SLIDE 1
INVESTOR PRΕSENTATION
March 2020
Table of Contents
I. Executive Summary
- II. Strategy Update
- III. 9M.2019 Financials
- IV. Appendix
PIRAEUS BANK
INVESTOR PR SENTATION March 2020 PIRAEUS BANK Table of Contents - - PowerPoint PPT Presentation
INVESTOR PR SENTATION March 2020 PIRAEUS BANK Table of Contents - - PowerPoint PPT Presentation
INVESTOR PR SENTATION March 2020 PIRAEUS BANK Table of Contents I. Executive Summary II. Strategy Update III. 9M.2019 Financials IV. Appendix Disclaimer The accompanying presentation has been prepared by Piraeus Bank S.A. and its
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Disclaimer
The accompanying presentation has been prepared by Piraeus Bank S.A. and its subsidiaries and affiliates (the “Bank” or “We”) solely for informational purposes. For the purposes of this disclaimer, the presentation that follows 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. This presentation does not constitute an offer to sell or a solicitation of an offer to buy or a recommendation to buy or invest in any form of security issued by the Bank or its subsidiaries or affiliates nor does it constitute an offer or commitment to lend, syndicate or arrange a financing, underwrite or purchase or act as an agent or advisor or in any other capacity with respect to any transaction, or to commit capital. This presentation is not intended to provide a basis for evaluations and does not constitute investment, legal, accounting, regulatory, taxation or other advice and does not take into account your objectives or legal, accounting, regulatory, taxation or financial situation or particular needs. No representation, warranty or undertaking is being made and no reliance may be placed for any purpose whatsoever on the information contained in this presentation in making any investment decision in relation to any form of security issued by the Bank or its subsidiaries or affiliates or for any other transaction. You are solely responsible for forming your own opinions and conclusions on such matters and for making your own independent assessment of the Bank. You are solely responsible for seeking independent professional advice in relation to the Bank and you should consult with your own advisers as to the legal, tax, business, financial and related aspects and/or consequences of any investment decision. No responsibility or liability is accepted by any person for any of the information or for any action taken by you or any of your officers, employees, agents or associates on the basis of such information. This presentation does not purport to be comprehensive and no representation, warranty or undertaking is made hereby or is to be implied by any person as to the completeness, accuracy or fairness of the information contained in this presentation. The Bank, its financial and other advisors, and their respective directors, officers, employees, agents, and representatives expressly disclaim any and all liability which may arise from this presentation and any errors contained herein and/or omissions therefrom or from any use of this presentation or its contents or otherwise in connection therewith. The Bank, its financial and other advisors, and their respective directors, officers, employees, agents, and representatives accept no liability for any loss howsoever arising, directly or indirectly, from any use
- f the information in this presentation or in connection therewith. Certain information contained in this presentation is based on estimates or expectations of the Bank, and there can be no assurance
that these estimates or expectations are or will prove to be accurate. This presentation speaks only as of the date hereof and neither the Bank nor any other person gives any undertaking, or is under any obligation, to update any of the information contained in this presentation, including forward-looking statements, for events or circumstances that occur subsequent to the date of this presentation. Each recipient acknowledges that neither it nor the Bank intends that the Bank act or be responsible as a fiduciary to such attendee or recipient, its management, stockholders, creditors or any other
- person. By accepting and providing this document, each attendee or recipient and the Bank, respectively, expressly disclaims any fiduciary relationship and agrees that each recipient is responsible for
making its own independent judgment with respect to the Bank and any other matters regarding this document. The Bank has included certain non-IFRS financial measures in this presentation. These measurements may not be comparable to those of other companies. Reference to these non-IFRS financial measures should be considered in addition to IFRS financial measures, but should not be considered a substitute for results that are presented in accordance with IFRS. Certain statements contained in this presentation that are not statements of historical fact, including, without limitation, any statements preceded by, followed by or including the words “targets,” “believes,” “expects,” “aims,” “intends,” “may,” “anticipates,” “would,” “could” or similar expressions or the negative thereof, constitute forward-looking statements, notwithstanding that such statements are not specifically identified. Examples of forward-looking statements include, but are not limited to, statements which are not statements of historical fact and may include, among other things, statements relating to the Bank’s strategies, plans, objectives, initiatives and targets, its businesses, outlook, political, economic or other conditions in Greece or elsewhere, the Bank’s financial condition, results of operations, liquidity, capital resources and capital expenditures and development of markets and anticipated cost savings and synergies, as well as the intention and beliefs of the Bank and/or its management or directors concerning the foregoing. Forward-looking statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions which are difficult to predict and outside of the control of the Bank. Therefore, actual outcomes and results may differ materially from what is expressed in such forward-looking statements. We have based these assumptions on information currently available to us, and if any one or more of these assumptions turn out to be incorrect, actual market results may differ significantly. While we do not know what impact any such differences may have on our business, if there are such differences, our future results of operations and financial condition, could be materially adversely affected. You should not place undue reliance on these forward-looking statements. Forward-looking statements speak only as of the date on which such statements are made. The Bank expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement to reflect events or circumstances after the date on which such statement is made, or to reflect the occurrence of unanticipated events.
