Alpha Bank FY 2019 Results Investor Presentation March 27, 2020
Disclaimer Systemic bank established in 1879 This presentation has been prepared and issued by Alpha Bank solely for informational purposes. For the purposes of this disclaimer, this presentation shall mean and include materials, including and together with any oral commentary or presentation and any question and answer session. By attending a meeting at which the presentation is made, or otherwise viewing or accessing the presentation, whether live or recorded, you will be deemed to have agreed to the following restrictions and acknowledged that you understand the legal and regulatory sanctions attached to the misuse, disclosure or improper circulation of the presentation or any information contained herein. By reading this presentation, you agree to be bound by the following limitations: No representation or warranty, express or implied, is or will be made in relation to, and no responsibility is or will be accepted by Alpha Bank (or any member of Alpha Bank’s Group) as to the accuracy, fairness, completeness, reliability or sufficiency of the information contained in this presentation and nothing in this presentation shall be deemed to constitute such a representation or warranty. The information contained in this presentation may contain and/or be based on information that has been derived from publicly available sources that have not been independently verified. Alpha Bank is not under any obligation to update, revise or supplement this presentation or any additional information or to remedy any inaccuracies in or omissions from this presentation. This presentation does not constitute an offer, invitation or recommendation to subscribe for or otherwise acquire securities. Also, it is not intended to be relied upon as advice to investors or potential investors and does not take into account the objectives, financial situation or needs of any particular investor. You are solely responsible for forming own opinion and conclusion. Certain statements in this presentation may be deemed to be “forward - looking” . You should not place undue reliance on such forward-looking statements. By their nature, forward- looking statements involve risk and uncertainty because they reflect current expectations and assumptions as to future events and circumstances that may not prove accurate. Forward- looking statements are not guarantees of future performance, and the actual results, performance, achievements or industry results of Alpha Bank’s operations, results of operations, financial position and the development of the markets and the banking industry in which it operates or is likely to operate may differ materially from those described in, or suggested by, the forward-looking statements contained in this presentation. In addition, even if the operations, results of operations, financial position and the development of the markets and the banking industry in which Alpha Bank operates is consistent with the forward-looking statements contained in this document, those results or developments may not be indicative of results or developments in subsequent periods. A number of factors could cause results and developments to differ materially from those expressed or implied by the forward-looking statements including, without limitation, general economic and business conditions, competition, changes in banking regulation and currency fluctuations. Forward-looking statements may, and often do, differ materially from actual results. Any forward-looking statements in this document reflect Alpha Bank’s current view with respect to future events and are subject to risks relating to future events and other risks, uncertainties and assumptions relating to Alpha Bank's financial position, operations, results of operations, growth, strategy and expectations. Any forward-looking statement speaks only as of the date on which it is made. New factors will emerge in the future, and it is not possible for Alpha Bank to predict which factors they will be. In addition, Alpha Bank cannot assess the impact of each factor on its business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those described in any forward looking statements. Alpha Bank disclaims any obligation to update any forward-looking statements contained herein, except as required pursuant to applicable law. 2
Pages • Business Highlights 3 • Macroeconomic Update 11 Alpha Bank • Financial Performance Analysis 14 • ESG 26 • Appendix 29 Asset Quality 29 Capital 35 Volumes 37 P&L 43 3
Deteriorating short-term prospects of the Greek economy as the COVID-19 pandemic spreads across Europe Further to previous clear recovery path, post COVID-19 outbreak , the Global economy as well as the Greek economy are surrounded with heightened uncertainty that is evolving The impact of Covid-19 on the growth of the domestic economy is to be determined - among other factors - by the intensity and duration of the phenomenon, but is expected to be v-shaped The short-lived effects are mainly stemming from an external demand shock, domestic uncertainty as well as a supply-side shock, due to the lockdowns in several sectors of the economy. The growth rate of the Greek economy is expected to slow down considerably however, this impact on the Greek economic activity is very difficult to be accurately quantified as the pandemic is still unfolding. In the midst of the pandemic outbreak, there is a coordinated monetary, fiscal and regulatory support to the Greek economy and the Banking system by both European authorities and the Greek Government 4
Improved capital and liquidity position to withstand the COVID-19 induced turbulence Robust capital ratio Liquidity enhanced Liquidity metrics 31/12/2019 Mar-20 104bps 19.0% Group Deposits (€ bn) 40.4 41.5 17.9% 17.4% Cash & Balances with CBs (€ bn) 17.9 % CET1% 2.0 3.1 13.75% Deposits density into Liabilities (%) 73% 74% 2019 12.875% 11.5% min. OCR 2018 LCR (%) 84% 87% 2020 SREP min. OCR min. OCR LDR (%) 97% 95% SREP SREP Debt notes (€ bn) 0.8 1.3 TLTROs (€ bn) 3.1 3.1 CAD CAD Tier 2 CAD pro forma Unencumbered Collateral (€ bn) 3.1 2.8 Dec-18 Dec-19 Tier 2 Recent ECB initiatives Updated TLTRO III terms significantly more generous Recent ECB initiatives Introduction of LTROs offers an efficient bridge financing facility in the short term; Lower CET1 requirement with 11.5% minimum OCR SREP for 2020, a the Bank plans to draw up to €800mn in the next auctions and aims to utilize buffer of €3.0bn or 6.4pp to CET1 and €3.5bn to Total CAD pro forma for the further the facility recent Tier 2 issuance Banks may also operate below the 100% limit of Liquidity Coverage Ratio Potential benefit of 125 bps in CET1 due to inclusion of AT1 and T2 to Additional net asset purchases of €750bn until the year end, under the PEPP Pillar 2 Requirement (P2R) initiative, on top of the € 120bn under QE programme Specifically for Greece, up to €12bn of GGB purchases included in the new Pandemic Emergency Purchase Programme (PEPP) 5
Regulatory and fiscal measures to address the challenges of Covid-19 EBA ECB Greek Government Classification of forbearance - No Exercise temporary flexibility regarding Tax Deferrals and Social security the classification of debtors as “UTP” automatic re-classification under the deferrals or subsidies (incl. businesses and definition of forbearance is needed, when when banks call on public guarantees self-employed professionals affected by the general measures or general moratoria granted in the context of coronavirus COVID-19 are being offered Income subsidies for affected workers Prudent identification of default – Supervisors will deploy full flexibility through a) partly covering the cost of special purpose leave, b) compensating to Defaults do not have to happen until when discussing with banks the 90dpd (UTP). Public and private moratoria implementation of NPL reduction workers whose labor contract was may extend that period strategies suspended, c) accelerating VAT and income tax payment return Avoid procyclicality in models to IFRS 9 in coordination with ESMA - determine provisions. Central Lease repayment adjustments for Public or private moratoria, should not be macroeconomic scenarios will be provided businesses affected by the COVID-19 and considered as an automatic trigger to to support IFRS9 application. Banks other employment contract adjustments Significant Increase in Credit Risk (SICR - should give a greater weight to long-term S2 migration) stable outlook evidenced by past experience Liquidity support - both directly and EU-wide stress test is postponed to Postponement by 6 months to comply through the form of State guarantees with 2021 to allow banks to prioritise with OSI findings € 5.8bn of support measures to businesses operational continuity 6
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