National Bank Of Greece S.a. · ATHEX:ETE
National Bank Of Greece — Q2 2023 Earnings Presentation
46 slides from National Bank Of Greece's earnings presentation, Aug 1, 2023
Slide 1: 2Q23 Financial Results
2Q23 Financial Results 1 August 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: 1 Key Highlights
NATIONAL BANK OF GREECE 1 | Key Highlights
Slide 4: Strong 1H23 overperformance on all fronts
Strong 1H23 overperformance on all fronts 1H23 Core PAT¹ 2Q23 Core PAT¹ 1H23 Core income €508m 3.6x yoy €288m +31% qoq €1,230m +60% yoy 1H23 Core RoTE C:CI 16.2% +10.9pps yoy 32% -18ppts yoy Net NPEs €0.3b CET1 FL 2 Performing loans 2 +€0.8b yoy, at €27.4b NPEs at €1.7b 17.3% +3% yoy +c80 bps qoq NP
Slide 5: Sustained core income momentum drives 2Q23 RoTE to 18%
Sustained core income momentum drives 2Q23 RoTE to 18%¹, paving the way for an upward revision to our FY23 guidance Cost to Core Income | % Core PAT | € m updated <35% 56% FY23 288 52% guidance 49% previous 220 c42% 45% 190 43% 142 34% 73 31% 69 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 1Q22 2Q22 3Q22 4Q22
Slide 6: Strong momentum for a fifth consecutive quarter in core income
Strong momentum for a fifth consecutive quarter in core income, combines with cost discipline and risk containment Profitability “jaws” | € m Core profitability | € m 646 +57% 584 830 2.2x 510 yoy Core PPI 527 436 +17% 384 448 qoq 398 383 Core 373 Income 288 Loan & other -113 -121 -151 impairments 2
Slide 7: Deposits substitution eases substantially in 2Q23
Deposits substitution eases substantially in 2Q23; core/total depos still at 80% NBG Deposits¹ flows ytd (€ b) NBG Deposits¹ mix (%) +€0.4b 3% 4% 4% 3% 3% 13% 12% 12% 16% 18% 2 other Time Core 84% 84% 84% 81% 80% -€0.4b +€0.8b 1Q23 2Q23 2Q22 3Q22 4Q22 1Q23 2Q23 & other & other 1 Domestic level | 2 O
Slide 8: Updated Guidance FY25: targeting a sustainable core RoTE of >13%
Updated Guidance FY25: targeting a sustainable core RoTE of >13% Financial performance metrics Actual Previous Guidance Updated Guidance Group 6M23 FY23 FY25 FY23 FY25 PE loan growth¹ +3% +7% CAGR +7% CAGR NPE ratio² 5.3% c5% c3% c5% c3% S3 coverage 54.5% >50% >50% >50% >50% NIM (bps) 278 >240 >210
Slide 9: NBG ranks 5th among participating EU banks in EBA's 2023 stress test
NBG ranks 5th among 70 participating EU banks in EBA's 2023 stress test Stress test results highlights FL CET1 evolution (%): ST 2023 vs 2021 ✓ NBG successfully completed the 2023 EU wide stress test Baseline Scenario Adverse Scenario conducted by EBA and ECB +580bps 21.6 ✓ NBG's FL FY22 CET1 ratio
Slide 10: 2 Macro
NATIONAL BANK OF GREECE 2\ Macro
Slide 11: Economic activity continues on a resilient growth path
Economic activity continues on a resilient growth path, with signs of acceleration in 2Q23 Economic activity in Greece remained on a robust upward trend in Greece’s economic recovery outpaces the euro area 1Q23, exceeding by a significant margin – for an 8th consecutive quarter – 110 index 110 the r
Slide 12: Declining inflation, favorable business and labor market conditions
Declining inflation, favorable business and labor market conditions, and backloading in public investment • CPI slowed significantly in June to a 22-month low of 1.8% yoy, on Manufacturing PMI points to accelerating production in declining energy prices. Similarly, core inflation decelerated to 4.9%
Slide 13: Solid fixed capital investment and rising real estate valuations
Solid fixed capital investment and rising real estate valuations House prices up by 50% in 1Q23 vs their 3Q17 low, but Fixed capital investment on a strong upward trend still 14% below their historical high of 2008 30 contributions y-o-y 30 20 20 y-o-y 25 in pps 25 15 15 20 20 10 10 15 15 5 5 10 10
Slide 14: Steadily improving labor market conditions and lower headline inflation
Steadily improving labor market conditions and lower headline inflation support real disposable income Labor compensation on the rise on the back of increasing Unemployment rate at a 13-year low of 10.8% in May, employment and wages employment up by 58Κ persons yoy in 5M23 24 €bn y-o-y 15 4.5 millio
