National Bank Of Greece S.a. · ATHEX:ETE
National Bank Of Greece — Q1 2023 Earnings Presentation
45 slides from National Bank Of Greece's earnings presentation, May 23, 2023
Slide 1: 1Q23 Financial Results
1Q23 Financial Results 23 May 2023
Slide 2: Table of Contents
Table of Contents 1 Key Highlights 2 Macro 3 Financial Results 4 ESG Update 5 Transformation Program Update 6 Appendix
Slide 3: Key Highlights
NATIONAL BANK OF GREECE 1 | Key Highlights
Slide 4: 1Q23 Group core PAT reaches €228m
1Q23 Group core PAT¹ reaches €228m 1Q23 Core PAT¹ 1Q23 PATattrib. Core income €228m €260m €584m +57% yoy >100% yoy +14% qoq +16% qoq C:CI 34% -17ppts yoy Net NPEs €0.2b CET1 FL 2 Performing loans 2 +€2.1b yoy, at €27.6b NPEs at €1.6b 16.5% NPE ratio 5.1% 2 +8% yoy +c90 bps qoq Disbursements NPE Cove
Slide 5: Core income momentum picks up, driving C:CI to 34% and core RoTE to 15%
Core income momentum picks up, driving C:CI to 34% and core RoTE to 15% Cost to Core Income | % Core PAT | € m 56% 52% FY23 guidance c42% 228 49% 197 45% 151 43% 101 88 34% 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 1Q22 2Q22 3Q22 4Q22 1Q23 EPS¹ | € Core RoTE | % 14.8% 1.00 13.6% 0.86 0.66 10.9% 0.44 0.38 c0.75
Slide 6: Profitability “jaws” widen on the back of strong core income growth
Profitability “jaws” widen on the back of strong core income growth Profitability “jaws” | € m Core profitability | € m C:CI 55.6% 51.5% 48.8% 45.2% 43.5% 34.4% 584 510 Core +33% 383 PPI qoq 288 436 181 >2x Core 398 383 yoy 382 Income 373 288 CoR -56 -57 -56 239 204 Core PPI 170 181 2.6x 222 yoy OpE
Slide 7: Strong PE NII expansion driven by healthy volume growth and higher ECB rates
Strong PE NII expansion driven by healthy volume growth and higher ECB rates Domestic PE loan portfolio evolution Domestic PE NII | € m Disbursements¹ +1.1 +1.2 (€ b) +21% +8% yoy +6% yoy 367 2.1 303 Net PE additions yoy (€ b) 1.5 203 1Q22 1Q23 1Q22 4Q22 1Q23 1. Bank level National Bank of Greece 1Q
Slide 8: Deposit substitution derives from corporates; core/total depos at 81%
Deposit substitution derives from corporates; core/total depos at 81% NBG Deposit¹ flows qoq (€ b) NBG Deposit¹ mix (%) FY23 guidance Core/ Total c65% -€0.4b 3% 3% 4% 4% 3% 14% 13% 12% 12% 16% 2 other Core Time Time Core 83% 84% 84% 84% 81% Premium Corporates 1Q22 2Q22 3Q22 4Q22 1Q23 & mass & other
Slide 9: Macro
NATIONAL BANK OF GREECE 2\ Macro
Slide 10: Strong start to 2023; heading to another year of overperformance
Strong start to 2023; heading to another year of overperformance Economic activity in Greece remains resilient and on a Greece’s economic recovery outpaced the euro area 110 110 strong upward trajectory: In constant prices, index, 4Q19=100 105 105 • Manufacturing production growth accelerated to 7.8
Slide 11: Enhanced fiscal credibility, strong investment pipeline, receding cost pressure
Enhanced fiscal credibility, strong investment pipeline, receding cost pressure • Greece’s General Government budget recorded a primary surplus International arrivals at Athens International Airport (AIA) of 0.1% of GDP in 2022 against a Budget estimate for a primary exceeded 2019 levels in early-20
Slide 12: Increasing fixed capital investment and robust export-oriented business activity
Increasing fixed capital investment combined with robust export-oriented business activity, supportive labor market conditions and increasing asset valuations bode well for output growth Strong domestic demand and receding external pressures House prices up by 42% in 4Q22 vs their 3Q17 low, but in 2
Slide 13: Key indicators for the Greek economy point to accelerating growth
