National Bank Of Greece S.a. · ATHEX:ETE
National Bank Of Greece — Q2 2021 Earnings Presentation
49 slides from National Bank Of Greece's earnings presentation, Aug 5, 2021
Slide 1: 2Q21 Financial Results
2Q21 Financial Results 5 August 2021
Slide 2: Table of Contents
Table of Contents 1 Key Highlights 2 Financial Results 3 Macro 4 ESG Framework 5 Transformation Program Update 6 Appendix
Slide 3: 1 Key Highlights
NATIONAL BANK OF GREECE 1 | Key Highlights
Slide 4: NBG 1H21 Group financial highlights
NBG 1H21 Group financial highlights 1H21 PAT cont. ops 1H21 COP 1H21 CoR €622m €208m €147m up by +34% yoy up by 58% yoy¹, reflecting rigorous cost cutting and core income growth 104bps (2Q21) Personnel Costs NPEs €4.1b CET1 2 -15.2%yoy 16.0% (FL at 13.8%) Net NPEs at €1.4b NPE ratio 12.7% 3 Opex 2 N
Slide 5: 1H21 results confirm NBG is well on track to deliver on/above guidance
1H21 results confirm NBG is well on track to deliver on/above guidance Core Operating Profitability¹ | €m Asset quality³ | €b Capital Coverage% 53.2% 62.8% 66.4% >66% 12.8% 13.8% 15.2% CET1 FL % c9% Excluding the c170bps Room for additional capital boost upon 200bps T2 and AT1 NPE% 32.2% issuance Fr
Slide 6: The upsurge in economic activity has strengthened further in 2Q21
The upsurge in economic activity has strengthened further in 2Q21 Broad-based Rapid vaccination rollout has bolstered confidence, paving the way for lifting GDP growth: NBG monthly indicator and actual data improvement restrictions and supporting a strong rebound in consumption and business activity
Slide 7: Payment performance of ex moratoria clients remains far better than expected
Payment performance of ex moratoria clients remains far better than expected Support measures by state Ex-moratoria client status Moratoria perimeter & anticipated • State subsidy program take up: status (PEs, FPEs) Gefyra I Step up - Gefyra I to primary residence mortgages at c€1.4b; & II c20% c20%
Slide 8: Our digital strategy demonstrates impressive results driven by new offerings
Our digital strategy demonstrates impressive results driven by new offerings ONBOARD ENGAGE CROSS-SELL ONBOAR D Digital subscribers (m) Digital active users (m) Digital sales (000s, cumulative) Registered Active YoY (%) YoY (%) Individuals subscribers users 12M 2.3 391 3.2 +18% 2.2 +28% 278 337 3.1
Slide 9: Pipeline of new digital functionalities creating a new competitive advantage
Pipeline of new digital functionalities creating a new competitive advantage ONBOARD ENGAGE CROSS-SELL ONBOAR D • Existing customers digital • Account aggregation • Cards (debit/ virtual prepaid/ credit) onboarding • Personal Financial Management (PFM) • Accounts & time deposits • New customers’ dig
Slide 10: 2 Financial Results
NATIONAL BANK OF GREECE 2.| Financial Results
Slide 11: 1H21 COP reaches €208m, up by 58%; 1H21 PAT at €622m
1H21 COP reaches €208m, up by 58%; 1H21 PAT (cont. ops.) at €622m higher by +34% yoy P&L Highlights P&L | Group 1H21 Group PAT (cont. ops.) up by 34% to €622m, reflects €m 1Η21 1Η20 YoY 2Q21 QoQ NII 591 551 +7% 297 +1% strong core operating trends and profitability. Excluding trading & Net Fees & Co
Slide 12: Organic NPE reduction continues in line with guidance; capital levels best in class
Organic NPE reduction continues in line with guidance; capital levels remain best in class Asset Quality, Liquidity & Capital Highlights Key P&L Ratios | Group 2Q21 domestic NPE stock reaches the €4b mark 2Q21 1Q21 4Q20 3Q20 2Q20 • NPE formation remained negative in 2Q21, adding up to a total NIM1 (
Slide 13: CET1 and Total capital at 16.0% and 17.0%; total CAD at c18.8%
CET1 and Total capital at 16.0% and 17.0% (+30bps ytd); total CAD at c18.8% including Frontier & Ethniki completion 1Η21 Capital movement c18.8% Upon Frontier & 16.7% +1.1% 17.0% Ethniki transaction completion c1.7% -0.2% -0.6% 11.0% 1 CAD CAD FL: 14.8% 15.7% CET1 FL: 12.8% 16.0% CET1 FL: 13.8% 1 6.
