A G E N D A U p d a t e B a s e d o n H R e s u l t s

Transcription

1 A G E N D A P i r a e u s B a n k s S t r a t e g i c P l a n U p d a t e B a s e d o n H R e s u l t s

2 DISCLAIMER This presentation has been prepared solely for informational purposes. Any projections or other estimates in this presentation, including estimates of returns or performance, comments with respect to our objectives and strategies, or the results of our operations and business, supersede all previous projections or other estimates, and are forward-looking statements based upon certain assumptions and beliefs in light of the information currently available to the company that may be wrong. These assumptions and beliefs may be influenced by factors within or beyond our control, and actual results may differ materially from any estimates and projections. Factors influencing actual results include but are not limited to fluctuations in interest rates and stock indices, the effects of competition in the areas in which we operate, and changes in economic and regulatory conditions. This presentation is not an offer to buy or sell or a solicitation of an offer to buy or sell any security or instrument or to participate in any trading strategy. No part of this presentation may be construed as constituting investment advice or a recommendation to enter into any transaction. No representation or warranty is given with respect to the accuracy or completeness of the information contained in this presentation, and no claim is made that any future offer to transact any securities will conform to any terms that may be contained herein. Before entering into any transaction, investors should determine any economic risks and benefits, as well as any legal, tax and accounting consequences of doing so, as well as their ability to assume such risks, without reliance on the information contained in this presentation. 2

3 CONTENTS 01 VISION, GOALS & OBJECTIVES 02 STRATEGY ENABLERS 03 TARGETED FINANCIAL PROFILE 04 APPENDIX 3

4 01 V I S I O N, G O A L S & O B J E C T I V E S 4

5 1.1 PIRAEUS VISION Our vision is: to be the most trusted Bank in Greece, creating value for our shareholders, clients and employees Our principles are: Customer Focus Management Accountability Performancedriven Culture Business Sustainability 5 VISION, GOALS & OBJECTIVES

6 1.2 GOALS AND OBJECTIVES reduce NPLs and NPEs to a normalised level create a profitable and sustainable business model maintain a strong capital base re-establish wholesale market funding access 6 VISION, GOALS & OBJECTIVES

7 02 S T R AT E G Y E N A B L E R S 7

8 2.1 STRATEGY ENABLERS A de-risk the balance sheet B resize and focus C implement a profitable and sustainable business model D optimise capital allocation E strengthen risk monitoring and controls F adopt superior governance standards 8 STRATEGY ENABLERS

9 A. De-risk the Balance Sheet 2.2 DE-RISK THE BALANCE SHEET Separating Piraeus Bank Group into two operating pillars to maximise value arising from our core businesses, whilst focusing on realising value in legacy holdings Piraeus Bank re-assess all client segments and business propositions focus on financing healthy borrowers, following strict credit criteria tap every source of liquidity in a profitable manner, while maintaining leading market position in customer deposits operate customer vs. product-centric business units focus on fee-based revenue sources remain a prominent SME & corporate bank along with increased generation of retail loan products under a conservative risk-adjusted approach Piraeus Legacy Unit (PLU) implement clearly designed strategies to accelerate our deleveraging plan related to the: o run-off assets (international subsidiaries and non-banking Greek holdings) and o curing / restructuring / disposing the NPE book manage efficiently the Real Estate Owned (REO) portfolio within the PLU perimeter 9 STRATEGY ENABLERS

10 A. De-risk the Balance Sheet 2.3 RING-FENCING LEGACY ASSETS Business model based on efficiency & risk-adjusted returns Piraeus Bank Decisive action on legacy issues, value-generating businesses Piraeus Legacy Unit Q1.17 H1.17 RWAs 28.0bn 28.6bn 90+dpd 2% 2% RoA 1.1% 1.1% Reg.Capital 4.7bn 4.8bn Q1.17 H1.17 RWAs 25.2bn 24.1bn 90+dpd 64% 64% RoA <0% <0% Reg.Capital 4.2bn 4.0bn CIB Retail Banking Asset Management Recovery Banking Unit International Operations Discontinued Operations 10 STRATEGY ENABLERS

