Alpha Bank S.a. · ATHEX:ALPHA

Alpha Bank — Q1 2019 Earnings Presentation

55 slides from Alpha Bank's earnings presentation, May 30, 2019

  1. Slide 1: Q1 2019 Results

    Alpha e-Banking Q1 2019 Results May 30, 2019

  2. Slide 2: Contents

     Key Highlights  Macroeconomic Update  Q1 19 Financial Performance  Appendix  Asset Quality Contents  Capital  Volumes  P&L

  3. Slide 3: Disclaimer

    Disclaimer This presentation has been prepared and issued by Alpha Bank solely for informational purposes. For the purposes of this disclaimer, this presentation shall mean and include materials, including and together with any oral commentary or presentation and any question and answer session. By

  4. Slide 4: Q1 2019 Results

     Key Highlights  Macroeconomic Update  Q1 19 Financial Performance  Appendix  Asset Quality Q1 2019 Results  Capital  Volumes  P&L

  5. Slide 5: Q1 2019 Financial Highlights

    Q1 2019 Financial Highlights  Core PPI at €212mn decreased by 12.6% q-o-q, mainly impacted by a 9.0% decrease in NII and seasonal pressure in fees. Recurring operating expenses declined by 7.9% q-o-q Financial Performance  Impairment losses on loans at €178mn, significantly decreased vs Q4 2018 

  6. Slide 6: Q1 2019 Results

     Key Highlights  Macroeconomic Update  Q1 19 Financial Performance  Appendix  Asset Quality Q1 2019 Results  Capital  Volumes  P&L

  7. Slide 7: Despite the conflux of international headwinds, economic upswing continues

    Despite the conflux of international headwinds, economic upswing continues Moderate growth with improving expectations in manufacturing Youth unemployment declines while part-time work in new hirings remains high 3% 60 2% 55% 56% 55% 55% 54% 55 51% 1% 45% 45% 46% 0% 50 40% -1% 35% 33% 45 -2% 25% -3%

  8. Slide 8: Tourism, Exports and Real Estate: Acting as Catalysts

    Tourism, Exports and Real Estate: Acting as Catalysts External sector imbalances remain manageable despite the House price-to-income and house-to-rent below long-term slowdown of trading partners average in 2018 160 Belgium 15% 150 UK 140 Ireland France 5% 130 120 Netherlands -5% Spain Price-to-rent

  9. Slide 9: Financial conditions relaxed as confidence returns

    Financial conditions relaxed as confidence returns Greek Government 10 yr Bond Spread de-escalates while the Liquidity conditions improve ASE Index recovers 140 150 5.0 Fitch: BB- Issuance of 10yr 900 (amounts in € bn) 886.54 S&P: B+ 120 4.5 Moody's: B1 850 100 140 4.0 800 80 3.5 750 130 60 3.0 Fitc

  10. Slide 10: Q1 2019 Results

     Key Highlights  Macroeconomic Update  Q1 19 Financial Performance  Appendix  Asset Quality Q1 2019 Results  Capital  Volumes  P&L

  11. Slide 11: Q1 2019 Group P&L and Balance Sheet highlights

    Q1 2019 Group P&L and Balance Sheet highlights Q1 Q4 qoq % Q1 yoy % Balance Sheet qoq Profit & Loss (€ mn) 31/03/2019 31/12/2018 2019 20181 change 20181 change (€ bn) change Net Interest Income (NII) 388 427 (9.0%) 444 (12.5%) Assets 61.6 61.0 0.6 Fees and commissions Income 70 86 (18.0%) 83 (15.6%)

  12. Slide 12: Q1 2019 Core PPI performance mainly affected by lower NII and fee income

    Q1 2019 Core PPI performance mainly affected by lower NII and fee income PPI q-o-q evolution (€ mn) -€31mn  Core Pre-Provision Income at €212mn, down by 264 74 271 243 12.6% affected by lower net interest income and lower 22 212 (15) (21) 1 fee income contribution (38) (15)  Income from financial

  13. Slide 13: NII decreased q-o-q on the back of lower contribution from loans

    NII decreased q-o-q on the back of lower contribution from loans NII q-o-q evolution (€ mn) -€38.2mn -9.0% Net Interest Income decreased mainly on the back 426.6 of a lower contribution of loans due to: 0.1 388.4  calendar effect (22.7) (0.3) (6.7)  sale of €2bn loan portfolios at the year end (8.

