DRAFT. Attica Bank. Q Financial Results. Together we are stronger.

Transcription

1 DRAFT Attica Bank Q Financial Results Together we are stronger. 1

2 Table of Contents MACROECONOMIC REVIEW HIGHLIGHTS FINANCIAL PERFORMANCE ASSET QUALITY FUNDING APPENDIX GLOSSARY OF TERMS 2

3 Macroeconomic Review 3

4 Economic Forecast for Greece & Recent Developments Amounts in bn 2017 (Current Prices) 2017 (YoY%) 2018 (YoY%) 2019 (YoY%) 2020 (YoY%) GDP GDP Deflator Private Consumption Public Consumption Gross Fixed capital formation Exports Imports The Greek economy continued to grow at a faster pace as GDP increased by 2.0 y-o-y. This growth is mainly driven by a) the increase in tourist arrivals, b) the increase in exports of goods and services, c) the rebound of private consumption and d) the decrease in unemployment. Employment is recovering and exports are expected to perform well by historical standards. Economic indicators suggest that economic growth is taking hold. Unemployment Rate Source: EC, Autumn 2018 Economic Forecast Based on the seasonally adjusted data published by the Hellenic Statistical Authority: Unemployment stood at 18.6% on September 2018, compared to 20.8% and 18.9% on September 2017 and August 2017 respectively. GDP in nominal rates increased by 1% in the 3 rd quarter of 2018 compared to the 2 nd quarter and 2,4% compared to the 3 rd quarter of 2017, while Real GDP grew by 2% compared to Q Consumer Price Index (CPI) grew by 2% in September 2018 compared to August 2018 and 1.9% compared to September Imports as at the end of Q increased by 3,64 billion (+9.10%) amounting to a total of 40,03 billion, while exports increased by 3,49 billion (+16.78%) amounting to a total of 24,34 billion.

5 Key - Macro Indicators Real GDP Evolution (in bln) Unemployment Rate (End of Year) ,0% increase as at Q % 25% 20% 15% 10% 5% 8.4% 10.6% 14.7% 21.2% 26.4% 27.4% 25.9% 23.9% 23.4% 20.8% 18.6% 0 0% Q Evolution of Imports and Exports (in bln) Economic Sentiment Indicator (ESI) Imports Exports 5

6 Highlights 6

7 At a glance - Selected Balance Sheet and P&L items (consolidated accounts) Amounts in mln Change % Gross Loans 2, ,666.7 (2.7%) Loan Loss Allowances (LLAs) (578.6) (474.7) 21.9% Deposits 2, , % Total Assets 3, ,560.4 (3.9%) Equity (7.7%) Amounts in mln Change % Net Interest Income (5.5%) Net Fee and Commission Income (54.7%) Total Operating Income (55.0%) Total Operating Expenses (excluding provisions) % Total IFRS 9 impact at 136mln; 98,2 for on balance sheet loan exposures, 11,3mln for off balance sheet exposures and 26,8mln mainly from revaluation of financial instruments measured at FVOCI, Net Fee & Commission Income down by 54.7%. If Fee Income amounting to 4 mln of Q (commission of Attica Bank acting as an intermediate operator) is excluded, the actual decrease reaches 6%. Deposits Increase by 15.03% (q-o-q) and 9.8% compared to Dec-17. Net Loans to Deposits at 95% vs 114% as at Dec-17. Staff costs down by 6% on comparable terms (excluding the cost of VEP). Cost of Risk at 1.3%. NPE ratio currently at % Bottom line result impacted by the full cost of VEP c.17mln and the results of investments in associates (2,9mln). Profit / (loss) before taxes (37.9) 12.2 Pre-Provision Income (excl. NRIs)* Includes on and off balance sheet items 7

8 Consistent increase in customer base - Volumes Number of customers, Q Q E-Banking Users, Q Q , , ,732 44,627 46,140 50, , , ,318 37,575 38,822 42,476 7,052 7,318 8,057 31,525 31,748 32,414 Q FY 2017 Q Corporates Individuals Q FY 2017 Q Corporates Individuals Total E-banking Users Evolution of POS, Q Q Evolution of Debit Cards, Q Q ,134 24, % 27, % Plus 13,799 through collaboration with Cooperative Banks 91,100 89, ,387 Plus 134,544 through collaboration with Cooperative Banks Q FY 2017 Q Q FY 2017 Q

