Eurobank S.A. · ATHEX:EUROB
Eurobank — EFG Eurobank Ergasias — 9M 2006 Earnings Presentation
37 slides from Eurobank's earnings presentation, Oct 31, 2006
Slide 1: Nine-Month 2006 Results
OCTOBER 31, 2006 NINE-MONTH 2006 RESULTS
Slide 2: Cautionary Statement Regarding Forward-Looking Information
PAGE 2 Cautionary Statement Regarding Forward-Looking Information This presentation may contain projections or other forward – looking statements related to EFG Eurobank Ergasias S.A. that involve risks and uncertainties. Readers are cautioned that these statements represent the Group’s judgments an
Slide 3: Contents
PAGE 3 Contents 1. Financial Highlights pg.4 2. Key Developments pg.10 3. Financial Review pg.15 3. Segmental Performance pg.22 4. High Profitability pg.29 5. Appendices pg.31
Slide 4: Financial Highlights
PAGE 4 1 HIGHLIGHTS 1 Financial Highlights
Slide 5: Robust profitability sustained
PAGE 5 1 HIGHLIGHTS Robust profitability sustained 9M 2006 Net Profit rises 27% to € 489 m Gross Loans reach € 32.3 bn, expanding by 25.8% Record net loan additions of € 1.85 bn in 3Q High efficiency with Cost / Income at 39.8% in Greece and 46.3% for the Group ROE at 23.5% - ROA at 1.39% Distributi
Slide 6: Loan growth accelerates to 25.8% y-o-y
PAGE 6 1 HIGHLIGHTS Loan growth accelerates to 25.8% y-o-y Group Household Lending Total Group Lending + 27.8% 15.6 12.2 + 38.9% Mortgages 7.8 + 25.8% 32.3 5.6 25.7 + 91.4% New Europe 2.9 + 18.4% 1.5 Consumer credit 7.8 6.6 9M 05 9M 06 + 21.8% Group Business Lending 29.4 Greece + 24.1% 16.7 24.2 13.
Slide 7: Net loan additions even stronger than 2Q
PAGE 7 1 HIGHLIGHTS Net loan additions even stronger than 2Q in a seasonally weak quarter - up 6.1% q-o-q to € 1.85 bn Net loan additions at € 4.9 bn y.t.d – Strong momentum in Strong across all segments international loan additions Net loan additions Loans 9M 06 ∆% y-o-y Poland 54 73 n.a. SBB 241 3
Slide 8: Robust Wealth Management
PAGE 8 1 HIGHLIGHTS Robust Wealth Management Customer Funds + 15.7% 41.8 Total AUM rise 15.7% y-o-y to € 41.8bn 36.1 Strong deposit growth of 16.3% to € 22.2bn 10.7 Mutual Funds Other investment products 7.9 + 34.7% Undisputed leader in Greece with 36.7% market share at the end of September ‘06 (exc
Slide 9: Greater contribution from International operations
PAGE 9 1 HIGHLIGHTS Greater contribution from International operations Household Lending Market Share (%) Operating income per country 10.7 8.5 7.2 107.4 87.8 Rom a nia Bulga ria Se rbia 9M 05 62.4 As at August ’06, based on estimates 9M 06 45.9 Net profit contribution in 9M 06 32.5 16 16 13.3 6.4 6
Slide 10: Key Developments
PAGE 10 2 KEY DEVELOPMENTS 2 Key Developments
Slide 11: Diversified Funding Strategy
PAGE 11 2 KEY DEVELOPMENTS Diversified Funding Strategy First ever securitization of € 2.25 bn of Greek Small Business Loans Provides funding at a reasonable cost (Class A Notes with coupon three month Euribor + 17bps) Attests to high portfolio quality – portfolio rated by S & P’s and Moody’s Three
Slide 12: Creating a strong regional group
PAGE 12 2 KEY DEVELOPMENTS Creating a strong regional group Organic growth remains the main strategy to grow in New Europe Emphasis on strengthening distribution networks – to reach >700 branches in the region by year-end Selective bolt-on acquisitions to complement existing operations Completed the
Slide 13: Increasing our investments in New Europe
PAGE 13 2 KEY DEVELOPMENTS Increasing our investments in New Europe – aiming for >700 branches by year-end Branches Branches Investment 31.12.05 FY ‘06e FY ‘06e Romania 151 210 €170m Bulgaria 142 281 € 308m Postbank 142 150 €150m DZI* - 131 €158m Serbia 97 100 €295m Poland 0 70 €40m Turkey* 0 30 €14
Slide 14: Strengthening our presence in Bulgaria
PAGE 14 2 KEY DEVELOPMENTS Strengthening our presence in Bulgaria Eurobank to acquire 74.26% of DZI Bank shares from DZI insurance group and other existing shareholders DZI Bank € 110m cash + 2m Eurobank shares (existing treasury stock) Key Financials Top 5 retail network in the country 1H 06 In € m
Slide 15: Financial Review
PAGE 15 3 FINANCIAL REVIEW 3 Financial Review
Slide 16: NII climbs 19% to € 1.2 bn
PAGE 16 3 FINANCIAL REVIEW NII climbs 19% to € 1.2 bn – new quarterly record at € 411.5 m 3Q 06 NII up 6.3% from 2Q 06 with New Europe contributes 12.9% of NII Loan margin rising 8.8% + 6.3% 411.5 381 387 371 Total NII* 355 304 290 279 58 281 275 Loan margin 47 45.9 43.4 39.2 354 New Europe* 340 325
Slide 17: Stable spreads – strong NIM at 3.3%
PAGE 17 3 FINANCIAL REVIEW Stable spreads – strong NIM at 3.3% Overall loan spread at 1Q levels NIM at 3.3% All spreads Greece only with Assets up 18.8% 4Q 05 1Q 06 2Q 06 3Q 06 9M 06 Deposits (exc. Time) 1.99 2.03 2.10 2.24 2.12 Time Deposits 0.11 0.11 0.11 0.11 0.11 3.6 3.5 3.5 3.5 3.3 3.3 3.3 NIM
Slide 18: Banking Fees & Commissions normalize
PAGE 18 3 FINANCIAL REVIEW Banking Fees & Commissions normalize, up 20.7%* y-o-y to € 323 m Strong income contribution from Capital Markets fees which jump 73% y-o-y to € 86 m Fees from Mutual Funds & AUM grow 11.4% y-o-y Total Fees climb 16.3% like-for-like to € 365 m, contributing 22% to Total Ope
Slide 19: Total Operating Income at € 1.7 bn
PAGE 19 3 FINANCIAL REVIEW Total Operating Income at € 1.7 bn, up 20.6% - Core Income at 93% of total Core Income rises 16.7% y-o-y to € 1,534 m Non core income supported by rising equities performance and one off gains from subsidiary disposals booked in 1Q New Europe contributes 13.2% of Total Ope
Slide 20: Efficient operations: Cost / Income at 46.3%
PAGE 20 3 FINANCIAL REVIEW Efficient operations: Cost / Income at 46.3% Cost/Income at 39.8% for Greek operations Cost/Income (%) Local costs stable q-o-q, up 9.5% y-o-y 47.9 New Polish, Turkish & NSB operations bring total 46.3 46.3 costs to € 768 m 42.7 42.7 9M 05 39.8 FY 05 Group costs grow 14.8
Slide 21: Healthy credit quality
PAGE 21 3 FINANCIAL REVIEW Healthy credit quality Group NPL Ratio (% of loans) NPLs at 3.05%, from 3.12% in 9M 05 Provisioning coverage at 88% 3.12% 3.02% 3.02% 3.01% 3.05% Provisions at 119 bps of avg. net loans (9M 06) 9M 05 FY 05 1Q 05 1H 06 9M 06 Bad Debt Provisions Greek NPLs per segment (% of
Slide 22: Segmental Performance
PAGE 22 4 SEGMENTAL PERFORMANCE 4 Segmental Performance
Slide 23: Profits before tax rises 23% y-o-y to € 629m
PAGE 23 4 SEGMENTAL PERFORMANCE Profits before tax* rises 23% y-o-y to € 629m PBT* per Segment Group PBT* 05/06 growth +15% + 48% + 56% + 31% 9M 06 281 + 23% Delta 629 141 511 139 245 9M 05 79 94 108 (17) 7 51 11 Retail Corporate AM, PB & Ins Global & New Europe Capital & Other Capital Markets 9M 05
Slide 24: Retail – overachieving targets
PAGE 24 4 SEGMENTAL PERFORMANCE Retail – overachieving targets FY 05 9M 06 05/06 +16% + 13% + 21% + 15% Cost to Income 45.5% 43.8% growth Return on Equity 39.3% 40.7% 891 Share of profits 49.4% 44.7% 771 391 281 346 220 Retail: incorporating customer current accounts, savings, deposits, credit and d
Slide 25: Corporate – highest profitability
PAGE 25 4 SEGMENTAL PERFORMANCE Corporate – highest profitability ∆ FY 05 9M 06 05/6 growth +15% + 9% (58%) + 48% Cost to Income 33.9% 32.1% Return on Equity 17.1% 24.9% 228 Share of profits 18.3% 22.1% 199 139 73 94 Corporate: incorporating direct debit facilities, current accounts, 67 16 deposits,