  14. Slide 14: Fees and Commission income down by €13mn y-o-y

    Fees and Commission income down by €13mn y-o-y Net Fees & Commission Income y-o-y (€ mn) -€13mn Fees decreased by €13mn y-o-y, primarily as a result of: 83.2 IB & Brokerage 2.3 70.2  extraordinary fees recorded in Q1 2018 from our credit cards Asset Gathering 14.6 & Bancassurance 1.7 loyalty scheme

  15. Slide 15: Recurring Operating expenses decreased by 3.5% y-o-y

    Recurring Operating expenses decreased by 3.5% y-o-y Recurring OPEX y-o-y (€ mn)  Staff costs down by 4.2% y-o-y, as a result of previous year’s VSS. Group headcount was reduced to 11,322 -€9mn or -3.5% Employees at the end of March 2019 from 11,802 a year ago 266 257 (-4.1% y-o-y) Depreciation 10

  16. Slide 16: CET1 ratio at 17%; Total CAD ratio at 17%

    CET1 ratio at 17%; Total CAD ratio at 17%, comfortably above 2019 SREP; On a fully loaded basis, CET1 stood at 14% in March 2019 CET1 ratio quarterly evolution (€ mn) CET1 8,273 8,123 8,138 6,525 6,573 capital 17.4% 5bps 14bps 17.0% 17.0% (41bps) (12bps) €1.6bn buffer 14.0% 14.0% over OCR SREP of 13

  17. Slide 17: Liquidity profile continued to improve with Group deposits up by €3.0bn y-o-y

    Liquidity profile continued to improve with Group deposits up by €3.0bn y-o-y Group deposits on positive trend (€ bn) +€3.0bn 38.7 0.3 38.9  Funding profile improved with ELA reliance fully eliminated 35.9 6.0 (0.1) 5.9 1 since February 2019, repo transactions increased by €4.0bn 5.6 y-o-y, while a

  18. Slide 18: NPE balances in Greece reduced by €0.2bn in Q1 2019

    NPE balances in Greece reduced by €0.2bn in Q1 2019 NPE Reduction – Greece (€ bn) Negative gross formation in Greece (€ bn) Gross (0.08) (0.13) 0.04 (0.47) (0.06) Formation -€3.0bn 24.8 21.9 21.7 Entries 0.64 0.66 0.68 0.66 0.68 0.2 Exits (0.72) (0.64) (0.74) (0.79) (1.13) Mar-18 Dec-18 Q1 19 Mar-19

  19. Slide 19: Group Cost of Risk significantly down q-o-q to 137bps; NPE cash coverage at 47%

    Group Cost of Risk significantly down q-o-q to 137bps; NPE cash coverage at 47% Group CoR (over Gross loans) Group NPE coverage 2 Total 105% 105% 104% 102% 101% Coverage 50% 50% 3.02% 48% 2.39% 47% 47% 2.26% 2.18% 1.37% 1 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Mar-18 Jun-18 Sep-18 Dec-18 Mar-19 Group NPL Cov

  20. Slide 20: Q1 2019 Results

     Key Highlights  Macroeconomic Update  Q1 19 Financial Performance  Appendix  Asset Quality Q1 2019 Results  Capital  Volumes  P&L

  21. Slide 21: NPE transactions update

    NPE transactions update Scheduled Size Estimated Completion Transaction details Individual Corporate c.€0.1bn 2019  Individual NPE loan sales Loan Sales Secured  Sale of SMEs loan portfolio secured with real estate assets (Project Neptune) c.€3.8bn Q4 2019 Portfolios  Securitisation of retail loa