SLIDE 4
- I. Executive Summary
EXECUTIVE SUMMARY
SLIDE 5
05
GREEK ECONOMY IS CLEARLY ACCELERATING
Expectations Support Economic Climate Increased Interest Reflected in Real Estate FDI
73 89 57 101 87 156 173 239 112 153 143 222 244 415 664 1,128 1,030 100 200 300 400 500 600 700 800 900 1,000 1,100 1,200 9M.11 2011 9M.12 2012 9M.13 2013 9M.14 2014 9M.15 2015 9M.16 2016 9M.17 2017 9M.18 2018 9M.19
Cumulative flows €mn Source: ELSTAT, European Commission DG-ECFIN, Bank of Greece, Piraeus Bank Research
Recent developments:
- Q3.19 GDP up 2.3% yoy, 2019 estimate at 2.3%, 2020 ~2.5%
- ESI at 107.7 on average in Q4.19, the highest level of the
past 12 years
- New building permits grew 13% yoy in Oct.19
- Sovereign credit rating upgrade path: Fitch to BB from BB-
with positive outlook (24 Jan.20) Initiatives / reforms:
- 22% average reduction in real estate tax in 2019
- Corporate tax rate from 28% to 24% this year and further
down in the following years; dividend tax rate cut to 5%
- 3-year VAT suspension for new building
- Government asset protection scheme (HAPS) for NPE
reduction
- New investment incentives law
- Pension reform under way
- Single insolvency framework reform under way
- Landmark “Hellinikon” real estate development project
about to start. Total investment of ~€8bn, ~75k new jobs; Piraeus to cover c.50% of the financing needs
Q4.19 60 70 80 90 100 110 120 Q1.03 Q4.03 Q3.04 Q2.05 Q1.06 Q4.06 Q3.07 Q2.08 Q1.09 Q4.09 Q3.10 Q2.11 Q1.12 Q4.12 Q3.13 Q2.14 Q1.15 Q4.15 Q3.16 Q2.17 Q1.18 Q4.18 Q3.19
- 12
- 10
- 8
- 6
- 4
- 2
2 4 6 8
Real GDP growth rate-RHS ESI-LHS
Executive Summary
Jan.20 108.4
SLIDE 6
06
GREEK ECONOMY OUTLOOK | TRENDS & OPPORTUNITIES
Executive Summary
Emphasis on export-oriented sectors: tourism, farming, food processing, energy, pharmaceuticals, chemicals Reorientation from consumption-based to an export-based economy Even in sectors with a competitive advantage, Greece is working towards infrastructure upgrades Need to move up the Value Added Chain Regulatory pressures to liberalize industries such as electricity, natural gas, waste processing & management, renewable energy Liberalization and privatization in a number of sectors Privatized assets & natural resources development will require substantial investment More funding in the form of equity or loans In sectors with less stellar prospects such as trade, fish farming, passenger shipping, consolidation is expected to create sectoral champions with improved margins On-going consolidation process
2019e 2020f 2021f 2022f Real GDP change 2.3% 2.5% 2.6% 2.5% Unemployment rate 17.3% 15.2% 13.6% 12.5% Inflation 0.3% 0.9% 1.8% 2.0% Office Price index change 6.0% 4.8% 4.4% 4.1% Residential real estate price change 7.8% 8.2% 7.4% 6.5%
e: estimate, f: forecast Source: Piraeus Economic Research
SLIDE 7
07
PIRAEUS BANK’S POSITIONING IN THE GREEK MARKET
29%
in loans
29%
in deposits
28%
in branches
33%
in ATMs
87%
- f farmers’ business
5.5mn
active customers, 65% of bankable customers
86 TRI*M
retention index with customers
38%
in leasing
16%
in factoring
17%
in brokerage
12%
in mutual funds
32%
in bancassurance
26%
- f capacity of RES
financed
29%
- f registered web
and mobile users
30%
- f active mobile
users
33% & 40%
- f web & mobile
transactions
Executive Summary
Note: positioning presented in terms of domestic market shares, with the exception of customers and the TRI*M customer retention index
SLIDE 8
2014 DG Comp Restructuring Plan completion Launch of strategic partnership with Intrum on NPE servicing Return to profitability based on business growth & cost efficiency Capital Plan completion with €4bn RWA relief Organic NPE movement on track, along with inorganic projects Further enhancement of capital with the issuance of €0.9bn T2 in Jun.19 & Feb.20
MULTIPLE ACHIEVEMENTS IN 2019 & 2020 TO-DATE
08
150k new clients to 5.5mn; 280k new digital clients to 2.4mn; x-sell at 3.6x vs 3.5x Full restoration of regulatory liquidity requirements
Executive Summary
Client focus pays off: TRI*M satisfaction/preference index to 86 from 82
SLIDE 9
09
2018-2019 CAPITAL ENHANCEMENT PLAN
Management Actions Capital Impact
- A. Organic capital measures (2018-2019)
+115bps
- B. Tier 2 debt issuance (June 2019)
+85bps
- C. NPE servicing carve-out (October 2019)
+70bps
- D. Sale of non-core operations
- ngoing
- E. Review of high capital-consuming businesses
- ngoing
- F. Enhanced organic capital generation (revenue-cost)
- ngoing
- G. Balance sheet optimization | RWA management
- ngoing
- The organic capital measures impact
reflects profitability and reserves movement, as well as divestments of non core subsidiaries & portfolios and overall de-risking since mid-2018 (RWA relief of €4bn)
- Tier 2 issuance €0.4bn
- NPE servicer deal €0.4bn
- Actions under way will further enhance
capital position