11 A. De-risk the Balance Sheet 2.4 SEPARATION OF PIRAEUS BANK VS. PIRAEUS LEGACY UNIT (H1.2017) A. Balance Sheet ( bn) PIRAEUS BANK PLU PIRAEUS GROUP 1 Net Loans 2 Customer Deposits 3 RWAs B. P&L ( mn) 4 Net revenues 5 Operating expenses 6 Pre provision income 7 Net income attrib. to SHs 800 (413) (168) 163 (217) 1,131 (582) C. Ratios 8 NIM over assets 9 NF&CI over assets 10 Cost-to-income ratio 11 Cost of risk (over net loans) 12 Loan-to-deposit ratio 13 >90+dpd 14 NPE ratio 15 RoA 3.1% 0.7% 52% 0.6% 68% 2% 8% 1.1% 2.1% 0.2% 51% 4.3% n.m. 64% 89% <0% 2.7% 0.5% 51% 2.2% 113% 37% 52% 0% *PLU includes RBU, international operations, REO, holdings, discontinued operations and non-core Greek subsidiaries. NPE ratios calculated over on-balance sheet exposures n.m. non meaningful 11 STRATEGY ENABLERS

12 A. De-risk the Balance Sheet 2.5 SEPARATION OF PIRAEUS BANK VS. PIRAEUS LEGACY UNIT (H vs. Q1.2017) A. Balance Sheet ( bn) PIRAEUS BANK Q1.17 H1.17 PLU Q1.17 H1.17 PIRAEUS GROUP Q1.17 H Net Loans 2 Customer Deposits 3 RWAs B. P&L ( mn) 4 Net revenues 5 Operating expenses 6 Pre provision income 7 Net income attrib. to SHs (208) (413) (86) (168) (119) (217) 552 1,131 (294) (582) (6) 0 C. Ratios 8 NIM over assets 9 NF&CI over assets 10 Cost-to-income ratio 11 Cost of risk (over net loans) 12 Loan-to-deposit ratio 13 >90+dpd 14 NPE ratio 15 RoA 3.0% 3.1% 0.7% 0.7% 53% 52% 0.3% 0.6% 69% 68% 2% 2% 8% 8% 1.1% 1.1% 2.2% 2.1% 0.2% 0.2% 53% 51% 4.5% 4.3% n.m. n.m. 64% 64% 88% 89% <0% <0% 2.7% 2.7% 0.5% 0.5% 53% 51% 2.2% 2.2% 116% 113% 38% 37% 52% 52% <0% 0% *PLU includes RBU, international operations, REO, holdings, discontinued operations and non-core Greek subsidiaries. NPE ratios calculated over on-balance sheet exposures n.m. non meaningful 12 STRATEGY ENABLERS

13 A. De-risk the Balance Sheet 2.6 NPL, NPE DOWNSIZING NPL & NPE TARGETS SSM Targets up to 2019 [parent data] Αgenda in bn June June December December actual actual target target NPLs>90dpd <10 NPEs <20 Domestic NPL/NPE Targets ( bn) NPEs <20 Piraeus aims at reducing NPE parent stock to 20.3bn by For 2020, the target is to reduce NPEs further to a level of < 20bn NPLs at parent level are targeted at 10.2bn by For 2020 the target is to reduce NPLs further to a level of < 10bn Selected inorganic solutions are being examined, in addition to write-offs, curing / collections, liquidations and selected sales Distinct REO management unit within RBU NPLs Jun.17 Write-Offs Restructurings, Collections, Liquidations Selected Sales 10.2 < Attracting talented and highly competent managers is a key condition for the NPE/NPL deleverage effort. Piraeus has been allocating its highest-performers to the internal RBU to execute on targets set 13 STRATEGY ENABLERS Operational targets to SSM Agenda 2020

14 B. Resize and Focus 2.7 RESIZE AND FOCUS Resize revisit retail network and footprint implement further cost rationalisation release of trapped capital examine outsourcing opportunities Focus conduct disciplined review of all Piraeus Bank s business lines target specific client and sectoral segments use digitalisation to extract maximum value exit from loss-making client relationships, refine segments strategy 14 STRATEGY ENABLERS