  22. Slide 22: Auctions and repossession activity evolution

    Auctions and repossession activity evolution Auctions conducted per quarter Successfully auctioned properties & breakdown by highest bidder % of succesful over conducted 807 auctions 789 e-auctions 17% 422 401 328 54% 83% 131 38% 17% 29% 38% 32% 3rd parties Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q1

  23. Slide 23: NPE gross formation per segment

    NPE gross formation per segment Gross formation – Wholesale (€ mn) Gross formation – Retail (€ mn) 60 26 65 (42) (28) (90) (117) (105) (186) (286) (983) (1,070) Q1 18 Q2 18 Q3 18 Mercury Q4 18 Q1 19 Q1 18 Q2 18 Q3 18 Jupiter Q4 18 Q1 19 & Sale Jupiter Sale Gross formation - SBL (€ mn) Gross formatio

  24. Slide 24: NPL stock in Greece down by €2.2bn y-o-y

    NPL stock in Greece down by €2.2bn y-o-y NPL balances evolution – Greece (€ bn) Wholesale Gross NPL formation – Greece (€ mn) -€2.2bn 16.4 16.5 142 14.9 14.6 14.2 (2) (14) (21) (43) (675) Mar-18 Jun-18 Sep-18 Dec-18 Mar-19 Q1 18 Q2 18 Q3 18 Jupiter Q4 18 Q1 19 Sale Retail Gross NPL formation per seg

  25. Slide 25: NPL Workout Units Analysis and Group forborne loans

    NPL Workout Units Analysis and Group forborne loans Loans perimeter managed by NPL Units (€ bn) NPL Workout Units balances breakdown by segment (€ bn) 21.6 Retail Wholesale 44.4 22.8 €6.2bn €15.4bn 8.0 22.2 30.2 Performing 15.4 Performing 8.4 0.6 5.4 3.4 4.0 4.4 13.6 NPLs 10.0 NPLs 3.0 6.2 0.9 1.5 1

  26. Slide 26: Detailed overview of asset quality by portfolio – Greece

    Detailed overview of Alpha Bank’s asset quality by portfolio – Greece (€ bn) Wholesale SBL Mortgages Consumer Total Gross loans 19.1 5.0 15.1 5.2 44.4 (-) Provisions (4.1) (1.8) (2.2) (1.9) (9.9) Net loans 15.0 3.3 12.8 3.3 34.5 NPLs 3.7 3.2 5.3 2.0 14.2 NPL ratio 19.5% 63.0% 35.3% 38.6% 32.0% NPEs

  27. Slide 27: Detailed overview of asset quality by portfolio – Group

    Detailed overview of Alpha Bank’s asset quality by portfolio – Group (€ bn) Wholesale SBL Mortgages Consumer Total Gross loans 22.7 5.1 18.3 5.8 51.8 (-) Provisions (5.1) (1.8) (3.1) (2.0) (12.0) Net loans 17.6 3.3 15.2 3.7 39.8 NPLs 5.1 3.2 6.8 2.2 17.3 NPL ratio 22.4% 63.0% 36.9% 38.4% 33.3% NPEs

  28. Slide 28: Q1 2019 Results

     Key Highlights  Macroeconomic Update  Q1 19 Financial Performance  Appendix  Asset Quality Q1 2019 Results  Capital  Volumes  P&L

  29. Slide 29: Group RWA and CET1 capital

    Group RWA and CET1 capital Group Risk Weighted Assets (€ bn) Credit Risk Weights per portfolio +€0.3bn 47.6 0.2 0.1 47.9 104% (0.0) 3.8 3.8 79% 0.9 1.0 65% 42.9 43.1 Dec-18 Credit Market Operational Mar-19 Performing NPE Total Loan Portfolio RWA Density RWAs Credit Market Operational Equity to regul

