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

Transcription

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

2 Table of Contents HIGHLIGHTS ASSET QUALITY FUNDING APPENDIX GLOSSARY OF TERMS 2

3 Highlights 3

4 Concluded and in - progress Capital actions Rights Issue ( RI ) of c.89mln concluded in May ,7% (2,9%) 2,7% (0,9%) 12,8% CET 1 and Total (0,7%) 11,1% Dec 17 Pref.Shares IFRS 9 effect, Q1 results and other adjustments Mar-18 RI Q2 results and other adjustments Jun-18 In progress Sale of the junior note Metexelixis with an estimated positive impact on CET 1 of c.1,5pps. Issuance of a Tier II instrument for the repayment of the Preference Shares (L.3723/2008), with an estimated positive impact on total capital adequacy ratio of c.3pps. 4

5 Strong rebound of deposits year on year increase of 13% Net loans to Deposits ratio (%) Deposit Balances ,9% 113,9% 108,0% 237mln deposits increase 720mln net loans decrease 99,9% % y-o-y H FY 2017 Q H Comments As at June 30 th, deposits stood at approximately 2.1 bn. As at June 30, 2018, Bank s deposits balances increased by approximately 13% compared to H Net Loans to Deposits ratio improved to 99.9% as at vs 114% as at

6 Consistent increase in customer base - Volumes Number of customers H H E-Banking Users H H , , ,885 Total E- banking Users 46,140 49, , H FY 2017 H Corporates Individuals H FY 2017 H Corporates Individuals Evolution of POS FY 2016 H Evolution of Debit Cards H H % % ,555 POS through collaboration with Cooperative Banks ,739 new debit cards issued through collaboration with Cooperative Banks. FY 2016 FY 2017 H H FY 2017 H

7 Selected Balance Sheet and P&L items (consolidated accounts) Amounts in mln Change % Gross Loans 2, ,666.7 (1.9%) Loan Loss Reserves (LLR) (578.6) (474.7) 21.9% Deposits 2, , % Total Assets 3, ,560.4 (3.1%) Equity (7.4%) Amounts in mln Change % Net Interest Income (0.9%) Net Fee and Commission Income (22.6%) Total Operating Income % Total Operating Expenses (excluding provisions) % Profit / (loss) before taxes (34.8) (16.9) 105.1% Moderate new loan production in H (c. 60mln). Net (after deferred tax) IFRS 9 impact at 96,7mln. Gross IFRS 9 impact on Loans & advances to customers at 98,2 and gross loans cash coverage at 22,1%. H1 Capex of 11mln for IT and Digital infrastructure. Deposits Increase by 13.1% (q-o-q) and 6.7% compared to Dec-17. Net Loans to Deposits at 100% vs 114% as at Dec-17. Staff costs down by 2,2% on comparable terms (VEP positive effect has kicked in for less than a full quarter). Cost of Risk at 1.6%. CET 1 at 12.8 %. NPE ratio currently at % (includes the Metexelixis NPE loan portfolio). Bottom line result impacted by the full cost of VEP c.17mln and the results of investments in associates (2,9mln). 1 Includes on and off balance sheet items 7

8 Asset Quality 8

9 The Strategic NPE deleveraging effort 2 nd Securitization of portfolio of c.701 mln In July 2018, the General Meeting of Shareholders unanimously approved a consortium led by PIMCO/QUALCO for the servicing of a NPE portfolio of 700.5mln for a 10 year period and under usual terms and conditions for such transactions. The servicing will be performed by Quant which is an unrelated entity to Attica Bank. QUANT The NPE loan book of 700,5mln has been securitized in December 2017 and the structure contains a Senior Tranche and mezzanine and junior tranches. Apart from the servicing contract, in this phase the investor will also acquire the junior note. More specifically, the Investor will acquire a) the Junior Note of a nominal value of million issued by ABS Metexelixis (SPV) and b) a 10 year servicing contract for NPEs amounting to 700,5mln, for a total consideration of 47 million. This consideration is expected to be recorded in the Income Statement in Q subject to execution of the legal documents. This process is currently in progress and it is reasonably expected to be completed within October Subject to approval by the competent authorities Attica Bank expects that both regulatory and accounting derecognition criteria will be met. Investors Junior Coupon Acquisition of Class B Notes Metexelixis SPV Senior Tranche Mezzanine Tranche Junior Tranche 10 year Servicing Fee Senior Coupon This is the second securitization / NPE sale transaction for Attica Bank in less than 2 years (first one Artemis of 1,331bn NPEs in August 2017) and demonstrates the Bank s firm commitment in reducing credit risk and rapidly deleveraging its NPE stock through innovative transactions. Post transaction, Attica Bank will have a significantly lower NPE/NPL ratio, will further enhance its CET 1 ratio with the capital gain corresponding to the consideration to be received and will meet the regulator s expectations in reducing bad loans. Attica Bank 9