Capital Position Enhanced c.270bps from mid-2018 to Sep.2019 through a Combination of Strategic Initiatives
Executive Summary
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Key Facts
- Strategic agreement to establish a market-leading
independent NPE servicer in Greece concluded on 23 October 2019
- Execution in just 4.5 months indicates agility and
efficiency of both Piraeus and Intrum teams
- The new servicer company is 80% owned by Intrum,
with Piraeus retaining a 20% stake
- The servicer manages Piraeus’ existing NPE & REOs,
as well as new inflows. The platform also manages non-performing assets of third parties. Two servicer companies, one for NPEs and one for REOs, comprising a single operating platform
Key Benefits
- An
independent servicer with the scale and capabilities to service large portfolios, facilitates forthcoming securitizations & more efficient NPE management
- PPI savings and overall boost of effectiveness is
expected in the management of NPEs
- Piraeus retains assets and proceeds on its balance
sheet / P&L
- Enhancement of Piraeus’ NPE recovery prospects
- The Bank’s management team is now re-focusing on
core banking activities, yielding improved results for the Group
EXECUTIVE SUMMARY
Executive Summary
PIRAEUS BANK INTRUM PARTNERSHIP COMPLETED
10
SLIDE 11
11
11
PIRAEUS BANK’S COMPETITIVE STRENGTHS
€24bn €45bn €4bn 5.5mn
Performing Exposures in Greece
Sep.19, in bn
Loan Generation in Greece
9M.19 annualised, €bn
Deposits in Greece
Sep.19, in bn
Number of Customers in Greece
Sep.19, in mn
Greek Peers Greek Peers Greek Peers Greek Peers
@4.8% client rate +150k yoy +2% yoy +5% yoy Fully Loaded Increase in Total Capital
pro-forma Sep.19 yoy, bps over RWAs
Core Income / Net Revenues
9M.19, %
NPE Reduction
(Sep.15 Peak to Dec.19) | €bn
+250bps
Greek Peers
95%
Greek Peers
- €13bn
Greek Peers
- 6%
Greek Peers
OpEx Recurring Annual Change
9M.19 vs 9M.18, %
Executive Summary
SLIDE 12
Performance De-risking Returns
<> Solid revenue margins <> Cost efficiency improved <> Loan growth acceleration <> Historical low NPE inflow
Executive Summary
12
PILLARS OF NEW STRATEGY
<> NPE securitisations execution <> Vega, Phoenix projects for 2020 <> Mid-teens NPE ratio in 2022 <> CoR de-escalation post 2020 <> Improved operating model <> New cost efficiency plan <> Largest performing book in Greece <> Digitalisation & simplification
Strong progress in 2019 Frontloading effort
- n the back of HAPS
~10% RoTE in 2022, a year earlier than planned
SLIDE 13
Executive Summary
13
NEW STRATEGIC & FINANCIAL ROADMAP
C:I RoTE 52%
<50%
3%
~10% ~15% ~15.5%
52% 16.0% NPE Capital
9Μ.19
2022
Improved operating model based on cost efficiency Business growth and de-risking Inorganic activity to be accelerated for 2020 Optimisation of capital structure
~45% >10% <10% ~16% 2023
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Executive Summary
14
RECENT DEVELOPMENTS
On 13 February 2020, Piraeus Bank successfully placed €500mn of Tier 2 subordinated debt with institutional investors at a coupon
- f 5.50%
The bond issue marked Piraeus Bank’s second issuance of a Tier 2 bond in the international debt capital markets, following the
Bank’s inaugural placement in June 2019
The issue received significant investor interest with approximately 350 institutional investors in the book:
- international book diversified throughout Europe and Asia
- 90% international institutional | 10% Greek institutional
- 85% asset managers, investment firms, banks | 15% hedge funds
Tier 2 Debt Issuance
On 21 February 2020, Piraeus Bank announced that it has entered into a strategic collaboration with ORIX, for the provision of
financing solutions to the Greek maritime sector
The agreement allows Piraeus Bank to leverage ORIX’s balance sheet and strategic relationships in Asia with its strong position in
the shipping market to generate fee income and allow transactions while reducing credit concentration
At the same time, the partnership will allow Piraeus current and prospective clients to have access to both a wider selection of
financing instruments in order to support their investment plans and to ORIX’s balance sheet capacity
Strategic Partnership with ORIX
SLIDE 15
- II. Strategy Update
STRATEGY UPDATE
- 1. NPE Past Performance & New Trajectory
- 2. FY.2019 Operating Performance & Strategic-
Financial Roadmap
SLIDE 16
01
NPE Past Performance & New Trajectory
STRATEGY UPDATE
SLIDE 17
17
ASSET QUALITY TRENDS
11.8 12.5
collateral provisions
95% 37.7 36.5 35.8 32.9 27.3 25.7
Sep.15 Dec.15 Dec.16 Dec.17 Dec.18 Sep.19
Group NPE Development | €bn
- €2.3bn NPE
reduction ytd
- n like-for-like basis
- €1.1bn
Q3 ΝPE quarterly reduction on a like-for-like basis
46%
ΝPE cash coverage, down qoq due to inorganic NPE activity
16th quarter
- f NPE reduction
€12.0bn NPE reduction
from Sep.15 peak
49%
ΝPE collateral coverage, up qoq helped by increasing collateral valuation
Coverage
- €12.
