Eurobank S.A. · ATHEX:EUROB
Eurobank — EFG Eurobank Ergasias — Q1 2006 Earnings Presentation
35 slides from Eurobank's earnings presentation, May 9, 2006
Slide 1: First Quarter 2006 Results
9 MAY 2006 FIRST QUARTER 2006 RESULTS
Slide 2: Cautionary Statement Regarding Forward-Looking Information
PAGE 2 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 an
Slide 3: Contents
PAGE 3 Contents 1. Highlights & Key Developments pg.4 2. Financial Review pg.12 3. Segmental Performance pg.20 4. Shareholders Return pg.27 5. Appendices pg.29
Slide 4: Highlights & Key Developments
PAGE 4 1 HIGHLIGHTS 1 Highlights & Key Developments
Slide 5: Strong business development yields a new record profit
PAGE 5 1 HIGHLIGHTS Strong business development yields a new record profit 1Q 2006 Net Profit rises 45% to € 157.3 m Revenues climb 25.4% to € 537.1 m Strong business expansion continues: gross Loans up 24.6% to € 28.7 bn Record asset gathering with total Customer Funds up 27.8% to € 40 bn Asset Qua
Slide 6: Robust volume growth
PAGE 6 1 HIGHLIGHTS Robust volume growth Loan growth for the Group maintained at high levels (+24.6%) Loans in New Europe increase 70.7% New record growth in AUM at € 40 bn, with deposits (net of repos) up 17.1% to € 20.5bn Total Group Lending Customer Funds + 27.8% 40 31.3 10.5 + 24.6% 28.7 + 104%
Slide 7: Strong momentum in credit expansion endures through 1Q 06
PAGE 7 1 HIGHLIGHTS Strong momentum in credit expansion endures through 1Q 06 Total Lending jumps 24.6% y-o-y to € 28.7 bn Net loan additions of 1.3bn in 1Q 06 Group Household lending climbs 29.6% Impressive growth in mortgages over 41% y-o-y Group Business lending expands 20.3% Group Household Lend
Slide 8: New Europe expansion well under way
PAGE 8 1 HIGHLIGHTS New Europe expansion well under way… Capturing market share in Stronger network delivers the region growth Branches Branches Gross Lending (Current) (2006e) Loans Growth (1Q ‘06) (1Q ‘06) 10.6% Romania 156 180 €955m 59% 8.6% 7.5% Bulgaria 143 165 €754m 62% 6.0% 5.1% Total Credit
Slide 9: …with performance markedly improved
PAGE 9 1 HIGHLIGHTS …with performance markedly improved Core income per country Net profit contribution per country in 1Q 2006 33.7 31.2 6.9 18.4 11.9 1Q 05 1Q 06 3.3 2.6 2.8 2.4 6.0 5.3 1.0 Romania Bulgaria Serbia Turkey Romania Bulgaria Serbia Turkey Poland Total Total exc. -1.4 Poland -4.1 Figure
Slide 10: Important initiatives in 2006
PAGE 10 1 HIGHLIGHTS Important initiatives in 2006 Commenced operations in Poland, with 20 branches to date Acquired remaining NSB stake from Serbian government (37.7%), paving the way for its merger with EFG Eurobank A.D. Beograd Listing of real-estate subsidiary EFG Properties in the Athens Stock
Slide 11: Entering Turkish banking sector through Tekfenbank
PAGE 11 1 HIGHLIGHTS Entering Turkish banking sector through Tekfenbank Acquiring 70% of Tekfenbank (including banking and leasing operations) from Tekfengroup 100% of Tekfenbank valued at USD 260m Key Financials (FY 2005 audited consolidated financial statements) Tekfenbank Book Value estimated at
Slide 12: Financial Review
PAGE 12 2 FINANCIAL REVIEW 2 Financial Review
Slide 13: Profit-oriented loan book with Retail Lending at 62.8% of total
PAGE 13 2 FINANCIAL REVIEW Profit-oriented loan book with Retail Lending at 62.8% of total Loan Book Composition (%) Greater balance with household lending 14.0% 14.9% Small Business Banking now at 47.9% from 46% one year ago 20.6% 23.3% Mortgage Lending Stronger focus on Small Business Banking and
Slide 14: NII rises 20.3% to € 371m
PAGE 14 3 FINANCIAL REVIEW NII rises 20.3% to € 371m NIM at 3.3% with Assets up 32.2% 3.6 3.5 3.5 3.5 1Q 06 NII up 8.2% on AvgQ 05 NIM (%) 3.3 46.4 44.5 42.5 371 39.0 Assets (in € bn) 343 35.1 308 1Q 05 1H 05 9M 05 FY 05 1Q 06 Total NII 275 266 New Europe contributes 12.4% of 236 total NII 45.9 Loan
Slide 15: Total spread normalizes to market conditions
PAGE 15 2 FINANCIAL REVIEW Total spread normalizes to market conditions SBB Book: Volumes & Spreads 4.90 Spread evolution per category 4.73 4.77 4.66 4.51 All spreads Greece only 4 4.2 3.4 3.6 3.2 1Q 05 4Q 05 1Q 06 Total Deposits & Repos 0.87 1.01 1.00 1Q 05 2Q 05 3Q 05 4Q 05 1Q 06 Mutual Funds* 0.8
Slide 16: Fees & Commissions jump 20.8% to € 120.7m
PAGE 16 2 FINANCIAL REVIEW Fees & Commissions jump 20.8% to € 120.7m Extraordinary performance with Capital Markets fees at €31.8m, up 158% y-o-y Equity market related activities share in total fees at 27.3%, from 17.1% in 1Q 05 Banking Fees rise 18.6% to € 105m, contributing 19.6% of Total Operatin
Slide 17: Total Operating Income up 25.4%
PAGE 17 2 FINANCIAL REVIEW Total Operating Income up 25.4% Core Income rises 20.4% y-o-y to € 491.8m Other income benefits from sale of HOL and Logic DIS New Europe contributes 12.5% of Total Operating Income, from 10.3% one year ago Operating Income Evolution Breakdown of Non Core Income 428 460 48
Slide 18: Great efficiency gains: Cost / Income at 45.2%
PAGE 18 2 FINANCIAL REVIEW Great efficiency gains: Cost / Income at 45.2% Cost/Income (%) Record low Cost/Income at 39.4% for Greek operations 47.4 47.9 Total costs at € 243m reflect: 45.2 44.4 42.7 1Q 05 Inclusion of Turkey, Poland, NSB operations (not 39.4 FY 05 in 1Q 05) 1Q 06 Network expansion t
Slide 19: Healthy credit quality - provisioning levels maintained
PAGE 19 2 FINANCIAL REVIEW Healthy credit quality - provisioning levels maintained Group NPL Ratio (% of loans) NPLs at 3.02%, from 3.12% in 9M 05 Provisioning coverage at 91% 2.94% 3.04% 3.12% 3.02% 3.02% Household lending NPLs at 2.2% Provisions at 1.27% of avg. net loans 1Q 05 1H 05 9M 05 FY 05 1
Slide 20: Segmental Performance
PAGE 20 3 SEGMENTAL PERFORMANCE 3 Segmental Performance
Slide 21: Profits before tax rises 37.1% y-o-y to € 209m
PAGE 21 3 SEGMENTAL PERFORMANCE Profits before tax* rises 37.1% y-o-y to € 209m PBT* per Segment Group PBT* 05/06 growth +32% + 61% + 132% + 1.2% - 59% 89 1Q 06 + 37.1% 209 Delta 152 43 41 68 30 1Q 05 40 27 2 3 13 5.5 Retail Corporate AM, PB & Ins Global & New Europe Capital & Other 1Q 05 1Q 06 Capi
Slide 22: Retail – overachieving targets
PAGE 22 3 SEGMENTAL PERFORMANCE Retail –overachieving targets FY 05 1Q 06 05/06 +22% + 10% + 37% + 32% Cost to Income 45.5% 43.4% growth Return on Equity 39.3% 38.0% 288 Share of profits 49.4% 42.8% 235 125 114 89 74 Retail: incorporating customer current accounts, savings, deposits, credit and debi
Slide 23: Corporate – superior performance and profitability
PAGE 23 3 SEGMENTAL PERFORMANCE Corporate – superior performance and profitability FY 05 1Q 06 05/6 growth +20% + 8.5% -10% + 61% Cost to Income 33.9% 31.7% Return on Equity 17.1% 22.6% 74 Share of profits 18.3% 20.5% 62 43 24 Corporate: incorporating direct debit facilities, current 27 22 8 account
Slide 24: AM, PB & INS – highest top line growth
PAGE 24 3 SEGMENTAL PERFORMANCE AM, PB & INS – highest top line growth FY 05 1Q 06 05/6 +73% + 18% + 132% Cost to Income 36.5% 32.7% growth Return on Equity 85.7% 103.4% 45 Share of profits 11.9% 14.5% 30 26 15 Asset Management, Private Banking and Insurance: 13 13 incorporating private banking serv
Slide 25: Global & Capital Markets – strong profits maintained
PAGE 25 3 SEGMENTAL PERFORMANCE Global & Capital Markets – strong profits maintained FY 05 1Q 06 05/6 Cost to Income 29.2% 24.5% growth +2.6% + 7% + 1.2% Return on Equity 73.5% 75.7% Share of profits 19.1% 19.6% 54 53 41 40.5 Global & Capital Markets: incorporating investment 13 banking services inc
Slide 26: New Europe – major investments continue
PAGE 26 3 SEGMENTAL PERFORMANCE New Europe – major investments continue FY 05 1Q 06 Cost to Income 87.8% 89.3% 05/6 growth +54% + 77% + 104% -59% Return on Equity 5.5% 3.4% Share of profits 1.6% 1.1% 69 62 *segmental reporting entails the internal allocation of all revenues and all costs between bus
Slide 27: Still more profits for shareholders
PAGE 27 4 PROFITABILITY 4 Still more profits for shareholders
Slide 28: Higher returns through rising profitability
PAGE 28 4 PROFITABILITY Higher returns through rising profitability RoE 1Q06 Net Profit +44.9% to €157.3m 25 22.8 Shareholders’ Equity at € 2.6bn 20 23.0 20.2 21.1 21.1 Hybrid Tier I capital at € 784m 15 16.8 10 Tier II capital at € 590m 5 0 FY 04 1Q 05 1H 05 9M 05 FY 05 1Q 06 RoA 1.6 Regulatory Cap
Slide 29: Appendices
PAGE 29 5 APPENDICES 5 Appendices
Slide 30: Financial Ratios
PAGE 30 5 APPENDICES Financial Ratios Financial Ratios 1Q 06 1Q 05 Net Interest Margin 3.3% 3.6% Cost-Income 45.2% 47.4% NPLs (% of loans) 3.0% 2.9% NPLs coverage 91.2% 95.8% Provision Charge (% of net loans) 1.27% 1.29% Tier Ι Ratio 10.4% 8.7% Total Capital Adequacy 12.9% 10.4% ROA after tax 1.39%
Slide 31: Summary Figures
PAGE 31 5 APPENDICES Summary Figures Summary Figures (€ m) 1Q 06 1Q 05 ∆% New Europe Net Interest Income 371.0 308.4 20.3% 45.9 Net fees & Commissions 105.2 88.8 18.6% 17.3 Non banking fees 15.5 11.2 37.9% 0.1 Core Income 491.8 408.4 20.4% 63.2 Non core income 45.4 19.8 128.9% 3.9 Total Operating In
Slide 32: Balance Sheet Figures
PAGE 32 5 APPENDICES Balance Sheet Figures Portfolio of Loans (Gross, € m) 1Q 06 1Q 05 ∆% Consumer Loans 7,033 5,847 20.3% Mortgages 6,700 4,748 41.1% Loans to Households 13,733 10,594 29.6% Small Business Loans 4,267 3,233 32.0% Loans to Medium Enterprises 6,242 5,125 21.8% Loans to Corporates 4,44
Slide 33: 1Q 2006 – Summary per Segment
PAGE 33 5 APPENDICES 1Q 2006 – Summary per Segment Treasury & Capital Capital & Elimination New Total Segmental Results 1Q 2006 (€ m) Retail Corporate AM, PB & INS Markets Other Center Europe Interest income 249 48 6 23 0 45 371 Net fee & commission income 12 9 30 38 -1 17 105 Net Insurance income 1
Slide 34: 1Q 2005 – Summary per Segment
PAGE 34 5 APPENDICES 1Q 2005 – Summary per Segment Treasury & Capital & Elimination New Total Segmental Results 1Q 2005 (€ m) Retail Corporate AM, PB & INS Capital Markets Other Centre Europe Interest income 212 45 4 22 -1 0 27 308 Net fee & commission income 11 9 27 26 0 0 16 89 Net Insurance incom
Slide 35: Contacts
PAGE 35 5 APPENDICES 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 3371162 E-mail: dnikolos@eurobank.gr
EFG Eurobank Ergasias — Q1 2006 Earnings Presentation on 6ix