National Bank Of Greece S.a. · ATHEX:ETE
National Bank Of Greece — Q2 2022 Earnings Presentation
44 slides from National Bank Of Greece's earnings presentation, Jul 29, 2022
Slide 1: 2Q22 Financial Results
2Q22 Financial Results 29 July 2022
Slide 2: Table of Contents
Table of Contents 1 Key Highlights 2 Financial Results 3 Macro 4 ESG Update 5 Transformation Program Update 6 Appendix
Slide 3: 1 Key Highlights
NATIONAL BANK OF GREECE 1 | Key Highlights
Slide 4: 1H22 Group financial highlights: sustained strong performance
1Η22 Group financial highlights: sustained strong performance 1H22 PAT cont. ops 1H22 COP Core income €490m €280m €770m up +5% yoy 1H22 attributable PAT up +40% yoy, on core income growth and normalizing CoR C:CI €546 (68bps) 50% -200bps yoy Net NPEs €0.4b CET1 FL 1 2 Performing loans 1 +€1.1b qoq N
Slide 5: Improvement in recurring profitability driven by strong core income leads to widening jaws
Improvement in recurring profitability driven by strong core income leads to widening “jaws” Profitability “jaws” | € m – 1H22 Profitability “jaws” | € m – 2Q22 COP & PAT cont. operations | € m C:CI 60.3% 52.1% 50.1% 55.6% 51.5% 48.8% NPE NII down NPE NII down 490 by c€64m vs 1H20 770 by c€21m vs 4Q
Slide 6: Positive trends across financial and operating KPIs continue in 1H22
Positive trends across financial and operating KPIs continue in 1H22… Profitability | € m Performing loans¹ | € b COP 200 250 280 +40% yoy 26.5 +10% yoy 24.2 25.2 16.7 +17% yoy Core Income 734 764 770 +5% yoy Corporate 14.3 15.2 Opex -383 -400 -386 +1% yoy Retail 9.8 10.0 9.8 +0% yoy CoR -151 -114 -
Slide 7: Supporting guidance on profitability, asset quality and capital
… supporting guidance on profitability, asset quality and capital Profitability | € b Asset quality¹ | € b Coverage% 77.5% 80.8% >80% >80% NPE% 6.9% 6.1% c6% c3% RoTE%² 8.1% 9.2% c9% c10% NPEs €b 2.1 1.9 1.8 0.7 COP 0.45 0.49 c1.1 0.28 FY21 1Η22 FY22 FY24 Core Income 1.5 guidance guidance 1.4 Capita
Slide 8: Economic activity in 1H22 overcame headwinds from surging inflation and geopolitical turbulence
Economic activity in 1H22 overcame headwinds from surging inflation and geopolitical turbulence Greece’s economic performance exceed expectations: Sustained • 1Q22 GDP up by +7.0% y-o-y (+5.4% in Euro Area), strong 1Q19 1Q20 1Q21 1Q22 2Q22 beating expectations; coupled with encouraging signs busines
Slide 9: Defenses against rising energy risks are being built up in 2H22
Defenses against rising energy risks are being built up in 2H22 New fiscal Inflation is likely to have peaked in June-July and will likely remain above previous estimates due to: i) significantly higher energy price forecasts for 2H22 and 1Η23, especially as regards natural gas; and support and a st
Slide 10: 2 Financial Results
NATIONAL BANK OF GREECE 2.| Financial Results
Slide 11: Accelerating core income recovery and CoR normalization lift 1H22 COP up 40% to €280m
Accelerating core income recovery (+5% yoy) and CoR normalization lift 1H22 COP up 40% to €280m P&L Highlights P&L | Group €m 1H22 1H21 YoY 2Q22 QoQ 1H22 Group PAT (cont. ops.) reaches €490m, supported by solid NII 600 596 +1% 312 +8% core operating trends, with COP up by 40% to €280m. Net fee & com
Slide 12: Consistently negative organic NPE flows drive the NPE ratio to 6.1%
Consistently negative organic NPE flows drive the NPE1 ratio to 6.1%; best in class capital buffers maintained Balance sheet Highlights Key P&L Ratios | Group Domestic PE loan book expands by €2.3b yoy 2Q22 1Q22 4Q21 3Q21 2Q21 • Disbursements² accelerate in 2Q22 reaching €1.9b, up by more than NIM (
Slide 13: Recurring organic capital generation in 2Q22 at +c20bps qoq
Recurring organic capital generation in 2Q22 at +c20bps qoq 2Q22 FL capital movement1 +c20bps in organic & recurring capital generation 16.7% pro forma EVO Payments merchant acquiring completion 16.2% +c0.5% 16.1% CAD FL -c0.3% -c0.3% 15.6% pro forma EVO Payments merchant CET1 Ph-in: 16.1% acquiring
Slide 14: 1H22 Group COP benefits from core income growth, CoR normalization and flat costs
1H22 Group COP (+40% yoy) benefits from core income growth, CoR normalization and flat costs Group core operating profit bridge 1Η22 (€ m) Group operating profit decomposition 1H22 (€ b) COP (€m) 200 280 +40% yoy +40% yoy COP margin (bps) 148 183 +35bps yoy OpEx +1% yoy +23% yoy +47 280 +1% yoy driv
Slide 15: 2Q NII recovers sharply mostly driven by PE expansion
2Q NII recovers sharply (+9% qoq) mostly driven by PE expansion, putting 1H NII back to a growth trajectory (+1%) Domestic NII (€ m), Group NIM & CoR (bps) Domestic NII breakdown (€ m) NIM (Group) NII 283 291 292 270 294 214 216 206 182 194 +9% 1H22 at 68bps 110 96 71 73 63 CoR (Group) 198 199 Loans
Slide 16: Strong pick up in 2Q22 disbursements drives PEs higher by +€1.1b qoq
Strong pick up in 2Q22 disbursements (+80% qoq) drives PEs higher by an impressive +€1.1b qoq Greek loan evolution | performing loans (€ b) Loan disbursements¹ (€ b) +50% yoy (+38% retail, 25.7 25.5 28.9 28.8 29.8 Net loans² +53% corporate) 3.0 26.5 25.2 25.5 +€2.3b 24.2 24.2 +10% yoy 2.1 1.9 2.0 +€
Slide 17: PE lending yield pivots from recent lows of c300bps
PE lending yield pivots from recent lows of c300bps Greek PE lending yields (bps) Greek forborne & PE yields, NPE NII % 5.4% 5.9% Total 313 309 308 306 307 Dom. NPE NII net of 4.4% 4.4% Performing ¹ cash collected and 3.3% provisions / Dom. NII % (ytd) 1H20 FY20 1H21 FY21 1H22 771 770 771 772 772 Co
Slide 18: Public fiscal measures and private sector credit expansion reflected in increasing deposits
Public fiscal measures and private sector credit expansion reflected in an increasing stock of deposits Greek deposit yields (bps) Greek deposit evolution (€ b) 82% 87% Core deposits/total 12 52.6 +€3.0b 51.6 51.3 +6.1% yoy 49.6 49.6 6.9 7 7.3 7.1 Time 8.8 8.0 5 -€1.9b -21.9% yoy 3 2 16.0 Term - EUR
Slide 19: 1H22 domestic fees increase by a strong 24% yoy
1H22 domestic fees increase by a strong 24% yoy, driven by card fees, payments and trade finance Domestic fees (€ m) Domestic retail fees decomposition (€ m) Fees/Assets 35bps 42bps YoY YoY 160 +24% 87 +31% 17 -2% 11 +26% 130 Deposits 66 17 +22% 22 +24% 57 Payments 9 46 Investment products 17 13 +22
Slide 20: OpEx near flat yoy drives our C:CI at 50%
Despite accelerating inflation throughout 1H22, OpEx near flat yoy drives our C:CI at 50% (<49% in 2Q22) OpEx by category (€ m) Domestic Branch evolution (#) Group -34 527 branches 1H22 1H21 YoY 2yrΔ¹ 461 Personnel 207 213 -2.7% -14% 389 qoq drop due to 366 conversion into i- G&As 95 92 +3.4% +5% Re
Slide 21: Organic NPE flows consistently negative, driven by successful restructurings
Organic NPE flows consistently negative, driven by successful restructurings yielding high cure rates Domestic NPE stock per category | 2Q22 (€ b) NPE balance change (€ m, Bank) o/w: €0.3b or FNPE & other c30% <30dpd impaired <90dpd Affected by 90+dpd 1.1 1.2 finalization of Frontier II perimeter o/
Slide 22: 1/3rd of domestic gross NPEs of €1.9b comprise FNPEs <30dpd
1/3rd of domestic gross NPEs of €1.9b comprise of FNPEs <30dpd, likely to cure in the next few quarters Domestic 90dpd ratios and coverage | 2Q22 Domestic 90dpd – NPE bridge (€ b) | 2Q22 Collateral 86% 5% 85% 71% 68% coverage1 12% 149% 90dpd 8% ratio 1.9 138% +0.6 +0.05 +0.2 3% 3.5% 3.8% 1.1 2% 90dp
Slide 23: Organic growth of S1 loans already offers increasing support to NII
Organic growth of S1 loans already offers increasing support to NII Group gross loan stage evolution (€ b) Group S2 ratio and coverage (%) Group S3 ratio and coverage (%) Stage 3 Δ yoy 4.1 -2.0 2.2 2.1 2.1 o/w: €2.2b FPEs €2.2b SICR Stage 2 €0.3b +30dpd 4.4 4.7 4.7 4.7 +0.3 Stage 1 14.9% 14.9% 14.4%
Slide 24: Project Frontier II: transaction signed and on track, completion expected in 2H22
Project Frontier II: transaction signed and on track, completion expected in 2H22 Portfolio attributes Securitization structure HAPS1 eligible Consumer 11% Corporate & c80% secured by real SBLs 41% Retain 100% of estate collateral senior notes c€1.0b >1.7b real estate value c€0.45b (of which c
Slide 25: Funding cost remains at all time lows
Funding cost remains at all time lows aided by systemic liquidity abundance and ECB’s monetary policy Eurosystem funding (€ b) NBG Funding Cost (bps) LCR: 259% Repo funding : -€3.0b 19 12 7 2 1 0 -2 -2 1 Blended 11.6 11.6 10.5 -50 -67 -67 -65 -65 -64 -64 -64 -64 ECB¹ ECB 2.2 2.2 2Q20 3Q20 4Q20 1Q21
Slide 26: Domestic deposit stock and private cash buffers continue to increase
Domestic deposit stock and private cash buffers continue to increase Deposit evolution by geography (€ b) NBG domestic deposit flows (€ b) YoY Group 51.6 51.6 53.5 53.1 54.3 +5.1% 4.7 4.6 3.4 1.5 1.1 1.3 0.2 0.5 2.1 2.0 1.9 1.8 1.7 -16.0% SEE & Other -0.3 52.6 +6.0% 51.5 51.3 -2.2 49.6 49.6 -3.6 -€1
Slide 27: 3 Macro
NATIONAL BANK OF GREECE 3| Macro
Slide 28: Economic activity remained resilient against rising global headwinds in 1H22
Economic activity remained resilient against rising global headwinds in 1H22, with tourism heading to a new all- time high, sustaining the upward trend in domestic demand and favorable labor market conditions Key indicators point to resilient growth in 2Q22 International arrivals at AIA close to the
Slide 29: Buoyant business activity endures cost-side pressure with inflation peak expected
Buoyant business activity endures cost-side pressure with the inflation peak expected in June-July Business turnover*: +26% (€21 bn) above its pre- A combined rebound in labor income and firms' profits pandemic level in 5M22 and +30% y-o-y (€23 bn) 20 y-o-y 20 25 €bn 25 15 15 10 10 5 5 20 20 0 0 -5
Slide 30: Impact of inflation on disposable income cushioned by fiscal measures
The impact of inflation on private disposable income is cushioned by fiscal measures, partly financed by tax revenue growth; further escalation of the energy crisis in EU could pose additional stress on 2H22 activity Futures-implied NG prices for 2H22 up by 59% compared Structure of natural gas impo
Slide 31: 4 ESG Update
NATIONAL BANK OF GREECE 4| ESG Update
Slide 32: We are pushing forward with our environment and climate strategy
We are pushing forward with our environment and climate strategy Highlights from ECB’s 2022 Climate risk Stress Test Scope 1-2-3 emissions (tCO2) Successful completion of ECB’s 2022 Climate risk Stress 20201 Test 2021 Full adherence to requirements Reflects NBG’s firm commitment and progress m
Slide 33: 5 Transformation Program Update
5 Transformation Program Update
Slide 34: Our Transformation achievements in 1H22 underpin a new business and operating model