9 Financial Performance 9

10 Effective NPE Management a) Artemis Securitization - 1,3bn NPE nominal value, capital gain of 70mln from junior note sale Attica Bank S.A. 806 million Junior Notes Payment of: 70 million for Junior Notes 80,000 for Thea Artemis stake Artemis Finance S.ar.l. Bond Issuance/Securitization Senior Notes 525 million Junior Notes 806 million Non-performing Loan Portfolio 1.3 Billion Artemis Securitization (Special Purpose Vehicle) Servicing of Loans Payment of Servicing Fees 80% of Thea Artemis Shares Thea Artemis (Asset Management Company) b) Metexelixis Securitization - 701mln NPE nominal value, capital gain of 47mln from junior note sale Investors Junior Coupon QUANT Metexelixis SPV Senior Tranche Mezzanine Tranche 10 year Servicing Fee Senior Coupon In the last two years, Attica Bank has managed to reduce its NPE stock by 2bn. Attica Bank through the two securitizations demonstrates the Bank s firm commitment in reducing credit risk and rapidly deleveraging its NPE stock through innovative transactions. NPE ratio (pro forma ): 31% from 61% ( ) Acquisition of Class B Notes Junior Tranche Attica Bank 10

11 Stronger Liquidity Basis Strong rebound of deposits by 15% yoy ( 280 mln) ELA Funding as at : 176 mln. Aggregate decrease of ELA funding more than 750 million from December mln yoy 780 1, FY 2015 FY 2016 FY Q H Q /11/ /12/2018 ECB Funding ELA Funding Share Capital Increase 89 mln Strong Rebound of Deposits by 350mln yoy (November) Repo Bond Pillar II 175 mln 11

12 Capital Adequacy Share Capital Increase 2018 of 89 mln Tier II issuance for the repayment of preference share of mln (issued on ) 1 st Securitization (Artemis) 70 mln capital gain 2 nd Securitization (Metexelixis) 47 mln capital gain 206 mln Total Capital Adequacy ratio (pro-forma): 16.2% 2.9% 15% 2.6% 12.7% 0.6% 11.2% 3.0% 1.4% 0.9% 16.2% 13.2% FY 2017 Prefs IFRS 9 Q SCI H Tier II Metexelixis Q3, Q4 and Q1 results results Pro Forma CET1 31/12/18 Pro Forma CAR 31/12/18 12

13 Rationalization of costs, optimization of procedures and ongoing transformation 81.0% 75.4% 82.8% 78.8% 76.6% Branch network restructuring (relocation and closure of branches, renegotiation of rents) Centralization of operations Automation of various time-consuming procedures Subsidiaries Opex reduction e Personnel cost General operating expenses Depreciation Total VEP cost of 2016 & 2018 excluded from personnel cost. Provisions for other risks excluded from general operating expenses Investments in IT and Digital Infrastructure Cost/ / Income ratio Q Q

14 Asset Quality 14

15 The Bank s current loan structure remains skewed towards corporate lending Gross Loans (Total as at : 2.59 bn) Gross Loans by type of product (Total as at : 2.59 bn) Consumer 5.3% Mortgage 16.8% Credit Cards 1.2% Other 5.7% Large Corporate 31.6% State 1.2% Leasing 5.4% Loans to Individuals 23.0% Loans to Corporates 70.4% SBLs 14.7% SMEs 24.8% Loans to Individuals by Type (Total as at : EUR 0.6 bn) Loans to Businesses by Sector (Total as at : 1.9 bn OtherCredit Cards 0.8% 5.3% Agriculture Consumer Loans 23.3% Other 32.1% 0.2% Trade 14.8% Industry 9.6% Manufacturing 1.2% Mortgages 70.6% Construction 30.3% Shipping 1.7% Tourism 9.9% 15

