Eurobank S.A. · ATHEX:EUROB
Eurobank — FY2014 Earnings Presentation
45 slides from Eurobank's earnings presentation, Mar 11, 2015
Slide 1: Full Year 2014 results
Full Year 2014 results 11 March 2015
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 4Q2014 results review 10 International operations 20 Appendix I – Supplementary information 28 Appendix II – Macroeconomic update 38 Page 2
Slide 4: 4Q14 results highlights
4Q14 results1 Highlights Key financials €m 4Q14 3Q14 1 Core PPI (pre-provision income) up 9.8% q-o-q Net interest income 394.0 378.6 Net interest income up by 4.1% q-o-q driven by lower deposit cost Commission income 79.0 70.9 Commission income up by 11.4% q-o-q on higher activity Operating ex
Slide 5: Pre-provision income (PPI)
Pre-provision income (PPI) Core and non-core PPI (€ m) Highlights 2 (25) 15 28 29 45 25 (9) Non-core Core pre-provision income up by 48.9% y-o-y and 9.8% q-o-q driven by improving deposit cost and better commissions 211 Core PPI 192 Net interest income increased by 4.1% q-o-q 178 165 FY14 151 49
Slide 6: Asset quality
Asset quality 90dpd formation maintained at 3Q14 low levels, as higher formation in 90dpd coverage mortgage and corporate loans is fully offset by improvement in consumer and International 270bps 56.3% q-o-q Accelerating provisioning increases coverage to 56.3% Coverage ratio up by 270 basis p
Slide 7: Provisions versus CA projections
Provisions versus CA projections Recalibrated provisioning levels and higher degree of conservatism applied in key risk metrics’ assumptions, almost aligning provisions at end 2014 with AQR findings and Stress Test (ST) projections 2014 Provisions stock (€ bn) AQR findings and ST projections (€ bn
Slide 8: Funding and liquidity
Funding and liquidity Eurosystem funding (€ bn) 2014 Liabilities breakdown (€ bn) Increase due to: 1. Greek deposits €5.0bn 34.0 32.6 2. Market repos €9.1bn 3. Other €2.4bn 29.0 5.2 Other2 69.2 12% 19.0 9.5 Other ECB 4.7 Covered 17.0 Wholesale 1.4 bonds 27.4 12.5 17% 11.4 9.1 19.5 Repos 9.7 ELA EFSF
Slide 9: Capital position
Capital position Phased-in CET1 ratio Fully loaded Basel III CET11 (FLB3) 16.1% 40bps 15.2% (132bps) 15.2% (72bps) 13.0% 3Q14 4Q14 result Other 4Q14 (136bps) (12bps) RWAs (€ m) 39,626 - (564) 39,062 10.5% (243bps) Capital (€ m) 6,384 (524) 69 5,929 Equity to CET1 capital bridge (€ m) 5,559 531 5,929
Slide 10: Summary performance
Summary performance Balance sheet – key figures Income statement – key figures €m 4Q14 3Q14 €m 4Q14 3Q14 Gross customer loans 51,881 51,783 Net interest income 394.0 378.6 Provisions (9,748) (9,163) Commission income 79.0 70.9 Net customer loans 42,132 42,620 Operating income 463.6 474.8 Customer de
Slide 11: 4Q 2014 results review
4Q 2014 results review Page 10
Slide 12: Loans and deposits
Loans and deposits Gross loans (€ bn) Deposits (€ bn) Δ €m before write-offs, bond loans reclassification (540) (392) 164 52.9 52.4 51.8 51.8 51.9 109.4% 109.3% 103.4% 99.8% 103.1% Loans/Deposits 8.0 7.9 International 7.8 7.6 7.6 41.3 42.7 41.9 40.9 Greece 40.5 8.8 9.2 International 8.3 8.3 9.9 21.9
Slide 13: Assets
Assets Total assets (€ bn) Gross Loans Consumer 13% 75.5 Corporate 38% Mortgages 35% Small Business 42.1 14% Net loans and advances to customers Securities Trading & other GGBs 8% 9% 18.2 Securities GTBs 13% PP&E, intangibles and other assets 6.3 Other Loans and advances to banks 3.1 EFSF government
