NBG Group Q1 Results 2018 PRESS RELEASE. NBG Group: Q1.18 results highlights. Domestic NPE stock dropped by 0.8bn qoq with negative formation of 0.

Transcription

1 NBG Grup Q Results 208 PRESS RELEASE NBG Grup: Q.8 results highlights Dmestic NPEs stck reductin cntinues fr an 8 th straight quarter Dmestic NPE stck drpped by 0.8bn qq with negative frmatin f 0.bn NPE reductin creates a buffer f 0.92bn vs the Q.8 SSM target; an imminent NPL sale will accelerate results Industry leading NPE and NPL cverage f 60% and 84% respectively, cmbined with the lwest NPE and NPL levels in Greece Fllwing a cmprehensive FY.7 prvisining plicy and IFRS 9 first time adptin, Q.8 dmestic CR declines t 67bps frm 250 in Q4.7 and 294bps in Q.7 The nly cre Greek Bank ff ELA ; Best-in-class L:D f 75% in Greece Eursystem funding at just 2.8bn currently (cmprising f nly TLTRO) frm 2.3bn at end- Q4.6 n zer ELA expsure since end-nvember 207 Dmestic depsits stabilize in Q.8, despite a seasnally strng Q4.7 with depsit inflws f.7bn Superir liquidity psitin and lw funding cst put NBG in an advantageus psitin t tap accelerating crprate credit demand CET rati at 6.5% CET rati at 6.5% incrprating IFRS 9 phase-in impact f 50bps and the CRD IV FL impact f 6bps CET rati includes BROM and Albania capital lsses Remaining divestments are expected t further bst capital Grup PAT frm cntinuing peratins at 20m in Q.8 against lsses f 60m in Q4.7 Operating prfitability in Greece reflects imprving results in OpEx (-6.6% qq) and a sharp de-escalatin in CR (-83bps qq) Dmestic NII at 269m (-.2% qq) n the back f the IFRS 9 impact, as well as sustained lan deleveraging n the retail bk and the impact frm restructurings Net Fees at 57m (-5.0% qq), due t seasnality; up by 4.8% n a yy basis Trading incme amunted t 34m in Q.8 vs 28m in Q4.7, adjusting fr the Titls reclassificatin Q.8 OpEx at 23m in Greece frm 228m in Q4.7, due t seasnal factrs, as bth G&As (-7.% qq) and persnnel expenses (-2.8% qq) declined Lan impairments declined by 36.0% qq t 2m in Greece, bringing perating result t psitive territry ( 4m) Dmestic PAT frm cntinuing peratins at 0m vs lsses f 55m in Q4.7 Peer grup cmparisn is based n latest available data Athens May 3, 208

2 NBG Grup Q Results 208 The Q.8 financial results signal NBG s return t perating prfitability, capitalizing n ur balance sheet strength and superir asset quality. Regarding P&L perfrmance, NBG prduced a psitive perating prfit f 26m, driven by significant cst f risk (CR) de-escalatin, fllwing a cmprehensive prvisining plicy and IFRS 9 first time adptin. The CR is expected t remain at these levels fr FY.8. Cst initiatives and fee buyancy will ffset the NII decline. As a result, NBG expects t cntinue t generate psitive prfitability in the remainder f 208. The liquidity psitin remains a strng cmpetitive advantage, as NBG remains the nly Greek bank ff ELA and with nly TLTRO funding frm the ECB. With a lans-tdepsits rati f just 75% in Greece, NBG remains well placed t tap the cuntry s strengthening recvery fcusing mainly n healthy crprate lending. On the asset quality frnt, NBG has managed t reduce NPEs fr an 8 th straight quarter, while maintaining a sectr-high NPE cverage f 60% in Greece. With an utperfrmance buffer f c 0.9bn and an imminent NPL sale, we feel cnfident that we are well n track nt nly t deliver FY.8 targets well ahead f time, but t maintain a large buffer ging int 209. The high cverage prvides NBG with flexibility in its NPE strategy. As regards capital, NBG CET stands at 6.5%, befre capital actins, with the sale f ur insurance cmpany as well as several internatinal subsidiaries expected t be agreed in H2.8. Athens, May 3, 208 Paul Mylnas Acting Chief Executive Officer, NBG 2

