Eurobank S.a. · ATHEX:EUROB
Eurobank — Eurobank Ergasias Services and Holdings — 9M2022 Earnings Presentation
64 slides from Eurobank's earnings presentation, Nov 10, 2022
Slide 1: 9M2022 results
9M2022 results 10 November 2022
Slide 2: Disclaimer
Disclaimer By attending the meeting where this presentation is made, or by reading the presentation slides, you agree to be bound by the following limitations: This presentation has been prepared by Eurobank Ergasias Services and Holdings S.A. (“Eurobank Holdings”) and its 100% subsidiary Eurobank S
Slide 3: Table of contents
Table of contents 9M22 results highlights 4 Diversified business model 12 Balance sheet 17 Profitability 23 Asset Quality 30 Capital 35 ESG commitments and performance 38 Macroeconomic update 43 Appendix I – Supplementary information 53 Appendix II - Glossary 59 3
Slide 4: 9M22 results highlights
9M 2022 Results 9M22 results highlights
Slide 5: 9M22 results highlights: Profitability
9M22 results highlights: Profitability P&L (€ m) 3Q22 2Q22 Δ(%) 9M22 9M21 Δ(%) Net interest income 380.9 360.6 5.6 1,080.8 999.7 8.1 Net Income1 €932m in 9M22; €173m in 3Q22 Commission income 139.0 132.7 4.7 394.7 325.9 21.1 Other Income 44.5 332.0 (86.6) 616.8 65.7 >100 ▪ NII up 8.1% y-o-y at €1,08
Slide 6: 9M22 results highlights: Balance sheet
9M22 results highlights: Balance sheet Capital Key Balance sheet ratios ▪ Total CAD at 17.2%1, up 150bps y-o-y ▪ CET1 at 14.9%1, up 160bps y-o-y Group (%) 3Q22 2Q22 1Q22 4Q21 3Q21 ▪ FBL3 at 14.2%1, up 190bps y-o-y Capital5 CAD 17.21 17.01 16.57 16.87 15.7 Volumes CET1 14.91 14.71 14.07 14.57 13.3 ▪
Slide 7: Outperforming 2022 goals
Outperforming 2022 goals 9M21 FY21 9M22 FY22 Revised FY22 Initial Actual Actual Actual outlook Business plan1 Δ performing loans €0.4bn €1.5bn €2.5bn c.€3.0bn c.€2.3bn Core PPI €675m €900m €795m c.€1.1bn c.€865m Core Operating Profit2 €357m €482m €592m c.€800m c.€610m RoTBV 7.8% 8.2% 10.8%3 c.11.0%3
Slide 8: Net interest income and fees change y-o-y
9M21 1,000 Loans NPEs (41) Δ NII (y-o-y, € m) Loans PEs 45 Core Income 2 Deposits Greece Bonds & other +8.1% 59 TLTRO (12) (9) Wholesale & other SEE 38 9M22 1,081 9M21 326 Lending 29 Δ Fees (y-o-y, € m) Network & credit cards 39 1 +21.1% Capital Markets 3 Bancassurance & Asset mng (2) Rental & other
Slide 9: Profitability
Profitability Core PPI and Provisions (€ m) Core Operating Profit2 (€ m) 795 +65.9% 592 +17.7% Core PPI 675 357 9M21 9M22 Loan Loss (318) Profit before Tax3 (€ m) (36.3%) Provisions (203) >100% 1,177 9M21 9M22 412 CoR1 1.1% 0.7% 9M21 9M22 1. On net loans. 2. Core Operating profit= Core PPI minus loa
Slide 10: Asset quality
Asset quality NPEs ratio NPEs stock (€ bn) 7.3% 6.8% 6.7% 22.9 5.9% 5.6%1 (20.5) 3Q21 4Q21 1Q22 2Q22 3Q22 NPE coverage 72.8% 72.7% 71.5% 2.4 70.6% 69.2% 0.7 FY16 FY17 FY18 FY19 FY20 FY21 9M22 9M22 Net NPEs 3Q21 4Q21 1Q22 2Q22 3Q22 1. Pro forma for Solar senior note recognition. 10
Slide 11: Capital & TBV
Capital & TBV CET1 FLB3 TBV per share (€) 14.2%1 1.63 +190bps 12.3% +€0.23 1.40 3Q21 3Q22 CAD 17.2%1 +150bps 15.7% 3Q21 3Q22 3Q21 3Q22 1. Pro forma for Solar securitization held for sale. 11
Slide 12: Diversified business model