12.0bn bn
NPE Past Performance & New Trajectory
SLIDE 18
0.4 0.2 0.2 0.2 0.3 0.2 0.2 ~ 0.1 0.4 0.4 0.3 0.2 0.3 0.2 0.2 ~ 0.1
(0.9) (0.9) (0.9) (0.8) (0.7) (0.7) (0.6) ~ (0.7) (0.5) (1.0) (0.4) (0.3) (0.3) (0.4) (0.3) ~ (0.5) (1.5) (0.1) (0.5) (0.6) ~ (0.5)
Re-defaults Defaults
NPEs | Bank data (€bn)
Curings, Collections, Liquidations Write-offs Sales
30.8 28.3 27.5 26.4 25.9 25.2
EXECUTIVE SUMMARY
24.9
Q1.18 Q2.18 Q3.18 Q4.18 Q1.19 Q2.19 Q3.19
HISTORICAL LOW NPE INFLOWS IN Q4.19
18
NPE Past Performance & New Trajectory
~23.6
Q4.19 0.7
~€260mn inflows in Q4.19 Note: Q4.2019 preliminary data; Q3.19 €0.7bn adjustment related to performing accounts (UTP) classified to NPE for technical & strategic reasons
SLIDE 19
EXECUTIVE SUMMARY
NPE INORGANIC ACTIONS UNDER WAY
Trinity Phoenix Iris
€0.6bn €0.3bn ~€2.0bn
- Personal loans & credit
cards, SBL, leasing
- Signing in Q1.20
- Secured large corporate
loans
- Signing in Q1.20
Securitization Sales
- Residential mortgage
portfolio
- Signing in Q2.20
held for sale
19
NPE Past Performance & New Trajectory
held for sale
SLIDE 20
EXECUTIVE SUMMARY
NPE Past Performance & New Trajectory
LATEST DEVELOPMENTS AFFECTING NPE DERISKING STRATEGY
Strategic partnership with Intrum Hellas enhances Piraeus’ NPE recovery prospects
<> Independent servicer with scale and capabilities already in place <> Intrum’s proven track record on NPE management heightens NPE recovery expectations
HAPS allows for larger securitisation transactions to take place
<> HAPS facilitates the NPE securitization process <> Application of favorable risk weighting to senior notes to have a double positive effect to NPE KPIs
Macro recovery improves NPE recoverability & boosts investor interest
<> Economic sentiment indicators show renewed optimism for stronger economic recovery
<> Real estate market recovery is gaining momentum, leading to better prospects ahead
20
SLIDE 21
24 ~17 ~12
Dec.19e Dec.20f Dec.21f EXECUTIVE SUMMARY
FRONTLOADED NPE EFFORT LEADS TO DRASTIC DE-RISKING OF THE BALANCE SHEET
NPE 2019 - 2021 | Previous Plan (€bn, %) NPE 2019 - 2022 | New Roadmap (€bn, %)
NPE ratio ~49% ~25% ~37%
- €7bn
- €5bn
24
~13 ~10 <8
Dec.19e Dec.20f Dec.21f Dec.22f
- €11bn
- €3bn
~49% ~22% ~29% ~15%
NPE Past Performance & New Trajectory
21
Note: Dec.19 preliminary data; Dec.20-Dec.22 forecasts
- €3bn
- forborne | ~€3.0bn
- <90 dpd | ~€0.5bn
- >90dpd | ~€0.5bn
- denounced | ~€3.5bn
NPE 2022f (€bn) The new NPE roadmap for 2022 envisages ~70% NPE decrease The plan includes marginal sales post the 2020 ~€7bn transactions; 2021-2022 strategy to be fine-tuned along with execution to reach single-digit ratio
e: estimate, f: forecast
SLIDE 22
~+4 ~-13 ~-8
<8.0
~24.5
Dec.19 Inflows Outflows Sales Dec.22
~€21bn
NPE ratio ~49% ~15%
- Inflows in the 3-year period to 2022
are assumed at ~€350mn per quarter, although current run-rate is at ~€260mn (Q4.19)
- Cash collections, curings, liquidations
& write-offs are assumed to ~€1.1bn per quarter at par with current run- rate of ~€1.1bn (Q4.19),
- n the back of enhanced borrowers’
disposable income, as well as forthcoming legislative reforms. Trajectory in terms of curings & liquidations requires improved performance versus current run-rate
FRONTLOADED EFFORT WITH INCREASED INORGANIC ACTIVITY IN 2020
NPE Past Performance & New Trajectory
22
- f which
Phoenix ~€2bn Vega ~€5bn
~€17bn reduction
NPE (€bn)
Components of NPE Movement 2020-2022
Note: Dec.19 preliminary data; Dec.22 forecasts
SLIDE 23
“Phoenix “
Gross Loans ~€2.0bn
Senior ~€0.9bn Mezzanine Junior Retain 100% Senior Note Retain 5% of Mezz & Junior Notes
Note: senior tranches estimated based on latest perimeter information
INDICATIVE STRUCTURE OF 2020 NPE SECURITISATIONS
NPE Past Performance & New Trajectory
23
Gross Loans ~€5.0bn
Senior ~€1.1bn Mezzanine Junior Retain 100% Senior Note Retain 5% of Mezz & Junior Notes
“Vega”
- Incremental, large-scale NPE securitisation of ~€5bn
in 2020 (“Vega”)
- The transaction includes the “Bridge” perimeter of