Slide 15: A services-based overperformance buoyed by tourism
A services-based overperformance buoyed by tourism and resilient economic sentiment offsets the drag from monetary and fiscal tightening ESI & sectoral confidence indicators in solid expansion territory International arrivals at Athens International Airport (deviation from 15-year average, Greece &
Slide 16: 3 Financial Results
NATIONAL BANK OF GREECE 3 | Financial Results
Slide 17: 1H23 Group core PAT exceeds €0.5b, core RoTE >16%
1H23 Group core PAT exceeds €0.5b, yielding a core RoTE of >16% P&L Highlights P&L | Group 2Q23 Group core PAT at €288m (+31% qoq), benefits from core €m 1H23 1H22 YoY 2Q23 QoQ income growth (+11% qoq) and tight control of OpEx. As a result, NII 1 052 600 +75% 554 +11% +14% yoy 1H23 Group core PAT r
Slide 18: Disbursements start to pick up, deposits rebound, capital buffers rise
Disbursements start to pick up, deposits rebound, capital buffers rise further Balance sheet Highlights Key P&L Ratios | Group Disbursements pick up in 2Q23 to €1.4b 2Q23 1Q23 4Q22 3Q22 2Q22 • Disbursements¹ in 2Q23 amounted to €1.4b, up by +22% qoq, driven NIM over avg total assets (bps) 297 260 21
Slide 19: Strong profitability sustains organic capital generation
Strong profitability sustains organic capital generation at c80bps per quarter since the beginning of the year 2Q23 FL capital movement1 Organic capital generation at c80bps in 2Q23 and c160bps in 1H23 18.4% 17.6% +c0.9% c0.0% CAD FL 16.8% -0.1% Includes DTC amortization 17.3% CET1 FL 15.7% 16.5% 4Q
Slide 20: 1H23 Group COP driven by sharp pick up in NII
1H23 Group COP is driven by the sharp pick up in NII, with the rest of core lines supportive Group core operating profit bridge 1H23 (€ m) Group operating profit decomposition 1H23 (€ b) COP (€m) 234 398 710 3.0x yoy 3.0x yoy COP margin (bps) 152 440 +288bps yoy +€21m yoy excl. impact of merchant ac
Slide 21: A high quality balance sheet underscores our comparative advantage
A high quality balance sheet underscores our unique comparative advantage Group Assets1 (€ b) Group Liabilities1 (€ b) Interbank 1.5 Cash & reserves 5.7 Excess liquidity at €7b, factoring in TLTRO repayment and net interbank Interbank 2.7 position Securities portfolio Securities² 15.8 • HTC €11.9b •
Slide 22: Continued 2Q23 PE NII recovery; NIM up c40bps qoq
Continued 2Q23 PE NII recovery (+12% qoq) benefits from base rate driven repricing; NIM up by c40bps qoq Domestic NII (€ m), Group NIM (bps) Domestic NII breakdown (€ m) +37bps qoq NII 294 328 401 474 529 297 NIM¹ (Group) 260 212 155 173 Loans (PE) 264 336 178 +72bps Loans (NPE) qoq Securities 3M Eu
Slide 23: Disbursements reach €1.4b in 2Q23
Disbursements reach €1.4b in 2Q23; 2H23 pipeline will lead strong PE expansion during the remainder of the year Greek loan evolution | performing loans (€ b) Bank Loan disbursements¹ (€ b) Includes negative FX & 0.8 other impact of €80m ytd 0.4 0.6 27.6 27.6 0.2 27.4 26.5 26.5 +€0.8b 0.3 0.2 +3% yoy
Slide 24: PE lending spreads lower as ECB rate pass through at c70%
PE lending spreads lower as our pass through of higher ECB rate stands at around the 70% mark Greek PE lending spreads¹ (bps) Greek NPE NII%, Loan yield Total 309 295 275 269 260 Performing ² Dom. NPE NII⁴ /Dom. NII % 5.9% 4.4% 3M Euribor -35 50 178 264 336 3.5% (avg) 1.4% FY20 FY21 FY22 1Η23 779 76
Slide 25: Deposits rebound in 2Q23, reversing 1Q23 corporate drawdowns
Deposits rebound in 2Q23, fully reversing 1Q23 corporate drawdowns Group deposits evolution (€ b) Greek deposit spreads against avg 3M euribor (bps) Group 54.3 55.7 55.2 54.8 55.7 +€1.4b yoy SEE & 1.7 1.7 1.8 1.8 1.9 Demand Other 331 260 176 Average +€1.2b yoy despite balance <€4k 53.9 53.8 Corporat
Slide 26: Superior net cash position highlights liquidity advantage
Superior net cash position highlights NBG’s liquidity advantage; TLTRO balance down to just €1.9b TLTRO, Cash & reserves, Net Interbank (€ b) NBG Funding Cost (bps) TLTRO Cash & reserves 336 Net Interbank 264 3M Euribor 17.6 (avg) 15.3 5.7 6.9 14.2 178 11.6 11.6 10.0 50 46 58 CoF 8.1 30 (Blended) 7.
Slide 27: Domestic fees grow by +16% yoy
Domestic fees grow by +16%1 yoy, with double digit growth in both the retail and corporate lines of business Domestic fees (€ m) Domestic retail fees decomposition (€ m) Fees/Assets 41bps 47bps YoY YoY 170 +6% +16%¹ 96 +12% 160 86 13 -22% 13 +19% 17 Deposits 11 61 +6% +14%¹ 24 +11% Payments 58 22 Re
Slide 28: Cost discipline intact: C:CI drops to 31% in 2Q23
Cost discipline intact: C:CI drops to 31% in 2Q23; Personnel and G&As at +1% yoy despite inflation and wage increases Group Cost-to-Core Income (%) Group headcount¹ evolution (# k) Cost/ core 19.8 income % 50.1 32.5 58.9 30.7 56.9 55.2 -17.6ppts yoy -3.7ppts qoq 7.8 6.7 at Bank level Personnel cost/
Slide 29: Small pick up in mortgage arrears in 2Q23
Small pick up in mortgage arrears in 2Q23, well inside FY23 formation guidance Domestic NPE stock per category | 2Q23 (€ b) NPE balance change (€ b, Bank) o/w: €0.3b or c40% <30dpd 1.1 o/w: €0.2b or 0.1 0.1 0.2 c45% <30dpd 0.8 NPE inflows (+) 0.1 0.1 -0.1 -0.1 -0.1 Curings -0.1 0.4 0.5 -0.2 -0.0 -0.
Slide 30: Likely to cure FNPEs <30dpd at €0.6b
Likely to cure FNPEs <30dpd at €0.6b on a total NPE stock of €1.7b Domestic NPE ratios and coverage | 2Q23 Domestic 90dpd – NPE bridge (€ b) | 2Q23 Collateral 88% 7% 82% 68% 71% coverage1 1.7 +0.1 +0.6 +0.05 15% 0.9 10% 90dpd FNPE <30 FNPE 31-90 Other impaired NPEs NPE ratio 7% 96% 5.3% 5.4% 112% Do
Slide 31: 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 1.8 1.8 1.8 -0.3 o/w: 14.4% €1.8b FPEs 13.8% 13.6% Stage 2 €2.1b SICR €0.2b +30dpd 12.3% Ratio 4.7 4.5 4.4 4.1 -0.6 Stage 1¹ 6.4%
Slide 32: 4 ESG Update
NATIONAL BANK OF GREECE 4 ESG Update
Slide 33: Climate & environment strategy, embedded into business strategy
Climate & environment (C&E) strategy, fully embedded into our business strategy C&E strategic themes and recent efforts Examples of impact achieved 1 Lead the market in sustainable energy financing Corporate financing to RES producers (€ b) 1.5 1.6 • Development of new Sustainable Bond Framework 1.1
Slide 34: Continuous reduction in non-financed emissions footprint and energy consumption
Continuous reduction in non-financed emissions footprint and energy consumption Non-financed emissions – market based (ktCO2e) Purchased electricity (MWh) -41% reduction in total non-financed emissions in 2 years -18% reduction in purchased electricity in 2 years 2020 2021 2022 -18% 53,378 49,296 53
Slide 35: 5 Transformation Program Update
5 Transformation Program Update
Slide 36: 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 37: 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 3.8 3.7 3.5 3.9 Active 3.6 users 12M 3.0 Mobile a
Slide 38: 6 Appendix
NATIONAL BANK OF GREECE 6| Appendix
Slide 39: Group Balance Sheet & P&L
Group Balance Sheet & P&L Balance Sheet | Group P&L | Group €m 2Q23 1Q23 4Q22 3Q22 2Q22 €m 2Q23 1Q23 4Q22 3Q22 2Q22 Cash & Reserves 7,551 9,950 14,226 17,572 15,261 NII 554 497 421 348 312 Interbank placements 2,735 2,731 2,900 3,143 2,711 Net fee & commission income 92 87 89 88 86 Securities 15,832
Slide 40: Geographical segment P&L: Greece & International
Geographical segment P&L: Greece & International Greece International €m 2Q23 1Q23 4Q22 3Q22 2Q22 €m 2Q23 1Q23 4Q22 3Q22 2Q22 NII 529 474 401 328 294 NII 25 23 21 20 18 Net fee & commission income 87 83 85 85 80 Net fee & commission income 5 3 4 3 5 Core Income 616 557 485 413 375 Core Income 30 27
Slide 41: ESMA Alternative Performance Measures (APMs)
ESMA Alternative Performance Measures (APMs), definition of financial data and ratios used The 2Q23 Financial Results Presentation contains financial information and measures as derived from the Group and Bank financial statements for the period ended 30 June 2023 and for the year ended 31 December
Slide 42: Definition of financial data, ratios used and alternative performance measures
Definition of financial data, ratios used and alternative performance measures Na me Abbre via tion De finition 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 meet
Slide 43: 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 total assets. Net Interest Margin equals net
Slide 44: Important Notice – Disclaimer
Important Notice – Disclaimer The information, statements and opinions set out in the 2Q23 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 45: 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 46: 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
National Bank of Greece — Q2 2023 Earnings Presentation on 6ix