9M 2022 Results Diversified business model
Slide 13: Segmental analysis: diversified earnings generation
Segmental analysis: diversified earnings generation Key Metrics (9M22) Net profit1 (q-o-q, € m) Net 2021 Group (%) Assets RWAs TBV RoTBV2 RoTBV Profit1 € bn € bn €m €m 382 226 114 Greek Banking 54 56 Greek banking 60.9 32.1 3,938 721 26.9% 7.0% operations Operations 3Q21 4Q21 34 1Q22 32 2Q22 3Q22 Gr
Slide 14: Eurobank Group Investment Real Estate Portfolio
Eurobank Group Investment Real Estate Portfolio Big boxes & 9M22 Office Mixed use Retail Logistics Special use Total supermarkets No. of assets (#) 65 28 81 34 22 27 257 Book Value (€ m) 427 197 159 347 91 72 1,291 % of total MV 33% 15% 12% 27% 7% 6% 100% MV / GLA (€ /sqm) 1,467 2,377 1,914 1,265 58
Slide 15: Bulgaria key metrics
Bulgaria key metrics1 9M22 Highlights Core PPI and provisions (€ m) Net profit €70m in 9M22, up 20.5% y-o-y ▪ 9M22 Core PPI at €113m, up 14.0% y-o-y Core 38 41 ▪ NII up 11.6% y-o-y at €154m 35 34 35 PPI ▪ Commission income up 20.5% y-o-y at €55m ▪ OpEx up 13.6% y-o-y (11) (11) (9) (9) (8) Provisions
Slide 16: Cyprus key metrics
Cyprus key metrics1 9M22 Highlights Core PPI and provisions (€ m) Net profit €68m in 9M22; up 29.0% y-o-y 31 Core ▪ 9M22 Core PPI up 26.9% y-o-y at €85m 26 26 28 PPI 23 ▪ NII up 19.7% y-o-y at €91m ▪ Commission income up 22.7% y-o-y at €29m (1) (0) (1) (1) (1) Provisions ▪ OpEx up by 7.2% y-o-y ▪ 9M
Slide 17: Balance sheet
9M 2022 Results Balance sheet
Slide 18: Balance sheet composition
Balance sheet composition Assets (€ bn) Liabilities and Equity (€bn) 83.4 83.4 60 Trading & other 50 3% Other issuers • Core 78% Net loans 41.4 28% Deposits 55.7 • Time 22% 40 Investment Securities 13.1 GGBs 41% 30 Derivatives 2.5 Loans & advances to banks 1.0 Other Senior Debt 3.6 sovereign Tier II
Slide 19: Loans
Loans Gross loans (€ bn) Performing loans (€ bn) Organic1 growth +€2.5bn in 9M22 39.9 41.0 42.3 43.3 38.5 40.8 41.2 38.2 39.8 37.0 SEE 9.9 SEE 10.2 9.5 9.5 9.9 8.8 9.1 8.6 9.2 8.1 4.9 Senior Notes 5.0 4.9 Senior Notes 5.1 5.1 5.0 5.1 5.1 5.1 5.1 Greece Greece Business Business 17.4 18.1 14.9 15.0 16
Slide 20: Funding and liquidity
Funding and liquidity Net loans / Deposits ratio Deposits (€ bn) +€4.6bn 60 55.7 53.2 54.0 74.9% 75.0% 74.3% 51.1 52.4 73.8% 73.2% 50 17.4 16.2 16.6 14.9 16.4 SEE 3Q21 4Q21 1Q22 2Q22 3Q22 40 Liquidity coverage ratio (LCR) 30 174.3% 169.0% 168.2% 20 37.0 37.4 38.3 152.4% 151.3% Greece 36.2 36.1 10 3Q
Slide 21: MREL position
MREL position 2023 non-binding MREL target already met MREL (%RWAs) MREL surplus of 85bps 21.30% ▪ Eurobank has issued since May 2021, 3 MREL-eligible senior 20.45% preferred bonds of €1,500m in total 3.97% Senior preferred CBR2 3.67% liabilities3 ▪ Following the issuance of €500m in May 2022 and th
Slide 22: Wealth Management
Wealth Management Asset under Management (€ bn) Private Banking CAL1 (€ bn) 8.9 8.5 8.7 8.4 4.4 8.1 4.2 4.3 4.1 4.1 3.9 4.1 4.1 3.9 3.8 Greece 3.3 3.2 3.1 3.1 3.1 Own Mutual Funds 2.6 Cyprus 2.0 2.3 2.4 2.4 3rd Party Mutual Funds 0.5 0.5 0.5 0.4 0.4 Luxembourg 2.2 2.1 2.2 2.1 2.4 Discretionary AuM 0
Slide 23: Profitability
9M 2022 Results Profitability