~€1bn GBV. Overall, “Vega” comprises commercial and residential NPEs
- The up to €5bn GBV “Vega” transaction, along with
the ~€2bn “Phoenix” transaction, both envisaged to take place this year, will drive Piraeus Bank to an NPE ratio of <30% at the end of 2020
- The frontloading of the effort enables cost of risk
normalization as of 2021
- The transactions will opt-in for the HAPS guarantee
- Bank will retain 100% of the senior notes and 5% of
each of the mezzanine and junior notes
SLIDE 24
INDICATIVE TIMELINE FOR 2020 NPE SECURITISATIONS
NPE Past Performance & New Trajectory
24
# Process Step ‘Phoenix’ ~€2bn ‘Vega’ ~€5bn
1 Servicer’s Business Plan & Securitisation Structure 02.2020 05.2020 2 Investor VDR 03.2020 06.2020 3 Non-binding offers 04.2020 07.2020 4 Rating Agency indicative rating 05.2020 09.2020 5 Binding offers 06.2020 10.2020 6 Signing 06.2020 10.2020 7 Completion 07.2020 12.2020
SLIDE 25
NPE Past Performance & New Trajectory
HIVE-DOWN PROCESS OVERVIEW
25
Senior
Mezzanine
Junior Securitised NPEs Asset ssets DTC Liabilities
Step 1
Securitization
Step 2
Hive-down
Asset ssets DTC Liabilities Senior
Mezzanine
Junior Securitised NPEs
Intrum Hellas Intrum Hellas
Banking license Banking license Listed in ATHEX, becomes Hold Co NEW Senior notes retained by New Piraeus Bank
Note: hive-down is subject to Bank BoD and regulatory approval; banking operations to be hived-down to a new banking subsidiary; NPE securitisation senior notes transferred to New Piraeus Bank, while mezzanine and junior notes to remain with the holding company, to be further divested to third parties
Shareholders Shareholders
Hive-down Servicing Servicing
SLIDE 26
13.6% 0.8% 0.7% 0.8% 16.0% ~0.1% ~-1.8% ~1.2% ~15.5%
Dec.18 Internal Capital Generation net of IFRS9 phasing Carve-out NPE servicer T2 (Jun.19) Sep.19 Internal Capital Generation net of IFRS9 phasing & CoCo coupons NPE transactions Debt issuance Dec.20
26
2020 CAPITAL IMPACT FROM NPE TRANSACTIONS TO PAVE THE WAY FOR LOWER COST OF RISK
NPE Past Performance & New Trajectory
26
Total Capital Ratio (%)
OCR 14.25% CET1 10.75%
2020 requirement Phoenix ~€2bn Vega ~€5bn Note: internal capital generation includes P&L and reserves movement as well as RWA evolution; CoCo coupon payment for both 2019 and 2020 €0.5bn issued in Feb.20
SLIDE 27
- REO & leasing properties
- Other
NPE Past Performance & New Trajectory
27
REO PORTFOLIO TO GENERATE VALUE GIVEN MARKET TRENDS
€2.0bn €1.3bn Initiatives Under Way
- Thematic SPVs to accelerate new REO
sales
- Bulk deals through portfolio sales
- Intrum REO servicer activation in 2020
- Leverage PRE & Intrum to actively
market properties through liquidations
- Extensive use of multiple channels
Real Estate Portfolio | €3.3bn
- Commercial | €0.9bn
- Industrial | €0.4bn
- Residential | €0.3bn
- Other | €0.4bn
SLIDE 28
02
FY.2019 Operating Performance & Strategic-Financial Roadmap
STRATEGY UPDATE
SLIDE 29
NII +2% yoy at ~€1,435mn in FY.19; Q4.19 at ~€363mn, strongest quarter in 2 years
29
STRONG 2019 PERFORMANCE
FY.2019 Operating Performance & Strategic-Financial Roadmap
NFI +9% yoy at ~€316mn in FY.19; Q4.19 at ~€90mn, strongest quarter in 2 years OpEx -5% yoy like-for-like at ~€980mn in FY.19; Cost-to-Income ratio at ~54% 17th consecutive quarter of NPE decrease at ~€24.5bn; historical low inflows in Q4.19 New loans of €4.1bn in FY.19 at average rate of 4.7% supporting NIM Deposits +6% yoy; Loan-to-Deposit ratio at ~80% & Liquidity Coverage ratio >110%
Note: all figures are based on preliminary FY.2019 results; core Pre-Provision Income on a recurring basis excluding trading and
- ther income; Net Fee Income, OpEx and Cost-to-Income on a recurring basis; new loans at group level
PPI +5% yoy like-for-like at ~€839mn; core PPI +16% yoy like-for-like at ~€771mn
SLIDE 30
30
RESTORATION OF PPI BASED ON RECURRING P&L LINES
244bps
NIM Q4 +4bps qoq
- 5%
OpEx yoy
60bps
NFI Q4 +6bps qoq
FY.2019 Operating Performance & Strategic-Financial Roadmap
1,410 1,435 291 316
2018 2019e
NII NFI
Core Net Revenues | €mn Operating Expenses| €mn
Note: all figures are based on preliminary FY.2019 results; Net Fee Income and OpEx on a recurring basis; all ratios expressed in bps over assets e: estimate
1,035 980
2018 2019e
+2 +2% +9 +9%
- 5%
5%
165bps
vs 177bps CoR in 2018
SLIDE 31
EXECUTIVE SUMMARY 36.5 39.3 40.9 44.5 43.6 44.7 44.9 ~47.1 49.5 Dec.14 Dec.15 Dec.16 Dec.17 Dec.18 Mar.19 Jun.19 Sep.19 Dec.19e
Domestic Deposits | €bn Interbank Funding | €bn
- Customer deposits increase c.6% yoy in Dec.19
- Private sector deposits increase by c.€2bn yoy
- LCR >110% in Dec.19
14 16 9 4 3 2
1
1 0.4 17 12 6 8 2 1 2 2 2 2 2.4 Dec.14 Dec.15 Dec.16 Dec.17 Dec.18 Mar.19 Jun.19 Sep.19 Dec.19e
Repos ELA ECB
3
- Tier 2 issue of €0.4bn in Jun.19
- Investment-grade rated retained Piraeus
covered bonds are ECB eligible collateral
- Utilization of the interbank repo market at
negative interest rates, supporting NII
23 34 21 11 5 4 3 3
FURTHER IMPROVEMENT IN LIQUIDITY PROFILE
31
FY.2019 Operating Performance & Strategic-Financial Roadmap
Note: Dec.19 preliminary data; e: estimate
SLIDE 32
from 37% previously
32
COMMITMENT TO “AGENDA 2023”, FRONTLOADING DERISKING EFFORTS IN 2020 TO ACHIEVE ~10% RoTE IN 2022
Grow 9M.2019 Agenda 2023 Simplify De-risk
3% >10%
CIR 52% NPE ratio 52% Capital ratio 16.0% ~45% <10% ~16%
Return on Tangible Equity (pre-tax, %)
~50% <30% ~15.5% 2020f
What We Need to Achieve: the Journey Begins With 2020
9M.2019 Agenda 2023 <50% ~15% ~15.5% 2022f
from high single-digit previously
FY.2019 Operating Performance & Strategic-Financial Roadmap
Note: 2020 and 2022 forecasts
SLIDE 33
+0.4% +0.1% +0.3% RoA 9M.2019 Derisk Grow Cost RoA 2022f RoA 2023f
De-risk Grow Simplify
~1.0% 0.2%
f: forecast; RoA, RoTE at pre-tax level
EXECUTIVE SUMMARY
RoA & RoTE BUILDS-UP EARLIER THAN PLANNED
33
FY.2019 Operating Performance & Strategic-Financial Roadmap >1.0%
RoTE 9M.2019 RoTE 2022f RoTE 2023f
~10% 3% >10%
RoA ~1.0% & RoTE ~10% to be achieved in 2022, a year earlier than planned in “Agenda 2023”
SLIDE 34
9M 2019 2022
FY.2019 Operating Performance & Strategic-Financial Roadmap
34
BRIDGE TO 2022 RETURNS
Revenues NIM 2.9%
~2.9%
2.4%
~2.1% ~0.7% ~-1.3%
0.5%
- 1.7%
NFI OpEx
Resilient level of core revenues Business growth absorbing de-risking impact Converging to pre-crisis levels; increase x-sell Improved cost efficiency Healthy & sustainable trend for PPI Normalised CoR (~90bps over net loans)
~1.6% ~-0.6%
1.3%
- 1.1%
PPI Impairment
- ver assets
SLIDE 35
35
Focus on Capabilities Exploiting Competitive Strengths
FY.2019 Operating Performance & Strategic-Financial Roadmap
FOCUS ON CAPABILITIES EXPLOITING COMPETITIVE STRENGHTS
35
CIB
Allocation of resources to increase revenue sources
- Defend existing
positions & relationships, increase average balances, x- sell by bundling factoring and leasing
- Optimise capital
consumption & focus
- n sectors with growth
potential
- Take advantage of
transaction banking
- pportunities
Retail Banking
Develop distinctive service offerings
- Optimize channel mix &
- ffer premium service
to high level customers, while migrating low value customers out of high cost channels
- Exploit the fast growing
market of individual loans to maximize NII
- Maximize NFI through
increased unit fees in traditional products, the growing investments products markets & bancassurance
- Reduce costs by
lowering the number of branches / FTE through enhanced model
Leading provider in SME financing
- “Know your customer”
personal banking type
- f service to customers
- Know their investment
plans & propose appropriate financial solutions
- Improve financing
structures, increase fee income & non-lending portfolio
- Target new customers
& new co-operations
SMEs Piraeus Financial Markets
Efficient asset & liability management
- Continue to enhance
liquidity & capital buffers
- Increase recurring
fee income by channeling part of deposits to investment products and services
- Reduce further cost
- f customer deposits
- Capitalise on
- pportunities in the
Greek capital markets
Digital Banking
Exploit digital leadership to differentiate and generate revenues
- Build on success of
transaction migration to lead the way also in migration
- f servicing to digital
channels
- Develop premium
digital services and use to differentiate customer offerings
- Leverage daily digital
customer interaction to initiate advisory and commercial dialogues, leading to increased sales
SLIDE 36
26 ~40 24 ~8
2019e 2022f
~48 Gross Loans (€bn) New Loan Generation (€bn, %)
Non performing exposures: reduced as per strategy Performing exposures: €18bn new loans plus €4bn from net curings & senior tranches, to be offset by amortization / repayments Business lending is the driver of loan growth 85% 83% ~80% ~80% ~75%
15% 17% ~20% ~20% ~25%
2018 2019e 2020f 2021f 2022f Retail Business ~5 ~6
50
NPE PE 4.1 3.1
- 16
+14
e: estimate, f: forecast
FY.2019 Operating Performance & Strategic-Financial Roadmap
LOAN EVOLUTION INCORPORATES THE DYNAMICS OF DERISKING & HEALTHY LOAN GROWTH
36
~7
SLIDE 37
37
2019 2020 2021 2022
Run the Bank Small Projects Non- Discretionary Change the Bank
In 2021-’22 we expect significant increase of investment capacity for Change the Bank initiatives driven by improved delivery capability Efficiencies realized in Run the Bank budget In 2020 we estimate a modest increase of Change the Bank consumption through the setup of the factories
37
GROW IT INVESTMENT, AS IT CAPABILITY MATURES AND SCALES
FY.2019 Operating Performance & Strategic-Financial Roadmap
We aim to conservatively grow 2020 IT investment & gear-up aggressively over 2021- 2022, as IT capability matures and scales IT CapEx Investment Amount
Note: six factories for data, digital, processes, middleware, de-risking & infrastructure. Factory is an alternative sourcing model based on a strategic partnership to maximise delivery while enhancing know-how, governance and control
SLIDE 38
38 Fundamentals Commercial presence Sustainable profitability Reorganisation Uniquely positioned to take advantage
- f recovering trends in Greece
Focused on transforming, simplifying & streamlining the business Acceleration of balance sheet growth dynamics and capital generation Improved performance demonstrating recurring earnings power
Adopting winning strategies in a demanding environment to achieve ~10% RoTE in 2022
Business model
FOCUS ON WHAT’S IMPORTANT IN THE NEW ENVIRONMENT
38
FY.2019 Operating Performance & Strategic-Financial Roadmap
SLIDE 39
Sustainability for Piraeus Bank
- Creating income within a new business model
- Transformative and forward-looking approach
- Integrated into the core purpose of business
Piraeus Bank’s ESG Priorities
- Actively participating in global initiatives
- Making sustainability a reality
- Co-shaping sustainability strategies
- €1.2bn green financing to approx. 20,000 customers, 26% of RES capacity
- €2.6bn cooperation agreements with supra-nationals (EIB, EBRD, ETEAN etc)
- Piraeus was one of the 30 core UNEP FI member banks that created the Principles
and their framework, and co-signed them in New York in September 2019
- Leading Quality Score in Environmental & Social Scope
PIRAEUS BANK ESG: IDENTIFYING AN EMERGING OPPORTUNITY
39
FY.2019 Operating Performance & Strategic-Financial Roadmap
SLIDE 40
- III. 9M.2019 Financials
9M.2019 FINANCIALS
- 1. Q3.2019 Snapshot Across the Board
- 2. Financial Performance
- 3. Asset Quality
- 4. Liquidity
- 5. Appendix
SLIDE 41
01
Q3.2019 Snapshot Across the Board
9M.2019 FINANCIALS
SLIDE 42
42
TARGETS ON TRACK
Q3.2019 Snapshot Across the Board
Progress in all fronts of the Bank’s operational performance. NII impacted from IFRS9 transition, stabilization post early 2018
Note: OpEx annualized, RoA at pre-tax level, NIM, NFI and RoA over assets, CoR over net loans, Branched and Headcount for domestic operations
LDR
117%
84%
Q3.2019
Dec.2016
ELA
€11.9bn
NPE
€35.8bn
€25.7bn
660
535
14,492
11,382 Branches NIM
275bps
240 bps NFI
49bps
55bps OPEX
€1.2bn