Slide 26: AM, PB & INS – highest top line growth
PAGE 26 4 SEGMENTAL PERFORMANCE AM, PB & INS – highest top line growth FY 05 9M 06 05/6 +39% + 15% + 56% Cost to Income 36.5% 32.9% growth Return on Equity 85.7% 82.7% 118 Share of profits 11.9% 12.5% 79 85 39 51 Asset Management, Private Banking and Insurance: incorporating private banking services
Slide 27: Global & Capital Markets – a strong contributor to profitability
PAGE 27 4 SEGMENTAL PERFORMANCE Global & Capital Markets – a strong contributor to profitability FY 05 9M 06 05/6 Cost to Income 29.2% 24.6% growth +26% + 15% + 31% Return on Equity 73.5% 86.8% 186 Share of profits 19.1% 22.3% 141 148 108 46 Global & Capital Markets: incorporating investment banking
Slide 28: New Europe – major investments continue
PAGE 28 4 SEGMENTAL PERFORMANCE New Europe – major investments continue FY 05 9M 06 Cost to Income 87.8% 96.7% 05/6 growth +45% + 68% + 138% Cost to Income1 85.1% 85.4% Share of profits1 2.4% 1.2% 220 212 1 excluding Polish operations *segmental reporting entails the internal allocation of all reven
Slide 29: High profitability
PAGE 29 5 PROFITABILITY 5 High profitability
Slide 30: Generating value for shareholders
PAGE 30 5 PROFITABILITY Generating value for shareholders RoE 9M06 Net Profit +27% to € 489 m 25 23.5 Ordinary Shareholders’ Equity at € 2.65bn 20 23.0 22.8 23.7 20.2 21.1 21.1 Preferred Equity at € 788 m 15 16.8 10 Tier II capital at € 603 m 5 0 FY 04 1Q 05 1H 05 9M 05 FY 05 1Q 06 1H 06 9M 06 RoA 1
Slide 31: Appendices
PAGE 31 6 APPENDICES 6 Appendices
Slide 32: Financial Ratios
PAGE 32 6 APPENDICES Financial Ratios Financial Ratios 9M 06 9M 05 Net Interest Margin 3.3% 3.5% Cost-Income 46.3% 46.3% NPLs (% of loans) 3.05% 3.12% NPLs coverage 87.8% 90.5% Provision Charge (% of net loans) 1.19% 1.32% Tier Ι Ratio 9.8% 8.6% Total Capital Adequacy 11.9% 11.0% ROA after tax 1.39%
Slide 33: Summary Figures
PAGE 33 6 APPENDICES Summary Figures Summary Figures (€ m) 9M 06 9M 05 ∆% New Europe Net Interest Income 1,169.5 981.0 19.2% 150.5 Net fees & Commissions 323.1 287.2 12.5% 55.1 Non banking fees 41.9 46.1 -9.1% 0.3 Core Income 1,534.5 1,314.2 16.8% 205.9 Non core income 124.6 61.4 103.1% 12.6 Total O
Slide 34: Balance Sheet Figures
PAGE 34 6 APPENDICES Balance Sheet Figures Portfolio of Loans (Gross, € m) 9M 06 9M 05 ∆% Consumer Loans 7,813 6,601 18.4% Mortgages 7,761 5,587 38.9% Loans to Households 15,574 12,188 27.8% Small Business Loans 4,941 3,624 36.3% Loans to Medium enterprises 6,801 5,529 23.0% Loans to Large Corporate
Slide 35: 9M 2006 – Summary per Segment
PAGE 35 6 APPENDICES 9M 2006 – Summary per Segment Treasury & Capital Capital & Elimination Total Segmental Results 9M 2006 (€ m) Retail Corporate AM, PB & INS Markets Other Center New Europe Interest income 783 152 21 62 1 0 150 1,170 Net fee & commission income 42 25 91 112 -2 0 55 323 Net Insuran
Slide 36: 9M 2005 – Summary per Segment
PAGE 36 6 APPENDICES 9M 2005 – Summary per Segment Treasury & Capital Elimination New Total Segmental Results 9M 2005 (€ m) Retail Corporate AM, PB & INS Markets Capital & Other Centre Europe Interest income 675 140 14 59 -4 0 96 981 Net fee & commission income 48 26 70 89 1 0 53 287 Net Insurance i
Slide 37: Contacts
PAGE 37 6 APPENDICES Contacts EFG Eurobank Ergasias, 8 Othonos Str., 10557 Athens, Greece Fax: +30 210 3337 337 E-mail: investor_relations@eurobank.gr Internet: www.eurobank.gr Reuters: EFGr.AT Bloomberg: EUROB GA Investor Relations Dimitris Nikolos Tel: +30 210 3371162 E-mail: dnikolos@eurobank.gr
EFG Eurobank Ergasias — 9M 2006 Earnings Presentation on 6ix