Slide 14: New time deposits spreads and client rates (Greece)
New time deposits spreads and client rates (Greece) New time deposit spreads (bps) Deposits mix (167) Core Time (177) 36% (181) 64% (190) (193) (175) (184) (208) (200) (215) (240) (247) (234) (259) Core deposit share in the mix increased by 3 percentage points since 3Q14 (265) (248) (262) (264) (2
Slide 15: Net interest income
Net interest income NII breakdown (€ m) NII per region (€ m) 386 375 394 367 379 119 102 103 106 99 International 288 267 269 274 275 Greece 597 Loan margin 542 519 525 521 4Q13 1Q14 2Q14 3Q14 4Q14 Capital & bonds 47 42 37 20 22 NII evolution q-o-q (€ m) (15) (10) (7) Market & Eurosystem (43) (32) f
Slide 16: Spreads & net interest margin
Spreads & net interest margin Lending spreads (Greece, bps) Deposit spreads (Greece, bps) 554 Savings 520 (30) (29) (42) and sight (43) (42) 509 503 501 Corporate (138) Total (151) 472 (170) (192) (185) 457 451 (213) (202) 449 Total 447 (238) Time 427 (268) 423 418 425 (289) 418 Retail 4Q13 1Q14 2Q1
Slide 17: Commission income
Commission income Commission income breakdown (€ m) Commission income per region (€ m) Total fees excluding 0.42% Fees / Assets 85 80 86 85 90 Govt. guarantees 0.38% 0.36% 0.37% expense 0.34% 79 79 70 70 71 70 70 71 14 Rental & other income 8 65 65 26 12 12 6 10 25 International 11 Insurance 27 25 8
Slide 18: Operating expenses
Operating expenses OpEx per region (€ m) OpEx breakdown (€ m)1 306 1,173 (10.1%) 267 268 262 77 258 104 1,054 70 68 68 68 99 Depreciation International 423 384 Administrative 229 Greece 196 200 190 194 645 571 Staff 4Q13 1Q14 2Q14 3Q14 4Q14 FY13 FY14 Cost-to-income ratio (%) Headcount evolution (#)
Slide 19: 90dpd gross formation per segment (Greece)
90dpd gross formation per segment (Greece) Mortgages (€ m) Consumer (€ m) 4Q13 onwards includes NHPB & New Proton 245 FY14 221 227 234 FY14 205 (22%) (16%) y-o-y 214 201 171 190 y-o-y 160 162 164 138 147 149 122 143 135 117 119 115 100 92 103 109 94 100 75 79 76 84 82 72 72 66 56 54 43 55 41 6 17 4Q
Slide 20: Asset quality metrics
Asset quality metrics 90dpd & and coverage per segment Non Performing Exposures (EBA) >90dpd Provisions >90dpd ratio 90dpd Coverage >90dp NPF1 Other Total NPEs Provisions and (%) (€ bn) (%) d 0-89dpd Impaired NPEs ratio over NPEs collaterals (€ bn) (€ bn) (€ bn)2 (€ bn) (%) (%) over NPEs(%) Consumer
Slide 21: International operations
International operations Page 20
Slide 22: International presence
International presence Total Assets (€ bn) 1.5 Net Loans (€ bn) 0.4 Deposits (€ bn) 1.2 Total Assets (€ bn) 1.4 Net Loans (€ bn) 0.8 Deposits (€ bn) 0.8 Total Assets (€ bn) 3.3 Branches (#) 95 Net Loans (€ bn) 2.0 Deposits (€ bn) 1.9 Branches (#) 176 Total Assets (€ bn) 3.0 Net Loans (€ bn) 2.1 Tota
Slide 23: Income statement highlights
Income statement highlights Core PPI (€ m) Pre Provision Income (€ m) 1Q14 11 2Q14 15 68 63 2 ROM 1 62 61 3Q14 14 14 1 4 LUX 12 14 4Q14 13 10 15 10 CYP 9 9 17 22 SER 1Q14 17 22 2Q14 24 BUL 20 BUL 3Q14 22 23 21 15 ROM 10 4Q14 23 1Q14 2Q14 3Q14 4Q14 1Q14 10 Net income before non-recurring charges (€ m
Slide 24: Operating expenses
