusted Ratio * Fin
Slide 100: A €700m RRE collective provision impact
A €700m RRE collective provision impact driven by more conservative assumptions – Bank reflected €485m as of Q2 2015 €700m of RRE additional provisions required are mainly driven by more Assumed Collateral Value Reduction conservative assumptions made in the 2015 AQR exercise: 2014 vs. 2015 CA **
Slide 101: B €705m Corporate provision impact
B €705m Corporate provision impact driven by more conservative assumptions – Bank reflected €575m as of Q2 2015 The provisioning adjustment for the Corporate portfolios was Use of Going and Gone Concern vs 2014 AQR largely driven by the 2015 AQR conservative approach: 100% 56% of Business plans we
Slide 102: Lowest NPE reclassifications and lowest post-AQR implied NPE ratio
Lowest NPE reclassifications and lowest post-AQR implied NPE ratio No NPE ratio adjustments Post-AQR from Retail portfolios credit file reviews due to Eurobank’s more stringent NPE definition Some adjustments to NPE ratio stemming from Corporate portfolios credit file reviews, primarily driven b
Slide 103: 54% implied NPE coverage ratio post-AQR
54% implied NPE coverage ratio post-AQR – higher than other Greek banks and peripheral Europe countries Highest AQR-implied provision coverage ratio across Greek banks Coverage among highest in peripheral Europe NPE Coverage Benchmarking: Average NPE Coverage Implied AQR NPE Coverage Ratio* rati
Slide 104: Stress Test
ey Eurobank | Stress Test
Slide 105: Stress Test – Approach Overview
Stress Test – Approach Overview Approach Macro Assumptions CET1 ratio benchmark in Baseline and Adverse scenario higher than in 2014 CA Variable Baseline Scenario Adverse Scenario Scenario 2014 CA 2015 CA (%) 2015 2016 2017 Cum. 2015 2016 2017 Cum. Baseline 8.0% 9.5% Real GDP Adverse 5.5% 8.0% (2.
Slide 106: Baseline Scenario Results in a Shortfall of €0.3bn
Baseline Scenario Results in a Shortfall of €0.3bn (91bps Of CET1%) Against 9.5% Threshold No further impact on the AQR-Adjusted CET1 Ratio from the Stress Test under the Baseline scenario CET1 ratio of 8.6% resulting from the AQR is the lowest over Stress Test horizon Net Interest Income, Add
Slide 107: Adverse Scenario Resulting in €2.1bn Shortfall
Significant Further Adjustments From Baseline in Adverse Scenario Resulting in €2.1bn Shortfall (670bps of CET1%) Against 8% Threshold Component Key Adjustments Adverse vs. Baseline • Increase of default flow • More conservative funding assumptions €957m lower Net Interest Income • No income on >180
Slide 108: Adverse Scenario Net Interest Income is c. 34% Below H1 2015 Run-Rate
Adverse Scenario Net Interest Income is c. 34% Below H1 2015 Run-Rate NII is mainly driven by the following adjustments: Higher default flows resulting in higher NPE stock Funding cost and composition NPE Income - no income on NPE that are >180 days past due (except for RRE portfolio where 25%
Slide 109: Adverse Scenario PPI is c. 56% Below H1 2015 Run-Rate
Adverse Scenario PPI is c. 56% Below H1 2015 Run-Rate Adverse scenario Pre-Provision Income (“PPI”) is €1.34bn below H1 2015 run-rate x 5 – mainly driven by reduction in NII 2017 PPI 56% below H1 2015 actual x2 PPI Analysis (€m) – Historical vs. Adverse Scenario (56%) Cumulative difference over
Slide 110: Q3 2015 Provisions Stock at 97% of Post-AQR Implied Level