16 Loan cash coverage per Type & Stage Loans stage breakdown Balances and LLAs per Loan category - Large Corporates FY 2017 Q H Q Balance LLAs Stage 1 1, Stage Stage 3 1, , , ,361.3 Stage Stage Stage Balances and LLAs per Loan category - SMEs & SBLs Balances and LLAs per Loan category Retail & Other Balance LLAs Balance LLAs Stage Stage Stage Stage Stage Stage

17 NPE analysis as at Sep-18 90dpd bridge to NPEs Forbearance for Performing Loans & NPEs, , , , , , , , , NPL not forborne Denounced NPF UTP NPE , NPL not forborne Denounced NPF UTP NPE 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% NPF 9.1% PE NPL 43.5% 27.3% Other PF 4.1% 16.1% Performing NPEs NPEs Concentration, ,000 10,000 8,000 6,000 4,000 2, % 99.1% 99.5% 99.8% 99.9% 100.0% 91.8% 11, % 9, % 8,800 7, % 6,600 5,500 2,200 1, % 5% 10% 20% 50% 60% 70% 80% 90% 100% % of total NPES (cumulative balances) No. customers (cumulative) 100% 80% 60% 40% 20% 0% 17

18 Pro forma NPEs post Metexelixis transaction completion NPE Portfolio collateral and cash coverage, in million Attica Bank Attica Bank - NPEs Mix 100% 80% 60% 8% 8% 21% 40% Pro-forma Contribution Attica Bank - NPEs Total Coverage Contribution Category Loan Balance Collateral LLAs (Gross) Coverage Total Coverage Loan Balance (Gross) Business % 89% 51.8% 70.9% Mortgages % 118% 39.8% 20.9% Consumer 58 68% 110% 8.4% 8.2% Total % 103% 100.0% 100.0% NPL % 52.0% NPF % 17.3% UTP % 8.9% Other % 21.9% 100% 80% 60% 110% Much lighter pro forma NPE book No alarming drop in pro forma NPE cash coverage (c.34% on balance sheet items cash coverage). Total coverage above market average for Mortgage (market at 107%) and Consumer (market at 97%) portfolios 40% 20% 71% 52% 40% 20% 118% 89% Almost half relates to non NPLs and non Denounced 0% 0% Pro-forma Attica Bank Business Mortgages Consumer Source: Attica Bank Q3 Results & IR Analysis Business Mortgages Consumer 18

19 Funding 19

20 Strong rebound of deposits year on year increase of 15% Loan Balances Net loans to Deposits ratio (%) 2,300 2,200 2,100 2, % 113.9% 108.0% 99.2% 420mln deposits increase as at % 1,900 Deposit Balances Q FY 2017 Q H Q ,200 2,100 2,000 1, % y-o-y 1,800 1,700 1,600 20

21 bps bps Composition of Deposits Breakdown of deposits by type of product (Total as at : ~ 2.11 bn) Breakdown of deposits by type of customer (Total as at : ~ 2.11 bn) Other 0.5% Current accounts 24.5% Public Sector 21.1% Other 2.9% Time Deposits 57.4% Savings accounts 17.6% Corporates 12.2% Individuals 63.7% Cost of Deposits: Total Deposits (stock) Cost of deposits: Term deposits (stock) (77.5%) (75.5%) (77.5%) (75.5%) (68.6%) (25.7%) (63.9%) (63.2%) (61.3%) (58.4%) Oct-17 Feb-18 Jun-18 Oct Oct-17 Jan-18 Apr-18 Jul-18 Oct-18 21

