National Bank Of Greece S.a. · ATHEX:ETE
National Bank Of Greece — Q3 2020 Earnings Presentation
48 slides from National Bank Of Greece's earnings presentation, Nov 30, 2020
Slide 1: 3Q20 Financial Results
3Q20 Financial Results 30 November 2020
Slide 2: Table of Contents
Table of Contents 1 Highlights 2 Profitability 3 Asset Quality 4 Liquidity 5 Capital 6 Transformation Program Update 7 Macro 8 Appendix
Slide 3: 1 Highlights
NATIONAL BANK OF GREECE | Highlights
Slide 4: NBG 9M20 Group financial highlights
NBG 9M20 Group financial highlights Profitable with High end Covid19 Resilient PAT CoR COP €461m €640m €228m Post the total anticipated Covid19 Covid19 incurred provisions of €429m Up by 13% yoy, excluding Covid19 related charge-offs; provides substantial or 147bps constitute the high end of related
Slide 5: Moving steadily to transform NBG into the Greek Bank of First Choice
Moving steadily to transform NBG into the Greek Bank of First Choice… Safety and resilience Acceleration of digital of operations transformation • Health and safety of our employees, customers and • Digital subscribers reach 2.9m in Sep (+27% yoy) stakeholders continues to be our top priority • Digi
Slide 6: Actively supporting our clients through the Covid19 crisis
…actively supporting our clients through the Covid19 crisis Support to corporates & households Payment moratoria State subsidy program “Gefyra” €3.6b of currently active moratoria, o/w €1.2b Mortgages, <€0.1b State subsidization to primary residence mortgage clients hit by Consumer, €0.2b SBs and €2
Slide 7: The 2nd pandemic wave is cushioned by a new set of fiscal measures
The 2nd pandemic wave is cushioned by a new set of fiscal measures Turnover of enterprises, retail 30 trade & exports of goods 30 y-o-y 20 20 GDP GDP expected at +7% qoq in 3Q20 following a compression of 14% qoq in 2Q20 10 10 recovered 0 0 GDP recovery supported by the lifting of restrictions in 3Q
Slide 8: Imminent Frontier launch will accelerate NBG's NPE clean up
Imminent Frontier launch will accelerate NBG’s NPE clean up A single large transaction.. .. that will push NPEs below 15%.. ..with loss absorbed in Bank P&L >60% of Current NPE stock Consumer 5% HAPS2 eligible Corporate & SBLs 18% c€6.1b ~90% secured by RE1 c€6.1b of Gross Book Value Residential 77%
Slide 9: A solid track record of NPE sales, achieving significant successes
Α solid track record of NPE sales, achieving significant successes Project Earth – June 2018 Project Symbol – July 2019 Project Marina • €2.0b NPEs • €0.9b NPEs • €0.3b NPEs • Unsecured Consumer / Credit Cards, • Secured SME/ SBL Loans • Cypriot, Corporate, SME and Retail Loans SBL • Purchaser: Cent
Slide 10: Costs cut by c1/5th in 2 years - new initiatives will maintain the momentum
Costs cut by c1/5th in 2 years - new initiatives will maintain the momentum Personnel & G&As costs (€m) | Domestic Headcount & branches | Domestic New branch network New VES rationalization launched in plan launched November in November HR cost FTEs (#) Branches (#) -16% -1.6k -98 405 371 339 9.8 48
Slide 11: PAT at €137m in 3Q20 and €602m in 9M20, despite Covid19 headwinds
PAT1 at €137m in 3Q20 and €602m in 9M20, despite Covid19 headwinds P&L Highlights P&L | Group 3Q20 PAT from continued operations reaches €137m relative to €m 3Q20 2Q20 QoQ 9M20 YoY €58m in 2Q20, driven by strong core income recovery, sustained NII 304 273 +12% 855 -5% momentum in OpEx reduction and
Slide 12: NPE stock drops below the €10b barrier ahead of Frontier launch
NPE stock drops below the €10b barrier ahead of Frontier launch Asset Quality, Liquidity & Capital Highlights Key P&L Ratios | Group 3Q20 Bank NPE stock edges lower dropping below €10b 3Q20 2Q20 1Q20 4Q19 3Q19 • NPEs are reduced by €0.2b qoq in 3Q20 organically, reaching NIM1 (bps) 222 216 236 261 2
