National Bank Of Greece S.a. · ATHEX:ETE
National Bank Of Greece — Debt Investor Presentation (October 2024)
47 slides from National Bank Of Greece's debt investor presentation, October 2024
Slide 1: Fixed Income Presentation
Fixed Income Presentation Credit Update October 2024
Slide 2: Disclaimer
Disclaimer Not an offer for sale This presentation, which has been prepared by the National Bank of Greece (the Bank), is confidential and is being made available to selected recipients only and solely for the information of such recipients. This presentation may not be published, redistributed, tra
Slide 3: Contents
Contents 01 Key Financial Highlights 02 Profitability 03 Capital, MREL and Liquidity 04 Asset Quality 05 ESG Update 06 BP 2024-26 and Updated Guidance 07 Macro 08 Appendix 3
Slide 4: Key Financial Highlights
01 Key Financial Highlights 4
Slide 5: Strong performance across all key metrics continues in 1H24
Strong performance across all key metrics continues in 1H24 RoTE | % C:CI | % Loan Disbursements², CET1, PAT | € m Core PPI | € b Balances | € b Total Capital | % Attrib. RoTE 18.1% C:CI 30.1% 2Q24 €2.8b CET1 change +100bps Disbursements ytd³ Core RoTE 17.4% 2Q24 €1.2b CET1 +c50bps ytd post the 1H24
Slide 6: 1H24 P&L performance leads to improved FY24 profitability guidance
1H24 P&L performance leads to improved FY24 profitability guidance Core PAT | € m FY24 guidance Core RoTE | % FY24 guidance Previous c€1.2b Previous c15% Updated c€1.3b Updated >16% 646 16,2% 17,4% 508 175 5,2% 1H22 1H23 1H24 1H22 1H23 1H24 Cost to Core Income | % FY24 guidance EPS¹ | € FY24 guidanc
Slide 7: Performance driven revision of our FY24 guidance
Performance driven revision of our FY24 guidance Previous Updated Financial performance metrics Actual Guidance Guidance FY24 NII expected to remain at FY23 record P&L KPIs 1H24 FY24E FY24E levels, despite lower base rates, driving Core Income higher YoY Net Interest Margin (bps) 323 <290 >300 Cost
Slide 8: Strong Balance Sheet is a unique comparative advantage
Strong Balance Sheet is a unique comparative advantage Group Assets1 (€ b) Group Liabilities1 (€ b) Interbank 1,8 Cash & reserves 8,4 Excess liquidity at €9.1b (post full repayment of TLTRO) Interbank 2,6 Securities portfolio +0.2bqoq Securities² 17,7 HTC €14.1b HTCS €2.7b Core Deposits 46,1 Trading
Slide 9: NBG has been assigned an IG rating from Moody's; on the IG verge also from S&P & Fitch
NBG has been assigned an IG rating from Moody’s; on the IG verge also from S&P & Fitch Date of last report 16 Sep 2024 18 October 2024 4 Sep 2024 Next Review Sovereign - Spring 2025 22 November 2024 Greece Sovereign Ba1 BBB- BBB- Outlook Positive Positive Positive Senior Rating Baa2 BB+ BB+ Outlook
Slide 10: Profitability
02 Profitability 10
Slide 11: Group 1H24 core PAT +27% yoy at €646m on core income strength
Group 1H24 core PAT +27% yoy (+2% qoq) at €646m on core income strength (+14% yoy) Group core PAT (€ m) Group operating profit (€ m) +27% yoy 933 +22% yoy +27 646 766 64 +141 +14 -15 -9 Non core income 56 -2 -22 508 Core PPI 976 +18% yoy Core PPI 830 CoR -109 -93 Other impairments -12 -15 1Η23 1Η24
Slide 12: Resilient NII & NIM on a normalizing path on lower rates
Resilient NII & NIM on a normalizing path on lower rates Group NII (€ m), Group NIM (bps) Domestic NII breakdown (€ m) -4bps NIM¹ (Group) 322 337 326 322 qoq 297 -11bps 529 563 594 578 561 3M Euribor (avg) -3% qoq 378 396 392 381 qoq 336 623 606 588 29 587 -3% qoq 554 25 28 26 Volume effect 25 443 4
Slide 13: 2Q24 disbursements reach €2.8b, a multi year high