3 NBG Grup Q Results 208 NPEs stck declines fr an 8 th cnsecutive quarter NPE reductin cntinued in Q.8, with the stck f dmestic NPEs dwn by 0.8bn qq, f which negative NPE frmatin accunted fr 0.bn. Ntably, the Bank has reduced NPEs by c 5.0bn since end-q4.5, exceeding the Q.8 SSM peratinal reductin target by 0.92bn. The cumulative reductin is attributable t negative NPE frmatin f -.8bn, with the remainder cming frm accunting write ffs. The NPE rati in Greece drpped by 00bps qq t 43.% in Q.8, with NPE cverage settling at 60.4%, the highest amng the systemic Greek banks. Dmestic 90dpd frmatin als remained in negative territry in Q.8 (- 57m). 90dpd rati settled at 30.9% (-20bps qq) n cverage f 84.0% (82.9% at the Grup level). Q.8 dmestic prvisining run rate drpped sharply t 67bps frm 250bps in Q4.7 and 294bps in Q.7, cnstituting the key driver fr ur return t perating prfitability. In SE Eurpe, the 90dpd rati settled at 32.% n cverage f 62.6%. Superir liquidity psitin Despite a seasnally strng furth quarter, Grup depsits remained stable qq at 40.3bn in Q.8. Dmestic depsits amunted t 38.4bn n marginal inflws f 39m. In SE Eurpe depsits als remained flat qq at.9bn. On an annual basis, Grup depsits grew by 6.4% yy, reflecting depsit inflws f.7bn in Greece. As a result, NBG s best-in-class L:D rati imprved further t 75% in Greece (79% in Q4.7) and 76% at the Grup level. Ntably, Eursystem remains at just 2.8bn currently (cmprising nly f TLTRO) frm 2.3bn at end-q4.6, with zer ELA expsure since late Nv 7, assisted by capital actins. Tellingly, NBG remains the nly cre Greek bank ff ELA, whilst retaining a liquidity buffer, which prvides flexibility in credit extensin, taking advantage f ur lw cst f funding frm ur 36% market share in savings accunts. The successful executin f NBG s restructuring plan, cupled with increasing market access, will safeguard NBG s disengagement frm ELA, prviding liquidity t fund credit expansin. Capital psitin CET rati std at 6.5 % in Q.8, incrprating the IFRS 9 phase-in impact f 50bps and the CRD IV FL impact f 6bps. CET rati als factrs in BROM and Albania capital lsses. Remaining divestments are expected t bst capital and liquidity meaningfully, driven mainly by the sale f Ethniki Insurance, with a sales agreement expected in the next mnths. SE Eurpe includes the Grup s businesses in Cyprus and the Frmer Yugslav Republic f Macednia 3

4 NBG Grup Q Results 208 Prfitability Greece: Q4.7 dmestic pre-prvisin incme (PPI) reached 34m frm 53m the previus quarter, as imprving results in OpEx (-6.6% qq) and trading incme (+2.6% qq) were ffset by pressure in NII (-.2% qq). NII amunted t 269m frm 302m in Q4.7, weighed by the impact f IFRS 9 and restructurings, as well as sustained deleveraging in Q.8 n the retail bk, with crprate balances remaining stable. NIM als decreased by 33bps qq t 287bps. Cmpared t a seasnally strng Q4, net fee and cmmissin incme amunted t 57m frm 60m the previus quarter. On a yy basis, net fees grew by 4.8% yy, driven by the eliminatin f ELA-related fees. Trading incme amunted t 34m in Q.8 frm 28m in Q4.7. Q.8 perating expenses amunted t 23m frm 228m in Q4.7, aided by seasnality. The quarterly reductin mainly cmes frm a 7.% qq drp in G&As n decreased expenses related t prfessinal services (legal, audit and cnsulting fees). Persnnel expenses settled at 34m (-2.8% qq). On an annual basis, OpEx remained practically stable (+.4% yy). The Bank reprted PAT frm cntinued peratins f 0m in Q.8 against lsses f 55m in Q4.7 (and 6m in Q.7), driven by the 36.0% qq decline in lan impairments t 2m that mre than ffset the drp in cre incme (-0.% qq). SE Eurpe: In SE Eurpe, PAT frm cntinued peratins reached m against Q4.7 lsses f 5m, reflecting lwer prvisins. SE Eurpe includes the Grup s businesses in Cyprus and the Frmer Yugslav Republic f Macednia 4