Slide 24: Net Interest margin & spreads
Net Interest margin & spreads Net Interest margin (bps) Deposit spreads (Greece, bps) 3Q21 4Q21 1Q22 2Q22 3Q22 3Q21 4Q21 1Q22 2Q22 3Q22 Greece 175 160 167 176 175 Savings & Sight (58) (58) (55) (49) 17 SEE 207 198 197 205 219 Time (59) (58) (55) (43) (8) Group 183 170 175 183 186 Total (59) (58) (55
Slide 25: Net Interest Income
Net Interest Income NII breakdown (€ m)1 Δ NII (q-o-q, € m)1 Total NII 330 321 Chart Title339 361 381 2Q22 361 o/w Greece 235 226 241 257 267 Δ loans 30 Δ Bonds 12 Loan Margin 297 337 Δ TLTRO net of placements to 283 284 290 (8) (PEs) central banks Greece Δ Deposits (7) Loan Margin (NPEs) 15 15 Δ ne
Slide 26: Commission Income
Commission Income Commission income breakdown (€ m) Commission income per region (€ m) 68bps over assets 139 139 130 133 130 133 123 123 117 37 Lending 117 36 SEE 30 32 36 23 33 21 33 29 48 47 56 56 Network transactions 48 & credit cards 5 9 97 97 103 Greece 6 4 7 Capital Markets 88 90 17 23 19 Banc
Slide 27: Operating expenses
Operating expenses OpEx per region (€ m) OpEx breakdown (Greece, € m) 478 482 218 226 222 228 231 59 61 64 66 69 SEE 63 66 Depreciation 34 35 IT 159 164 158 162 162 Greece 100 108 Administrative 3Q21 4Q21 1Q22 2Q22 3Q22 45 41 Resolution Fund Cost –to- core income (%) 236 231 Staff 9M21 9M22 3Q22 Gre
Slide 28: Pre-provision income (PPI)
Pre-provision income (PPI) Core PPI and other income (€ m) Δ Core PPI (q-o-q, € m) 20 62 240 332 45 Other income 289 45 334 265 SEE 229 225 240 82 6 74 20 289 65 67 68 265 (3) 207 Greece 165 158 173 192 3Q21 4Q21 1Q22 2Q22 3Q22 PPI per region (€ m) 597 Δ NII Δ opex 2Q22 Core PPI 3Q22 Core PPI 3Q22 P
Slide 29: Δ Core Operating Profit (y-o-y)
Δ Core Operating Profit (y-o-y, € m) 48 4 32 85 (3 ) 795 (5 ) 9M22 9M21 675 Core PPI (41 ) Greece Core PPI 2 9M22 Loan Δ staff OPEX Δ SEE Δ Fees Δ admin & RF 9M21 1 Δ NII NPEs Δ depreciation (318) Δ NII excl. NPEs (203) Loss Loan Loss Provisions Provisions 9M21 9M22 Core Operating 357 +65.9% 592 Pro
Slide 30: Asset Quality
9M 2022 Results Asset Quality
Slide 31: Asset quality metrics
Asset quality metrics NPEs formation1 (€ m) NPEs ratio (%) Δ NPEs stock (2,831) (125) (26) (251) (94) (q-o-q, €m) 7.3% 41 6.8% 6.7% 17 SEE 5.9% 18 5.6% 4 14 Greece 3Q21 4Q21 1Q22 2Q22 3Q22 3 (26) (24) 3Q21 4Q21 1Q22 2Q22 3Q22 Loan loss provision (€ m) NPE coverage (%) 1.0% 1.0% 0.6% 0.6% 0.7% Cost o
Slide 32: NPEs formation per segment (Greece)
NPEs formation per segment (Greece) Mortgages (€ m) Consumer (€ m) 39 32 26 22 13 12 17 12 (5) 7 7 10 10 1 2 4 (17) (24) (27) 3 (41) (57) (66) (67) (3) (2) (2) (2) (80) (83)(85) (81) (4) (5) (105) (9) (10) (123) 1Q18 1Q19 3Q20 3Q21 3Q22 3Q18 3Q19 2Q20 4Q20 2Q22 1Q21 2Q21 4Q21 2Q18 4Q18 2Q19 4Q19 1Q2
Slide 33: NPE metrics (Group)
NPE metrics (Group) 90dpd bridge to NPEs (€ bn) NPEs per region NPE Provisions & Total NPEs NPE ratio 0.2 2.4 coverage collaterals / NPEs 0.6 (€ bn) (%) (%) (%) 1.6 Consumer 0.2 11.1 112.9 114 (1.7) Mortgages 0.5 5.8 65.8 148 Small Business 0.4 13.3 68.5 134 0.7 Corporate 0.9 4.8 67.4 125 2 Greece 2
Slide 34: Loans’ stage analysis (Group)
