Eurobank S.A. · ATHEX:EUROB
Eurobank — EFG Eurobank Ergasias — Q1 2004 Earnings Presentation
29 slides from Eurobank's earnings presentation, 2004
Slide 1: First Quarter 2004 Results
@ Eurobank | FIRST QUARTER 2004 RESULTS
Slide 2: Cautionary Statement Regarding Forward-Looking Information
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 and futur
Slide 3: Contents
Contents Page I. Highlights & Key Developments 4 II. Financial Review 11 Appendices - FY 2003 Financial Figures 27 - Contacts 28 3
Slide 4: Highlights & Key Developments
HIGHLIGHTS & KEY DEVELOPMENTS 4
Slide 5: Favourable domestic environment
Favourable domestic environment Strong GDP Growth in Greece – 2004 GDP growth slightly below 4% Real GDP Growth – GDP growth to exceed 3% in 2005-6 5.0 supported by EU flows, structural 4.5 4.3 4.1 4 4 3.8 reforms, regional economies 4.0 3.5 3.4 3.6 3.5 – CPI at 2.9% in April 2004 3.0 2.5 2.4 2.9 2.
Slide 6: Gaining market share across all segments
Gaining market share across all segments Leveraging our franchise – We have developed technologically advanced, segmented distribution networks – We capture leading positions in the fastest growing segments of the Greek market – We are expanding our successful business model to a 50 million people a
Slide 7: A Robust First Quarter
A Robust First Quarter Strong business expansion: gross Loans up 25% to € 17.8 bn – Consumer lending up 32% to € 4.1 bn – Mortgage lending up 35% to € 3.4 bn – Business lending up 19% to € 10.4bn Revenue growth of 23% to € 348 m Cost / Income ratio drops from 57.3% to 50.2% Improved asset quality: o
Slide 8: Loan growth at 25% group-wide
Loan growth at 25% group-wide Strong volume growth generated across all lending segments Household lending up 33.5%* Business Lending up 18.9% SE European entities contribute € 658m of loans Loans outstanding (gross, in € m) + 24.6% 17,826 SE Europe: € 658m Growth Rates (y.o.y.) Greece Group-wide 14
Slide 9: Household Lending up 34%
Household Lending up 34% Household Lending at Group level rises 33.5% to € 7.5 bn In Greece, Household Lending rises 30% y.o.y. to € 7.2 bn Net new balances in Greece at € 553 m in 1Q ’04 vs € 455 m in 1Q ’03 SE European household loans at € 282 m (3.8% of total) Household Lending in Greece (in €m)
Slide 10: Business Lending rises by 19%
Business Lending rises by 19% Business Lending (in € m) Small & Medium-sized businesses drive growth + 18.9% 10,360 Leaders in Small Business Lending, growing strongly at 26.3% to € 2.4 bn Strong expansion in Medium-sized Enterprises (turnover € 2.5- 8,711 € 25m) with loans rising 24.5% y.o.y. to €
Slide 11: Consolidating leadership in Asset Mgmt. & Capital Markets
Consolidating leadership in Asset Mgmt. & Capital Markets Mutual Funds market shares (excl. MM Funds) Mutual Funds March 2004 – Dominant position with 20.6% market share EFG 20.6% (excluding Money Market funds) and 26.2% of the total market. – Total Market Share of 26.2% in 1Q 04, with 20.6% in the
Slide 12: Financial Review
A eurobank | FINANCIAL REVIEW 12
Slide 13: Retail Lending at 55% of total
Retail Lending at 55% of total Loan book composition (% contribution per loan category) Household lending at 42% of total, from 39% in 1Q 2003 17,826 16,782 Retail lending (Household + SBLs) (gross) Loans in € m. 20.3% at 55% of total loans, from 52.3% 14,303 20.7% in 1Q 2003 23.2% Corporates 24.4%
Slide 14: Customer Funds up 12.4% to € 26 bn
Customer Funds up 12.4% to € 26 bn Total AUM rise to € 26 bn, with solid deposit expansion of 10.3% to € 15.6 bn Customer shift to investment products continues: – Mutual Funds up 40% to € 2.7 bn – Mutual Funds & other investment products at 29% of total FUM (vs. 20% in 1Q’03) Customer Funds (in € m
Slide 15: Net Interest Income up 15% Y-o-Y
Net Interest Income up 15% Y-o-Y NII quarterly evolution (in € m) +6% 234 221 216 19 208 12 Q1 ’04 NII rises by 15% over Q1 ’03 204 11 215 +3% NII rises 6% over 4Q ’04 for the 10 209 9 205 Group and 3% in Greece 198 195 SE Europe operations contribute 8% of NII, vs. 5% in FY ’03 NIM stronger at 3.34
Slide 16: Loan Margin up 32% drives the NII