  30. Slide 30: Q1 2019 Results

     Key Highlights  Macroeconomic Update  Q1 19 Financial Performance  Appendix  Asset Quality Q1 2019 Results  Capital  Volumes  P&L

  31. Slide 31: Balance Sheet composition

    Balance Sheet composition Asset split (€ bn) Liabilities and Equity split (€ bn) 61.6 61.6 61.0 61.0 0.0 ELA 0.3 ELA Cash 1.9 Cash 1.8 ECB 3.1 ECB 3.1 Due from Banks 2.5 Due from Banks 2.5 Due to Banks Due to Banks 7.1 7.5 excl. ECB/ELA excl. ECB/ELA Securities 7.0 Securities 7.8 Time Time 18.0 depo

  32. Slide 32: Business Volumes

    Business Volumes % (€ mn) Mar 2019 Dec 2018 Sep 2018 Jun 2018 Mar 2018 Mar 2019/ Mar 2018 Group Gross Loans 51,832 52,462 53,242 55,432 55,850 (7.2%) Mortgages 18,311 18,561 18,863 18,955 19,161 (4.4%) Consumer Loans 4,418 4,446 4,492 4,902 4,943 (10.6%) Credit Cards 1,341 1,456 1,385 1,521 1,537 (1

  33. Slide 33: Breakdown of loans portfolio – March 2019

    Breakdown of loans portfolio – March 2019 Group loans breakdown Loans portfolio structure – Group Electric Supply Other 7% 2% Real Estate 3% Mortgages Leisure 5% 35% Wholesale Households loans Transportation 46% €51.8bn 44% 5% €51.8bn Construction 7% Credit Cards 3% Manufacturing Consumer 11% loans

  34. Slide 34: New financing of €0.6bn in Q1 2019; Securities at €7.8bn

    New financing of €0.6bn in Q1 2019; Securities at €7.8bn New disbursements - per category € mn Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019  Loan disbursements of €0.6bn in Q1 2019 Individuals 33 34 36 58 48  92% to business, 8% to individuals  Business disbursements primarily towards sectors that dri

  35. Slide 35: Deposits flow per quarter

    Deposits flow per quarter Alpha Bank deposits evolution in Greece (€ bn) Deposits breakdown – March 2019 Q2: Q3: Q4: Q1: €1.2bn €1.2bn (€0.0bn) €0.3bn Time 44% 32.7 0.1 0.2 33.0 Core 0.6 0.6 32.7 0.4 31.5 56% 30.3 0.8 (0.0) (0.0) Δ Time Δ Core Mar-18 Core Time Jun-18 Core Time Sep-18 Core Time Dec-1

  36. Slide 36: Wealth Management evolution

    Wealth Management evolution Alpha Private Bank balances (€ mn) Asset Management balances (€ mn) 4,291 4,235 4,275 1,224 1,183 1,447 1,825 1,817 89 235 1,437 269 1,169 1,046 2,771 2,825 2,639 960 536 567 208 206 241 266 Mar-17 Mar-18 Mar-19 Mar-17 Mar-18 Mar-19 Money Market Mutual Funds Non Money Mar

  37. Slide 37: Q1 2019 Results

     Key Highlights  Macroeconomic Update  Q1 19 Financial Performance  Appendix  Asset Quality Q1 2019 Results  Capital  Volumes  P&L

  38. Slide 38: PPI and NII breakdown

    PPI and NII breakdown Core PPI breakdown (€ mn) NII decomposition (€ mn) 535 553 513 522 469 480 444 282 459 427 270 388 90 83 70 67 241 243 59 212 439 436 427 428 396 (55) (54) (53) (51) (50) (266) (270) (272) (279) (257) (6) (17) (17) (17) (31) 1 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q1 18 Q2 18 Q3 18 Q4