Q3 2015 Provisions Stock at 97% of Post-AQR Implied Level Baseline scenario (€bn, Greece only) Adverse scenario (€bn, Greece only) 13.0 12.5 12.0 11.0 11.0 10.7 10.7 10.3 Q2 2015 Post-AQR Q3 2015 2014 ECB 2015 ECB Q2 2015 Post-AQR Q3 2015 2014 ECB 2015 ECB Implied Provisions Provisions CA - 2016 YE
Slide 111: Appendix III – Recapitalization Framework
Appendix III – Recapitalization Framework Page 110
Slide 112: HFSF Participation Mechanism
Summary of the Recapitalisation Framework of the Greek Credit Institutions (Oct. 2015) A key pre-requisite for HFSF participation in the recapitalisation exercise HFSF Participation Mechanism Burden Burden sharing waterfall applicable in the following order : common shares, preference shares / e
Slide 113: Preference shares vs. Contingent Convertibles (CoCos)
Preference shares vs. Contingent Convertibles (CoCos) Preference shares providing more flexibility compared to CoCos Preference shares Contingent Convertibles (CoCos) • Contingent convertible instrument, non • Perpetual , redeemable, non voting, non voting, non listed issued to the Greek State liste
Slide 114: State Contingent Capital Securities (CoCos) – Key Terms
State Contingent Capital Securities (CoCos) – Key Terms Quantum 75% of total HFSF participation in the capital requirement in the adverse case Eligibility Eligible for Common Equity Tier 1 capital Direct, unsecured and subordinated obligation Ranking Junior to all creditors (including AT1 an
Slide 115: Appendix IV – Commitments to DG Comp
Appendix IV – Commitments to DG Comp Page 114
Slide 116: Commitments to DG Comp
Commitments to DG Comp Potential New Commitments in case of Matter/ Issue Existent Commitment to DG Comp Planned State aid # of Branches in Greece max 546 by end-2017 max 510 by end-2017 # of Employees in max 10,950 by end-2017 max 9,800 by end-2017 Greece Total Costs in Greece max €800m by end-2017
Slide 117: Appendix V – Additional Information on 3Q 2015 Results
Appendix V – Additional Information on 3Q 2015 Results Page 116
Slide 118: Consolidated quarterly financials
Consolidated quarterly financials Income Statement (€ m) 3Q15 2Q15 1Q15 4Q14 3Q14 Net Interest Income 371.1 377.9 372.7 394.0 378.6 Commission income 49.1 72.4 76.5 79.0 70.9 Other Income 57.3 8.4 13.9 (9.4) 25.3 Operating Income 477.4 458.7 463.2 463.6 474.8 Operating Expenses (247.2) (246.5) (247.
Slide 119: Consolidated Financials
Consolidated Financials Income Statement (€ m) 9M15 9M14 Δ y-o-y (%) Net Interest Income 1,121.7 1,121.1 0.1 Commission income 198.0 205.3 (3.5) Other Income 79.6 99.1 (19.7) Operating Income 1,399.3 1,425.5 (1.8) Operating Expenses (741.3) (791.9) (6.4) Pre-Provision Income 658 633.6 3.9 Loan Loss
Slide 120: Income statement highlights (Greece)
Income statement highlights (Greece) Operating income (€ m) Operating expenses (€ m) 345 334 338 348 327 190 194 183 182 183 3Q14 4Q14 1Q15 2Q15 3Q15 3Q14 4Q14 1Q15 2Q15 3Q15 Provision charge (€ m) Net income before non-recurring charges (€ m) 1,794 37 (101) (252) (345) 652 414 260 221 (1,289) 3Q14
Slide 121: Private Banking
Private Banking Market leader in Greece with holistic servicing model in 3 countries AuM (€ bn) Data as of September 2015 Relationship AuM (€ m) Clients (#) 6.3 6.5 6.0 Managers (#) 5.9 1.0 1.3 5.3 1.1 1.1 2.2 1.1 Greece 2,507 3,555 47 2.3 2.1 2.2 1.6 Luxembourg 1,646 1,280 12 3.1 2.9 2.7 2.6 2.5 Cy
Slide 122: Asset Management
Asset Management Market leader in Greece with 49.3% market share in mutual funds AuM (€ m) Net flows (€ m) 4,758 1,061 210 77 945 45 Institutional 591 Equity Asset Management Fund of funds 984 321 900 31 86 Mutual Funds 291 Special purpose 13 78 20 (6) (13) (23) 2,882 (36) (174) Balanced 246 Mutual