5 NBG Grup Q Results 208 Annex P&L Grup m Q.8 Q4.7 qq Q.7 yy NII % 366-2% Net fees & cmmissins % 60 +5% Cre incme % 426-8% Trading & ther incme % 39-36% Incme % 465-9% Operating expenses (23) (248) -7% (228) +% Cre PPI % 98-39% PPI % % Prvisins (20) (200) -40% (233) -49% Operating prfit 25 (38) n/m 4 >00% Other impairments (9) n/m (7) n/m PBT 26 (57) n/m (3) n/m Taxes (6) (4) +66% (6) -9% PAT (cntinuing peratins) 20 (60) n/m (9) n/m PAT (discntinued peratins) 2 24 (200) n/m 3-24% Minrities (0) (5) >00% (9) % PAT (reprted) 34 (265) n/m 3 >00% Fr cmparability reasns, NII & trading incme have been restated in the previus perids t reclassify the interest incme f the lan t the Greek State frm NII t trading incme under IFRS 9 2 Q4.7 PAT incrprates a capital lss f 40m frm the nt yet cmpleted sale f the Albanian business, as well as a lss f 80m frm the cmpleted sale f the Serbian business that is recycling f FX lsses thrugh the P&L, with zer impact n equity and regulatry capital. Balance Sheet Grup m Q.8 Q4.72 Q3.7 Q2.7 Q.7 Cash & reserves Interbank placements Securities Lans (Grss) Prvisins (0 439) ( 40) (0 868) (0 937) ( 44) Gdwill & intangibles Tangible assets DTA Other assets Assets held fr sale Ttal assets Interbank liabilities Due t custmers Debt securities Other liabilities Liabilities held fr sale Minrities Equity Ttal liabilities and equity Grup Balance Sheet has been adjusted fr the agreed sales f Ethniki Insurance, Banca Rmaneasca and Banka NBG Albania that have been classified as nn-current assets held fr sale and liabilities assciated with nn-current assets held fr sale 2 Grup Balance Sheet in Q4.7 is pr frma fr IFRS 9 accunting standards 5

6 NBG Grup Q Results 208 Key Ratis Grup Liquidity Q.8 Q4.7 Q.7 Lans-t-Depsits rati 76% 80% 87% ELA expsure ( bn) Prfitability NIM 2 (bps) Cst-t-Cre incme 66% 64% 54% Asset quality NPE rati 42.7% 43.7% 44.9% NPE cverage rati 60.2% 6.2% 56.0% Cst f Risk (bps) Capital CET rati CRD IV FL 6.5% 6.7% 5.8% RWAs ( bn) Q4.7 Lans-t-depsits and NPE cverage ratis are adjusted fr IFRS 9 2 NIM is adjusted fr IFRS 9 P&L Greece m Q.8 Q4.7 qq Q.7 yy NII % % Net fees & cmmissins % 54 +5% Cre incme % 397-8% Trading & ther incme % 40-45% Incme % 438-2% Operating expenses (23) (228) -7% (20) +% Cre PPI % 87-4% PPI % % Prvisins (2) (89) -36% (232) -47% Operating prfit 3 (36) n/m (5) n/m Other impairments (6) n/m (7) n/m PBT 4 (52) n/m () n/m Taxes (4) (3) +33% (5) -0% PAT (cntinuing peratins) 0 (55) n/m (6) n/m PAT (discntinued peratins) % 3 +92% Minrities (9) (4) >00% (9) +% PAT (reprted) 26 (43) n/m (2) n/m Fr cmparability reasns, NII & trading incme have been restated in the previus perids t reclassify the interest incme f the lan t the Greek State frm NII t trading incme under IFRS 9 6