10 NPEs have decreased significantly in FY 2017 due to the securitization transaction of Q LLRs ( m) and NPE ratio* (%) Stock of NPEs ( m) and NPE Cash Coverage (%) 60,80% 44,6% 49,4% Or 42.6% when considering on and off balance sheet items. 49,9% 39,9% 44,8% 1.207, ,9 474,7 578, , ,4 FY 2016 FY 2017 H FY 2016 FY 2017 H LLRs NPE Ratio NPEs NPEs Cash Coverage Evolution of NPE Portfolio collateral and cash coverage FY 2017 H NPE 1, ,291.5 Collateral Value Cash Coverage NPE total coverage 99.7% 105.3% *Includes only on balance sheet items for comparability purposes 10

11 NPE analysis as at June-18 90dpd bridge to NPEs 1.400, ,0 27, , , ,0 281,0 800,0 600,0 620,0 Forbearance for Performing Loans & NPEs, ,0 200,0 0,0 NPL not forborne Denounced NPF UTP NPE 60,0% 50,0% 40,0% NPF 13,9% , , ,00 200,4 409,6 36, ,2 30,0% 20,0% PE 43,2% NPL 23,7% 800,00 600,00 400,00 517,5 10,0% 0,0% Other PF Categories 7,4% 11,8% Performing NPEs 200,00,00 NPL Denounced NPF UTP NPE Not forbourne 11

12 NPEs of SMEs and SBLs account for 60% of total NPEs Breakdown of NPEs by type, Concentration of NPEs Mortgage Loans; 19,2% SBLs; 20,8% Consumer Loans; 7,2% Credit Cards; 1,2% Large Corporates; 15,0% SMEs; 36,6% ,7% 69,7% 80,0% 90,1% 98,3% 99,0% 99,5% 99,8% 100,0% 100,0% % 80% 60% 40% % % % of total NPES (cumulative balances) No. customers (cumulative) 12

13 Loan cash coverage per Type & Stage Loans stage breakdown Balances and LLRs per Loan category - Large Corporates FY 2017 H Balance LLRs Stage 1 1,038, ,703 Stage 2 439, ,031 Stage 3 1,189,185 1,291,449 Stage 1 464,070 4,405 Stage 2 241,056 16,778 Stage 3 193,368 86,750 Balances and LLRs per Loan category - SMEs & SBLs Balances and LLRs per Loan category Retail & Other Balance LLRs Stage 1 213,951 9,319 Stage 2 150,090 16,151 Stage 3 741, ,823 Balance LLRs Stage 1 196,681 3,471 Stage 2 59,885 5,671 Stage 3 356, ,210 13

14 The Bank s current loan structure is skewed towards corporate lending Gross Loans (Total as at : 2.62 bn) Gross Loans by type of product (Total as at : 2.62 bn) Mortgage 16,7% Consumer 3,2% Credit Cards 1,2% Other 2,3% Large Corporate 34,3% State 1,2% Leasing 5,3% Loans to Individuals 22,9% SBLs 16,2% Loans to Corporates 70,6% SMEs 26,1% Loans to Individuals by Type (Total as at : EUR 0.6 bn) OtherCredit Cards 0,8% 5,2% Loans to Businesses by Sector (Total as at : 1.9 bn Agriculture 0,3% Trade 14,7% Consumer Loans 23,1% Other 32,7% Industry 9,6% Manufacturing 1,2% Tourism 10,4% Mortgages 70,8% Construction 29,3% Shipping 1,7% 14

15 Funding 15

16 Composition of Deposits Breakdown of deposits by type of product (Total as at : ~ 2.05 bn) Breakdown of deposits by type of customer (Total as at : ~ 2.05 bn) Other 0,4% Current accounts 24,5% Public Sector 22,6% Other 3,0% Time Deposits 56,7% Savings accounts 18,4% Corporates 12,5% Individuals 61,9% Cost of Deposits: Total Deposits (stock) Cost of deposits: Term deposits (stock) bps (77.5%) (75.5%) (77.5%) (75.5%) (68.6%) Aug-17 Dec-17 Apr-18 Aug-18 bps (25.7%) (63.9%) (63.2%) (61.3%) (58.4%) Aug-17 Nov-17 Feb-18 May-18 Aug-18 16

17 Eurosystem Funding; continuous deleveraging by intensified efforts to zeroed ELA Funding Comments Total Eurosystem funding ( mln) As at , Eurosystem funding amounted to 690 million. Eurosystem funding as a percentage of total assets reached 19.7% Evolution of Eurosystem funding (% of total assets) H H ,3% H Q FY 2017 Q H Sep-18 19,7% H H