Slide 13: 2 Profitability
NATIONAL BANK OF GREECE 2.| Profitability
Slide 14: Operating profit increases sharply in 3Q20 to €137m
Operating profit increases sharply in 3Q20 to €137m, driven by a recovering top line and small trading gains Group operating result bridge 3Q20 (€ m) Group operating profit decomposition 3Q20 (bps) Excl: trading one- Excl: Covid19 Excl: Covid19 off & Covid19 CoR CoR CoR Group operating margin (bps)
Slide 15: Domestic NII, up by 12% qoq, reflects the expansion of the performing loan book
Domestic NII, up by 12% qoq, reflects the expansion of the performing loan book and funding cost benefits Domestic NII breakdown (€ m) Domestic NIM & CoR (bps); Risk adj NII (€ m) 281 278 Total 284 271 262 259 290 256 250 238 NIM¹ ex. cash 266 258 232 NIM¹ 214 220 CoR 153 32 100 94 103 Loans (PE) 20
Slide 16: Corporate PE expansion gathers pace in 3Q20 on loan disbursements
Corporate PE expansion gathers pace in 3Q20 on loan disbursements of €3.5b ytd, up +42% yoy Greek loan evolution; performing loans1 (€ b) Loan disbursements (€ b) 28.6 27.8 27.9 27.6 28.0 Net loans2 +42% yoy 1.2 1.1 23.0 23.5 +5% yoy 1.1 22.8 22.9 22.3 0.9 +14% yoy 11.8 12.2 12.6 12.8 13.4 0.7 0.7 1
Slide 17: Yields have been stabilizing, remaining at satisfactory levels
Yields have been stabilizing, remaining at satisfactory levels despite the historically low interest rate environment Greek lending yields1 (bps) Greek new production lending yields1 (bps) 408 390 317 343 Total Book Total 366 357 344 338 326 1079 1001 992 Performing 855 Consumer 867 862 854 644 SBLs
Slide 18: Deposits are up by €2.3b yoy, while repricing of time deposits keeps providing support
Deposits are up by €2.3b yoy, while repricing of time deposits keeps providing support to NII Greek deposit yields (bps) Greek deposits evolution (€ b) 73% 76% Core deposits/total 79 64 New 52 production at 20bps +€2.3b/+5% yoy 41 31 Term 44.0 54 43.3 43.7 52 53 41.4 42.2 -6.8% yoy 12.4 10.5 10.5 11
Slide 19: 3Q20 domestic fees grow +13% qoq, driven by both retail and corporate businesses
3Q20 domestic fees grow +13% qoq, driven by both retail and corporate businesses; fees up +3% in the 9M20 Domestic fees (€ m) Domestic retail fees decomposition (€ m) YoY 32bps 35bps 38bps 36bps Fees/Assets1 103 +13% 92 YoY Intermediation & +23% 32 other +14% yoy +3% 26 adjusting for the 179 Bancass
Slide 20: Transactions recover to pre Covid19 levels, with physical to digital channel substitution
Transactions recover to pre Covid19 levels, recording an impressive physical to digital channel substitution aided by our Transformation Program Transactions per channel (m) Transactions per channel (monthly volume €m) Pre Covid19 Lock-down Post Lock-down Pre Covid19 Lock-down Post Lock-down yoy ±%
Slide 21: Cost reduction momentum is maintained in 3Q20
Cost reduction momentum is maintained in 3Q20, driving 9M20 personnel and G&A expenses lower by c9% yoy Group OpEx by category (€ m) Domestic Branch evolution (#) Domestic Group 528 527 9M20 9M19 yoy 9M20 9M19 yoy 510 -73 branches 486 Personnel 339 371 -8.5% 359 389 -7.9% 461 G&As 123 137 -9.7% 134
Slide 22: 3 Asset Quality
NATIONAL BANK OF GREECE 3) Asset Quality
Slide 23: NPE organic reduction continues in 3Q20, aided by liquidations, restructurings and moratoria
NPE organic reduction continues in 3Q20, aided by liquidations, restructurings and moratoria Domestic NPE stock per category – 3Q20 (€ b) NPE balance change (€ m, Bank) clients outside the moratoria 5.9 perimeter, FNPE & other €9.96b at 105 subsequently Bank level NPE inflows 332 254 289 impaired 1.
