SW-EUB022-2007-03-19-CMD-V7 April 20, 2012 Full Year 2011 Results
Page 2 Macroeconomic outlook Successful PSI completion a major milestone for Greece. Upcoming general elections: critical for new government to assume programme ownership and implement rigorously. Greek economy in 5 th year of recession; GDP ca -7% in ’11; -5% in ’12; stabilization and improvement from 2013 onwards. Progress on fiscal consolidation. New Europe: positive trajectory for most economies in the region.
Page 3 PSI impact on equity 5.8 5.8 4.6 PSI+ Perimeter Greek securities 3.9 €7.3bn of Greek Govn’t haircut Bonds & Govn’t 5.0 (Additional) (53.5%) guaranteed securities. 3.9 Greek Sovereign Debt Impairment of 79%. (Recoverable) Valuation 1.9 effect 0.8 PSI (July 21st, 2011) 0.7 Pre-tax impact After tax impact Pre-tax impact € bn. HFSF underwrites immediate capital needs (€ 4.2bn) to bring total CAD above 8% post PSI.
Page 4 Organic capital enhancement plan BoG assessment does not take into account the following: Actions completed: LME: buyback of hybrid & LTII securities in Q1 with a Core Tier I gain of €250m. Polbank transaction to close in April. Signed agreement to sell Eurobank Tekfen to Burgan Bank of Kuwait; completion in 3Q12. These initiatives improve Core Tier I by ca.€1bn and liquidity position by €3.5bn upon full completion. Further short-term actions: RWA optimization & selective deleveraging: IRB methodology on select NE countries - capital equivalent benefit of €200 - €300m by 3Q12.
Page 5 Liquidity Greek deposit outflows of €1.5bn in 4Q11 but significant improvement since successful PSI, with trend reversal in March; trend continues in 2Q12. ECB funding at €18bn; total Eurosystem funding around €30bn. Available Eurosystem eligible liquidity buffers at €5bn. No wholesale funding obligations in 2012. Liquidity boost of around €3.5bn upon full completion of Polbank and Tekfen transactions. New Europe funding gap less than €1bn post transactions.
Page 6 FY 2011 results highlights FY11 operating net result marginally negative at -€29m, despite crisis. Including PSI impact and one-off valuation losses (with no regulatory capital impact) total loss amounted to €5.5bn. Pre-provision income at €1.3bn in FY11; core pre-provision income down only 5% yoy at €1.2bn . NII at €2.0bn just 3% lower yoy. Lending spreads in Greece expanded over 20bps qoq in 4Q11. Provisions up 5% yoy. Greek 90+ formation accelerates in 4Q11 due to economic contraction; New Europe 90+ formation down 28%yoy. Group 90+ coverage at 43%. OpEx down 6%yoy, exceeding target. Greek OpEx down 8%yoy. FY11 New Europe profits at €60m. Strong improvement in core profits.
Page 7 Asset quality
BlackRock credit losses diagnostic; 3-year Page 8 credit loss projections GREECE Base Stress BRS 3-year loss projections € 4.2bn € 5.4bn BoG additional stress buffer* € 0.7bn € 1.1bn Estimated future 3-year losses: € 4.9bn € 6.5bn Eurobank Provisions stock end -2011 (Greece) € 2.8bn Basel II IRB Capital Reserve € 0.6bn Capital Allocated to cover credit impairments € 3.4bn Additional requirements to cover 3-year stress € 1.5bn € 3.1bn loss projections Compared to: Coverage in Coverage in 2011 Pre Provision Income (Greece)** : € 1.0bn c.1.5 years c.3 years 2011 Annual Loan Provisions (Greece): € 1.1bn *covering earlier loss recognition for mortgage loans, losses on new production, additional 1% charge on Dec. 2014, loan balances, etc. **note that New Europe annual net income of €60m can also be used to cover the gap
Three-year expected credit losses by Page 9 sector/market comparison 31/12 Eurobank portfolio is expected to perform significantly better than the market, 25% Portfolio Outstandings better in terms of credit losses in Corporate loans and Small Business Mortgage €11.9bn loans. Consumer € 5.5bn Corporate €16.7bn At par with market in Mortgage loans. SBL € 6.8bn Eurobank consumer loan portfolio GREECE Base Stress expected to experience slightly more losses (10% worse) than the market. However, Eurobank has already taken BlackRock 3-year loss € 4.2bn € 5.4bn very high provisions for the expected 3- projections year credit losses (equal to 88% of Base or 70% of Stress scenario expected Capital already allocated to losses -the balance will be covered by PPI cover credit impairments € 3.4bn within the period). (31 Dec 2011)
