The Future of Greek Banks: A Regional Strategy

Transcription

1 London, September 30 th 2009 The Future of Greek Banks: A Regional Strategy Takis Arapoglou Hellenic Observatory London School of Economics November 12 th 2009

2 History The crisis Looking ahead Takis Arapoglou London School of Economics November 12 th 2009 page 2

3 Household loans spearheaded growth since the county s entrance into the EMU Loan Composition Corporate loans 47% 29% 17% Household loans Takis Arapoglou London School of Economics November 12 th 2009 page 3

4 The domestic market entered a growth trajectory, following Greece s entrance into the EU in 2001 Lending Penetration (Loans/GDP) A high share of well secured loans Incl. securitizations 140% Excl. securitizations 120% 104% 44% Incl. securitizations Greece enters the EMU Takis Arapoglou London School of Economics November 12 th 2009 page 4

5 Privatizations and successful strategies adopted by the private players changed the banking landscape State share in domestic banking assets NBG Emporiki Takis Arapoglou London School of Economics November 12 th 2009 page 5

6 International investors became the major holding class in the domestic banking system Foreign institutional holdings in FTSE/ASE 20 Banks represent 64% of index Takis Arapoglou London School of Economics November 12 th 2009 page 6

7 Lending penetration and per capita output levels support a convergence-play prospect for SEE countries Lending Penetration 1 GDP/capita 2 ( 000 s) 3 1 Data as of September Including household lending securitizations 2 Data as of December 2008 Takis Arapoglou London School of Economics November 12 th 2009 page 7

8 Greek banks have a solid international exposure in absolute terms... Banking assets in CEE 1 ( bn) 1 Poland, Czech Republic, Hungary, Baltics, Turkey, Romania, Bulgaria, Serbia, Russia, Ukraine Takis Arapoglou London School of Economics November 12 th 2009 page 8

9 ...and relative to their size Banking assets in CEE/Group Assets Takis Arapoglou London School of Economics November 12 th 2009 page 9

10 Early entrance of Greek banks into the SEE markets led to the establishment of a presence in promising markets Profit per country as % of Group profit 1 Bulgaria Romania Serbia 1 NBG, EFG: net profit. Alpha: PBT. All data FY.08 Takis Arapoglou London School of Economics November 12 th 2009 page 10

11 NBG Group History The crisis Looking ahead Takis Arapoglou London School of Economics November 12 th 2009 page 11

12 NPLs across geographies rose rapidly reflecting the deteriorating macro environment (1 of 2) Greece Turkey Takis Arapoglou London School of Economics November 12 th 2009 page 12

13 NPLs across geographies rose rapidly reflecting the deteriorating macro environment (2 of 2) Bulgaria * Romania ** * Defined to include bad and restructured loans ** Defined as loans for which legal procedures have been initiated Takis Arapoglou London School of Economics November 12 th 2009 page 13

14 Leverage ratios played a critical role during the liquidity crunch Loans/Deposits Avg : 143% Takis Arapoglou London School of Economics November 12 th 2009 page 14

15 European banks capital gravitated to the levels of 8% as the crisis erupted in 2008 Tier-1 capital ratios 1 (FY.08) Avg Tier-1: 8.2% 1 Expectations Takis Arapoglou London School of Economics November 12 th 2009 page 15

16 NBG Group History The crisis Looking ahead Takis Arapoglou London School of Economics November 12 th 2009 page 16

17 Cost control is a top priority Cost/Income Avg : 60% Takis Arapoglou London School of Economics November 12 th 2009 page 17

18 Investors pay a premium for larger caps with solid CEE exposure Takis Arapoglou London School of Economics November 12 th 2009 page 18

19 The Future of Greek Banks: A Regional Strategy Takis Arapoglou Hellenic Observatory London School of Economics November 12 th 2009 Takis Arapoglou London School of Economics November 12 th 2009 page 19