Eurobank S.A. · ATHEX:EUROB
Eurobank — EFG Eurobank Ergasias — 9M 2004 Earnings Presentation
40 slides from Eurobank's earnings presentation, November 2004
Slide 1: Nine-Month 2004 Results
@ Eurobank | NINE - MONTH 2004 RESULTS
Slide 2: Cautionary Statement Regarding Forward-Looking Information
Cautionary Statement Regarding Forward-Looking Information This presentation may contain projections or other forward – looking statements related to EFG Eurobank Ergasias S.A. that involve risks and uncertainties. Readers are cautioned that these statements represent the Group’s judgments and futur
Slide 3: Contents
Contents Page I. Highlights & Key Developments 4 II. Financial Review 12 Appendices - Nine-Month 2004 Summary Tables 33-39 - Contacts 40 3
Slide 4: Highlights & Key Developments
HIGHLIGHTS & KEY DEVELOPMENTS 4
Slide 5: Record Nine Month results – interim dividend €0.30 per share
Record Nine Month results – interim dividend € 0.30 per share Net Profit expands 43.6% to € 273 m Loans1 climb 26.5% to € 20.4bn Healthy Spreads maintained, NIM at 3.3% Total Operating Income grows 23% to € 1.1 bn Core profit2 rise 34.1% to € 326m Cost / Income ratio improves further from 2003 to 48
Slide 6: Accelerated expansion in all segments
Accelerated expansion in all segments Group Household Lending* (€,m) Group Business Lending* (€,m) + 40.7% 9,048 + 17.1% 11,330 6,432 9,675 + 30.1% 473 + 152% 377 SE Europe* 364 + 39.3% 2,753 SE Europe 150 SBLs (GR) 1,977 + 38.8% Mortgages 3,929 + 19.3% 4,641 (GR) 2,830 Medium-sized Enterprises (GR)
Slide 7: Outpacing the market in Greece
Outpacing the market in Greece Market vs Eurobank y.o.y. growth per lending category Current Market Shares 1 Market Share gains y.t.d. 29.5% 27.6%2 38.0% 38.8% 31.0% 17.5% 27.0% 15.6% 25.2% 12.2% 12.5% 15.9% 16.6% 6.9% Total Household Mortgage Business Lending Lending Lending Lending Consumer Mortga
Slide 8: Undisputed leader in Asset Management
Undisputed leader in Asset Management Acquisition of INTERTRUST Mutual Funds Mgmt Co. with Mutual Funds market shares (excl. MM Funds) €1.8bn AUM completed in October ’04 October 2004 – Acquisition to contribute ca. € 14 - 16m in net fees annually Eurobank Intertrust – Interamerican will continue to
Slide 9: Proactive liquidity management
Proactive liquidity management Loans at 82% of deposits and liabilities evidenced by paper Liquidity source and usage (in € m) 24,263 Tier II € 400m RMBS € 722m 19,886 Liabilities 4,658 evidenced by paper RMBS € 722m 18,483 Net Loans Deposits 19,164 9
Slide 10: Stronger in SE Europe
Stronger in SE Europe SEE contributes 10% of Total Operating Income and 4% of Net Profit in 9M04 SE Europe Contribution (% of total) Robust loan growth and improving profitability in Romania & Bulgaria Loans Net profit Expanding regional consumer lending 5.8% franchise Strengthening regional managem
Slide 11: Recent Awards
Recent Awards Best Bank in Greece 2004 Global Finance Bank of the Year 2004 The Banker Domestic Top Rating 2004 Global Custodian Best e-banking website 2004 RAM Magazine PC Magazine 11
Slide 12: Financial Review
A eurobank | FINANCIAL REVIEW 12