Slide 123: Securities services and Equity brokerage
Securities services and Equity brokerage Securities Services Eurobank Equities Clear market leader in institutional custody in domestic capital markets, over Dominant position in domestic capital markets, consistently ranking the past 10 years number one over the past 5 years The only Greek pr
Slide 124: Eurolife ERB Insurance
Eurolife ERB Insurance Insurance Operations Overview Key Consolidated Financials (IFRS basis) 3rd largest insurance provider in Greece in 2014, operating both in life and non- life segments, focused on retail €m 3Q15 3Q14 Wholly-owned holding company created in 2014 to streamline ownership struc
Slide 125: Appendix VI – Additional Materials
Appendix VI – Additional Materials Page 124
Slide 126: Loan Portfolio Analysis - Greece
Loan Portfolio Analysis - Greece Page 125
Slide 127: Loan Quality Statistics (1H2015)
Loan Quality Statistics (1H2015) Loan portfolio overview by delinquency status - June 2015 Performing Exposures (€m) Non-performing Exposures (€m) Unlikely to Total Loans - Group Total Current 1-30 31-60 61-90 91-180 180+ Denounced Pay Business 27,382 12,277 954 379 868 2,631 500 3,232 6,541 Mortgag
Slide 128: Top Business Exposures (1H2015)
Top Business Exposures (1H2015) Top 20 performing Business Exposures Top 20 non-performing Business Exposures Outstanding Amount (€m) % Jun 2015 Outstanding Amount (€m) % Jun 2015 1 476 1.74% 1 416 1.52% 2 375 1.37% 2 335 1.22% 3 287 1.05% 3 239 0.87% 4 212 0.78% 4 125 0.46% 5 186 0.68% 5 89 0.32% 6
Slide 129: Deposits
Deposits | Page 128
Slide 130: Deposits outflows breakdown (November 2014 – June 2015)
Deposits outflows breakdown (November 2014 – June 2015) Composition of outflows, Group Mid-term plan to restore outflows (€ bn) General Government 5.0% Payments Public Sector 1.5 11.0% Bank Notes Institutional 37.0% 0.5 Money transfers 22.0% GCIB / SMEs 1.7 Retail Other 5.5 Investments 3.0% Private
Slide 131: Corporate Governance Framework
Corporate Governance Framework Page 130
Slide 132: Eurobank's Board of Directors & Committees
Eurobank’s Board of Directors & Committees Committee Strategic # of Board Member Capacity Audit Risk Nomination Remuneration Planning1 Committees Eurobank has the highest Private Nikolaos V. Karamouzis Chairman, Non-Executive Director P P P 3/5 investor participation amongst Greek Banks Vice Chair
Slide 133: Our Solid Corporate Governance Framework
Our Solid Corporate Governance Framework Key Role and Responsibility Composition Exercises its responsibilities in line with local legislation, European legislation, international best 5 out of the 9 non-executive directors are practices and the Bank’s contractual obligations with the HFSF under
Slide 134: Risk Management Framework
Risk Management Framework Page 133
Slide 135: Risk Appetite Framework
Risk Management Framework Overview Risk Management Structure Timely and effective management of risks is a key priority for Eurobank Group Risk Management General Division The Board Risk Committee meets at least on a monthly basis and is responsible for: Designing and formulating the risk mana
Slide 136: Investor Relations contacts
Investor Relations contacts Dimitris Nikolos +30 210 3704 754 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 Ariadni Kranidioti +30 210 3704 764 E-mail :akranidioti@eurobank.gr Group E-mail: i