22 Appendix 22

23 Group P&L and balance sheet Amounts in mln Q FY 2017 Change % ASSETS Cash and balances with central bank (12.1%) Due from other financial institutions (27.6%) Derivative financial instruments - assets % Financial instruments at fair value through P&L (53.2%) Net loans and advances to customers 2.015,1 2,192.1 (8.1%) Financial assets available for sale (4.1%) Financial assets at fair value through other total income Investments held to maturity Investments in associates (46.7%) Property, plant & equipment (10.9%) Investment property Intangible assets (7.3%) Deferred tax assets % Other assets % Total assets 3, ,560.4 (3.9%) LIABILITIES Due to financial institutions (32.4%) Due to customers 2, , % Derivative Financial Instruments (100.0%) Defined benefit obligations (24.5%) Other provisions % Deferred tax liabilities Other liabilities % Total liabilities 2, ,927.7 (3.1%) EQUITY Share capital (common Shares) (80.3%) Share capital (preference Shares) Reserves % Retained earnings (133.5) (415.9) (67.9%) Equity attributable to parent owners (7.7%) Total equity (7.7%) TOTAL LIABILITIES & EQUITY 3, ,560.4 (3.9%) Amounts in mln Q Q Change % Interest and similar income (7.4%) Less: Interest expense and similar charges (34.27) (38.26) (10.4%) Net interest income (5.5%) Fee and commission income (34.5%) Less: Fee and commission expense (6.32) (6.65) (5.0%) Net fee & commission income (54.7%) Profit / (loss) from trading portfolio % Profit / (loss) from investment portfolio (99.2%) Other Income 0.58 (0.8) (175.6%) Total Operating income (55.0%) Personnel expenses (25.92) (27.38) (5.3%) General operating expenses (21.01) (21.22) (32.8%) Depreciation (5.70) (4.78) 19.3% Profit/ (Loss) before taxes and provisions (85.9%) Provisions for credit risks (24.62) (62.70) (60.7%) Provisions for other risks (2.88) (10.04) - Staff Retirement Compensation (17.21) - - Income from investment in associates (3.15) (0.9) 248.8% Profit / (Loss) before tax (37.90) (410.6%) Less: Income tax (1.18) (4.75) (124.9%) Profit /(Loss) for the period (36.72) 7.45 (592.8%) 23

24 Key financial ratios BALANCE SHEET STRUCTURE Q FY 2017 Due to Customers / Loans and Advances to customers (after provisions) 104.8% 87.8% Due to customers / Total Assets 61.8% 54.0% Loans and Advances to customers (after provisions) / Total Assets 58.9% 61.6% Total Equity / Total Assets 17.1% 17.8% Total Equity / Due to Customers 27.6% 32.9% NPE Ratio 52.4% 44.6% Provisions / NPEs 42.5% 39.9% CAPITAL CET I Ratio 12.2% 14.7% Total Capital Adequacy Ratio 12.2% 14.7% EFFICIENCY Q Q Profit (Loss) before taxes / Average Equity (RoAE) (6.0%) 2.6% Profit (Loss) before taxes / Average Total Assets (RoAA) (1.1%) 0.9% Total Operating Expenses less provisions for credit risks / Total Assets 2.1% 2.4% 24

25 Glossary of Terms Terms Definitions Common Equity Tier 1 ratio (CET 1) Common Equity Tier 1 regulatory capital as defined by Regulation (EU) 573/2013. Capital Adequacy ratio (CAD) Total regulatory capital divided by total Risk Weighted Assets, as defined by Regulation (EU) 573/2013. Cost of Risk (CoR) Loan Loss Reserves for the period divided by Gross Loans of the relevant period. Deferred Tax Assets (DTA) Amounts of income taxes recoverable in future periods, in respect of deductible temporary differences, unused tax losses that can be carried forward and unused tax credits. Deferred Tax Credit (DTC) Amounts of tax credits that are eligible for conversion in tax credits under specific circumstances. Forborne Exposures An exposure where forbearance measures have been extended, i.e. concessions, such as a modification or refinancing of loans and debt securities, has been granted as a result of a counterparty's financial difficulty. Loan Loss Allowances (LLAs) Provisions to cover credit risk. Net Interest Margin (NIM) Net Interest Income for the period, annualized and divided by average Total Assets of the relevant period. Non-Recurring Items (NRIs) Expenses or income that occurs only for the period under examination. * For the calculation of PPI on p.7, the following NRIs are excluded: Artemis securitization servicing fees ( 4 mln) + Investment gain from Artemis Securitization ( 70 mln) + Provisions for other risks ( 10 mln). Net Interest Income (NII) Interest Income less Interest Expense. Net Commission Income (NCI) Commission Income less Commission Expense. 25