Slide 13: Robust loan growth at 26.5% group-wide
Robust loan growth at 26.5% group-wide* Growth Rates in Greece Eurobank 25.2% Greek market 15.9% Loans outstanding* (gross, in € m) -2.0% 3.0% 8.0% 13.0% 18.0% 23.0% 28.0% Per Geographic Area Per Type + 26.5% 20,378 + 26.5% 20,378 851 16,107 16,107 % 66 514 + SE Europe 9,048 19,527 Household + 41% L
Slide 14: Retail Lending exceeds 58% of total
Retail Lending exceeds 58% of total Loan book composition* (% contribution per loan category) Household lending at 44.4% of total, from 40% in 9M ‘03 Retail lending (Household + SBLs) 23.4% 20.7% 18.7% at 58.1% of total loans, from 52.4% Corporates in 9M ‘03 Medium 24.8% 23.2% 24.1% Wholesale lendin
Slide 15: Customer Funds up 17% to €27.9 bn
Customer Funds up 17% to € 27.9 bn Total AUM rise to € 27.9 bn, with liquid funds up 10.6% at € 19.6 bn Customers’ preference continuous to shift to investment products: – Mutual Funds up 24% to € 3 bn – Other investment products increase 43% to € 5.2 bn Customer Funds (in € m) Deposits’ Analysis (i
Slide 16: Net Interest Income up 20% y-o-y
Net Interest Income up 20% y-o-y NII quarterly evolution (in € m) 265 252 NII climbs 5.2% in 3Q 04 at +5.2% Group level; up 4.8% for Greek 234 24 operations 221 22 216 241 SE Europe operations contribute 208 19 230 8.6% of NII Total NII 204 12 11 215 NII accounts for 68% of Total SE Europe 9 10 205
Slide 17: Loan Margin strengthens, still driving NII
Loan Margin strengthens, still driving NII (up 30% y-o-y) NII quarterly evolution (in € m) 265 252 234 Strong Loan Spread* +3.6% 216 221 Total NII 3.79% 3.84% 3.78% 188 3.76% 3.79% 182 3.65% 3.58% 161 169 Loan margin 147 Money market 14 11 9 9 12 1Q 03 1H 03 9M 03 FY 03 1Q 04 1Η 04 9M 04 mismatch Ea
Slide 18: Strength of Loan spread continues
Strength of Loan spread* continues 9M 03 2003 1H 04 9M 04 Total Deposits & 0.86% 0.86% 0.84% 0.85% Repos Loans Wholesale (Greece) 2.03% 1.98% 1.92% 1.89% Mortgage 1.80% 1.89% 2.21% 2.21% Consumer 9.11% 9.15% 8.79% 8.65% SBLs 5.18% 5.17% 4.62% 4.52% Total Retail (Greece) 5.47% 5.57% 5.42% 5.33% Total
Slide 19: Fee income grows 23% y-o-y
Fee income grows 23% y-o-y Fee income composition (in € m) 96 92 84 88 78 Total Fees Fees from Mutual Funds and 32.2 AUM up 109% y-o-y Lending 27.8 28.6 27.1 29.6 Activities Insurance fees increase 137% y-o-y Network 31.9 Fee income contributes 24% Activities 31.6 & Other 25.3 27.4 24 of Total Opera
Slide 20: Core Revenues expand by 20.4% y-o-y
Core Revenues expand by 20.4% y-o-y Non-core income driven by equity gains Core Revenues q-o-q evolution (in € m) Non-core income (in € m) + 20% 353 348 80.3 6.4 Securitisation 318 313 4.8 Other Income 3.8 Associates 294 9.1 Dividends 0.4 46 FX & Derivatives 5.8 8.2 3.3 55.8 10.6 Bonds & Equities 18
Slide 21: Total Operating Income rises 23% driven by Core Income
Total Operating Income rises 23% driven by Core Income q-o-q evolution (Figures in € m) +17.7% 283 293 316 324 348 379 372 Total Operating income at Non Core € 1,099m in 9M04 from € 892m 22 30 31 19 Income 13 11 10 in 9M 03 353 Core Income at 93% of 348 Total Operating Income 313 318 SE Europe contr