Key conjunctural and leading indicators for the Greek economy point to accelerating growth in 1Q23 and early 2Q23, backed by strong carryover effects from 2022 Manufacturing PMI points to accelerating production in ESI & sectoral confidence indicators in solid expansion territory Greece and a wideni
Slide 14: Return to a primary surplus and sharp decrease in debt-to-GDP ratio
Return to a primary surplus one year earlier than planned and sharp decrease in the debt-to-GDP ratio in 2022. Rising public investment and FDI, in conjunction with declining energy prices, pose upside risks to economic growth Fiscal targets have been surpassed on strong efficiency Remarkable 23.3-p
Slide 15: Financial Results
NATIONAL BANK OF GREECE 3 | Financial Results
Slide 16: Impressive core income expansion pushes core RoTE to c15%
Impressive core income expansion and contained operating and credit costs push core RoTE to c15% P&L Highlights P&L | Group €m 1Q23 1Q22 YoY 4Q22 QoQ 1Q23 Group Core PAT at €228m (>100% yoy), reflects core income +11% yoy NII 497 288 +73% 421 +18% growth of +57% yoy; Operating costs were contained i
Slide 17: PEs up by +€2.1b yoy, deposits +3.3% yoy and CET1 FL ratio at 16.5%
PEs up by +€2.1b yoy, deposits +3.3% yoy and CET1 FL ratio +c90bps qoq at 16.5% Balance sheet Highlights Key P&L Ratios | Group Domestic PE loan book expands by +€2.1b yoy, flat qoq 1Q23 4Q22 3Q22 2Q22 1Q22 • Following a very strong 4Q22, with disbursements¹ amounting to €2.7b, disbursements¹ in 1Q2
Slide 18: Strong profitability accelerates organic capital generation
Strong profitability accelerates organic capital generation 1Q23 FL capital movement1 Organic capital generation at c80bps 17.6% 16.8% +c0.9% +c0.1% CAD FL -c0.1% Includes DTC amortization CET1 FL 16.5% 15.7% 4Q22 1Q23 Profitability RWA net expansion Other (incl. FVTOCI) 1Q23 RWAs €36.2b €36.5b 1 In
Slide 19: 1Q23 Group COP driver is the sharp pick up in NII, reaching €327m
1Q23 Group COP driver is the sharp pick up in NII, reaching €327m Group core operating profit bridge 1Q23 (€ m) Group operating profit decomposition 1Q23 (€ b) COP (€m) 125 231 327 2.6x yoy 2.6x yoy COP margin (bps) 164 291 405 +241bps yoy +11% yoy excl. impact of merchant acquiring deconsolidation
Slide 20: A high quality balance sheet supports profitability
A high quality balance sheet supports profitability Group Assets1 (€b) Group Liabilities1 (€b) Interbank 1.9 Cash & reserves 5.0 Excess liquidity at €6b, factoring in full TLTRO repayment Interbank 2.7 Securities portfolio Securities² 15.1 • HTC €11.5b (hedged) • HTCS €2.9b (hedged) • Trading €0.4b
Slide 21: Strong 1Q23 PE NII recovery benefits from base rate loan repricing
Strong 1Q23 PE NII recovery (+18% qoq) benefits from base rate loan repricing; NIM up by 48bps qoq to 2.6% Domestic NII (€ m), Group NIM (bps) Domestic NII breakdown (€ m) +48bps qoq NII 270 294 328 401 474 260 NIM¹ (Group) 212 155 173 139 Loans (PE) 264 178 +86bps Loans (NPE) 50 qoq Securities 3M E
Slide 22: Domestic PEs are up by +€2.1b yoy
Domestic PEs are up by +€2.1b yoy, with the ytd evolution reflecting higher working capital corporate repayments Greek loan evolution | performing loans (€ b) Bank Loan disbursements¹ (€ b) +13% yoy (+21% corporate) 27.6 27.6 26.5 26.5 +€2.1b 25.5 +8% yoy 2.7 +€2.5b 2.1 +16% yoy 16.7 18.0 18.1 1.9 1
Slide 23: PE lending spreads lower due to successively higher ECB rates
PE lending spreads lower due to successively higher ECB rates with the pass through since 2Q22 near 70% Greek PE lending spreads¹ (bps) Greek NPE NII%, Loan yield Total 311 309 295 275 269 Performing ² Dom. NPE NII⁴ /Dom. NII % 5.9% 4.4% 3.5% 3M Euribor -53 -35 50 178 264 1.0% (avg) FY20 FY21 FY22 1