Our Transformation achievements in 1H22 underpin a new business and operating model BEST BANK FOR EFFICIENCY & HEALTHY BALANCE OUR CLIENTS (BBC) AGILITY (ENA) SHEET (HBS) • Dedicated processes for RRF • Implementation of actions to optimise • Completion of Frontier portfolio opportunities; 1st Greek
Slide 35: Our digital strategy demonstrates impressive results driven by new offerings
Our digital strategy demonstrates impressive results driven by new offerings ENGAGE CROSS-SELL ONBOARD ONBOAR D Digital subscribers (m) Digital active users (m) Digital sales (000s, cumulative) Registered subscribers YoY 3.5 3.5 +10% 3.5 3.3 623 YoY 3.2 3.3 561 +26% 3.1 3.1 500 3.0 Active YoY +58% 2
Slide 36: 6 Appendix
NATIONAL BANK OF GREECE 6| Appendix
Slide 37: Group Balance Sheet & P&L
Group Balance Sheet & P&L Balance Sheet¹ | Group P&L¹ | Group €m 2Q22 1Q22 4Q21 3Q21 2Q21 €m 2Q22 1Q22 4Q21 3Q21 2Q21 Cash & Reserves 15,261 14,530 15,827 11,587 11,001 NII 312 288 308 308 300 Interbank placements 2,711 3,715 3,639 3,152 2,906 Net fee & commission income 86 85 74 74 70 Securities 14
Slide 38: Geographical segment P&L: Greece & International
Geographical segment P&L: Greece & International Greece International¹ €m 2Q22 1Q22 4Q21 3Q21 2Q21 €m 2Q22 1Q22 4Q21 3Q21 2Q21 NII 294 270 292 291 283 NII 18 18 16 18 17 Net fee & commission income 80 80 70 69 66 Net fee & commission income 5 5 4 5 4 Core Income 375 350 362 360 349 Core Income 23 23
Slide 39: ESMA Alternative Performance Measures (APMs), definition of financial data and ratios used
ESMA Alternative Performance Measures (APMs), definition of financial data and ratios used The 2Q22 Financial Results Press Release contains financial information and measures as derived from the Group financial statements for the period ended 30 June 2022 and for the year ended 31 December 2021, wh
Slide 40: 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 Balance Sheet B/S Statement of Financial Position Combined Buffer Requirement CBR Total CET1 capital required to meet the requirements
Slide 41: Definition of financial data, ratios used and alternative performance measures
Definition of financial data, ratios used and alternative performance measures Loan / Lending Yield Annualized (or annual) loan interest income over gross performing exposures Loans-to-Deposits Ratio L:D ratio Loans and advances to customers over due to customers, at year end or period-end, excludin
Slide 42: Important Notice – Disclaimer
Important Notice – Disclaimer The information, statements and opinions set out in the 2Q22 Results Press Release and accompanying discussion (the “Press Release”) have been provided by National Bank of Greece S.A. (the “Bank”) (together with its consolidated subsidiaries (the “Group”)). They serve i
Slide 43: Important Notice – Forward Looking Information
Important Notice – Forward Looking Information Forward Looking Statements reflect knowledge and information available at the date of the Press Release and are subject to inherent uncertainties and qualifications and are based on numerous assumptions, in each case whether or not identified in the Pre
Slide 44: Contact details
Contact details Christos Christodoulou +30 210 334 3051 cchristodoulou@nbg.gr Group CFO Greg Papagrigoris +30 210 334 2310 papagrigoris.gr@nbg.gr Group Head of IR Maria Kanellopoulou +30 210 334 1537 mkanellopoulou@nbg.gr Panagiotis Alevras +30 210 772 7292 Alevras.Pan@nbg.gr George Panagopoulos, CF
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