26 Glossary of Terms Terms Definitions Non Performing Exposures (NPEs) An exposure that is a) 90 days past-due (material exposure) and b) unlikely to be repaid in full without collateral realization (irrespective of any past-due amount or of the number of days past-due). Non Performing Exposures Coverage (NPE coverage) Loan Loss Reserves divided by Non Performing Exposures for the period. Pre Provision Income (PPI) Preference Shares Risk Weighted Assets (RWAs) Tier II instrument Stage 1 Stage 2 Stage 3 Unlikely to pay (UTP) Total Operating Income for the period less Total Operating Expenses for the period. Non-transferable redeemable preference shares of a nominal value of 0.35 each. The shares were issued pursuant to the provisions of Law 3723/2008 on enhancement of the liquidity of the Greek economy to limit the impact of the international financial crisis. Risk Weighted Assets are the Bank s assets and off-balance sheet exposures, weighted according to risk factors based on the Regulation (EU) 575/2013 for credit, market and operational risk. Secondary component of the bank capital, in addition to Tier 1 capital, that makes up the bank's required regulatory reserves. Loan Loss Reserves for exposures classified under Stage 1 are calculated from the initial recognition of the loan on a 12-months period. (Expected Credit Losses). Loan Loss Reserves for exposures classified under Stage 2 are calculated for the lifetime of the exposure. (Lifetime Expected Credit Losses). Includes credit impaired exposures. Loan Loss Reserves for exposures classified under Stage 3 are calculated for the lifetime of the exposure. (Lifetime Expected Credit Losses). The debtor is assessed as unlikely to pay its credit obligations in full without realization of collateral, regardless of the existence of any past-due amount or of the number of days past due (Regulation (EU) 575/2013). Voluntary Exit Plan (VEP) A plan that provides an incentive for employees to retire early. 26

27 By receiving this document, the Recipient accepts and agrees to be bound by the following obligations and limitations: The above material has been prepared by Attica Bank for the exclusive use of the selected parties to whom it is delivered. Neither the whole ore any part of the information in this presentation may be disclosed to or used by any other person or used for any other purpose without the prior consent of Attica Bank. Neither Attica Bank nor any of its connected persons accept any liability or responsibility for the accuracy or completeness of. nor make any representation or warranty, express or implied, with respect to the information on which this material is based or that this information remains unchanged after the issue of this presentation. In addition, the reader of the material agrees that Attica Bank and all connected persons neither owe nor accept any duty or responsibility to the former, whether in contract or in tort (including without limitation, negligence and breach of statutory duty), and shall not be liable in respect of any loss, damage or expense of whatsoever nature which is caused by any use the reader may choose to make of this material, or which is otherwise consequent upon the gaining of access to the report by the reader. The content of this material should not be construed as a solicitation or a recommendation. It has been prepared for information purposes only and is purely indicative. It does not constitute an offer or invitation for sale or purchase of securities or any of the businesses or assets described herein or any form of commitment, advice, recommendation or valuation opinion on the part of Attica Bank or its connected persons. No part of this material should form basis of or can be relied upon in connection with any contract or investment decision or commitment relating thereto. This material should not be regarded by the Recipient as a substitute for the exercise of its own judgment and the Recipient is expected to rely on its own due diligence if it wishes to proceed further. Additionally, the Recipient should not construe the contents of this material as legal, tax, accounting or investment advice. The Recipient should consult its own independent counsel, tax and financial advisers as to financial, tax legal and related matters concerning any transaction described herein. This material does not purport to be all-inclusive or to contain all of the information that the Recipient may require or request. The present material may contain targets, prospects, returns and/or opinions which obviously involve elements of subjective judgment. Any opinions expressed in this material are subject to change without notice. Forward looking statements may also be contained. Attica Bank gives no undertaking and is under no obligation to update these targets, prospects or potential statements for events or circumstances that occur subsequent to the date of this material or to update or keep current any of the information contained herein and this material and there exists no representation that it will do so. Actual results will vary from the projections or targets mentioned and such variations may be material. In this notice Attica Bank means Attica Bank S.A. and its connected persons means the shareholders, subsidiaries and the respective directors, officers, employees and agents of each of them. ATTICA BANK S.A. Contact Information: Strategy and Financial Planning Department 23 Omirou Str Athens. Greece InvestorRelations@atticabank.gr Tel.: