Corporate Presentation October 2019
Table of Contents 1 Overview 2 Financial Highlights 3 Profitability 4 Asset Quality 5 Liquidity 6 Capital 7 Macro 8 Appendix
Overview 1
NBG has a large and stable client base and is a highly trusted bank in Greece 5.3MM active retail Trusted brand, testified by customers in a Greek bankable client loyalty and marketing population of ~8.3M 1 surveys 36% savings deposits market Well-established, share in a total market of long lasting ~ € 53b 2 Corporate relationships 1. NBG Customer Analytics (Greek population >20 years old, based on Hellenic Statistical Authority census, 2018) | 2. Bank of Greece – statistics of monetary deposits Overview 3 Corporate Presentation – September 2019
Cash coverage and low cost liquidity are our key strengths Highest NPE coverage in the market Strongest liquidity position Core deposits 2 € b 29.7 Total provision Yield 3 3bps 56% 49% coverage 21.2 Market Gross NPE 32% 21.7 share 2 Group, € b NBG Greek peers average 10.6 13.7 Loan to deposit ratio % Provided 91 7.6 LCR 171% 70 11.1 Unprovided NSFR 113% 6.1 NBG Greek peers average NBG Greek peers average 1 Note: Group level 1H2019 figures 1. Average of NPE stock for Greek systemic banks (excluding NBG group). Source: 1H19 financial reports | 2. Core deposits includes savings, sights & other on the domestic market – market share based on the sum of the four systemic banks | 3. Average funding cost on savings deposits Overview 4 Corporate Presentation – September 2019
Our six strategic priorities for 2019-2022 Reward performance and motivate our CLEAN-UP Front-load NPE clean-up delivering a MOBILISE OUR A D people aligning individual objectives to THE BALANCE ~5% NPE ratio PEOPLE SHEET strategic goals Complete FTE reductions and G&A ENHANCE IMPROVE Enhance client planning and steering tools B E rationalisation supporting C:I drop to EFFICIENCY VISIBILITY & enabling value and risk-based decisions & AGILITY CONTROL ~ 45% Improve sales and service orientation Invest to modernize the technology BOOST UPGRADE C F growing non-risk income and shifting infrastructure improving efficiency and REVENUE TECHNOLOGY GENERATION INFRASTRUCTURE transactions to digital channels service levels Overview 5 Corporate Presentation – September 2019
A clean bank with an NPE ratio of ~5% in 2022 Strategic directions NPE stock and coverage 2018YE, Group, € b Material NPE reduction by 2020, • driven by sales in the consumer, SBL ~ 7.0 and corporate portfolios ~ 4.9 More concessionary restructurings • ~ 1.9 ~ 1.4 66% ~ 0.9 42% Total Provisions and friendlier legal framework to 78% 89% 60% increase recoverable value in the Mortgages Consumer SBL Corporate, SME & Shipping Subsidiaries mortgages portfolio NPE evolution targets Group, € b Large mortgage securitisations • ~50% inorganic reduction 2019-2022 in 2021 – 22 , when market conditions ~16.3 have further improved and restructuring efforts have been ~4.4 ~5% explored NPE Ratio ~2.3 >50% S3 Coverage Internal REO platform to cover the • ~ € 1BN FNPEs <90dpd ~4.7 entire value chain from onboarding to commercialisation, supporting liquidation targets ~2.9 ~1.7 2018 2019 2020 2021 2022 2022YE Overview 6 Corporate Presentation – September 2019
Efficient and more agile operations, with fewer people and a lower cost base Strategic directions Staff cost 1 targets G&A expenses targets Group, € m Group, € m Focused exit solutions to release FTE • capacity and increase average employee productivity -20% 560 Efficiency improvement via • ~450 -20% back-office centralisation and process 230 automation (e.g. mortgage lending, ~180 retail restructuring) and alternative channels 2018 2022 2018 2022 Branch footprint rationalisation • FTE targets Branch 2 targets Bank, # Bank, # Central functions real estate • ~1,500 net optimisation reduction by 2020YE G&A reduction through the • -15% -20% introduction of a cost control function ~9,500 ~485 ~460 ~8,850 and a stronger procurement function ~390 ~7,150 2017 2018 2022 2017 2018 2019 1. Excludes LEPETE (Auxiliary fund) charges | 2. Excluding transaction centres & i-Stores, i.e. satellite units with limited commercial purpose Overview 7 Corporate Presentation – September 2019
A clean and profitable bank in 2022 – the Greek bank of choice 1H19 2018 2022 targets ROE 4.8% 1 <0% ~11% 37% NPE ratio 41% ~5% Cost : Income 2 57% 3 75% ~45% 15.5% CET1 16.1% ~15% Note: Group level figures 1. ROE for 1H.19 calculated as PAT from Cont. Operations only and excluding trading and other income; 1H.19 reported ROE at 5.0%, 2. Excluding restructuring costs, 3. Cost to Core Income (excluding trading & other income of € 151m in 1H.19) Overview 8 Corporate Presentation – September 2019
Transformation Program results support the delivery of 2019 Business Plan targets Transformation Program highlights in 1H19 Enablers advancing at a good pace Key achievements Key transformation metrics Key achievements NPEs Symbol and Mirror portfolio sales c40 specialized hubs and TECHNOLOGY Redesigned lending • • • c230 dedicated officers for & PROCESSES processes (e.g., retail Branch restructuring capacity increase, • restructurings across restructuring, new Split & Settle product and network mortgages, corporate streamlined process for retail back-office) restructurings c € 70m/month run rate on • Split & Settle mortgage IT delivery aligned to • REO unit for repossessed assets • restructurings transformation priorities COST Additional wave of open VES c500 FTE released PEOPLE New management • • • team and top-level Branch network consolidation 64 branches consolidated • • organization in place G&A crash program of targeted actions 9% yoy reduction in G&A • • Labor code revision in • and setup of new cost demand progress management framework CORE RM coverage and sales time increase, +46% yoy new lending RISKS & Enhanced VBM • • • INCOME new fast credit application process in growth CONTROLS framework and Corporate management +20 Corporate RMs • reporting New product bundles, repriced fees • +9% yoy Retail fees growth • (e.g., safety deposit box rental, ATM Revised risk appetite • +15% i-banking monthly • direct access fee, cheque service fee) in framework active users Retail Enhanced internal • +45% m-banking monthly • Relaunched internet and mobile controls and • active users banking platforms operational risk management 9 Overview Corporate Presentation – September 2019
2 Financial Highlights
1H19 PAT from continuing operations reaches € 253m against PAT of € 48m in 1H18 P&L Highlights Group P&L € m 1H19 1H18 YoY 2Q19 1Q19 QoQ 1H19 Group PAT from continuing operations at € 253m (>5x yoy), NII 598 566 +6% 309 290 +6% reflecting the following key P&L movements: 1H19 NII up by 6% yoy to € 598m , driven by securities interest income • Net Fees & Commissions 120 117 +3% 61 59 +4% reflecting the swap arrangement with the Greek State; 2Q NII bears the Core Income 718 683 +5% 370 349 +6% full impact, pushing NII up by +6% qoq Trading & other income 151 1 (19) n/m 51 100 -49% Fees are up by 3% yoy , as retail banking fees expand by 9% on strong • Income 869 664 +31% 421 448 -6% card, digital channels and bancassurance fees Operating Expenses (408) (437) -7% (204) (204) +0% Trading & other income benefits from one off gains relating mainly • to the swap arrangement and a disposal; the underlying trading & Core PPI 310 246 +26% 165 145 +14% other income line is firmly in positive territory PPI 461 227 >100% 217 245 -11% OpEx down by 7% yoy on the back of successful VES completion • (157) 2 Loan Impairments (204) +29% (101) (103) -1% concerning a total of c1,150 employees, the reduction of the physical Operating Profit 258 70 >100% 116 142 -19% network by 83 branches and tighter G&A cost control; 1H19 C:CI drops Core Operating Profit 107 88 +21% 64 43 +51% to 57% vs 64% a year ago. Other impairments 3 (10) n/m 11 (8) n/m CoR at 136bps in 1H19 relative to 132bps in 1H18 • PBT 261 60 >100% 126 135 -6% At a core level, 1H19 COP is up 21% yoy , with the 2Q19 result up 51% Taxes (8) (12) -31% (5) (4) +34% qoq PAT (cont. ops) 253 48 >100% 122 131 -7% 1H19 PAT from discontinued operations adds € 103m to the bottom line, PAT (discont. ops) 103 32 >100% 82 21 >100% aided by the capital gain from the sale of Pangaea. VES & other restructuring (105) (40) >100% (4) (101) -96% costs 3 Minorities (18) (20) -10% (8) (10) -20% PAT 233 19 >100% 192 41 >100% 1. Includes among others € 59m trading gain from the GGB swap arrangement with the Greek State and € 30m capital gain from Grand Hotel disposal, 2. Includes recoveries of € 42m from NPL sales, 3. Restructuring charges, mainly comprising of VES costs of € 94m in 1Q19 & € 4M in 2Q19 11 Highlights Corporate Presentation – September 2019
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