15 B. Resize and Focus 2.8 COST OPTIMISATION Rationalisation of the branch network (hub and spoke model) Cost-to-income ratio 2016 H Redesign of front-to-back processes, aiming at reducing manual workload in branches 57% 51% <45% Enhanced automation of back-office processes by deployment of new solutions Effects of cost initiatives bn, Further externalisation of non-core activities ~ <1.05 Cost optimisation through channel migration of teller transactions for mass retail Further FTE optimisation in Greek operations Corporate 2016 H1.17 Branch centre Divestments 2020 annualized efficiency efficiency gains gains 15 STRATEGY ENABLERS

16 C. Implement a Profitable and Sustainable Business Model 2.9 FOCUS ON PROFITABILITY & SUSTAINABILITY Profitability gradually direct loan mix towards retail lending (small business and consumer products), while repricing corporate and SME book higher offer an innovative product spectrum review loss-making client relationships and segments and refine strategy before exit focus on cross selling opportunities within large customer base Sustainability 11 STRATEGIC PRIORITIES maximise migration of transactions to digital transform our retail branch network implement risk-based pricing across asset classes target segments with potential upside, e.g. trade finance, corporate advisory, factoring, cash management, wealth management, and promising sectors, e.g. tourism, green energy, agri-business, logistics 16 STRATEGY ENABLERS

17 Net Fee Income Net Interest Income AGENDA 2020 C. Implement a Profitable and Sustainable Business Model 2.10 REVENUE DRIVERS ELA elimination Loan generation Loan mix effect 11.0bn 10.3bn Balance end Aug. 8.5bn 0bn ~ 2bn 2.3bn > 5bn 2016 H target 2016 H target 2016 H target annualized Annual new loan production 5% 8% ~20% % higher loan yield products (Small Businesses, Consumer Loans) over new production Retail banking CIB Other 20bps 22bps >30bps 22bps 24bps >25bps 3bps 5bps ~5bps 2016 H target 2016 H target 2016 H target Drivers: bancassurance, cards, payments transaction banking investment products digitalisation Note: elimination of ELA exposure is targeted earlier than STRATEGY ENABLERS

18 C. Implement a Profitable and Sustainable Business Model 2.11 ΝΙΙ DRIVERS NII 1.8bn NII 1.8bn NII target > 2.1bn in 2020 Income Other 0.2bn 0.2bn Income Other > 0.2bn Loans 2.3bn, o/w GR 2.1bn 2.1bn, o/w GR 2.0bn Loans > 2.3bn GR NII improvement will arise from: -Credit expansion -NPE deleverage -ELA elimination Expense Deposits Interbank/ELA Other ( 0.2bn) ( 0.3bn) ( 0.2bn) ( 0.2bn) ( 0.2bn) ( 0.2bn) Expense Deposits Interbank/ELA Other ( 0.2bn) ( 0.1bn) ( 0.1bn) FY.2016 H annualized FY.2020 target 18 STRATEGY ENABLERS

19 D. Optimise Capital Allocation 2.12 CAPITAL ALLOCATION & EFFICIENT DEPLOYMENT Capital maintain solid capital position, resilient to any unexpected external shocks allocate capital resources in an optimal and efficient manner target risk-adjusted returns monitor loan collaterals diligently manage portfolios focusing on capital allocation 19 STRATEGY ENABLERS

20 E. Strengthen Risk Monitoring and Controls 2.13 BEST-IN-CLASS RISK MANAGEMENT & CONTROLS Risk execute on a three lines of defense principal implement a risk-adjusted approach on return on capital follow a concrete risk appetite framework robustly reinforce credit policies strengthen internal controls and reinvigorate internal support functions Controls ensure stability and continuity of operations follow 360 o assessment in every action, decision and function of the Bank implement targeted audit plans focus on compliance and legal controls apply regulatory reporting in a fully automated manner 20 STRATEGY ENABLERS

21 F. Adopt Superior Standards of Governance 2.14 INTERNATIONAL GOVERNANCE STANDARDS Governance operate under the supervision of a BoD with deep experience in banking, risk and NPL management reinvigorate executive management team focus on meritocracy and expertise build a corporate structure steered towards executing our plan set clear targets with identified and measured owners excel in corporate responsibility Shareholder Structure Aug.2017 Individuals 6% HFSF 26% Institutional Investors & Legal Entities 68% 21 STRATEGY ENABLERS