Slide 14: 1H21 group core operating profit reaches €208m, up by +58% yoy
1H21 group core operating profit reaches €208m, up by +58% yoy driven by all core operating P&L lines Group core operating profit bridge 1H21 (€ m) Group operating profit decomposition 1H21 (€ b) COP¹ (€m) 132 208 +58% yoy OpEx +58% -8% yoy yoy COP¹ margin (bps) 91 154 +64bps yoy Operating profit(€)
Slide 15: Funding cost benefits combined with resilient loan income drive domestic NII up +8%
Funding cost benefits combined with resilient loan income, drive domestic NII up by +8% yoy in 1H21 Domestic NIM (€ m) & CoR (bps) Domestic NII breakdown (€ m) €521m €562m +8% yoy NIM¹ 232 223 214 220 210 209 NII 262 259 290 296 280 283 250 244 97 104 118 109 CoR Incl. Frontier Incl. Covid-19 provis
Slide 16: Domestic loan disbursements of €2.0b driven by corporates
Domestic loan disbursements of €2.0b driven by corporates; retail starts to pick up; PE loan portfolio continues to grow (+€1.2b yoy) Greek loan evolution: performing loans (€ b) Loan disbursements (€ b) 27.6 28.0 25.5 25.6 25.7 Net loans Mortgages Consumer SBL Corporate Total 24.2 €1.6b €1.8b €2.0b
Slide 17: Headline PE lending yields remain well above the 300bps mark
Headline PE lending yields remain well above the 300bps mark; unprovided, non cash NPE NII at <5% of total NII Greek lending yields1 (bps) Greek forborne & PE yields, NPE NII % 5.4% 5.1% 5.0% Dom. NPE NII net of 4.6% 4.4% Total 337 327 324 318 312 Performing cash collected and provisions / Dom. NII
Slide 18: System liquidity remains abundant allowing yields to gravitate towards zero
System liquidity remains abundant allowing yields to continue to gravitate towards zero levels Greek deposit yields (bps) Greek deposit evolution (€ b) 76% 82% Core deposits/total +€6.3b 49.6 +14.5% yoy 41 47.0 46.6 31 23 Time 36 16 43.3 43.7 8.8 13 Term -€1.7b 9.6 9.3 -16.4% yoy 32 New production 1
Slide 19: In the absence of restrictions in 2Q21, 1H21 fees start to recover
In the absence of restrictions in 2Q21, 1H21 fees start to recover up by 10% yoy Domestic fees (€ m) Domestic retail fees decomposition (€ m) YoY 35bps 35bps 34bps Fees/Assets1 72 71 +4% 68 YoY Intermediation & 21 130 +10% other 21 24 +13% 126 Bancassurance 7 118 6 7 +4% 15 18 +36% Digital channels
Slide 20: Transactions conducted via digital channels edging substantially higher
In the aftermath of Covid-19, transactions are conducted via digital channels, edging substantially higher (+17% yoy) Transactions per channel (#, m) Transactions per channel (volume, €m) 1st Lock-down 2nd 2Q21 1st Lock-down 2nd 2Q21 yoy yoy 43.9 47.6 40.9 40.4 41.4 44.7 Total +7% +17% 41.5 42.2 Tot
Slide 21: Domestic C:CI drops further to 51%
Domestic C:CI drops further to 51%, nearly 9ppts lower yoy, reflecting mainly personnel cost reduction OpEx by category (€ m) Domestic Branch evolution (#) Domestic Group 527 510 -134 branches 1H21 1H20 Yoy 1H19 2y± 1H21 1H20 Yoy 1H19 2y± 486 Personnel 194 228 -15.2% 251 -23% 205 241 -14.9% 264 -22%
Slide 22: Formation remains negative and in line with 2021-2022 NPE guidance
Formation remains negative and in line with our 2021-2022 guidance for organic NPE reduction of €0.8b Domestic NPE stock per category – 2Q21 (€ b) NPE balance change (€ m, Bank) FNPE & other o/w: €0.7b or 79% impaired <90dpd <30dpd o/w: €0.6b or 91% 90+dpd <30dpd 2.0 2.0 264 258 1.3 1.2 NPE inflows
Slide 23: Net formation across Lines of Business is either negative or immaterial
Net formation across Lines of Business is either negative or immaterial; curings remain strong Mortgages (€ m) Consumer (€ m) NPE change1 (€ m) 16 8 2 -52 -99 -3 -7 -70 Organic -127 -96 Organic -173 -184 -26 -132 -205 -161 -158 -316 -242 -33 -4,326 Inorganic -2 -46 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 -57
Slide 24: Domestic NPEs near €4b, while coverage rises to 67%