Slide 22: Segment Revenues
Segmental view: acceleration of revenue growth in Retail, Corporate & SE Europe 2003/4 Growth (1) +18.1% +10% +25.5% +14.8% +13.0% +82.8% N/C €m 700 585 600 SEGMENT REVENUES 495 500 400 300 170 187 200 101 116 110 100 50 46 52 60 40 0 Retail Corporate Asset Capital markets Other SE Europe Management
Slide 23: Cost of local operations under tight control
Cost of local operations under tight control Operating Expenses in Greece up 2.3% at € 456m in 9M 04 –Administrative and depreciation expenses at 2Q ’04 levels –Staff expenses at € 81m in 3Q ’04 from € 83 m in 2Q ’04 On a like-for-like basis*, Operating Expenses in Greece are up 4.1% y-o-y Total Exp
Slide 24: Efficiency sharpens further
Efficiency sharpens further Cost / Income ratio improves further to 48.6% for the Group, Cost / Income ratio at 46% for Greek operations SE Europe entities account for 14.6% of 9M 04 group-wide costs, compared to 9.3% in 9M 03, contributing €78m, as Bulgarian Post Bank is fully consolidated from 1Q
Slide 25: Cost to Income Ratio
Stringent discipline on costs and man power enhances efficiency 2003/4 Expenses Change (1) +1.5% -3.4% -10.9% +7.8% +1.2% +65.9% Increase N/C % 90 83.1 75.5 COST TO INCOME RATIO 70 61.2 60.8 Group 52.6 51.6 2003 50 43.2 46.2 2004 36.3 35.1 33.0 31.8 30 10 0 Retail Retail Corporate Corporate Asset As
Slide 26: Asset quality improving
Asset quality improving Organic NPLs at 2.4% of total loans Vigilant provisioning policy maintained and increasing tax shield NPL Coverage at 91%; provisions cover 126% of non-collateralized part of NPLs NPL Ratio Bad Debt Provisions % In € m % 4.0 80.0 3.5% 1.38 3.5 3.3% 70.0 1.50 2.9% 0.97 1.00 1.
Slide 27: Core profit up 34.1% y-o-y to €326m
Core profit up 34.1% y-o-y to € 326m Dynamic rise of NII and Fee Income with effective cost containment SE Europe contributes 7% of Core Profit New quarterly high of € 123 m, up 18% q.o.q. ‘Positive jaws’ Core Profit* q-o-q evolution (in €m) In € m drive core profit growth 350 + 18% 123 Core Revenue
Slide 28: 9M 2004 Net Profit climbs 44% y-o-y to €273m
9M 2004 Net Profit climbs 44% y-o-y to € 273m Group Net Profit q-o-q evolution (in €m) + 27% 94 Setting new profit record, with 3Q 04 up 27% vs. 3Q 03 91 88 SE Europe contribution 82 rising to 4% of Net Profit in 9M 04 versus 1.7% in 9M 03 74 3Q 03 4Q 03 1Q 04 2Q 04 3Q 04 28
Slide 29: Earnings Before Tax after M.I.
Retail, Asset Management & SE Europe drive earnings up 37% Growth (1) + 54.9% + 16.6% + 73.2% + 17.5% +5.5% + 371.3% €m NC EARNINGS BEFORE TAX AFTER M.I. 194 168 174 154 134 109 114 86 94 74 76 65 74 54 27 34 16 15 15 11 14 2 -6 1 Retail 2 Corporate Asset 3 Capital markets 4 5 Other 6 SE Europe Mana
Slide 30: Steadily Improving Returns for our shareholders
Steadily Improving Returns for our shareholders RoE Shareholders’ Equity at € 2.1bn (after tax & minority interests) Tier II capital at €400m 18.7% RoA at 1.25% 18.9% Return on Equity at 18.7% Return on Required Equity at 22.5% 15.1% (@ 8% of RWA) 13.3% 12.4% RoA (after tax) 1Η 03 9M 03 FY 03 1Η 04
Slide 31: Return on Equity on the rise
Return on Equity (1) on the rise % 30% % 26.40% 25% 290.6 76.7 20% 20.60% (1) RETURN ON EQUITY BEFORE TAX 62.7 15% 14.80% 34.5 239.6 10% 2002 2003 2004 5% 30 27.3 18.4 17.7 16.8 15 Hurdle rate 9.1 4.8 3.7 0 Retail Corporate Asset Capital markets Other SE Europe Management & Treasury 9M 03 9M 04 9M 0
Slide 32: Financial Targets
Financial Targets 2003 Target 9M 04 2004-2005 Revenue growth 23% >14% p.a. 23% Cost/ Income (Group) 54.6% < 53% in 2005 48.6% Cost/ Income (Greece) 52.9% < 50% in 2005 46.0% Return on Equity 15.1% >18% in 2005 18.7% EPS Growth 36.9% >20% p.a. 32%* DPS Growth 27.7% >12% p.a. * annualised 32
Slide 33: Appendices
A eurobank | APPENDICES 33
Slide 34: 9M 2004 – Summary figures
9M 2004 – Summary figures (in €m) 9M ‘04 9M ‘03 % Change SE Europe Net interest income 750.5 627.7 19.6% 64.2 Net fee and commission income 268.0 218.0 23.0% 40.6 Core Revenues 1,018.5 845.7 20.4% 104.7 Non-core income 80.3 46.0 74.5% 4.1 Total operating income 1,098.8 891.7 23.2% 108.8 Operating ex
Slide 35: 9M 2004 – P&L analysis
9M 2004 – P&L analysis Income Statement (€ m) 9Μ 04 9Μ 03 ∆% 9Μ 04 3Q04 2Q04 ∆% Q-o-Q Net Interest Income 750.5 627.7 19.6% 265.0 252.0 5.2% Commission Income 268.0 218.0 23.0% 88.0 96.0 -8.7% Core Revenues 1018.5 845.7 20.4% 352.0 348.0 1.3% Non Core Income 80.3 46.0 74.5% 19.0 31.0 -38.3% Total Op
Slide 36: Balance Sheet Figures
Balance Sheet Figures Loan Portfolio (€ m) * 9Μ 04 9Μ 03 ∆% 9Μ 04 Consumer Loans 5,034 3,587 40.4% Mortgages 4,014 2,846 41.0% Loans to Households 9,048 6,432 40.7% Small Business Loans 2,789 2,012 38.7% Loans to Medium enterprises 4,728 3,889 21.6% Loans to Corporates 3,813 3,775 1.0% Business Loan
Slide 37: Composition of Fees & Financial Ratios
Composition of Fees & Financial Ratios Fee and Commission Income (€ m) 9Μ 04 9Μ 03 ∆% 9Μ 04 Lending activities 88.9 87.8 1.2% Mutual Funds and AUM 60.2 28.8 109.2% Capital markets 31.4 31.7 -1.1% Network Activities & Other services 87.5 69.7 25.7% Total 268.0 218.0 23.0% Financial Ratios 9Μ 04 9Μ 03
Slide 38: 9M 2004 – Summary per segment
9M 2004 – Summary per segment Segmental Results YTD SEP 2004 Retail Corporate Capital Markets Asset Mgmt Capital & Other SE Europe Total (€ m) &Treasury Interest income 499 123 58 4 0 67 750 Non-interest income 64 44 79 67 51 43 348 Fees Received/Paid 22 20 -20 -22 0 0 0 Gross Market Revenues 585 18
Slide 39: Summary per segment – 75% of FY 2003
Summary per segment – 75% of FY 2003 Segmental Results 75% of FY 2003 Retail Corporate Capital Markets Asset Mgmt Capital & Other SE Europe Total (€ m) &Treasury Interest income 419 115 63 7 1 32 637 Non-interest income 65 37 53 48 43 28 275 Fees Received/Paid 11 17 -14 -16 2 0 0 Gross Market Revenu
Slide 40: Contacts
Contacts EFG Eurobank Ergasias, 8 Othonos Str., 10557 Athens, Greece Fax: +30 210 3337 337 E-mail: investor_relations@eurobank.gr Internet: www.eurobank.gr Reuters: EFGr.AT Bloomberg: EUROB GA Investor Relations Dimitris Nikolos Tel: +30 210 33371162 E-mail: dnikolos@eurobank.gr Marlen Miliadi Tel:
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