Slide 24: 3Q20 NPE reduction benefits from mortgage restructurings via split and settle product
3Q20 NPE reduction, benefits from mortgage restructurings via our innovative split and settle product Mortgages (€ m) Consumer (€ m) NPE change1 (€ m) -31 -4 -26 16 -33 -149 -158 -173 -184 -205 -214 -256 c1/2 due to debt -304 forgiveness 3Q19 4Q19 1Q20 2Q20 3Q20 3Q19 4Q19 1Q20 2Q20 3Q20 SBLs (€ m) C
Slide 25: NPE coverage at 56.7%, up +330bps ytd incorporating Covid19 provisions
NPE coverage at 56.7%, up +330bps ytd incorporating Covid19 provisions Domestic 90dpd ratios and coverage | 3Q20 Domestic 90dpd – NPE bridge (€ b) | 3Q20 Collateral 73% 22% 67% 64% 66% coverage1 42% 0.2 10.1 120% 2.5 0.3 90dpd 31% 24% 7.0 ratio 21.0% 20.4% 115% 10% 90dpd 57% 171% 80.9% 81.0% coverag
Slide 26: Positive substitution effect of Stage 2 and 3 loans by Stage 1
Positive substitution effect of Stage 2 and 3 loans by Stage 1 Group loan staging and evolution (€ b) Group Stage 2 ratios and coverage (%) Group Stage 3 ratios and coverage (%) Δ qoq Stage 3 12.1 10.9 10.4 10.2 -0.2 o/w: 34.1% €2.7b FPEs 31.2% €1.8b SICR 29.9% €0.4b +30dpd 29.2% Ratio 19.9% Stage 2
Slide 27: 4 Liquidity
NATIONAL BANK OF GREECE 4 | Liquidity
Slide 28: ECB's TLTRO exposure and deposit cost reductions have pushed funding cost to an all time low
ECB’s TLTRO exposure and deposit cost reductions have pushed our funding cost to an all time low of 12bps Eurosystem funding (€ b) Repo funding (net, € b) 27.6 NBG Funding Cost (bps) 3.6 41 31 1.9 24.0 1.6 19 0.9 12 0.2 0.3 0.3 0 Blended -17 -0.2 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 ELA¹ 17.6 11.
Slide 29: Domestic deposits are up +€1.5b ytd, driven by household & corporate savings
Domestic deposits are up +€1.5b ytd, driven by household & corporate savings Deposit evolution by geography (€ b) NBG domestic deposit flows (€ b) YoY Group 42.9 43.7 45.5 44.8 45.2 +5.0% 3.4 SEE & 1.5 1.5 1.5 1.5 1.5 1.5 1.5 +5.1% 1.1 Other 0.2 0.5 44.0 43.3 43.7 41.4 42.2 +5.0% Greece -2.2 -3.6 -4
Slide 30: 5 Capital
NATIONAL BANK OF GREECE 5 | Capital
Slide 31: 3Q20 CET1 and Total capital at 15.9% and 16.9%
3Q20 CET1 and Total capital at 15.9% and 16.9%, absorbing close to 250bps of CoR in 9M20 3Q20 CET1 ratio movement Total Capital ratio at 16.9%, or 14.0% FL 1 15.9% 15.9% 16.1% +0.28% -0.12% -0.17% +0.16% Not including a benefit of c20bps on software intangibles (EBA CET1: CET1: CET1: recommendation)
Slide 32: 6 Transformation Program Update
6 Transformation Program Update
Slide 33: Transformation Program acts as a competitive advantage supporting change
Transformation Program acts as a competitive advantage supporting change Strong governance and solid momentum, with 100% management team participation and Board PURPOSE & VALUES sponsorship 40+ initiatives with ambitious objectives linked to the Business Plan HEALTHY BEST BANK EFFICIENCY BALANCE
Slide 34: Transformation Program supports move towards a new business and operating model
Transformation Program supports move towards a new business and operating model HEALTHY BALANCE • Finalization of Marina and Danube transactions SHEET • Preparation of Frontier securitization for imminent launch • Strengthening of organic NPE efforts across segments, including to minimise new flows
Slide 35: Digital continues to accelerate, with continuous pipeline of new functionalities
Digital continues to accelerate, with continuous pipeline of new functionalities underway Highlights of digital strategy Digital subscribers (M) 2.9 2.7 Registered YoY (%) ONBOARD • New and existing customers (individuals) subscribers onboarded to digital: c475k ytd (1st in market for 2.5 2.4 +27% n
Slide 36: 7 Macro
NATIONAL BANK OF GREECE 7 | Macro
Slide 37: Economic activity picked-up in 3Q20 supported by policy measures
Economic activity picked-up in 3Q20 supported by policy measures and the lifting of restrictions Economic sentiment & Greek real GDP growth Turnover of Greek enterprises (double-entry bookkeeping category) y-o-y index 115 110 15 15 3 105 -2 5 5 100 -7 95 -5 -5 90 -12 85 -15 -15 80 -25 -25 -17 75 -22
Slide 38: Deteriorating epidemic trends pose downside economic risks
Deteriorating epidemic trends pose downside economic risks for the rest of the year Covid19: Intubated patients & daily deaths in Greece Retail sales, consumer confidence and house prices 80 number of deaths, number of 500 9 y-o-y index 0 70 daily flows intubated patients 6 400 3 -20 60 50 0 -40 300
Slide 39: Additional fiscal stimulus and enhanced liquidity will cushion the shock
Additional fiscal stimulus, a slower fiscal rebalancing in 2021 and enhanced liquidity will cushion the shock New issuance supports the State’s liquidity reserves ahead of the activation of the EU Recovery Fund Bank lending growth (y-o-y) & corporate credit expansion State budget revenue, expenditur
Slide 40: 8 Appendix
NATIONAL BANK OF GREECE 8 | Appendix
Slide 41: Group Balance Sheet & P&L
Group Balance Sheet & P&L Balance Sheet¹ | Group P&L¹ | Group €m 3Q20 2Q20 1Q20 4Q19 3Q19 €m 3Q20 2Q20 1Q20 4Q19 3Q19 Cash & Reserves 6,750 6,705 5,650 3,519 2,975 NII 304 273 278 289 300 Interbank placements 3,899 3,562 3,794 3,008 3,333 Net fees & commissions 65 57 66 71 64 Securities 14,907 15,27
Slide 42: Geographical segment P&L: Greece & Other International
Geographical segment P&L: Greece & Other International Greece International¹ €m 3Q20 2Q20 1Q20 4Q19 3Q19 €m 3Q20 2Q20 1Q20 4Q19 3Q19 NII 290 259 262 272 284 NII 15 14 16 17 17 Net fees & commissions 61 54 63 68 60 Net fees & commissions 3 3 3 3 4 Core Income 351 313 325 340 344 Core Income 18 16 19
Slide 43: ESMA Alternative Performance Measures (APMs), definition of financial data and ratios used
ESMA Alternative Performance Measures (APMs), definition of financial data and ratios used The 3Q20 Financial Results Press Release contains financial information and measures as derived from the Group and the Bank financial statements for the period ended 30 September 2020 and for the year ended 31
Slide 44: 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 45: 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 46: Important Notice – Disclaimer
Important Notice – Disclaimer The information, statements and opinions set out in the 3Q20 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 47: 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 48: Contact details
Contact details Greg Papagrigoris Head of IR +30210 334 2310 papagrigoris.gr@nbg.gr Maria Kanellopoulou Panagiotis Alevras Maria Constantinou Investor Relations Officer Investor Relations Officer Investor Relations Officer +30210 334 1537 +30210 772 7292 +30210 334 0828 mkanellopoulou@nbg.gr Alevras
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