Domestic NPEs near €4b, while coverage rises to 67%, with c€1.4b of FNPEs <30dpd Domestic 90dpd ratios and coverage | 2Q21 Domestic 90dpd – NPE bridge (€ b) | 2Q21 Collateral 73% 13% 69% 61% 59% coverage1 24% 16% 103% 90dpd ratio 111% 3 3 6% 7.4% 7.4% +1.4 +0.2 4.0 6% 2.3 +0.1 90dpd 115.2% 114.3% 10
Slide 25: S3 loans continue to decline, gradually replaced by S1 loans
S3 loans continue to decline in loan portfolio contribution, gradually replaced by S1 loans Group loan stage evolution (€ b) Group S2 ratio and coverage (%) Group S3 ratio and coverage (%) Δ yoy 10.4 Stage 3 4.4 4.2 4.1 -6.3 o/w: €2.4b FPEs €1.7b SICR 29.9% €0.3b +30dpd 5.2 4.5 4.6 4.4 -0.8 Stage 2
Slide 26: Project Frontier: transaction on track, completion expected in 3Q21
Project Frontier: transaction on track, completion expected in 3Q21 Timeline & key milestones HAPS application Transaction signing Business Plan Non-Binding offers & closing 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 Initial Rating Agencies Feedback Updated Rating Agencies Feedback Migration Tran
Slide 27: Solid track record of transactions of c€12.5b in GBV
Solid track record of 8 transactions of c€12.5b in GBV Jun Jul Nov Jun Oct Nov Jun 2018 2019 2019 2020 2020 2020 2021 Project Earth – Jun18 Project Leo – Nov19 Project Marina– Oct20 Project Frontier • €2.0b • €0.3b • €0.3b • c€6.0b • Unsecured Consumer / • Shipping loans • Cypriot, Corporate, SME •
Slide 28: Funding cost at zero levels, benefits from low deposit rates and TLTRO
Funding cost at zero levels, benefits from all time low deposit rates and ECB’s TLTRO facility Eurosystem funding (€ b) NBG Funding Cost (bps) 41 31 19 12 LCR: 259% 7 0 2 1 Repo position : -€2.5b Blended -17 -50 -67 -67 -65 -65 ECB² 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 Funding structure (%) 11.6 2% 10
Slide 29: Domestic deposits continue on a positive trajectory, up 14% yoy
Domestic deposits continue on a positive trajectory – up by 14% yoy – despite rates reaching near zero levels Deposit evolution by geography (€ b) NBG domestic deposit flows (€ b) YoY Group 44.8 45.2 48.5 48.2 51.1 +14.1% 4.7 3.4 2.9 SEE & 1.5 1.5 1.5 1.5 1.5 -0.1% 1.5 1.1 Other 0.2 0.5 49.6 +14.5%
Slide 30: 3 Macro
NATIONAL BANK OF GREECE 3| Macro
Slide 31: Greece's economy rebounded strongly in 2Q21
Greece’s economy rebounded strongly in 2Q21, on the back of robust business activity, domestic demand & tourism Ergani: Net hiring flows of wage earners (thousand persons) Key indicators: Increasing signs of improvement in 1H21 300 thsnds 250 -16.0% Tax revenue 0.9% 200 22.8% 150 -9.2% 100 Goods exp
Slide 32: Forward-looking indicators remained buoyant until July
Forward-looking indicators remained buoyant until July, pointing to a strong start to 3Q21. Increasing vaccination coverage is expected to alleviate the pressure on the health system from the recent upsurge in Covid-19 cases PMI & main sectoral confidence indicators Covid-19 Community Mobility 50 EC
Slide 33: Four catalysts to sustain the recovery momentum
Four catalysts to sustain the recovery momentum in the coming quarters Continuing fiscal stimulus Credit impulse & corporate profitability 10 10 15 %, y-o-y 15 €b % of potential GDP 10 10 5 5 5 5 0 0 0 0 -5 -5 -5 -5 -10 -10 -10 -10 -15 -15 -15 -15 1Q19 2Q19 3Q20 4Q20 1Q20 2Q20 3Q20 4Q20 1Q21 2018 20
Slide 34: 4 ESG Framework
NATIONAL BANK OF GREECE 4| ESG Framework
Slide 35: NBG continues to strengthen its ESG ratings and practices
NBG continues to strengthen its ESG ratings and practices ESG ratings ESG recent actions and achievements Latest • Implementation launched for actions committed to ECB ESG index • Market leadership in eco-mortgages (46% share in 1H21 rating disbursements) ESG rating BBB Environment • E-car financing
Slide 36: 5 Transformation Program Update