22 F. Adopt Superior Standards of Governance 2.15 PIRAEUS GROUP STRUCTURE Board of Directors & BoD Committees CEO BoD Risk Committee BoD Audit Committee CEO OFFICE PIRAEUS BANK PIRAEUS LEGACY UNIT PIRAEUS FINANCE PIRAEUS SUPPORT PIRAEUS RISK & CONTROLS RETAIL & DIGITAL CORPORATE & INV. BANKING ASSET MANAGEMENT RECOVERY BANKING UNIT DIVESTMENTS FINANCIAL MANAGEMENT HUMAN RESOURCES RISK MANAGEMENT INTERNAL AUDIT INFORMATION TECHNOLOGY CREDIT COMPLIANCE OPERATIONS LEGAL Notes: (1) BoD committees, apart from those illustrated above, are also Strategic Planning Committee, Remuneration Committee, Nominations Committee (2) CEO Office: team of experts assisting in the implementation of Agenda 2020 and the Group s digital strategy LOGISTICS & PROCUREMENT 22 STRATEGY ENABLERS

23 03 TA R G E T E D F I N A N C I A L P R O F I L E 23

24 FINANCIAL GOALS 2020 financial profile maintain a leading market position in the Greek market significantly downsize PLU tap diversified funding sources preserve current robust capital base achieve operating excellence deliver superior returns to shareholders 24 TARGETED FINANCIAL PROFILE

25 GROUP TARGETS NIM from Q1.17 H bps 271bps to >310bps NFI from 50bps 50bps to >65bps CIR from 53% 51% to <45% LDR from 116% 113% to <105% NPL from 38% 37% to <15% NPE from 52% 52% to <30% Pre-tax RoA from losses losses to ~1.5% RoA from losses break-even to >1.0% Note: c. 70bn assets at the end of 2020 (est.) for the calculation of NIM, NFI and RoA 25 TARGETED FINANCIAL PROFILE

26 04 A P P E N D I X 26

27 4.1 GREEK MACRO & BANKING MARKET ASSUMPTIONS Greece: Macroeconomic Forecasts 2016a 2017e 2018f 2019f 2020f Real GDP (sa data, % change) -0.2% 1.2% 2.1% 2.3% 2.7% Gross Fixed Capital Formation (sa data, bn) Unemployment Rate (% of labour force) 23.5% 21.6% 19.7% 18.0% 16.7% Greece: Banking Sector Forecasts 2016a 2017e 2018f 2019f 2020f Total Loans, bn Total Loans, % change -3% -3% -4% -1% 3% - write-offs sales per annum, bn Total Loans exc. write-offs & sales, % change -2% -3% -3% 2% 2% Total Deposits, bn Total Deposits, % change 4% 6% 6% 7% 6% Sources: Ministry of Finance, ELSTAT, BoG, Piraeus Bank Economic Research a: actual e: estimate f: forecast Note: set of assumptions at the time of the launch of the Agenda 2020 plan (May 2017) Political stability Pent-up demand (for both consumption and depreciated capital) Privatisation-related capital expenditure Export-oriented sectors, such as tourism and farming, as well as logistics, renewable energy projects, likely drivers of economic recovery Loans in the Greek market affected by write-offs and sales of c. 25bn in the period to 2020 Deposit inflows of c. 35bn anticipated in the period to 2020 vs. > 100bn outflows since crisis beginning 27 APPENDIX

28 A. De-risk the Balance Sheet 4.2 PIRAEUS LEGACY UNIT PERIMETER (Q2.2017) A. Balance Sheet ( bn) PLU Q1.17 H1.17 RBU Q1.17 H1.17 Int l Q1.17 H1.17 Other(*) Q1.17 H Net Loans 2 Customer Deposits 3 RWAs B. P&L ( mn) 4 Net revenues 5 Operating expenses 6 Pre provision income 7 Net income (86) (168) (119) (217) (45) (93) (117) (214) (36) (68) (2) (3) 37 (5) (8) (8) 29 (10) (1) C. Ratios 8 NIM over assets 9 NF&CI over assets 10 Cost-to-income ratio 11 Cost of risk (over net loans) 12 Loan-to-deposit ratio 13 >90+dpd ratio 14 NPE ratio 15 RoA 2.2% 2.1% 0.2% 0.2% 53% 51% 4.5% 4.3% n.m. n.m. 64% 64% 88% 89% <0% <0% 2.5% 2.3% 0.1% 0.1% 39% 44% 5.3% 4.8% n.m. n.m. 66% 65% 92% 93% <0% <0% 2.7% 2.6% 0.6% 0.6% 74% 82% 0.6% 1.2% 92% 87% 38% 41% 47% 49% 0.5% <0% (0.5%) (0.4%) 0.2% 0.1% n.m. 22% 0.7% 2.9% n.m. n.m. 74% 80% 100% 100% <0% <0% *other includes international operations, REO, holdings, discontinued operations and small non-core Greek subsidiaries. NPE ratios calculated over on-balance sheet exposures n.m. non meaningful 28 APPENDIX

29 A. De-risk the Balance Sheet 4.3 RBU RETAIL & SMALL BUSINESS (H1.2017) Advance analytics in order to optimise restructurings in the early delinquency buckets Improve the take up ratio of restructurings in the denounced portfolios Develop detailed segmentation and decision trees on SB portfolios Reverse engineering of solutions based on REO input Pilot amicable solutions with more active REO management ( bn %) Balances ( bn) Customers (#) ( bn %) Balances ( bn) Customers (#) Retail (1) ,951 Buckets 0 days , days ,335 >90 days ,311 Small Business Loans ,488 Buckets 0 days 0.4 5, days 0.2 2,028 >90 days ,069 (1) Retail includes Mortgage, Consumer, Credit cards & Agri-loans The number of customers does not add up due to multiple relationships 29 APPENDIX

30 A. De-risk the Balance Sheet 4.4 RBU CORPORATE & SME (H1.2017) Refine the operating model, focusing on the following areas: a. RBU value chain b. Workflows and restructuring tools c. SLAs across support functions d. Utilisation of legal actions, throughout the restructuring process for viable / non-cooperative customers e. Introduce middle office roles to increase efficiency and reduce the implementation time of restructuring solution f. Apply a 360o approach on large cases Assess the scope and potential mandate of a new interbank platform for common SME borrowers ( bn %) Balances ( bn) Customers (#) ( bn %) Balances ( bn) Customers (#) Corporate Buckets 0 days days >90 days SME 2.7 1,577 Buckets 0 days days >90 days The number of customers does not add up due to multiple relationships 30 APPENDIX

31 A. De-risk the Balance Sheet 4.5 RBU COMMERCIAL WORKOUT (H1.2017) Develop real estate / REO strategy in the foreclosure decision making process Empower the workout unit with increased legal capacities Securitise selected part of the portfolio ( bn %) Balances ( bn) Customers (#) Commercial Workout (1) ,848 Buckets 0 days 1.9 3, days >90 days ,975 (1) Commercial Workout includes Corporate, SMEs and SBLs The number of customers does not add up due to multiple relationships 31 APPENDIX

32 A. De-risk the Balance Sheet 4.6 INTERNATIONAL OPERATIONS & PARTICIPATIONS International operations disposal under process Serbia Albania Romania Bulgaria Ukraine Non-core participations divestment plan All equity investments 5mn as per Restructuring Plan (RP) commitment Beyond RP commitments, divestment from noncore banking stakes included in PLU perimeter Radically reduce international assets: Already disposed: Marathon Bank NY (2012) ATEbank Romania (2013) Piraeus Bank Egypt (2015) Tirana Leasing (2015) Piraeus Bulgaria Leasing (2016) Piraeus Bank Cyprus (2016) ATE Insurance Romania (2017) Key participations for divestments are: Avis rent-a-car (subsidiary) [SPA signed] HSW ferries (40% stake) [SPA signed] Nireas fish farming (33% stake) [disposal under process] Selonda fish farming (33% stake) [disposal under process] Henry Dunant hospital (subsidiary) Attiki Odos (10% of Athens ring road) Astakos terminal (27% stake) Merlin (28% of land plot in Corfu) 32 APPENDIX

33 A. De-risk the Balance Sheet 4.7 REO MANAGEMENT ( mn) Piraeus REO holdings is concentrated in Attiki and North Greece regions, jointly making up ~50% of the portfolio North Greece Thessaloniki Central Greece Current Status ~4.7k properties accumulated mainly in the last 3 years from acquisitions & repossessions (2.1k residential, 1.1k commercial, 0.3K industrial, 1.2k plots) Current market value of those properties 0.9bn Sterea Peloponnisos Commercial Retail Crete Attiki Islands In 2016 #60 were sold vs. #28 in 2015 and just #9 in 2014 Actions Run the Real Estate re-organisation project Improve on the current strengths of Piraeus Real Estate and transform it in the marketing company for REO, utilising the newly introduced innovative platform for auctions in Greece Enhance the capabilities of the Group with property and facility management contracts Create an RBU unit to reverse engineer both the restructuring and foreclosure processes with REO input and strategy Large assets > 5mn 33 APPENDIX

34 A. De-risk the Balance Sheet 4.8 REO ONLINE PLATFORM Piraeus Bank was the 1 st Bank to launch the innovative site Properties4sale, achieving the sale of REO assets through online & publicly accessible auctions June st Auction Key takeaways Online property site launch: 9 May 2017 First auction: June 2017 # of properties: 58 of various types in several parts of Greece Significant customer traffic: >100,000 unique users >1.1mn page views Results at a glance: 2 out of 3 properties received bids 196 bids from 80 bidders Bids approved on 50% (29 properties) of the assets Top 8 assets received 115 bids Properties4sale (P4S) Site Benefits Open and transparent to interested buyers & RE agents globally Easy to monitor by Piraeus management Scalable & consistent process for numerous and various types of assets Data collected automatically on property interests, prices, etc. Well-managed, timely and competitive process Attract investor interest with a differentiated offering Assist price discovery and further buildup of historical pricing Provides additional cross selling opportunities (financing, deposits etc) Build brand and client base with each auction; >3,000 registered users 2017 auctions time plan 1 st Auction June 2017 Completed 2 nd Auction October 2017 Expected 3 rd Auction December 2017 Expected 34 APPENDIX

35 B. Resize and Focus 4.9 RETAIL BANKING TRANSFORMATION Progress so far Expected Benefits Migrate transactions to digital channels Gradual integration of Branches into Network s new business structure and monthly monitoring of transactions conversion from physical to digital Value for Shareholders Cost savings, through automation of transaction servicing and rightsizing of network Increased revenue, through improved sales performance per FTE Maintaining customer perception as the most innovative Bank in the Greek market GOALS Enhance in-branch commercial activity Rollout in details 85% of scheduled trainings and orientation workshops for Branch Managers completed Assigned new roles to employees Assigned new formats to branches 70% of newly designed in-branch digital zones already operational Service to Customers Improved level of service, based on speed and professionalism Increased options in service channels Extended coverage and personalised service of most valued customers Optimise network footprint Kicked-off change management Multiple workshops and trainings with senior retail management Developed new career paths Opportunities for Employees New opportunities for professional growth New, structured way of working with clear responsibilities and targets 35 APPENDIX

36 Cost Savings Experience & Revenue Increase AGENDA 2020 B. Resize and Focus 4.10 TECHNOLOGY DRIVER FOR COST REDUCTION AND INCREASE CUSTOMER EXPERIENCE & REVENUES 1 Apply innovation to streamline day to day processes: e-signature remote teller paperless cashier printers for passbook update issuance of prepaid cards Exploit usage of cloud outsourcing services for day to day operations Introduce video Identification in new customer registration to reduce cost Continuous process review and reengineering Sustain high level of IT systems security Introduce a new data governance framework to secure data quality and completeness Continuous alignment with regulatory and supervisory requirements New services for people with specialized banking service needs 2 Value Based Management system Extend bank-wide loyalty cooperation Full operation of 3 e-branches in Attica region Continuous reform of internet banking and mobile banking platforms Enforce transaction migration from branch to digital channels Remote servicing through internet banking and mobile banking (esignature) Extend video banking applications to increase customer accessibility & experience Ιntroduce new full automated processes and instant credit tools Create new fast track services through appropriate automated workflows Adopt efficient new technologies (BYOD, Big Data, Block Chain, Advanced Data Analytics) 36 APPENDIX

37 B. Resize and Focus Transactions to be migrated to ATMs Transactions to be migrated online Type of transaction Cash withdrawal Migration rate Jul-17* 90% Cash deposit 41% 42% 50% Passbook update Bill payment (including taxes) 88% 67% ** 62% Migration rate target End % 75% 65% Migration rate target End % Fund transfers 82% 85% 90% Total potential target to migrate a further 35mn teller transactions per annum 100% 4.11 DIGITALISATION Initiatives Meeter-greeter role in branches to guide and train customers with the use of facilities Installation of deposit-taking ATMs within branches Usage of analytics to target heavy teller users with campaigns and incentives Policy changes eliminating option to use cashier for certain transactions (e.g. passbook updates dependent upon deployment of paperless cashier by end of year) Further enhancements of the services offered in e-branches Revamping of online and mobile channels, targeting less technology-savvy customers by emphasising simplicity, speed and security In-branch education of customers TOTAL 75% 78% 86% More than 90% for 2020 * the KPI measures the performance as of ** average to-date. Full roll-out of paperless cashier on track - to be in all branches by end of year, thus beginning of 2018 is expected to be 100% 37 APPENDIX

38 B. Resize and Focus 4.12 E-BRANCH PROJECT Transactional migration: reached 81% of equivalent transactions of nearby traditional branch in Increase in deposits: reached 38% of deposit amount in new money of the largest nearby traditional branch in Enhance Image: significant coverage in the Greek press and numerous references in prestigious international banking, design, fin-tech and innovation sites and conferences Digital Literacy: 74% of usage of remote teller by ages 41+ (31% / ages 60+) highlights e- branch as intermediate step to internet & mobile for older age groups Corporate Social Responsibility: Facilitation of transactions execution for visually impaired customers, which will be extended for hearing impaired customers too Explore new cost model: data gathered used in evaluation of alternative branch formats optimising for OPEX while maintaining service levels 38 APPENDIX

39 C. Implement a Profitable and Sustainable Business Model 4.13 SMEs FIRST POSITIVE DEVELOPMENTS Piraeus Bank holds a dominant position in the SMEs market: 8,000 upscale SMEs in Greece 80% of the SMEs market are customers of Piraeus Bank Cross sell ratio for SMEs at 5.9x vs 3.6x Piraeus corporate clients SMEs Piraeus Penetration 20% SMEs Loans Development ( mn) 3,510 3,480 3,440 3,450 SMEs Disbursements ( mn) % PB's customers Other customers Jun.16 Dec.16 Mar.17 Jun H1.17 annualized SMEs Evolution of Employment in Greece Q1.14 Q3.14 Q1.15 Q3.15 Q1.16 Q3.16 Q1.17 Trade, Transport, Tourism Industry Information & Communication Professional Services Arts & Recreation SMEs generate 3/4 of added value and almost 90% of employment vs. avg 2/3 and 60% respectively throughout the rest of Europe Employment figures show first signs of recovery Certain sectors of the economy are showing strong employment growth, which could hint at a broader economic recovery Strong rebound in trade, transport and tourism, being the largest sector in the market, recording 7.5% more employees in Q1.17 than three years before 39 APPENDIX

40 C. Implement a Profitable and Sustainable Business Model 4.14 RETAIL BANKING Leader in customer service, digital solutions and nationwide presence, more room for affluent and SB segments Target: boost revenues & lower servicing costs, maintaining leadership in mass retail, achieve top place in SB & affluent RETAIL BANKING Migration of transactions to digital channels, in order to reduce cost and improve sales & revenues Focused strategy: - targeting SB, affluent and upper mass customers for deposits, consumer loans, credit cards and SB loans - becoming top of mind bancassurance provider in Greece Remain key player of payment ecosystem Safeguard the best in class customer experience in Greece Currently: 33bn deposits & investment products currently ~4.7mn active customers in Greece 4.6mn cards & 1.5mn registered digital online banking users now Target for more than 90% of transactions to migrate to digital from 75% today Target for 120mn positive impact from multichannel transformation under way ~5% ~8% ~20% 2016 H % of (SBL Consumer) over New Production Loans 40 APPENDIX

41 C. Implement a Profitable and Sustainable Business Model 4.15 CORPORATE & INVESTMENT BANKING Leading position in corporate, SME and agri-financing, room for expansion in transaction banking, trade finance Target: significantly improve non-lending business, providing holistic solutions to clients, increasing top line CORPORATE & INVESTMENT BANKING Lending to customers based on risk-adjusted return, leading to improved profitability Focused in specific market sectors in corporate banking such as infrastructure projects and renewables Fully deploy the recently launched transaction banking unit to target deposits and fee business Focus on non lending customers for deposit gathering Expand Contract Farming (supply chain financing of agricultural sector) to other sectors of the economy, as well as factoring Differentiate service level through customer categorisation (bronze to platinum) in SMEs to increase fee income Implement fast track procedures for top clients and reduce servicing costs Currently: 10bn loans in corporate portfolio 4bn loans in SME portfolio 2bn loans in agri-finance Target is to boost cross selling so as to expand the revenue base ~6% ~7% ~10% 2016 H % of (Corporate & SME Deposits) over Total Deposits 41 APPENDIX

42 C. Implement a Profitable and Sustainable Business Model 4.16 MARKETS & ASSET MANAGEMENT Ready-to-go status for DCM issuance. ELA reduction and deposit restoration in Greece Target to increase revenues from sales of investment products, contributing to top line expansion PIRAEUS FINANCIAL MARKETS Re-establish access to interbank markets Ready-to-go status regarding DCM issuance Eliminate ELA pursue sustainable funding structure & cost of funding x2 assets under management and x3 related fee revenues Spearhead increase of investment products activity & related fees across the Bank and client segments Currently: 2bn AuM in Mutual Funds 1bn AuM in Private Banking International partnerships for asset management and private banking Off-shore banking unit and initiatives, addressing Greek wealth abroad end Aug. ELA 8.5bn ( bn) 0 ~ H ELA Debt Securities 42 APPENDIX

43 GLOSSARY DEFINITIONS OF ALTERNATIVE PERFORMANCE MEASURES 1 Net loans to deposits ratio Loans and advances to customers (net of impairments) over customer deposits 2 Net interest margin, NIM Net interest income over total assets excluding assets of discontinued operations, EFSF/ESM bonds 3 NFI over assets Net fee and commission income over total assets excluding assets of discontinued operations, EFSF/ESM bonds 4 OpEx Operating expenses before provisions 5 Cost to income ratio, CIR Total operating expenses excluding impairments over total net revenues 6 Profit before provisions, impairment and income tax (PPI) Total net income minus total operating expenses before impairments 7 Cost of Risk (CoR) over net loans Loan impairments for the period over net loans before adjustments 8 NPLs-Non performing loans Loans in arrears over 90 days past due 9 NPEs-Non performing exposures On and off balance sheet credit exposures: (a) that are past due over 90 days (b) impaired or those which the debtor is deemed as unlikely to repay its obligations in full without liquidating collateral, regardless of the existence of any past due amount or the number of past due days (c) forborne and still within the probation period under EBA rules (d) contagion from (a) according to EBA technical standards 10 NPE/Non performing exposures ratio NPEs over loans and advances to customers (including off balance sheet exposure, before impairments) 11 NPL/Non performing loans ratio Non-performing loans over gross loans and advances to customers (before impairments) 12 Return on Assets (RoA) Net result from continuing operations including non-controlling interest for the period, over assets excluding discontinued operations, EFSF/ESM bonds 13 Risk Weighted Assets (RWA) Risk weighted assets are calculated by adjusting each asset class for risk. The risk weight varies according to each asset s inherent risk potential 14 Migration rate % of transactions migrated to digital channels, that is common available transactions (Payments, Money Transfers & Remittances, Withdrawals, Deposits & Passbook updates) via digital channels (Web banking, Mobile banking, ATM, APS and PPU) over total number of respective transactions in branch network and digital channels (branch cashier, platform and digital channels) in the current period 15 Cross selling ratio Number of active categorized products over number of active customers 43 GLOSSARY

44 PIRAEUS BANK MANAGEMENT Christos Megalou, CEO 4 Amerikis St, Athens Tel. : (+30 ) , , investor_relations@piraeusbank.gr Bloomberg: TPEIR GA Reuters: BOPr.AT ISIN: GRS SEDOL: BYWKR93 Latest update: 18 October 2017