Slide 24: 1Q23 deposits slightly down qoq due to seasonality and corporate repayments
1Q23 deposits slightly down qoq due to seasonality and corporate repayments; deposit repricing picks up Group deposits evolution (€ b) Greek deposit spreads against avg 3M euribor (bps) 260 Group 53.1 54.3 55.7 55.2 54.8 +€1.7b yoy 176 Average 49 balance <€4k -54 -36 Demand per account SEE & 1.8 1.7
Slide 25: Superior cash and reserves position highlights NBG’s liquidity advantage
Superior cash and reserves position highlights NBG’s liquidity advantage; >€3b TLTRO repaid in 2023 TLTRO, Cash & reserves, Net Interbank (€ b) NBG Funding Cost (bps) 17.6 TLTRO 264 Cash & reserves 15.3 3M Euribor 14.5 14.2 Net Interbank 178 (avg) 11.6 11.6 11.6 10.0 8.1 50 46 30 CoF -2 -2 1 (Blende
Slide 26: Domestic fees grow by +13% yoy
Domestic fees grow by +13%1 yoy, with double digit growth in both retail and corporate lines of business Domestic fees (€ m) Domestic retail fees decomposition (€ m) Fees/Assets 40bps 45bps YoY YoY +4% 47 +9% 80 83 +13%¹ +18%¹ 43 7 -3% 8 +17% 9 Deposits 7 29 +2% Payments 11 +13% 29 +10%¹ 10 Reflecti
Slide 27: C:CI drops to 34% with Personnel and G&As at +3% yoy
C:CI drops to 34% with both Personnel and G&As at +3% yoy despite inflation and wage increase Group Cost to Core Income (%) Group headcount¹ evolution (# k) Cost/ core 19.8 income % 51.5 43.5 58.9 34.4 56.9 55.2 -9.1 ppts qoq -17.1 ppts yoy 7.8 6.7K at Bank level Personnel cost/ 10.8 27.8 10.1 core
Slide 28: No net NPE inflows in 1Q23 and no signs of an appreciable pick up
No net NPE inflows in 1Q23 and no signs of an appreciable pick up in early arrears Domestic NPE stock per category | 1Q23 (€ b) NPE balance change (€ b, Bank) o/w: €0.2b or c30% <30dpd 1.1 0.13 0.14 o/w: €0.2b or 0.9 NPE inflows (+) 0.09 0.10 0.11 c50% <30dpd 0.4 0.4 Curings -0.09 -0.11 -0.09 -0.11
Slide 29: FNPEs <30dpd of €0.5b comprise 30% of our NPEs
FNPEs <30dpd of €0.5b comprise 30% of our NPEs and have a high chance to cure Domestic NPE ratios and coverage | 1Q23 Domestic 90dpd – NPE bridge (€ b) | 1Q23 Collateral 88% 6% 82% 68% 70% coverage1 1.6 +0.1 +0.5 +0.06 1.0 14% 10% 90dpd FNPE <30 FNPE 31-90 Other impaired NPEs 101% NPE ratio 6% 115%
Slide 30: Sector leading coverage levels across all stages
Sector leading coverage levels across all stages Group gross loan stage evolution (€ b) Group S2 ratio and coverage (%) Group S3 ratio and coverage (%) Δ yoy Stage 3 2.1 2.0 1.8 1.8 -0.4 14.9% o/w: 14.1% Ratio €2.0b FPEs 13.8% 13.6% Stage 2 €2.1b SICR €0.3b +30dpd 4.7 4.6 4.5 4.4 -0.2 Stage 1¹ 6.6%
Slide 31: ESG Update
NATIONAL BANK OF GREECE 4| ESG Update
Slide 32: Pushing forward with our climate & environment strategy
We are pushing forward with our climate & environment (C&E) strategy, within our broader ESG agenda C&E strategic themes and recent efforts Examples of impact achieved 1 Lead the market in sustainable energy financing Green bond indicators (2022) • Utilisation of green bond at 100% 58 RES projects f
Slide 33: We baselined our GHG emissions and gained insights on our impact
We baselined our GHG emissions and gained valuable insights on our direct and indirect impact on the environment Non-financed emissions (tCO2e) Financed emissions – selected intensity metrics 2020 2021 lower emissions higher emissions 245 = same level emissions -30% D35 – Electricity generation 134
Slide 34: Transformation Program Update
5 Transformation Program Update
Slide 35: The Transformation Program acts as a competitive advantage
The Transformation Program acts as a competitive advantage, supporting sustainable change and target achievement BEST BANK FOR BEST BANK FOR SPECIALIZED ASSET EFFICIENCY & AGILITY OUR CLIENTS OUR CLIENTS SOLUTIONS (SAS) (ENA) (BBC Corporate) (BBC Retail) • New, more centralized Corporate • New inves
Slide 36: NBG is widely recognised for its digital transformation
NBG is widely recognised for its digital transformation, as our strategy continues to deliver impressive results ONBOARD ENGAGE CROSS-SELL ONBOA RD Digital subscribers (m) Digital active users1 (m) Digital cumulative sales2 (m) Registered subscribers 3.7 3.8 3.5 Active 3.8 3.6 users 12M 3.0 Mobile a
Slide 37: Appendix
NATIONAL BANK OF GREECE 6| Appendix
Slide 38: Group Balance Sheet & P&L
Group Balance Sheet & P&L Balance Sheet | Group P&L | Group €m 1Q23 4Q22 3Q22 2Q22 1Q22 €m 1Q23 4Q22 3Q22 2Q22 1Q22 Cash & Reserves 9,950 14,226 17,572 15,261 14,530 NII 497 421 348 312 288 Interbank placements 2,731 2,900 3,143 2,711 3,715 Net fee & commission income 87 89 88 86 85 Securities 15,14
Slide 39: Geographical segment P&L: Greece & International
Geographical segment P&L: Greece & International Greece International €m 1Q23 4Q22 3Q22 2Q22 1Q22 €m 1Q23 4Q22 3Q22 2Q22 1Q22 NII 474 401 328 294 270 NII 23 21 20 18 18 Net fee & commission income 83 85 85 80 80 Net fee & commission income 3 4 3 5 5 Core Income 557 485 413 375 350 Core Income 27 25
Slide 40: ESMA Alternative Performance Measures (APMs)
ESMA Alternative Performance Measures (APMs), definition of financial data and ratios used The 1Q23 Financial Results Presentation contains financial information and measures as derived from the Group financial statements for the period ended 31 March 2023 and for the year ended 31 December 2022, wh
Slide 41: Definition of financial data, ratios used and alternative performance measures
Definition of financial data, ratios used and alternative performance measures Na me Ab b re via tio n De fin itio n Assets held for sale -- Non- c urrent assets held for sale Cash and Reserves -- Cash and balanc es with c entral banks Combined Buffer Requirement CBR Total CET1 c apital required to
Slide 42: Definition of financial data, ratios used and alternative performance measures
Definition of financial data, ratios used and alternative performance measures Minorities -- Non-controlling interest Net Interbank -- Due from banks less due to banks, excluding the TLTRO facility Net Interest Margin NIM Net interest income over average assets Net Loans -- Loans and advances to cus
Slide 43: Important Notice – Disclaimer
Important Notice – Disclaimer The information, statements and opinions set out in the 1Q23 Results Presentation and accompanying discussion (the “Presentation”) have been provided by National Bank of Greece S.A. (the “Bank”) together with its consolidated subsidiaries (the “Group”). They serve infor
Slide 44: Important Notice – Forward Looking Information
Important Notice – Forward Looking Information Forward Looking Statements reflect knowledge and information available at the date of the Presentation and are subject to inherent uncertainties and qualifications and are based on numerous assumptions, in each case whether or not identified in the Pres
Slide 45: Contact details
Contact details Christos Christodoulou +30 210 334 3051 cchristodoulou@nbg.gr Group CFO Greg Papagrigoris +30 210 334 2310 papagrigoris.gr@nbg.gr Group Head of IR Maria Kanellopoulou +30 210 334 1537 mkanellopoulou@nbg.gr Panagiotis Alevras +30 210 772 7292 Alevras.Pan@nbg.gr George Panagopoulos, CF
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