Cumulative provisions of €4.5bn since the Page 10 crisis & high collateral lead to solid coverage Cumulative provisions & Cost of Risk NPL 9.5% 950bps Value of Total NPL 90+ NPLs recovery collaterals coverage 6.3% rates Consumer 1,333 4,545 3.8% Stock (€m) 1,975 1,975 1.6% Provisions(€m) 1,355 1,355 >10% ~70% 40% Coverage (%) 69% 69% Mortgages 1,273 1,383 1,127 Stock (€m) 268 268 >100% >100% 95% Provisions(€m) 19% 24% Coverage (%) Business Stock (€m) 4,540 3,122 1,090 1,627 1,627 >65% >100% 55% Provisions(€m) 36% 52% Coverage (%) TOTAL 7,898 6,224 Stock (€m) 849 3,400 3,400 Provisions(€m) 43% 55% Coverage (%) FY08 FY09 FY10 FY11 Total € m € m
90+ formation picks up on Greek economic Page 11 contraction 90dpd formation picks up in Greece 90dpd ratio 4Q10 1Q11 2Q11 3Q11 4Q11 Group 10.2% 11.4% 12.5% 13.8% 15.3% 774 Greece 9.9% 11.3% 12.5% 14.0% 15.8% 708 New Europe 11.5% 12.0% 12.5% 12.7% 13.5% 681 657 644 596 598 563 534 Loans loss provisions evolution 517 500 492 41.3% 40.5% 40.5% 41.1% 43.0% Coverage 420 416 464 347 331 633 335 323 554 320 LLPs 576 525 534 Greece 347 414 472 445 281 273 281 275 275 Greece 261 261 282 217 New 153 Europe 139 143 120 103 91 75 72 71 68 64 New Europe 66 61 59 59 57 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 4Q 10 1Q11 2Q11 3Q11 4Q11 € m € m
Asset quality in New Europe: gross 90+ Page 12 formation stable at reasonably low levels 17.7% 15.2% 14.6% 14.3% 13.4% 13.1% 11.6% 19.0% 9.5% 16.4% 14.6% 14.3% 13.9% 5.3% 5.0% 12.1% 12.9% 12.4% 3.6% 3.2% 10.5% 90+ over av. 8.5% 6.4% 5.9% loan book 4.3% 3.6% 3.1% 80 63 56 46 42 44 39 39 38 35 37 34 33 32 26 19 Gross 90+ 15 14 10 0 2 formation -3 -7 -6 -8 -10 -2 € m. 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 Turkey (€ 1.5bn) Loan book Romania (€ 3.2bn) Bulgaria (€ 2.8bn) 29.0% 30.7% 29.4% 24.9% 31.0% 30.7% 29.1% 26.8% 24.0% 7.5% 6.8% 5.9% 6.6% 1.6% 1.6% 1.6% 2.1% 90+ over av. 9.4% 6.4% 6.1% 7.0% 6.3% loan book 3.5% 1.6% 2.8% 1.4% 1.5% 22 19 13 Gross 90+ 11 9 9 10 10 10 7 6 5 5 5 5 5 1 2 1 1 1 1 0 0 formation -5 -4 -8 € m. 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 Cyprus (€ 1.2bn) Ukraine (€ 0.7bn) Serbia (€ 1.1bn) Loan book
Page 13 Results review
Page 14 Capital position post PSI Current position Regulatory capital on 31 December 2011 at € 5.2bn (CAD 12%) before PSI. Bank of Greece (BoG) assesses the bank as viable. PSI regulatory impact € 5.8bn HFSF underwrites immediate capital needs (€ 4.2bn) to bring CAD above 8%. Short and medium term Medium term capital needs and terms of the instruments to address these are currently under discussion with BoG, HFSF, the Government and official creditors (“troika”).
Loan book de-risking continues – deposits Page 15 in New Europe continue to grow Loans – Gradual selective de-risking; Deposits evolution – trend reversal in March ‘12 53.4 53.2 53.0 51.5 50.9 41.2 New 10.3 10.6 10.0 10.6 Europe New 10.6 8.1 Europe 33.9 32.5 Greece: 31.6 31.5 30.8 8.4 8.5 8.5 9.0 8.6 23.8 25.1 25.3 Business 23.5 23.0 33.1 Greece 25.5 22.6 10.5 23.9 23.0 10.7 22.2 Mortgages 11.5 11.9 11.9 8.3 7.3 Consumer 6.4 5.5 5.4 FY08 FY09 FY 10 FY11 1Q12* FY10 9M11 FY11 Jan-12 Feb-12 Mar-12 * * * € bn € bn * Provisional data
FY11 core pre-provision income down only Page 16 5%yoy 1,530 1,450 1,497 1,258 202 194 Non-Core PPI 115 66 Core PPI -5%yoy 1,382 1,328 +82 1,256 -63 1,192 -83 Δ NII Δ Fees Δ OpEx Δ Core PPI FY08 FY09 FY10 FY11 € m
Page 17 NII stable over the last six quarters, despite the crisis, both in Greece and abroad NII evolution per segment NII evolution per region 515 515 513 508 503 Total NII 619 625 607 595 599 Loan margin 361 366 370 360 354 Greece Capital & bonds 58 53 51 50 43 Interest rate gapping -21 -27 -33 -43 -53 New 154 149 150 148 143 Europe Deposit margin -109 -107 -117 -120 -117 4Q10 1Q11 2Q11 3Q11 4Q11 4Q10 1Q11 2Q11 3Q11 4Q11 * Client NII = Loan margin NII + Deposit margin NII € m
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