Operating expenses OpEx per Country (€ m) OpEx breakdown (€ m) 296 (7.1%) 71 69 68 69 37 275 3 3 4 4 LUX 6 35 6 6 5 12 13 CYP Depreciation 13 12 127 20 SER 120 20 20 19 BUL Administrative 30 27 27 28 ROM 132 119 Staff 1Q14 2Q14 3Q14 4Q14 FY13 FY14 Cost-to-income ratio (%) Cost-to-average assets (%)
Slide 25: Gross Loans
Gross Loans Romania (€ m) Bulgaria (€ m) 2,659 2,629 2,631 2,598 2,575 2,547 2,546 2,516 405 404 642 641 400 395 631 606 Consumer Consumer 16% 25% 802 797 792 784 793 781 Mortgage 45% Mortgage 53% 779 772 31% 30% Business Business FY14 FY14 1,424 1,397 1,354 1,337 1,224 1,207 1,165 1,169 3M14 1H14 9
Slide 26: Deposits
Deposits Romania (€ m) Bulgaria (€ m) 2,512 2,542 2,572 2,387 876 842 1,804 1,898 1,875 1,879 921 951 Time 34% 33% Time 1,328 1,248 66% 67% 1,257 1,303 1,666 1,731 Core 1,466 1,561 Core FY14 FY14 547 571 573 631 3M14 1H14 9M14 FY14 3M14 1H14 9M14 FY14 Serbia (€ m) Cyprus (€ m) 3,457 3,183 843 2,842
Slide 27: Asset quality
Asset quality Romania Bulgaria 65.5% 69.2% 56.1% 62.9% 55.4% 59.5% Coverage Coverage 52.5% 52.2% 29.4% 31.2% 31.9% 31.4% 90dpd 22.6% 23.0% 23.4% 23.2% 90dpd 57 90dpd gross 90dpd gross formation 32 24 formation 20 (€ m) 16 (€ m) (7) (1) (7) 1Q14 2Q14 3Q14 4Q14 1Q14 2Q14 3Q14 4Q14 Serbia Cyprus 61.9%
Slide 28: Key figures
Key figures Romania Bulgaria Serbia Cyprus Lux Sum Assets 3,257 2,998 1,355 3,915 1,458 12,983 Gross loans 2,547 2,515 909 1,223 360 7,555 Balance Sheet (€m) Net loans 1,993 2,148 821 1,171 360 6,493 Balance Sheet 90dpd Loans 800 584 142 95 2 1,623 Deposits 1,879 2,572 792 3,457 1,190 9,890 Operatin
Slide 29: Appendix I – Supplementary information
Appendix I – Supplementary information Page 28
Slide 30: Consolidated quarterly financials
Consolidated quarterly financials Income Statement (€ m) 4Q14 3Q14 2Q14 1Q14 4Q13 Net Interest Income 394.0 378.6 375.3 367.2 386.0 Commission income 79.0 70.9 69.9 64.5 70.0 Other Income (9.4) 25.3 44.6 29.2 27.7 Operating Income 463.6 474.8 489.8 460.9 483.7 Operating Expenses (262.4) (257.7) (267
Slide 31: Consolidated Full year financials
Consolidated Full year financials Income Statement (€ m) FY14 FY131 Δ y-o-y (%) Net Interest Income 1,515.1 1,269.8 19.3 Commission income 284.2 269.1 5.6 Other Income 89.7 19.2 >100.0 Operating Income 1,889.1 1,558.1 21.2 Operating Expenses (1,054.2) (1,038.2) 1.5 Pre-Provision Income 834.8 519.8 6
Slide 32: Income statement highlights (Greece)
Income statement highlights (Greece) Operating income (€ m) Operating expenses (€ m) 354 229 196 200 194 190 345 339 334 327 4Q13 1Q14 2Q14 3Q14 4Q14 4Q13 1Q14 2Q14 3Q14 4Q14 Provision charge (€ m) Net income before non-recurring charges (€ m) 652 557 422 414 (200) (198) 383 (252) (345) (400) 4Q13 1
Slide 33: Private Banking
Private Banking Market leader in Greece with holistic servicing model in 3 countries AuM (€ bn) Data as of December 2014 Relationship AuM (€ m) Clients (#) 6.2 6.2 6.3 6.3 6.5 Managers (#) 0.9 0.9 0.9 1.0 1.3 2.3 2.2 2.3 2.2 2.3 Greece 2.898 3,518 47 3.1 Luxembourg 2,304 1,025 11 3.0 3.1 3.1 2.9 Cyp
Slide 34: Asset Management
Asset Management Market leader in Greece with 35.2% market share in mutual funds AuM (€ m) Net Inflows (€ m) 227 Institutional Asset 151 Management 2,882 2,727 246 Equity Mutual Funds 74 326 20 318 Fund of funds 76 13 54 204 4 20 Special (13) (25) purpose (6) (23) 481 (21) Mutual Balanced (36) 541 4