18 Appendix 18

19 Group P&L and balance sheet Amounts in mln H FY 2017 Change % ASSETS Cash and balances with central bank % Due from other financial institutions % Derivative financial instruments - assets (26.1%) Financial instruments at fair value through P&L (39.2%) Net loans and advances to customers 2, ,192.1 (7%) Financial assets available for sale Financial assets at fair value through other total income Investments held to maturity (0.3%) Investments in associates (43.1%) Property, plant & equipment % Investment property Intangible assets % Deferred tax assets % Other assets % Total assets 3, ,560.4 (3.1%) LIABILITIES Due to financial institutions (22.3%) Due to customers 2, , % Derivative Financial Instruments (76.5%) Defined benefit obligations (26.9%) Other provisions % Deferred tax liabilities Other liabilities (3.8%) Total liabilities 2, ,927.7 (2.2%) EQUITY Share capital (common Shares) (80.3%) Share capital (preference Shares) Reserves % Retained earnings (132.6) (415.9) (68.1%) Equity attributable to parent owners (7.4%) Total equity (7.4%) TOTAL LIABILITIES & EQUITY 3, ,560.4 (3.1%) Amounts in mln H H Change % Interest and similar income (6.2%) Less: Interest expense and similar charges (22.97) (26.69) (13.9%) Net interest income (0.9%) Fee and commission income (12.3%) Less: Fee and commission expense (4.09) (4.15) (1.4%) Net fee & commission income (22.6%) Profit / (loss) from trading portfolio (8.6%) Profit / (loss) from investment portfolio 0.38 (0.25) 253.8% Other Income 0.44 (1.34) 132.8% Total Operating income % Personnel expenses % General operating expenses % Depreciation % Profit/ (Loss) before taxes and provisions (18.8%) Provisions for credit risks (7.0%) Provisions for other risks (79.0%) Staff Retirement Compensation Income from investment in associates % Profit / (Loss) before tax (34.79) (16.97) 105.1% Less: Income tax (1.07) % Profit /(Loss) for the period (35.87) (13.61) 163.6% 19

20 Group results by segment H H Total Amounts in 000s Retail Business Banking Investment Banking & Treasury Retail Business Banking Investment Banking & Treasury H H Change % Operating Income - Net interest income (2,073) 44,662 (4,163) (1,100) 45,831 (5,964) 38,426 38,768 (0.88%) - Net fee and commission income - Income from trading & other income - Adjustment between segments Income from investments in associates 927 4,509 (2,051) 483 3, ,384 4,373 (22.58%) (383) (700) 3 1,282 (1,080) (217.96%) 3,102 (7,117) 4,015 2,895 (8,851) 5, (523) (1,759) (628) (164) (681) (20) (2,910) (866) % Profit / (loss) before taxes 10,113 (31,707) (13,201) (12,595) (3,625) (747) (34,795) (16,967) % Taxes (1,074) 3,361 (103.09%) Profit / (loss) after taxes Provisions for credit risks and securities impairment (35,870) (13,606) % 18,291 (39,669) 270 (7,514) (15,186) 0 (21,108) (22,700) (7.01%) Depreciation (665) (2,249) (798) (592) (2,472) (72) (3,712) (3,135) (18.37%) Total Assets 518,709 1,746,473 1,185, ,455 2,782, ,323 3,450,196 3,601,936 (4.21%) Total Liabilities (1,776,061) (1,088,255) (29) (1,857,784) (1,125,960) (322) (2,864,345) (2,984,066) (4.01%) 20

21 Key financial ratios BALANCE SHEET STRUCTURE H FY 2017 Due to Customers / Loans and Advances to customers (after provisions) 100.8% 87.8% Due to customers / Total Assets 59.5% 54.0% Loans and Advances to customers (after provisions) / Total Assets 59.1% 61.6% Total Equity / Total Assets 17.0% 17.8% Total Equity / Due to Customers 28.5% 32.9% NPE Ratio 49.4% 44.6% Provisions / NPEs 44.8% 39.9% CAPITAL CET I Ratio 12.8% 14.7% Total Capital Adequacy Ratio 12.8% 14.7% EFFICIENCY H H Profit (Loss) before taxes / Average Equity (RoAE) (5.7%) (5.4%) Profit (Loss) before taxes / Average Total Assets (RoAA) (1.0%) (1.9%) Total Operating Expenses less provisions for credit risks / Total Assets 1.6% 2.0% 21

22 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 Reserves (LLRs) 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. Net Interest Income (NII) Interest Income less Interest Expense. Net Commission Income (NCI) Commission Income less Commission Expense. 22

23 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) Pre Provision Income (PPI) Preference Shares Risk Weighted Assets (RWAs) Tier II instrument Stage 1 Stage 2 Stage 3 Unlikely to pay (UTP) Loan Loss Reserves divided by Non Performing Exposures for the period. 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. 23

24 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.: