Eurobank S.A. · ATHEX:EUROB
Eurobank — Eurobank EFG — FY2010 Earnings Presentation
36 slides from Eurobank's earnings presentation, Feb 24, 2011
Slide 1: Full Year 2010 Results
SW-EUB022-2007-03-19-CMD-V7 February 24, 2011 Full Year 2010 Results
Slide 2: FY 2010 results highlights
FY 2010 results highlights Page 2 FY10 net profit at €113m*, 4Q10 at €8m. Resilient pre-provision income maintained at €1.5bn NII up 1% qoq at €553m and down 3.7% yoy at €2,254m. OpEx at €1,426m achieves target of 3%yoy reduction. Quarterly gross 90+ formation down 8%qoq – quarterly provis
Slide 3: The Polbank EFG strategic partnership with Raiffeisen Bank International
Page 3 The Polbank EFG strategic partnership with Raiffeisen Bank International
Slide 4: Major points of the Polbank transaction
Page 4 Major points of the Polbank transaction Benefits from the strategic partnership with RBI in Poland: The partnership allows Polbank to execute its second growth phase at a faster pace. Eurobank reaps the benefits of a successful investment and retains substantial upside through its 13% sta
Slide 5: Polbank EFG: a greenfield retail banking success story in a very short timeframe
Page 5 Polbank EFG: a greenfield retail banking success story in a very short timeframe 5,184 4,573 # 8 retail franchise in Poland in 4 years 4,097 Focused banking platform with 1,670 nationwide branch network Loans 231 € bn. 3,262 Strong product and sales capabilities 2,655 in Retail Banking
Slide 6: Polbank and Raiffeisen Poland: merger of equal and complementary banks
Polbank and Raiffeisen Poland: merger of Page 6 equal and complementary banks Raiffeisen Poland and Polbank strategic fit Employees ~3,100 ~2,900 Customer Loans* €5.1bn €5.0bn Customer Deposits* €3.5bn €3.1bn Branches* 123 335 Large corporates/SME clients ~16,000 ~400 Retail clients/Micro businesses
Slide 7: Purchase Price & Valuation
Page 7 Purchase Price & Valuation €490m for 70% in Polbank payable at closing The remaining 30% Eurobank EFG stake in Polbank will be exchanged for 13% in the combined RBPL-Polbank operations Put option for Eurobank EFG to dispose of our 13% stake in the combined bank at any time; call Purchas
Slide 8: Financial Review: Assets & Liabilities actively managed
Page 8 Financial Review Assets & Liabilities actively managed
Slide 9: Selective loan growth and de-risking – deposits stabilization reduces L/D further
Selective loan growth and de-risking – Page 9 deposits stabilization reduces L/D further Loans – selective de-risking L/D ratio declines 130.4% 127.5% 125.5% 126.6% 57.4 58.5 Rest of New 119.3% 9.4 9.5 Europe 116.5% 124.3%* Poland & 5.2 6.0 Cyprus 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 Greece: * pro-forma fo
Slide 10: Liquidity position at comfortable levels
Page 10 Liquidity position at comfortable levels ECB exposure stable over 3 quarters ECB exposure stable around €20bn in the last 3 quarters. Strong contingent liquidity 5.5 5.5 reserve of €6bn including 5.0 Unutilized 4.5 unutilized New Europe ECB liquidity collateral. 19.9 20.3 2.0 19.5 18.3
Slide 11: Financial review
mB Eurobank EFG Financial review
Slide 12: Resilient pre-provision performance in spite of crisis
Resilient pre-provision performance in spite Page 12 of crisis Resilient pre- provision income 1,551 1,462 1,498 2010 -164 2010 124 -144 140 -33 Δ fees ΔOpEx ΔOther -715 699 2009 -551 2009 578 Δ interest from Δ interest deposits from loans FY 07 FY08 FY10
Slide 13: Funding costs continue to adversely impact NII – loan NII on record highs
Page 13 Funding costs continue to adversely impact NII – loan NII on record highs 621 608 608 590 599 592 590 560 566 561 544 548 553 Total NII 616 624 633 600 608 600 564 580 497 457 404 417 382 Loan margin Interest rate 10 3 7 4 5 -13 -7 -18 -16 -9 -11 -15 -21 gapping 74 72 77 81 73 70 85 79 72 71
Slide 14: Loan repricing continues, deposit spreads ease
Loan repricing continues, deposit spreads Page 14 ease Evolution of Greek spreads (%) Evolution of NIM (%) 3Q 09 4Q 09 1Q 10 2Q 10 3Q 10 4Q10 NIM (%) 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 Core deposits -0.46 -0.21 -0.19 -0.17 -0.10 0.04 Greece 2.54 2.59 2.48 2.32 2.26 2.26 New Europe 3.75 3.77 3.65 3.38 3.2
Slide 15: Commission income adversely affected by market conditions
Commission income adversely affected by Page 15 market conditions New Europe fees up 7%yoy Total commission income 496 474 130 133 129 119 120 124 113 112 109 168 +7% 179 5 New 53 58 56 Europe Lending Activities 42 44 52 5 42 48 44 Network & 21 22 23 22 19 Other Activities 21 25 23 25 328 -10% Capit
Slide 16: Costs containment -3%yoy target achieved
Costs containment -3%yoy target achieved Page 16 4Q10 OpEx drops by 3% yoy Cost containment vs. previous year’s quarter -3% -3.4% -4.6% -6.6% -9.7% 383 362 363 364 372 35 354 348 352 33 35 37 Depr. 36 31 30 30 -2.3% -3.0% -2.8% -4.0% 140 1Q 2Q 3Q 4Q Admin. 133 132 133 130 139 125 133 FY10 OpEx drops
Slide 17: Asset quality trends: 90+ formation down 8% qoq; cost of risk stable
Page 17 Asset quality trends: 90+ formation down 8% qoq; cost of risk stable 90dpd formation in downward trend 90dpd ratio 787 4Q09 1Q10 2Q10 3Q10 4Q10 713 Group 6.7% 7.3% 8.1% 9.0% 9.6% 693 Greece 6.4% 7.1% 8.1% 9.2% 9.9% New Europe 7.5% 7.9% 8.1% 8.6% 8.7% 594 574 548 492 508 464 LLPs / 90+ covera
Slide 18: Asset quality in New Europe: gross 90+ formation at pre-crisis levels
Page 18 Asset quality in New Europe: gross 90+ formation at pre-crisis levels 13.1% 14.3% 10.8% 11.6% 9.5% 6.6% 14.3% 7.6% 12.9% 5.8% 12.4% 2.7% 3.3% 12.1% 10.5% 90+ over av. 1.3% 2.2% 8.5% 9.0% 6.9% loan book 2.4% 3.0% 3.3% 3.2% 4.1% 1.1% 1.8% 129 105 71 80 63 56 60 64 54 46 40 36 39 44 35 37 32 32
Slide 19: New Europe pre-provision income on the rise; provisions continue to decline
New Europe pre-provision income on the Page 19 rise; provisions continue to decline Pre- provision income picks up Provisions decline -34% 452 -20% 119 +4% 115 115 380 103 102 366 359 96 -7% 94 84 79 Pre-provision profit Provisions 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 FY09 FY10
Slide 20: New Europe profits at €32m in FY10 vs. losses €44m a year ago
New Europe profits at €32m in FY10 vs. Page 20 losses €44m a year ago 10.3 8.6 6.9 3.3 3.2 2.8 2.6 3.3 2.1 1.9 1.2 2.0 0.8 Net Profit -4.1 -4.1 -3.5 -4.0 -5.9 -6.8 -7.3 -11.1 -10.1 -12.2 -14.4 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q09 2Q09 3Q09 4Q09 1Q10 2Q
Slide 21: New Europe performance: self funded growth; FY10 returns to profitability
New Europe performance: self funded Page 21 growth; FY10 returns to profitability Total net loans New Europe net profits +5.8 52 46 14.4 -0.4 14.0 +0.9 14.9 36 13 4 7 8 9.1 2 -11 -10 -8 -15 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 €m FY07 FY08 FY09 FY10 € bn New Europe operation
Slide 22: Capital Strength & Priorities
Page 22 Capital Strength & Priorities
Slide 23: Successfully enhancing capital adequacy through organic initiatives
Successfully enhancing capital adequacy Page 23 through organic initiatives Recent actions are equivalent to an increase of capital of almost €800m Capital Adequacy 13.1% Total CAD 12.4% 11.9% 11.9% Tier 1 10.4% 11.2% 10.7% Partnership with RBI in Poland - €700m capital enhancement Placement of
Slide 24: Priorities
Page 24 Priorities Strengthen further our capital position. Improve liquidity and reduce ECB funding. Capitalise on renewed business expansion in New Europe and introduce initiatives aiding the recovery of the Greek economy. Preserve pre-provision income and continue to actively trim costs.