Slide 35: 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 36: Eurolife ERB Insurance
Eurolife ERB Insurance Insurance Operations Overview Key Consolidated Financials 3rd largest insurance provider in Greece in 2013, operating both in life and non-life €m 2013 2014 segments, focused on retail Gross Written Premiums 342.9 397.7 Wholly-owned holding company created in 2014 to strea
Slide 37: CHF loans analysis
CHF loans analysis CHF loans portfolio FY14 Greece Gross loans >90dpd 90dpd ratio 90dpd Gross loans >90dpd 90dpd ratio 90dpd coverage (€ bn) (€ bn) (%) coverage (%) (€ bn) (€ bn) (%) (%) Consumer 0.1 0.0 37.0 65.9 Consumer 0.0 0.0 0.0 0.0 Mortgages 4.4 1.1 26.0 16.3 Mortgages 3.7 1.0 26.6 12.8 Small
Slide 38: Other impairments and non-recurring items, Consolidated 4Q14
Other impairments and non-recurring items, Consolidated 4Q14 € m, after tax Comment Goodwill impairment (96) Bulgaria (€ 92m) Other impairments (87) Repossessed and investment properties (€ 51m), equities and bonds (€ 32m) Restructuring costs (29) Branches closures, provisions for staff reduction Di
Slide 39: Appendix II – Macroeconomic update
Appendix II – Macroeconomic update Page 38
Slide 40: Adjustment program achievements & socioeconomic costs
Adjustment program achievements & socioeconomic costs Notable progress in correcting macro imbalances Twin deficits nearly eliminated Price competitiveness restored (Unit Labor Costs in Real Effective Exchange Rates back to pre-Euro entry levels) Average maturity of Greek public debt extended
Slide 41: Notable improvement in domestic economic activity in 2014
Notable improvement in domestic economic activity in 2014 Real GDP up 0.7% in 2014, with strong gains recorded in most expenditure-side components Positive private consumption growth following 5 consecutive years of steep declines Notable improvement of investment activity in 2H14 (+11.3% y-o-
Slide 42: Positive economic growth still expected in 2015
Positive economic growth still expected in 2015, but lower than that forecasted initially Final agreement with European partners and the Institutions should allow resumption of official-sector financing and stronger GDP growth driven by stabilization of domestic demand and higher services exports
Slide 43: Short-term risks
Short-term risks State financing Sizeable funding needs & limited domestic sources of financing in 2015 Borrowing requirement much more manageable in 2016-2020 Progress in implementing agreed list of reforms to allow gradual disbursement of € 7.2bn loan tranche Remaining IMF commitments & ex
Slide 44: Potential sources of long-term growth in Greece
Potential sources of long-term growth in Greece Additional annual GVA (in € bn) over 10-year horizon Tourism 18.0 Energy 9.0 Manufacturing - Food processing 6.5 Agriculture - Crops agriculture 4.5 Retail and wholesale 4.3 Major Sectors Rising Stars Manufacturing of generics pharmaceuticals 1.9 Aquac
Slide 45: Investor Relations contacts
Investor Relations contacts Dimitris Nikolos +30 210 3337 688 E-mail: dnikolos@eurobank.gr Yannis Chalaris +30 210 3337 954 E-mail: ychalaris@eurobank.gr Christos Stylios +30 210 3337 428 E-mail: cstylios@eurobank.gr Ariadni Kranidioti +30 210 3337 377 E-mail :akranidioti@eurobank.gr Address: 20 Ama