2Q24 disbursements reach €2.8b, a multi year high, driving PEs +€1b ytd & +€2b (+9%) yoy Group Performing loan evolution (€ b) Loan disbursements¹ (€ b) +€2.4b Group 29.0 30.5 31.4 +8% yoy +€0.0b Int’l +2% yoy >2x yoy +€2.3b 2,8 >2.5x qoq 29,7 2,7 28,8 +9% yoy 2,6 Greece 27,4 1,9 1,9 +€2.5b 19,6 20,
Slide 14: Lending spread tightening tapering off
Lending spread tightening tapering off Greek PE lending spreads¹ (bps) Loan yield | % Total 3M Euribor Performing 260 234 229 224 221 (avg) 336 378 396 392 381 Consumer² 649 630 Pass through at 624 618 620 c70% in 2Q24 SBLs 484 456 Performing 6.0% 6.2% 6.1% 430 5.7% 6.0% 404 Yield drop mostly due Lo
Slide 15: Fees continue on an impressive growth path, +15% yoy
Fees continue on an impressive growth path, +15% yoy, nearly +10bps/assets yoy Group fees (€ m) Domestic retail fees (€ m) Fees/Assets 47bps 56bps ΥοΥ ΥοΥ +15% 109 +14% 95 14 +11% 205 Deposits 13 178 8 28 +16% 17 8 24 9 Payments Driven by increased 72 22 +33% bancassurance and mutual 65 Investment p
Slide 16: Recurring expenses contained, up by just +3.6% with C:CI at 30%
Recurring expenses contained, up by just +3.6% with C:CI at 30% Group C:CI (%) Group headcount¹ (#k) Optimization supported by digital strategy 19,8 implementation Cost/ core income % 32.5 30.1 -2.3pps yoy 7,8 6.6 at Bank level Personnel cost/ 17,0 10,8 core income % 16,1 10,1 9,4 1,6 8,8 8,1 1,6 7,
Slide 17: Capital, MREL and Liquidity
03 Capital, MREL and Liquidity 17
Slide 18: CET1 +100bps ytd/+c50bps post a dividend accrual for a 40% payout
CET1 +100bps ytd¹/+c50bps post a dividend accrual for a 40% payout from 2024 earnings 1Η24 capital movement² 20.9% CAD 20.2% +c1,8% -c0,6% -c0,3% -c0,5% 1H24 accrual for a 40% payout Organic capital generation of c120bps 18,8% 18,3% CET1 17,8% 3 FY23 1H24 Profitability RWAs Other 1H24 before dividen
Slide 19: Modest remaining net issuance to reach the final MREL target
Modest remaining net issuance to reach the final MREL target Evolution of MREL capacity vs targets (% of RWAs) MREL Target CBR Own funds Senior Preferred and Other Eligible Liabilities Expected MREL recalibration ▪ Single point of entry and issuance from Parent 27,79% Company National Bank of Greece
Slide 20: Net cash position at €9.1b supports NII and NIM
Net cash position at €9.1b supports NII and NIM TLTRO, Cash & reserves, Net Interbank (€ b) Flat qoq NBG Funding Cost (bps) despite large 378 396 392 381 3M Euribor (avg) NBG is a net lender in net loan 6.9 8.0 9.1 expansion 336 the interbank market 264 9,0 8,4 TLTRO 7,6 TLTRO fully repaid since 58
Slide 21: Deposits up by a solid +€1.4b yoy while spreads affected mainly by euribor decline
Deposits up by a solid +€1.4b yoy while spreads affected mainly by euribor decline Group deposits evolution (€ b) Greek deposit spreads¹ (bps) Group 55.7 56.3 57.1 55.6 57.1 +€1.4b yoy Demand Spread drop solely 373 390 386 375 due to Euribor Int’l 331 movement Greece 54,4 55,1 54,9 +€1.1b yoy 53,8 5
Slide 22: Asset Quality
04 Asset Quality 22
Slide 23: Favorable asset quality trends, leading to successively lower CoR
Favorable asset quality trends, leading to successively lower CoR Domestic NPE stock per category | 2Q24 (€ b) NPE balance change (€ b, Bank) o/w: €0.3b or c46% <30dpd o/w: €0.1b or c56% <30dpd 0,2 0,2 0,8 NPE inflows (+) 0,1 0,1 0,1 0,7 -0,1 -0,1 -0,1 -0,1 0,5 Curings -0,1 -0,0 -0,0 -0,0 -0,0 0,2 -
Slide 24: NPE ratio at 3.3%, coverage at 86%
NPE ratio at 3.3%, coverage at 86% NPE ratios and coverage | 2Q24 Domestic forborne stock (€ b) | 2Q24 Collateral coverage¹ 70% 62% 66% FNPEs <30 dpd 0,5 NPE coverage NPE ratio 4,4% at c86% FPEs 1,0 3,3% 3,3% €1.6b 2,8% FNPEs 31-90dpd 0,0 FNPEs >90dpd 0,0 Stage 3 coverage 37% 57% 49.4% 50.3% Retail
Slide 25: Sector leading coverage levels across stages
Sector leading coverage levels across stages Group gross loan stage evolution (€ b) Group S2 ratio and coverage (%) Group S3 ratio and coverage (%) Δ yoy 1,8 1,3 1,3 Stage 3 1,2 -0.6 12,3% o/w: €1.0b FPEs €1.4b SICR €0.2b +30dpd Stage 2 4,1 9,3% 3,1 3,0 2,6 -1.5 8,9% 7,4% Ratio 5,5% 31,2 +4.1 3,7% 3
Slide 26: ESG Update
05 ESG Update 26
Slide 27: Our Sustainability Strategy is aligned to the Bank's purpose & values and to UN SDGs
Our Sustainability Strategy is aligned to the Bank's purpose & values and to UN SDGs NBG's sustainability strategy was formulated in 2021, along 3 pillars closely aligned with the UN Sustainable Development Goals, as well as the Bank’s core values and its purpose "to create a more prosperous and sus
Slide 28: Our Climate & Environment (C&E) strategy continues to create value
Our Climate & Environment (C&E) strategy continues to create value NBG's C&E strategy is underpinned by ambitious net-zero emissions targets and specific actions to achieve them C&E strategic themes and recent highlights Lead the market in sustainable energy financing Hydro & Other 15% • Strong fran
Slide 29: Ambitious emissions targets for 2030 substantiate our Net-Zero commitment for 2050
Ambitious emissions targets for 2030 substantiate our Net-Zero commitment for 2050 NBG is the first Greek systemic bank to join PCAF1 and declare emissions reduction interim targets in the context of the NZBA2; our targets focus on the most carbon-intensive sectors in NBG’s loan portfolio and levera
Slide 30: Our ESG activity and best practices are broadly recognized
Our ESG activity and best practices are broadly recognized External validation of our commitment to sustainability through notable advancements in key ESG ratings and indices NBG upgrade ESG ratings and indices 2022 2023 2024 ytd update Years of coverage MSCI ESG rating BBB A A 11 ISS Corporate rati
Slide 31: BP 2024-26 and Updated Guidance
06 BP 2024-26 and Updated Guidance 31
Slide 32: Core PAT over €1.3b in 2026, backed by an extended interest rate normalization horizon
Core PAT over €1.3b in 2026, backed by an extended interest rate normalization horizon Core PAT evolution (€b) Key drivers Net Interest Income nearly (+) high (+) low (-) mid CAGR flat sds sds sds • Healthy credit expansion throughout the period, structural hedges in place and fixed rate assets miti
Slide 33: Loan CAGR of c7% driven by Corporates; Retail to support growth from 2025
Loan CAGR of c7% driven by Corporates; Retail to support growth from 2025 onwards c9% CAGR c2% CAGR Corporate balances Retail balances c5% c8% c4% Large Mortgages Corporates c5% c10% SMEs Consumer loans 0% Shipping SBL FY23 FY26 FY23 FY26 • Maintain leadership in energy transition and large-scale st
Slide 34: Further increase in already strong capital buffers, bodes well for increasing distributions
Further increase in already strong capital buffers, bodes well for increasing distributions Group CET1 ratio evolution (%) Key drivers • Common Equity Tier 1 (CET1) ratio: Organic capital generation >500bps Driven by sustainable profitability, comfortably accommodating credit >900bps expansion and r
Slide 35: Macro
07 Macro 35
Slide 36: The Greek economy on solid footing in 1H24 with resilient demand and strong tourism
The Greek economy on solid footing in 1H24 with resilient demand and strong tourism Greece’s GDP growth accelerated to 2.1% yoy in 1Q24 (+0.7% qoq, s.a.) from 1.3% in 170 166,1 Greece’s index, sustained recovery 2017=100 4Q23 (+0.3% qoq s.a.), post a temporary, flood- and investment-led slowdown in
Slide 37: Forward-looking indicators point to further strengthening in business activity & investments
Forward-looking indicators point to further strengthening in business activity & investments Forward-looking indicators point to a steady pace of GDP growth in qoq terms for 2Q24, 130 Wildfires and 130 Robust economic index Covid-19 historic flood Production and despite the weak external environment
Slide 38: Favorable labor market trends, increasing real estate prices and improving liquidity
Favorable labor market trends, increasing real estate prices and improving liquidity 8 yoy % 30 24 €b yoy 15 Acceleration in employment Increasing compensation growth to 1.9% yoy in 5M24 of employees & consumer from 1.3% in FY23 with labor 6 25 loans to support 10 22 force participation rate at an c
Slide 39: Increasing production, high capacity-utilization rates and a pick-up in external demand
Increasing production, high capacity-utilization rates and a pick-up in external demand 70 70 Business activity and 60 60 Continuing index yoy, exports on the rise in 2Q24 outperformance of Greek 65 65 50 2m m.a. 50 manufacturing against the 60 60 40 40 euro area peers 55 55 30 30 50 50 Manufacturin
Slide 40: Solid fiscal performance and supportive liquidity conditions (bank lending, RRF)
Solid fiscal performance and supportive liquidity conditions (bank lending, RRF) General Government %GDP %GDP 210 VAT revenue growth 30 yoy 30 primary surplus at 1.9% surplus gained steam pointing to 12 of GDP in FY23 and 185 strengthened final 20 20 1.0%* in 5M24 with demand in 2Q24 8 Gross Debt-to
Slide 41: Appendix
08 Appendix 41
Slide 42: Balance Sheet & P&L
Balance Sheet & P&L Balance Sheet | Group P&L | Group €m 2Q24 1Q24 4Q23 3Q23 2Q23 €m 2Q24 1Q24 4Q23 3Q23 2Q23 Cash & Reserves 8,356 8,307 9,015 8,400 7,551 NII 587 606 623 588 554 Interbank placements 2,573 2,527 2,792 2,330 2,735 Net fee & commission income 106 100 109 95 92 Securities 17,719 17,47
Slide 43: Geographical segment P&L: Greece & International Group
Geographical segment P&L: Greece & International Group Greece International €m 2Q24 1Q24 4Q23 3Q23 2Q23 €m 2Q24 1Q24 4Q23 3Q23 2Q23 NII 561 578 594 563 529 NII 26 28 29 25 25 Net fee & commission Net fee & commission 102 96 106 92 87 4 4 4 4 5 income income Core Income 662 673 700 654 616 Core Incom
Slide 44: ESMA Alternative Performance Measures (APMs), financial data and ratios definitions
ESMA Alternative Performance Measures (APMs), financial data and ratios definitions This presentation contains financial data, which is compiled as a normal part of our financial reporting and management information systems. For instance, financial items are categorized as foreign or domestic on the
Slide 45: Definition of financial data, ratios used and alternative performance measures
Definition of financial data, ratios used and alternative performance measures Name Abbreviation Definition Assets held for sale -- Non-current assets held for sale Cash and Reserves -- Cash and balances with central banks Combined Buffer Requirement CBR Total CET1 capital required to meet the requi
Slide 46: Definition of financial data, ratios used and alternative performance measures
Definition of financial data, ratios used and alternative performance measures Minorities -- Non-controlling interest MREL -- The minimum requirement for own funds and eligible liabilities under the BRRD. Net Interbank -- Due from banks less due to banks, excluding the TLTRO facility Net Interest Ma
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