  39. Slide 39: Loan and deposit spreads

    Loan and deposit spreads Net loan balances & spreads Deposit mix & cost evolution (bps) 429 426 423 (bps) (61) (57) (54) (51) (50) % Total 415 (€ billion) 41.5 408 41.2 40.8 40.2 39.9 (€ billion) 37.1 38.6 38.7 38.9 35.9 17.2 17.9 18.0 18.0 46% 17.0 End of End of quarter quarter 19.9 20.7 20.8 20.9

  40. Slide 40: Operating expenses

    Operating expenses € mn Q1 18 Q1 19 yoy % Recurring OPEX Evolution (€ mn) Staff costs (116) (112) (4.2%) 270 272 279 266 257 General expenses (125) (110) (11.8%) 26 Depreciation 25 25 26 & amortisation 35 Depreciation and amortisation expenses (25) (35) 41.8% expenses 128 131 137 125 General 110 exp

  41. Slide 41: SEE Operations

    SEE Operations 1 (€ mn) Δ% Δ% Δ% Δ% Mar-19 Cyprus yoy Romania yoy Albania yoy SEE yoy Deposits 2,253 (2.0%) 2,381 15.7% 508 8.3% 5,143 6.5% Gross Loans 4,204 (13.6%) 2,546 (0.8%) 305 (5.1%) 7,055 (9.0%) Mortgages 2,039 (7.0%) 1,115 5.1% 70 2.5% 3,224 (2.9%) Consumer Credit 253 (4.7%) 242 1.2% 31 10.

  42. Slide 42: SEE Operations / Cyprus

    SEE Operations / Cyprus Deposits y-o-y (€ bn) Gross loans y-o-y (€ bn) Cyprus -€0.7bn 4.9 Main Macroeconomic Indices 2017 2018 2.3 2.3 4.2 GDP growth 4.5% 3.9% Unemployment 11.1% 8.4% Harmonised Index 0.7% 0.8% of Consumer Prices (HICP) Source: European Commission, European Economic Forecast, Spring

  43. Slide 43: SEE Operations / Romania

    SEE Operations / Romania Deposits y-o-y (€ bn) Gross loans y-o-y (€ bn) Romania +€0.3bn 2.6 2.5 Main Macroeconomic Indices 2017 2018 2.4 7.0% 4.1% 2.1 GDP growth Unemployment 4.9% 4.2% Harmonised Index 1.1% 4.1% of Consumer Prices (HICP) Source: European Commission, European Economic Forecast, Sprin

  44. Slide 44: SEE Operations / Albania

    SEE Operations / Albania Deposits y-o-y (€ bn) Gross loans y-o-y (€ bn) Albania Main Macroeconomic Indices 2017 2018 GDP growth 3.8% 4.1% 0.5 0.5 0.3 0.3 Unemployment 14.1% 12.8% Harmonised Index 2.0% 2.0% of Consumer Prices (HICP) Source: European Commission, European Economic Forecast, Spring 2019

  45. Slide 45: Alpha Bank Group

    Alpha Bank Group qoq% yoy % (€ mn) Q1 2019 Q4 2018 Q3 2018 Q2 2018 Q1 2018 change change Net interest income 388.4 426.6 426.6 459.0 443.8 (9.0%) (12.5%) Net fee and commission income 70.2 85.7 77.6 83.5 83.2 (18.0%) (15.6%) Income from financial operations 73.8 64.3 134.8 77.5 186.1 … … Other Incom

  46. Slide 46: Group Results by Business Unit

    Group Results by Business Unit Investment Asset Commercial & Retail SE Europe Banking & Other Group Corporate Management (€ mn) Treasury Jan-Mar Jan-Mar Jan-Mar Jan-Mar Jan-Mar Jan-Mar Jan-Mar 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018 Operating Income 196.5 259.6 162.5 17

  47. Slide 47: Results I Retail Business Unit

    Results I Retail Business Unit (€ mn) Q1 2019 Q4 2018 Q3 2018 Q2 2018 Q1 2018 Operating Income 196.5 240.1 237.3 245.6 259.6 Net Interest Income 175.4 202.5 208.5 218.2 218.0 Net fee and Commission Income 20.2 26.6 26.8 26.3 26.4 Income from Financial Operations 0.3 10.4 1.5 0.6 14.7 Other Income 0.

  48. Slide 48: Results I Commercial & Corporate Business Unit

    Results I Commercial & Corporate Business Unit (€ mn) Q1 2019 Q4 2018 Q3 2018 Q2 2018 Q1 2018 Operating Income 162.5 163.9 172.8 195.8 177.2 Net Interest Income 130.9 141.8 147.3 153.2 155.0 Net fee and Commission Income 29.2 38.3 32.0 35.9 32.7 Income from Financial Operations (0.8) (19.3) (9.5) 3.

  49. Slide 49: Results I Asset Management Business Unit

    Results I Asset Management Business Unit (€ mn) Q1 2019 Q4 2018 Q3 2018 Q2 2018 Q1 2018 Operating Income 14.5 12.1 12.9 14.5 15.8 Net Interest Income 2.9 2.2 1.8 2.0 2.1 Net fee and Commission Income 9.8 10.2 9.9 10.7 13.1 Income from Financial Operations 1.9 (0.4) 1.4 2.1 1.0 Other Income (0.1) 0.1

  50. Slide 50: Results I Investment Banking & Treasury Business Unit

    Results I Investment Banking & Treasury Business Unit (€ mn) Q1 2019 Q4 2018 Q3 2018 Q2 2018 Q1 2018 Operating Income 105.8 107.6 172.7 125.0 230.1 Net Interest Income 26.7 27.7 26.6 38.4 28.6 Net fee and Commission Income 3.8 2.7 2.1 3.5 3.7 Income from Financial Operations 73.1 75.4 142.5 81.9 196

  51. Slide 51: Results I SE Europe Business Unit

    Results I SE Europe Business Unit (€ mn) Q1 2019 Q4 2018 Q3 2018 Q2 2018 Q1 2018 Operating Income 64.6 56.4 60.2 60.4 56.2 Net Interest Income 51.2 51.9 50.6 49.8 46.8 Net fee and Commission Income 7.3 7.7 7.0 7.2 7.1 Income from Financial Operations 3.2 (5.5) 1.0 2.3 (0.3) Other Income 2.9 2.4 1.5

  52. Slide 52: Results I Other Business Unit

    Results I Other Business Unit (€ mn) Q1 2019 Q4 2018 Q3 2018 Q2 2018 Q1 2018 Operating Income (10.6) 19.2 (7.9) (11.2) (17.7) Net Interest Income 1.3 0.5 (8.2) (2.6) (6.7) Net fee and Commission Income (0.0) 0.2 (0.3) (0.1) 0.1 Income from Financial Operations (3.9) 3.8 (2.1) (12.9) (12.4) Other Inc

  53. Slide 53: Glossary

    Glossary Reconciliation of key Management’s definitions with terms in “Annual report (In accordance with Law 3556/2007)” Terms Definitions Abbreviation Accumulated Provisions or Loan 1 Accumulated Impairment Allowance, as disclosed for credit risk monitoring purposes (note 41) LLR Loss Reserve 2 Cor

  54. Slide 54: Glossary

    Glossary Alternative Performance Measures Definitions Abbreviation Accumulated Provisions (1) including the value of the associated collaterals divided by Non Performing Exposures (NPEs) at the end of the NPE Total Non Performing Exposure Total Coverage reported period coverage Non Performing Loans

  55. Slide 55: Alpha Bank Contacts

    Alpha Bank Contacts Lazaros Papagaryfallou General Manager – CFO +30 210 326 2261 cfo-office@alpha.gr Dimitrios Kostopoulos Elena Katopodi Stella Traka Manager Assistant Manager Senior Investor Relations Division Investor Relations Division Investor Relations Officer +30 210 326 2271 +30 210 326 227

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