Slide 25: Appendices
a NS Page 25 iN mB Eurobank EFG Appendices
Slide 26: Raiffeisen Poland: Focused Corporate Bank
Page 26 Raiffeisen Poland: Focused Corporate Bank Operating Income in Corporate Segment (1-9/2010) Strong corporate banking platform Loans Cash 18% Managem ent 20% Comprehensive product offering for corporates Project Finance 13% Market leader in leasing and factoring Trade Treasury Financing
Slide 27: Enhanced Market Position
Page 27 Enhanced Market Position Creation of universal bank with comprehensive product range Enhanced market position driven by diversified business and risk profile Leveraging of retail customer portfolio for cross selling initiatives Total Assets (in PLN bn) Customer Loans (in PLN bn) Custom
Slide 28: Envisaged Transaction Structure
Page 28 Envisaged Transaction Structure Concurrent Current Structure Acquisition of 70% Stake Contribution of Businesses Operational Merger Eurobank Cash Eurobank Eurobank Eurobank RBI RBI RBI RBI EFG EFG EFG EFG 100% 70% 30% 87% 13% 87% 13% 100% 100% Combined RBPL Polbank RBPL Polbank RBPL bank 100
Slide 29: Adequate provision coverage
Page 29 Adequate provision coverage 5,635 90dpd NPLs provisions provisions Consumer coverage coverage 1,511 4,534 Lending 41.3% 51.3% Total 1,511 Mortgages 1,010 760 65.3% 65.3% Consumer 2,328 Lending 988 Business 15.9% 21.2% Mortgages Lending 3,115 161 2,264 1,180 37.9% 52.1% Business Lending 90dpd
Slide 30: Financial Ratios
Page 30 Financial Ratios Financial Ratios FY10 FY09 Net Interest Margin 2.63% 2.81% Cost-Income 48.8% 48.4% NPLs (% of loans) 7.7% 5.2% NPLs coverage 51% 59% Provision Charge (% of net loans) 2.43% 2.11% Equity Tier 1 ratio 9.0%** / 8.0% 8.4% Tier Ι Ratio 11.9%** / 10.6% 11.2% Total Capital Adequacy
Slide 31: Summary Figures
Summary Figures Page 31 Summary Figures (€ m) FY 10 FY 09 Δ% New Europe Net Interest Income 2,253.5 2,340.9 -3.7% 759.4 Net fees & Commissions 403.6 418.2 -3.5% 172.8 Insurance and non banking fees 70.7 78.1 -9.5% 6.7 Total Operating Income 2,923.7 3,039.8 -3.8% 977.2 Operating Expenses 1,426.0 1,47
Slide 32: Key figures of New Europe operations
Key figures of New Europe operations Page 32 Romania Bulgaria Serbia Cyprus Poland Turkey Ukraine NE Δyoy% Total Assets 5,355 3,611 1,816 2,603 5,693 2,480 817 22,299 +3.8% Balance Sheet Balance Total Loans 3,324 2,957 1,182 830 5,184 1,386 607 15,469 +6.5% Sheet Total Deposits 1,864 2,023 792 2,263
Slide 33: FY 2010 – Summary per Segment
Page 33 FY 2010 – Summary per Segment Wealth Global & Capital Capital & Elimination Total (€ m) Retail Corporate Management Markets Other Center New Europe Interest income 1,090.9 469.2 4.1 16.0 -51.3 0.0 724.6 2,253.5 Net fee & commission income 58.7 60.9 47.8 61.0 2.46 0.0 172.8 403.6 Net Insuranc
Slide 34: FY 2009 – Summary per Segment
Page 34 FY 2009 – Summary per Segment Wealth Global & Capital Capital & Elimination Total (€ m) Retail Corporate Management Markets Other Center New Europe Interest income 1,111.2 421.8 -0.9 58.1 -7.9 0.0 758.7 2,340.9 Net fee & commission income 53.7 51.8 48.3 105.0 -2.58 0.0 161.8 418.2 Net Insura
Slide 35: Contacts
Page 35 Contacts EFG Eurobank Ergasias, 20 Amalias Avenue, 105 57 Athens, Greece Fax: +30 210 3337 160 E-mail: investor_relations@eurobank.gr Internet: www.eurobank.gr Reuters: EFGr.AT Bloomberg: EUROB GA Investor Relations Dimitris Nikolos Tel: +30 210 3337688 E-mail: dnikolos@eurobank.gr Yanni
Slide 36: Disclaimer
Page 36 Disclaimer This communication has been prepared by and is the sole responsibility of EFG. It has not been reviewed, approved or endorsed by any third party retained by EFG. This communication is provided for information purposes only. The contents of this communication do not constitute or f