National Bank Of Greece S.a. · ATHEX:ETE
National Bank Of Greece — Investor Presentation (October 2015)
48 slides from National Bank Of Greece's investor presentation, Oct 30, 2015
Slide 1: Important notice: forward-looking statements
Important notice FORWARD-LOOKING STATEMENTS This presentation includes forward-looking statements. Such statements in the presentation include, but are not limited to, statements made in respect of the business prospects and profitability of the Bank and its subsidiaries in Greece, Turkey and other
Slide 2: Table of Contents
Table of Contents 1 2 3 4 5 Key strengths Drivers of profit growth Upside from NPL management Macro update 2Q’15 trading update
Slide 3: Table of Contents
Table of Contents 4 Key strengths Drivers of profit growth Upside from NPL management Macro update ahon 2Q'15 trading update
Slide 4: Key strengths
Key strengths 1 2 3 4 5 4 Key strengths Asset and liability structure provide maximum strategic flexibility Attractive and profitable domestic and international subsidiaries Resilient Greek PPI with improvement potential Consistently strong domestic funding and liquidity profile Strong brand recogni
Slide 5: Strong brand recognition and deeply rooted customer relationships
1 Strong brand recognition and deeply rooted customer relationships Strategically positioned with high customer penetration Reputational excellence in Greece: “premium brand of choice” Bank of reference in Greece for over 170 years High customer penetration - 6mn+ retail customers - c.8,700 corporat
Slide 6: Technology and innovation provide new value added services
1 Technology and innovation provide new value added services Modern and sophisticated bank offering premium cashless and digital services Strategic emphasis on developing and upgrading the i-bank platform has resulted in significant transaction growth Following imposition of capital controls NBG iss
Slide 7: Consistently strong domestic funding and liquidity profile
Consistently strong domestic funding and liquidity profile 2 Highest exposure in domestic core deposits (1Q’15)… … results in lower deposit outflows between Sep’14-Jun’15… Domestic Deposit Spread(3) 0.92% 1.15% n.a(2) 1.10% €14.8bn Share of 52% 48% 45% 41% Core deposits €10.6bn NBG Peer 1 Core Depos
Slide 8: Resilient Greek PPI with improvement potential
Resilient Greek PPI with improvement potential 3 Strong domestic core PPI margin (1) … 283bps 281bps 274bps 269bps 241bps 245bps 217bps 208b 199bp 155bps 145bps 2Q'14 3Q'14 4Q'14 1Q'15 2Q'15 NBG Peer 1 FY 2014 Peer 2 Peer 3 1Q'15 …still high time deposit spreads Gross Loans Average Q3 production on
Slide 9: Self funded, well diversified and profitable international business
Self funded, well diversified and profitable international business 4 Consolidated SEE & Other(1) Loans (€mn) Deposits (€mn) % % Branches PBT (1H’15, €mn) Equity (1Q’15, €mn) 29.6 1,445 % Assets (€mn) Loans (€mn) L:D Branches Loans market share PBT (€mn) (1H’15) CAR 1,952 1,522 184.9% 116 3.2% (2.5)
Slide 10: Finansbank, a sizable and profitable asset in Turkey
Finansbank, a sizable and profitable asset in Turkey 4 Universal bank with proven track record of success since its foundation No. 5 privately owned bank (1) with a strong track record of profitable growth Finansbank operates in an attractive macroeconomic environment with low banking penetration, a
Slide 11: NBG Insurance: #1 in Greece in life and non-life business
NBG Insurance: #1 in Greece in life and non-life business 4 Highly profitable on the back of a multi-channel distribution GWP(2) breakdown FY2014 NBG insurance is well positioned in Greece both in life (26% market share (1)) and in non-life (11% market share (1)) insurance - NBG insurance accounts f
Slide 12: Asset & liability structure allows for maximum strategic flexibility
Gasset & liability structure allows for maximum strategic flexibility peiriten has Capital CET1 Capital, ébn 78 RWA, €bn 647 CET1 Ratio (%) 124 [Liabitty structure Gunior to deposits) (10715) 1Q'15 IFRS Book Values® Turkey 710m SEE & International Subsidiaries €1445mn insurance e631mn Astir €130mn [
Slide 13: Strategic objectives and priorities
Strategic objectives and priorities Return of deposits to the system Time deposit repricing Reduction of ELA Reduction / expiration of government guaranteed bonds (Pillar II) 1 Funding cost improvement New production to be directed to higher margin corporate business Repayments of low margin mortgag
Slide 14: Strong tailwinds underpin Greek recovery
1 Strong tailwinds underpin Greek recovery A Over the past 5 years, Greece achieved an unprecedented correction of economic imbalances Greece improved its cyclically adjusted primary balance by 17% of GDP between end-2009 and end-2014 Large gains of price competitiveness (e.g. wages have been reduce
Slide 15: Positioned to benefit from deposit inflows
1 Positioned to benefit from deposit inflows Franchise value leads to organic gains in market share NBG “fair market” share in deposits should lead to €6-7bn inflows e cash 25.3% 192.5bn >50% ca 2011 Jun-2015 Sep-2014 Jun-2015 Total Deposits Time Deposits Source: NBG 16 Drivers of profit growth 20.7
Slide 16: Potential uplift from improved funding costs
1 Potential uplift from improved funding costs Substitution of Pillar II bonds within ELA funding Substitution of ELA funding with ECB and deposits Cash value of ELA collateral (1) Spread Funding cost €389mn 1.7% €23.4bn cash value of collateral bps on cash value or €155mn per annum €155mn fee cost
Slide 17: Increased corporate lending improves business mix
2 Increased corporate lending improves business mix lending Portfolio rebalancing towards corporates to enhance lending spread (1) Well positioned to extend credit 1Q ’15 Leveraging on its liquidity position, NBG expects to resume extending credit as soon as the situation in Greece normalises Spread
Slide 18: Depressed fee income should be revived by economic recovery
Depressed fee income should be revived by economic recovery and increased banking activity 3 Drivers of fee and commission revenue Fee commission income through the cycle (excl. guarantee fees) Low run-rate vs. pre-crisis levels due to economic recession and depressed transaction activity levels Pot
Slide 19: Potential for further efficiency improvements
4 Potential for further efficiency improvements Operating expenses(1) evolution Key drivers # employees 4.4% contractually agreed reduction on pension fund related employer contributions in 2016, more to come 15,579 12,211 -38% Expected natural attrition of 420 FTEs in 1H’15, 48 in 2H’15, 202 in 201
Slide 20: Declining NPL formation and cost of risk improvement
5 Declining NPL formation and cost of risk improvement Delinquency formation abates Key drivers Delinquency formation / net customer loans NPL formation peaked in 2012, decelerating thereafter 2.1% (1) 3.8% 5.6% 9.2% 3.9% 2.8% Aim of AQR to fully address provisioning requirements €3.6bn The macro ba
Slide 21: Upside Potential from NPL Management
Upside Potential Management from NPL 3
Slide 22: Dedicated and independent internal units for retail and corporate NPL management
1 Dedicated and independent internal units for retail and corporate NPL management Corporate NPL Management Overview of Portfolio Special Assets Unit (“SAU”) is a centralised unit with end-to-end responsibility for the management of corporate NPLs with: Large Corporates 1.7 2.5 1.4 n.a 0.7 1.3 0.8 n
Slide 23: RCU: A centralised approach delivers tangible results
2 RCU: A centralised approach delivers tangible results Matrix strategy based on customer risk profile and delinquency status, on the back of statistical segmentation of customers Bucket (1) Bucket (1) 3–4 2–3 1–2 3–4 2–3 1–2 Jan-12 Aug-15 Jan-12 Aug-15 Short-lived impact from capital controls, norm
Slide 24: RCU: A centralised approach delivers tangible results
3RCU: A centralised approach delivers tangible results Matrix strategy based on customer risk profile and delinquency status, on the back of statistical segmentation of customers Maturity extension Delinquencies) Delinquencies) Restructurings €59mn 2Q'14 3Q'14 4Q'14 1Q'15 2Q'15 Mortgages Consumer SB
Slide 25: SAU: Well designed, comprehensive strategy and solutions
4 SAU: Well designed, comprehensive strategy and solutions Industry mid-term? over time? Initiation of legal actions restructuring be a feasible option? Yes Cooperativeness of client No Is client willing to cooperate (1) ? Yes Is there sellable collateral not affecting “going Is client still in busi
Slide 26: Strong performance to date and robust coverage
Strong performance to date and robust coverage pave the way to recoveries and profitability 5 Restructurings (1H’15) Collections 24% of the non-denounced portfolio 13% of the total portfolio €723mn <90 dpd 9.0% >90 dpd 1.7% Denounced 0.8% <90 dpd >90 dpd Denounced Total Well covered book -1Q15 Large
Slide 27: Strengthened NPL resolution ability through legislative change
6 Strengthened NPL resolution ability through legislative change The new legal framework facilitates faster, simpler and more efficient processing of NPLs and significantly improves recoverability potential Shorter time from denouncement to auction (incl. enforcement period) completion and recovery
Slide 28: Successful NPL management holds the key for bottom-line and RoE outperformance
Successful NPL management holds the key for bottom-line and RoE outperformance 6 External factors support NPL management - Political stability and macro trends pave the way to recovery - Regulatory focus with close monitoring of TAR development - Credit friendly legal framework (following the signin
Slide 29: Successful NPL management holds the key for bottom-line and RoE outperformance
Successful NPL management holds the key for bottom-line and RoE outperformance "External factors support NPL management = Political stability and macro trends pave the way to recovery — Regulatory focus with close monitoring of TAR development — Credit friendly legal framework (following the signing
Slide 30: Unprecedented economic adjustment results in correction of external imbalances
Unprecedented economic adjustment results in correction external imbalances of fiscal and Current account and primary fiscal balance Commentary % GDP During 2009 – 2015E, the Greek economy achieved significant fiscal and current account rebalancing Decline of primary fiscal balance of c. 10% and of
Slide 31: Economic adjustment has led to restoration of competitive positioning
Economic adjustment has led to restoration of competitive positioning Real effective exchange rate – based on unit labour costs Commentary 160 Greece’s real effective exchange rate based on unit labour costs has returned to 2000 levels 140 120 111 104 103 8 4 - Improvement by 26% since 2009 100 Over
Slide 32: Recession in 2015 set to be milder than expected
Recession in 2015 is set to be milder is feasible than expected while a strong recovery GDP growth and strong recovery Economic Resilience During Capital Controls % 4.0 1.0 (2.0) (5.0) (8.0) (11.0) Capital controls were initially expected to have a large impact on a cash-based and import-dependent G
Slide 33: Near term catalysts for resetting the recovery process
Near term catalysts for resetting the recovery process Key next steps for the Greek economy 10yr Government bond spreads over bund Greece Portugal Spain Successful Completion of the 1st programme Review PSI & 2nd MOU Bank recapitalisation with gradual restoration of confidence paving the way for a m
Slide 34: Upgrading Greece's long-term growth potential
Upgrading Greece’s long-term growth potential New Programme focuses on further enhancing Greece’s competitive advantages while progress in resetting external competitiveness is already notable: - Cumulative reduction in wages of 23% since 2010; Greek labour market is now among the most flexible and
Slide 35: Upgrading Greece's long-term growth potential
Upgrading Greece's long-term growth potential New Programme focuses on further enhancing Greece's competitive advantages while progress in resetting external ‘competitiveness is already notable: Restored = Cumulative reduction in wages of 23% since 2010; Greek labour market is now among the most fle
Slide 36: 2Q'15 Financial Highlights & Themes
2Q’15 Financial Highlights & Themes 1 Domestic L:D at 104%(1) despite substantial deposit outflows in Q2 – Greek banks’ anticipated recapitalisation is expected to allow for the gradual relaxation of capital controls, improving household and business confidence levels Liquidity conditions remain tig
Slide 37: Pre capital controls domestic L:D ratio at 104%
1 Pre capital controls domestic L:D ratio at 104% L:D ratio evolution Greek deposit flows per quarter (€ bn) Assuming 1Q’15 run rate of provisions 116% Group 112% 110% Greece 104% 104% -4.8 95% 95% 94% 93% €-8.4bn or 19% of FY14 deposit base 83% 83% 81% 4Q'14 1Q'15 2Q'15 2Q'12 2Q'14 3Q'14 4Q'14 1Q'1
Slide 38: Cash value of excess collateral at €8bn
1 Cash value of excess collateral at €8bn Eurosystem collateral cash values (€ bn) – 3Q15 Eurosystem funding (€ bn) 34.7 Other, 1.0 Pillar-2 Pillar-3 Cov. bonds Greek Sov. Credit claims Securitizations ECB only 27.6 1.2 ECB: € 10.2bn ELA 23.4 EFS 9.2 1.1 17. ELA 15 13. cash value of eligible collate
Slide 39: Domestic deposit outflows moderate in 2Q, positive in 3Q
1 Domestic deposit outflows moderate in 2Q, in positive territory in 3Q Gross loans’ evolution by geography (€ bn) Deposits’ evolution by geography (€ bn) Group 70.4 71.4 72.1 73.9 73.3 +4.1% Group 65.4 66.9 64.9 60.4 55.7 -14.9% 7.4 -0.5% 7.5 7.3 7.4 7.3 SEE & other 6.4 6.0 4.3% (TL) -7.5% 6.5 6.6
Slide 40: Group PPI rises 18% qoq as non-core income normalises
2 Group PPI rises 18% qoq as non-core income normalises 421 209 413 357 2Q'14 3Q'14 4Q'14 1Q'15 2Q'15 2Q'14 3Q'14 4Q'14 1Q'15 2Q'15 -10m qoq FX impact -16m qoq trading 224 219 50 200 45 40 40 2Q'14 3Q'14 4Q'14 1Q'15 2Q'15 2Q'14 3Q'14 4Q'14 1Q'15 2Q'15 Source: NBG 41 Profitability 36 172 176 PPI SEE
Slide 41: Group NIM at 309bps reflects ELA substitution impact
2 Group NIM at 309bps (-12bps qoq) reflects ELA substitution impact 344 274 283 282 336 269 321 325 309 245 423 414 420 414 821 379 797 779 760 750 2Q'14 3Q'14 4Q'14 1Q'15 2Q'15 2Q'14 3Q'14 4Q'14 1Q'15 2Q'15 NII (€mn) NIM (bps) NII (€mn) NIM (bps) 351 335 550 535 532 312 474 302 456 286 82 82 82 895
Slide 42: Lower pricing in time deposits to reduce further funding costs
2 Lower pricing in time deposits to reduce further funding costs Greek deposits evolution (€ bn) Greek deposit spreads (bps) -12 Core -19 -22 -25 -25 -9% 46.1 46.0 43.9 -90 -92 39.0 -99 Total -104 35.5 -115 Time September new production at 106 bps -162 -162 -168 Time -176 Sight & other -203 Savings
Slide 43: Greek lending spread remains steady at 379bps
2 Greek lending spread remains steady at 379bps Greek gross loans evolution (€ bn) Greek lending spread (bps) 934 923 903 902 Consumer 896 387 385 385 380 379 Total lending spread (bps) 659 654 -1% qoq 652 46.0 649 45.5 45.6 45.2 45.3 637 SBLs Corporate SBL 409 407 404 393 392 Corporate Consumer Mor
Slide 44: Domestic C:I continues to improve
2Domestic C:I continues to improve mn) vs. 2Q14 2Q15 1Q15 2Q14 qoq 55 268 Greece 265 262 59 Incl. €7m cash bonus 262 Greece 256 252 1.7% -2.3% Turkey 228 209 180 9.4% 26.7% 57 56 96 Group 93 05 91 85 SEE & other 68 64 62 5.6% 9.7% 2Q'15 2Q'14 -40% s. 1Q10 69 69 67 65 63 vs. 2Q14 2Q14 qoq 2Q15 1Q15 3
Slide 45: Domestic 90dpd stock stable in Q2; formation contracts
3 Domestic 90dpd stock stable in Q2; formation contracts 90dpd (€ bn) 18.0 14.7 1.2 2.1 60% 55% 32% 31% 28% 25% 20% Mortgages Consumer SBL Corporate Group Greece Turkey SEE & other 336 262 246 233 2Q'14(1) 3Q'14(1) 2Q'14(1) 3Q'14(1) 4Q'14 1Q'15 2Q'15 4Q'14 1Q'15 2Q'15 Source: NBG Notes: (1) Mortgage
Slide 46: Domestic formation abates in 2Q reflecting accelerated restructuring efforts
3 Domestic formation abates in 2Q reflecting accelerated restructuring efforts 281 76 46 47 42 22 21 15 14 15 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 1Q'15 2Q'15 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 1Q'15 2Q'15 260 85 74 53 36 31 10 -42 -101 2Q'15 -6 4Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14
Slide 47: Contact details
Contact details Leonidas Fragkiadakis CEO +30210 334 1024 lfragk@nbg.gr Paul Mylonas Deputy CEO +30210 334 1521 pmylonas@nbg.gr Ioannis Kyriakopoulos CFO +30210 334 3051 ikiriakopoulos@nbg.gr Greg Papagrigoris Head of IR +30210 334 2310 papagrigoris@nbg.gr ir@nbg.gr Anthony Kouleimanis Investor Rela
Slide 48: Signatures
SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. National Bank of Greece S.A. /s/ Nikolaos Voutychtis (Registrant) Date: October 30 th , 2015 Deputy Chi
National Bank of Greece — Investor Presentation (October 2015) on 6ix