Loan Margin up 32% drives the NII NII evolution (in € m) 234 221 216 Total NII 207 Loan Spread 204 expanding 3.79% 3.81% 161 169 140 147 3.76% 128 Loan margin 3.65% Money market 17 16 14 11 9 3.58% mismatch Earnings on 19 17 20 14 19 capital & bonds 40 38 1Q 03 1H 03 9M 03 FY 03 1Q 04 35 35 35 Depos
Slide 17: Loan spread improving
Loan spread improving 1Q 2003 2003 1Q 2004 Total Deposits & Repos 0.98% 0.86% 0.84% Loans Wholesale (Greece) 1.89% 1.98% 1.89% Mortgage 1.38% 1.89% 2.17% Consumer 8.88% 8.99% 8.57% SBLs 4.67% 5.02% 4.86% Total Retail (Greece) 5.30% 5.57% 5.45% Total Loans 3.58% 3.79% 3.81% 17
Slide 18: Fee income up 28% Y-o-Y
Fee income up 28% Y-o-Y Fee income composition (in € m) Fee income of €84m, at 24.1% of total operating income + 28.3% 83.9 ASE-related fees up 141% yoy 65.4 3% + 11 15.5 Capital Markets 7.3 Mutual Funds & 7% + 12 17.2 AUM 7.6 ASE-related Fees / Total Fees (%) Network 24 14,2 Activities 21.7 13,1 12
Slide 19: Core Income (NII + Fees) up 18%- Equities drive non-core income
Core Income (NII + Fees) up 18%- Equities drive non-core income Core Income (in € m) Breakdown of non-core income (in € m) + 18% 318 29.8 0.7 1.6 270 83,9 0.8 Net Fees & Commissions 65,4 234 12.6 Net Interest 204 27.4 Income Other Income 1.2 Associates 1.2 Dividends 2.9 F/X 3.3 Bonds & 4.0 Equities
Slide 20: Total Operating Income rises 23%
Total Operating Income rises 23% Core Income at 91% of Total Operating Income SE Europe contributes 9.5% Y-o-Y evolution Q-o-Q evolution (Figures in € m) (Figures in € m) 348 330 100 324 + 23.3% 348 318 320 90 313 30 310 316 80 282 318 293 70 12 300 294 282 60 270 290 282 50 280 270 40 270 30 30 22
Slide 21: Cost expansion in Greece slows further
Cost expansion in Greece slows further Total Expenses in Greece (in € m) Greek Staff at 1Q 2002 levels, 156.5 148 despite outstanding business growth 149 149 151 Administrative expenses just above 53 53 Admin. 47 49 48 1Q ‘03 levels Total Operating Expenses in Greece up 1.4% at € 150.7 m in 1Q ‘04 S
Slide 22: Group-wide efficiency sharply improved
Group-wide efficiency sharply improved Cost / Income Ratio at record low levels of 50.2%for the Group, 47.9% for Greek operations SE Europe entities account for 13.8% of 1Q ‘04 group-wide costs, compared to 8%in 1Q ‘03, contributing €24.1m as Bulgarian Post Bank is consolidated for the first time Ov
Slide 23: Asset quality improving
Asset quality improving Further improvement of Organic NPLs at 2.7% of total loans Vigilant provisioning policy maintained NPL Coverage at 82% NPL Ratio Bad Debt Provisions % 4.0 In € m % 3.7% 3.5 3.3% 3.2% 0.99 1.00 0.91 1.00 0.8 40 0.90 3.0 0.5 0.5 0.80 2.5 0.70 30 0.60 2.0 0.50 1.5 20 39.5 38.2 2
Slide 24: Core profit soars 36% to € 99m
Core profit soars 36% to € 99m Core Profit* Q-o-Q evolution (in €m) + 36% 99 95 93 Dynamic rise of NII and 77 Fee Income with vigilant 73 cost containment 1Q 03 2Q 03 3Q 03 4Q 03 1Q 04 * Core Profit = NII + Fees – Cost - Provisions 24
Slide 25: 1Q 2004 net profit up 50% Y-o-Y
1Q 2004 net profit up 50% Y-o-Y Quarterly Net Profit (Figures in € m) + 49.6% 88 83 74 SE Europe contribution at 2.8% of total 59 57 1Q 03 2Q 03 3Q 03 4Q 03 1Q 04 25
Slide 26: Rising Returns
Rising Returns RoE (after tax & minority interests) Shareholders’ Equity at € 1.9 bn Return on Equity at 19.03% 19.0% RoA at 1.29% 15.1% RAR at 10.2% 13.3% Return on Required Equity at 21.8% 12.7% 12.4% (@ 8% of RWA) RoA 1.29% 1Q03 1Η 03 9M 03 FY 03 1Q 04 (after tax) 1.06% 1.04% 1.00% 0.95% 1Q 03 1H
Slide 27: Appendices
A eurobank | APPENDICES 27
Slide 28: 1Q 2004 – Summary figures
1Q 2004 – Summary figures (in €m) 1Q ‘03 1Q ‘04 % Change SE Europe Net interest income 204 234 14.7% 19 Net fee and commission income 65 84 28.3% 12.9 Core income 270 318 18% 32 Non-core income 13 30 137.3% 1.3 Total operating income 282 348 23.3% 33.2 Operating expenses 162 175 8.1% 24.1 Core profi
Slide 29: Contacts
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 Yannis Tegopoulos Tel: +30 210 3371222 E-mail: itegopoulos@eurobank.gr Dimitris Nikolos
EFG Eurobank Ergasias — Q1 2004 Earnings Presentation on 6ix