7 NBG Grup Q Results 208 Name Abbreviatin Definitin Cmmn Equity Tier Rati Fully Laded Cre depsits Cre Incme Cre Operating Result (Prfit / (Lss)) CET rati, CRD IV FL CI -- Cre Pre-Prvisin Incme Cre PPI Cre Incme less perating expenses Cst f Risk / Prvisining Rate CR CET capital as defined by Regulatin N 575/203, with the applicatin f the regulatry transitinal arrangements fr IFRS 9 impact (fr Q.8) ver RWAs Cnsist f current, sight and ther depsits, as well as savings accunts, and exclude reps and time depsits Net Interest Incme ( NII ) + Net fee and cmmissin incme + Earned premia net f claims and cmmissins Cre incme less perating expenses and prvisins (credit prvisins and ther impairment charges) Credit prvisins f the perid annualized ver average net lans Cst-t-Cre Incme Rati C:CI Operating expenses ver cre Incme Cst-t-Incme Rati C:I Operating expenses ver ttal incme Funding cst / Cst f funding -- The blended cst f depsits, ECB refinancing, rep transactins, ELA funding (until late Nvember, 207), as well as cvered bnd and securitizatin transactins Grss Lans -- Lans and advances t custmers befre allwance fr impairment Lans-t-Depsits Rati L:D Net lans ver ttal depsits, perid end Net Interest Margin NIM NII annualized ver average interest earning assets. The latter include all assets with interest earning ptentials and includes cash and balances with central banks, due frm banks, financial assets at fair value thrugh prfit r lss (excluding Equity securities and mutual funds units), lans and advances t custmers and investment securities (excluding equity securities and mutual funds units). Net Lans -- Lans and advances t custmers Nn-Perfrming Expsures Nn-Perfrming Expsures Cverage Rati Nn-Perfrming Expsures Frmatin Nn-Perfrming Expsures Rati NPEs NPE cverage NPE frmatin NPE rati Nn-perfrming expsures are defined accrding t EBA ITS technical standards n Frbearance and Nn-Perfrming Expsures as expsures that satisfy either r bth f the fllwing criteria: (a) material expsures which are mre than 90 days past due, (b) the debtr is assessed as unlikely t pay its credit bligatins in full withut realizatin f cllateral, regardless f the existence f any past due amunt r f the number f days past due Stck f prvisins (allwance fr impairment fr lans and advances t custmers) ver nnperfrming expsures excluding lans mandatrily classified as FVTPL, perid end Net increase / (decrease) f NPEs, befre write-ffs Nn-perfrming expsures ver grss lans, perid end Nn-Perfrming Lans NPLs Lans and advances t custmers in arrears fr 90 days r mre 90 Days Past Due Cverage Rati 90 Days Past Due Frmatin 90dpd cverage 90dpd frmatin Stck f prvisins ver lans and advances t custmers in arrears fr 90 days r mre excluding lans mandatrily classified as FVTPL, perid end Net increase / (decrease) f lans and advances t custmers in arrears fr 90 days r mre, befre write-ffs and after restructurings 90 Days Past Due Rati 90dpd rati Lans and advances t custmers in arrears fr 90 days r mre ver grss lans, perid end Operating Expenses Operating Prfit / (Lss) -- Pre-Prvisin Incme Risk Weighted Assets OpEx, csts PPI RWAs Ttal depsits -- Due t custmers Persnnel expenses + General, administrative and ther perating expenses ( G&As ) + Depreciatin and amrtisatin n investment prperty, prperty & equipment and sftware & ther intangible assets Ttal incme less perating expenses and prvisins (credit prvisins and ther impairment charges) Ttal incme less perating expenses, befre prvisins (credit prvisins and ther impairment charges) Assets and ff-balance-sheet expsures, weighted accrding t risk factrs based n Regulatin (EU) N 575/203 7

8 NBG Grup Q Results 208 Disclaimer N representatin r warranty, express r implied, is r will be made in relatin t, and n respnsibility is r will be accepted by Natinal Bank f Greece (the Grup ) as t the accuracy r cmpleteness f the infrmatin cntained in this annuncement and nthing in this annuncement shall be deemed t cnstitute such a representatin r warranty. Althugh the statements f fact and certain industry, market and cmpetitive data in this annuncement have been btained frm and are based upn surces that are believed t be reliable, their accuracy is nt guaranteed and any such infrmatin may be incmplete r cndensed. All pinins and estimates included in this annuncement are subject t change withut ntice. The Grup is under n bligatin t update r keep current the infrmatin cntained herein. In additin, certain f these data cme frm the Grup s wn internal research and estimates based n knwledge and experience f management in the market in which it perates. Such research and estimates and their underlying methdlgy have nt been verified by any independent surce fr accuracy r cmpleteness. Accrdingly, yu shuld nt place undue reliance n them. Certain statements in this annuncement cnstitute frward-lking statements. Such frward lking statements are subject t risks and uncertainties that may cause actual results t differ materially. These risks and uncertainties include, amng ther factrs, changing ecnmic, financial, business r ther market cnditins. As a result, yu are cautined nt t place any reliance n such frward-lking statements. Nthing in this annuncement shuld be cnstrued as a prfit frecast and n representatin is made that any f these statement r frecasts will cme t pass. Persns receiving this annuncement shuld nt place undue reliance n frward-lking statements and are advised t make their wn independent analysis and determinatin with respect t the frecast perids, which reflect the Grup s view nly as f the date heref. 8