Loans’ stage analysis (Group) Loans’ stage breakdown Provisions stock over NPEs (€ bn) 3Q21 4Q21 1Q22 2Q22 3Q22 72.8% 72.7% Stage 1 29.6 32.6 33.1 34.0 35.1 70.6% 71.5% 69.2% Stage 2 5.7 5.5 5.3 5.7 5.6 Stage 3 2.9 2.8 2.7 2.5 2.4 (NPEs) 1 Total 38.1 40.8 41.2 42.2 43.1 3Q21 4Q21 1Q22 2Q22 3Q22 Stag
Slide 35: Capital
9M 2022 Results & EUROBANK Holdings Capital
Slide 36: Capital ratios (CET1 FLB3, q-o-q)
Capital ratios (CET1 FLB3, q-o-q) 58bps 14.2% 4bps 14.0% (7bps) (20bps) (17bps) 1 1 2Q22 CET1 FLB3 DTC amortisation Asset growth other Debt securities at 3Q22 PBT 3Q22 CET1 FLB3 FVOCI RWAs 41,628 (36) 5942 (95)3 0 0 42,091 (€ m) Capital 5,826 (36) 0 2 (72) 244 5,964 (€ m) 1. Incl. period profits, su
Slide 37: Capital ratios (CAD, q-o-q)
Capital ratios (CAD, q-o-q) 58bps 17.2%2 17.0%2 14bps (7bps) (24bps) (17bps) 2.3% Tier II Tier II 2.3% 14.9% CET1 CET1 14.7% 1 1 2Q22 CAD DTC amortisation Asset growth Other Debt securities at 3Q22 PBT 3Q22 CAD FVOCI RWAs 41,718 (36) 594 (93)3 0 0 42,183 (€ m) Capital 7,078 (36) 0 464 (72) 244 7,261
Slide 38: ESG commitments and performance
9M 2022 Results ESG commitments and performance https://www.eurobankholdings.gr/en/esg-environment-society-governance
Slide 39: 3Q 2022 Highlights of ESG actions, initiatives and achievements
3Q 2022 Highlights of ESG actions, initiatives and achievements Incorporating climate risk in the Bank’s risk management framework ▪ Adopting a strategic approach for the management of risks and the identification of opportunities in relation to Integration of sustainability and climate change, the
Slide 40: 3Q 2022 Highlights of ESG actions, initiatives and achievements
3Q 2022 Highlights of ESG actions, initiatives and achievements Environment: Minimizing operational footprint ▪ Environmental Impact - Energy Management & Conservation: CEO Initiative for Energy Conservation announced Energy in Sept. 2022 focusing on both large-scale actions (transition of IT system
Slide 41: 3Q 2022 Highlights of ESG actions, initiatives and achievements
3Q 2022 Highlights of ESG actions, initiatives and achievements Socio-Economic Impact (cont.) Raising Market ▪ Digital Academy series of webinars address the effort for raising market awareness for ESG: 3 such webinars Awareness for took place in Q3 (general ESG, environmental and social), 277 clien
Slide 42: ESG Ratings / Indices & Partnerships
ESG Ratings / Indices & Partnerships Continuing improvement in ESG Ratings & Indices (3Q22 vs FY21): Initiatives & partnerships ESG Ratings & Indices September 2022 BBB ■ Member of ICMA since UNEP FI participant since 2005; 2020. Participant in the Eco-Management and signatory to PRBs since 2019. Au
Slide 43: Macroeconomic update
9M 2022 Results Macroeconomic update
Slide 44: Recent macro & market developments and FY23 outlook
Recent macro & market developments and FY23 outlook ▪ According to the Draft State Budget 2023 (Oct-22), real GDP is expected to grow by 5.3% and 2.1% in 2022 and 2023 respectively; inflation rate to peak at 8.8% in 2022 and then to decelerate to 3.0% in 2023; unemployment rate to drop to 12.9% and
Slide 45: Domestic Labour Market
Domestic Labour Market Support measures and the reopening of the economy led to drop of unemployment Employment growth decelerates in recent months Long term unemployment still well above the pre-debt crisis levels Recovery of productivity requires continued implementation of structural reforms and
Slide 46: Selected indicators of domestic economic activity
Selected indicators of domestic economic activity ESI deteriorates; more resilient relative to the Euro Area PMI marginally below the 50 units threshold for 3 months in a row Retail trade volume: resilience despite inflationary pressures Manufacturing production: growth decelerates Source: ELSTAT, I
Slide 47: Significant boost to growth ahead from RRF funds
Significant boost to growth ahead from RRF funds Greece is the largest RRF beneficiary relative to the size of its economy (RRF G&Ls at 16.7% of its 2021 GDP) • RRF loan-arm: contracting for 41 projects concerning investments in excess of €1.8bn completed so far (€824mn from RRF loans, 4Q22 financin
Slide 48: Real estate prices: growth remained strong in Q2 2022
Real estate prices: growth remained strong in Q2 2022 Index of Apartment Prices Index of Retail and Office Prices 2Q10 – 2Q22 2H10 – 2H21 Source: BoG 48
Slide 49: Fiscal and current account balances
Fiscal and current account balances ▪ 2023 Draft Budget fiscal forecasts for 2022 & 2023 (in ESA2010 terms): ▪ General Government (GG) balance at -4.1% and -2.0% of GDP respectively (from 1.1%, -9.9% and -7.4% of GDP in 2019, 2020 and 2021 respectively) ▪ GG Primary balance at -1.7% and 0.7% of GDP
Slide 50: Sovereign debt profile
Sovereign debt profile General Government gross public debt Net Debt5 (% of GDP, ESA terms) at c172.5% of GDP ▪ According to the 2023 Draft Budget DSA, the Greek Gross Public Debt is expected at 169.1% and 161.6% of GDP in 2022 and 2023 respectively vs 194.5% in 2021 and a peak of 206.3% in 2020 ▪ O
Slide 51: Bulgaria: Solid GDP growth footing in H1, challenges lie ahead
Bulgaria Solid GDP growth footing in H1, challenges lie ahead ▪ In October, the IMF forecasted a 3.9% GDP growth in 2022, with geopolitical risks and inflationary pressures causing a slow down to 3.0% in 2023 ▪ 1H22 GDP growth rate stands at 5.1% y-o-y, with some loss of steam expected in the second
Slide 52: Cyprus: Soothing signals from the tourist sector
Cyprus Soothing signals from the tourist sector but challenges remain ▪ IMF (2022 Autumn Forecasts) foresees a FY22 growth of 3.5% y-o-y; for 2023 a 2.5% growth is projected ▪ Solid economic momentum in 1H22 with GDP growth coming in at 6.3% y-o-y, after a 4.4% contraction in 2020 and a rebound of 6
Slide 53: Appendix I – Supplementary information
9M 2022 Results Appendix I – Supplementary information
Slide 54: Summary performance
Summary performance Balance sheet – key figures Income statement – key figures €m 3Q22 2Q22 €m 3Q22 2Q22 Gross customer loans 43,086 42,246 Net interest income 380.9 360.6 Provisions (1,696) (1,733) Commission income 139.0 132.7 Loans FVTPL 20 20 Operating income 564.4 825.3 Net customer loans 41,40
Slide 55: Consolidated quarterly financials – Income statement
Consolidated quarterly financials – Income statement (€ m) 3Q22 2Q22 1Q22 4Q21 3Q21 Net Interest Income 380.9 360.6 339.4 320.9 329.9 Commission income 139.0 132.7 123.0 129.9 117.0 Other Income 44.5 332.0 240.4 62.2 20.3 Operating Income 564.4 825.3 702.7 513.0 467.2 Operating Expenses (230.9) (228
Slide 56: Consolidated quarterly financials – Balance sheet
Consolidated quarterly financials – Balance sheet (€ m) 3Q22 2Q22 1Q22 4Q21 3Q21 Consumer Loans 3,352 3,372 3,281 3,241 3,053 Mortgages 10,265 10,173 10,091 10,097 10,006 Household Loans 13,617 13,544 13,372 13,337 13,059 Small Business Loans 3,822 3,858 3,765 3,752 3,764 Corporate Loans 20,860 19,8
Slide 57: Consolidated financials
Consolidated financials Income Statement (€ m) 9M22 9M21 Δ y-o-y (%) Net Interest Income 1,080.8 999.7 8.1 Commission income 394.7 325.9 21.1 Other Income 616.8 65.7 >100 Operating Income 2,092.4 1,391.3 50.4 Operating Expenses (680.9) (650.6) 4.7 Pre-Provision Income 1,411.5 740.7 90.6 Loan Loss Pr
Slide 58: SEE operations key figures – 3Q22
SEE operations key figures – 3Q221 Bulgaria Cyprus Serbia Lux Sum Assets 7,692 8,761 2,473 2,264 21,190 Gross loans 5,297 2,589 1,777 748 10,411 Balance Sheet Net loans 5,124 2,540 1,727 748 10,139 (€m) NPE loans 207 57 102 0 366 Deposits 6,795 7,237 1,548 1,816 17,396 CAD2 20.8% 26.3% 18.7% 22.7% C
Slide 59: Appendix II – Glossary
9M 2022 Results Appendix II – Glossary
Slide 60: Glossary – Definition of Alternative Performance Measures
Glossary – Definition of Alternative Performance Measures (APMs) & other selected financial measures / ratios This document contains financial data and measures as published or derived from the published consolidated financial statements which have been prepared in accordance with International Fina
Slide 61: Glossary – Definition of Alternative Performance Measures
Glossary – Definition of Alternative Performance Measures (APMs) & other selected financial measures / ratios Adjusted net profit: Net profit/loss from continuing operations after deducting restructuring costs, goodwill impairment, gains/losses related to the transformation plan and income tax adjus
Slide 62: Glossary – Definition of Alternative Performance Measures
Glossary – Definition of Alternative Performance Measures (APMs) & other selected financial measures / ratios Forborne Non-performing Exposures (NPF): Forborne Non-performing Exposures (in compliance with EBA Guidelines) are the Bank’s Forborne exposures that meet the criteria to be classified as No
Slide 63: Glossary – Definition of Alternative Performance Measures
Glossary – Definition of Alternative Performance Measures (APMs) & other selected financial measures / ratios Pre-provision Income (PPI): Profit from operations before impairments, provisions and restructuring costs as disclosed in the financial statements for the reported period. Provisions (charge
Slide 64: Investor Relations contacts
Investor Relations contacts Dimitris Nikolos +30 214 4058 834 dnikolos@eurobankholdings.gr Yannis Chalaris +30 214 4058 832 ychalaris@eurobankholdings.gr Christos Stylios +30 214 4058 833 cstylios@eurobankholdings.gr Investor Relations Division +30 214 4058 834 investor_relations@eurobankholdings.gr
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