5 Transformation Program Update
Slide 37: Transformation Program supports move towards a new business and operating model
Transformation Program supports move towards a new business and operating model HEALTHY BALANCE EFFICIENCY & BEST BANK FOR SHEET (HBS) AGILITY (ENA) OUR CLIENTS (BBC) • Preparation for Frontier securitization • Further reduction of staff costs through • Enhanced cross-selling in Corporate and transi
Slide 38: 6 Appendix
NATIONAL BANK OF GREECE 6| Appendix
Slide 39: Outlook 2022: Reaching a 6% NPE ratio
Outlook 2022: Reaching a 6% NPE ratio on negative formation and transactions of c€1.5b NPE evolution 2020-2022¹ Organic formation 2021-22 -€0.8b +c€1.4b NPE ratio 13.5% €4.2b Assuming moratoria defaults up to a max of NPE ratio €0.6b -c€2.2b c6% c€1.8b 3.4 -c€1.5b 1.9 2 FY20A NPEs Organic inflows Or
Slide 40: Outlook 2022: Organic capital generation yields 2022 CET1 of >16%
Outlook 2022: Organic capital generation and completion of transactions yield 2022 CET1 of >16% • Post Frontier and Ethniki insurance transaction completion capital ratios will be enhanced by c170bps • 2020-2022 CET1 uplift of c50bps, despite 200bps impact from IFRS9 transitional adjustment Group ca
Slide 41: Outlook 2022: core RoE of c9%
Outlook 2022: core RoE1 of c9% reflects a clean balance sheet and higher efficiency Group core operating profit evolution 2020-2022 CoR of c60bps in FY22 C:CI improvement • NII CAGR -3% c400bps Core RoE • Fees CAGR +10% c9% 1 +c€120m c€490m +c€70m €328m -c€30m • Swift NPE clean up • High coverage •
Slide 42: Group Balance Sheet & P&L
Group Balance Sheet & P&L Balance Sheet¹ | Group P&L¹ | Group €m 2Q21 1Q21 4Q20 3Q20 2Q20 €m 2Q21 1Q21 4Q20 3Q20 2Q20 Cash & Reserves 10,802 10,461 9,175 6,750 6,705 NII 297 294 314 304 273 Interbank placements 2,875 2,990 3,440 3,899 3,562 Net fees & commissions 69 67 68 65 57 Securities 16,053 16,
Slide 43: Geographical segment P&L: Greece & International
Geographical segment P&L: Greece & International Greece International¹ €m 2Q21 1Q21 4Q20 3Q20 2Q20 €m 2Q21 1Q21 4Q20 3Q20 2Q20 NII 283 280 296 290 259 NII 15 14 18 15 14 Net fees & commissions 66 64 65 61 54 Net fees & commissions 3 3 3 3 3 Core Income 349 343 360 351 313 Core Income 18 17 21 18 16
Slide 44: ESMA Alternative Performance Measures (APMs), definition of financial data and ratios
ESMA Alternative Performance Measures (APMs), definition of financial data and ratios used The 2Q21 Financial Results Press Release contains financial information and measures as derived from the Group and the Bank financial statements for the period ended 30 June 2021 and for the year ended 31 Dece
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 Balance Sheet B/S Statement of Financial Position Cash & Reserves -- Cash and balances with central banks Common Equity Tier 1 Ratio CE
Slide 46: Definition of financial data, ratios used and alternative performance measures
Definition of financial data, ratios used and alternative performance measures Net interest income over average interest earning assets. Net Interest Margin equals net interest income divided by the average of interest earning assets (the average of interest Net Interest Margin NIM earning assets at
Slide 47: Important Notice – Disclaimer
Important Notice – Disclaimer The information, statements and opinions set out in the 2Q21 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 48: 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 49: Contact details
Contact details Christos Christodoulou Greg Papagrigoris Group CFO Head of IR +30210 334 3051 +30210 334 2310 cchristodoulou@nbg.gr papagrigoris.gr@nbg.gr Maria Kanellopoulou Panagiotis Alevras Maria Constantinou Investor Relations Officer Investor Relations Officer Investor Relations Officer +30210
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