<€1.0bn CoR
222bps
165bps RoA
losses
0.50%
Q3.2019
FY.2016
Headcount
SLIDE 43
43
PRE WRITE-OFF FORMATION IN NEGATIVE TERRITORY IN Q3.19
Q3.2019 Snapshot Across the Board
- 41 -33
- 208
47
- 187
- 740
- 612
- 381
- 247
- 460
- 189
131 23 6
- 120
- 53
56 31
- 63
- 9
- 55 -28
19
- 19
9
- 47-61-38 -2 -21
18
- 52 -29
Q1.17 Q2.17 Q3.17 Q4.17 Q1.18 Q2.18 Q3.18 Q4.18 Q1.19 Q2.19 Q3.19 Q1.17 Q2.17 Q3.17 Q4.17 Q1.18 Q2.18 Q3.18 Q4.18 Q1.19 Q2.19 Q3.19 Q1.17 Q2.17 Q3.17 Q4.17 Q1.18 Q2.18 Q3.18 Q4.18 Q1.19 Q2.19 Q3.19
Greek NPE Formation by Segment |€mn
Business Mortgages Consumer
NPE Greece | €mn
27,646
- 465
- 172
- 535
26,473
- 238
- 215
26,020
- 567
- 211
25,242
- 246
- 176
- 658
675 24,838
Sep.18 NPE formation W/O clean-up Sales (NPE portion) Dec.18 NPE formation W/O clean-up Mar.19 NPE formation W/O clean-up Jun.19 NPE formation W/O clean-up Sales (NPE portion) Technical adjustment Sep.19
NPE formation continued its negative pace for another quarter in Q3.19 both in retail and business segment Q3 trend affected by seasonality
SLIDE 44
83%
20%
Cash coverage Collateral coverage
49%
44%
Cash coverage Collateral coverage
44
CASH COVERAGE AUGMENTED BY TANGIBLE COLLATERAL
Q3.2019 Snapshot Across the Board
83%
42%
Cash coverage Collateral coverage
72%
22%
Cash coverage Collateral coverage * Figures as at September 2019, pre-haircut tangible collateral (guarantees not included) capped at loan amount
Mortgages Business Consumer Mortgages Business Total 124% Total 105% Total 103% Total 93% Total 99% Total 94%
NPE NPL
28%
71%
Cash coverage Collateral coverage
36%
69%
Cash coverage Collateral coverage
Consumer
SLIDE 45
45
ORGANIC COST OF RISK TRENDING LOWER
- Total loan impairment of €157mn in Q3.19
- Organic CoR at €90mn
organic CoR impacted by NPE adjustment. The organic CoR is negative excluding this impact CoR was helped by increasing collateral valuations (by c.€0.2bn) and improving NPE flow trends
- Inorganic CoR for NPE sale deals at €67mn
Q1.19 Q2.19 Q3.19 9M.19 Organic 186 110 90 386 Inorganic
- 36
67 103 Total 186 146 157 489 1.94% 1.15% 0.95% 1.36%
0.38% 0.71% 0.36%
Q1.19 Q2.19 Q3.19 9M.19 Inorganic Organic Cost of Risk (%, over net loans) Cost of Risk | €mn 1.72 72% 1.94 94% 1.53 53% 1.65 65%
Q3.2019 Snapshot Across the Board
SLIDE 46
13.3%
16.0%
~15.5% ~15.5% ~16%
Sep.19 pro-forma 2019 2020 2021 2022 2023
14.0%
- 0.2%
+0.2% +0.5% +0.8% +0.7%
16.0%
Dec.18 IFRS9 Results Reserves T2 impact Intrum impact Sep.19 ratio pro-forma
14.2% 14.0% 13.7% 14.9% 15.3%
16.0%
14.0% +70bps
Jun.18 Sep.18 Dec.18 Mar.19 Jun.19 Sep.19 Intrum Impact Sep.19 ratio pro-forma
Total Regulatory Capital (%, phased-in) Total Regulatory Capital (%, fully loaded)
10.8% 10.9% 11.0% 12.3% 10.6% +70bps 12.6%
Jun.18 Sep.18 Dec.18 Mar.19 Jun.19 Sep.19 Intrum impact Sep.19 ratio pro-forma
Total Regulatory Capital (%, phased-in) Phased-in Capital Ratio | year-to-date movement
Note: all 2019 figures incorporate profit for the period; ratios pro-forma for the execution of divestments and de-risking actions (NPE servicer agreement for September 2019)
EXECUTIVE SUMMARY
Q3.2019 Snapshot Across the Board
46
CAPITAL TRAJECTORY POST RECENT TRANSACTIONS
SLIDE 47
47
STRENGTHENED CAPITAL ADEQUACY LEVEL
€ bn | % Sep.19 Sep.19 Sep.19 Sep.19 CET-1 Capital 6.7 5.2 7.0 5.6 Total Capital 7.0 5.6 7.4 6.0 RWAs 46.3 44.9 46.5 45.1 CET-1 ratio 14.4% 11.7% 15.1% 12.4% Total ratio 15.2% 12.5% 16.0% 13.3%
CET-1 Ratio SREP Capital Requirement
- 2020 CET1 requirement 10.75%
- P2R capital requirement was lowered
for Piraeus Bank in 2019
- CCB already fully phased-in at 250bps;
O-SII of 50bps in 2020, fully phased-in at 75bps in 2021
- 2018-2019 capital enhancement plan
with internal capital generating actions, NPE servicer deal and Tier 2 issue, executed
- Capital ratios up +30bps in Q3.19 on
a like-for-like basis
% 2018 2019 2020 Pillar 1 CET1 4.50% 4.50% 4.50% Pillar 2 Requirement (P2R) 3.75% 3.25% 3.25% Capital Conservation Buffer (CCB) 1.875% 2.50% 2.50% Other Systemically Important Institutions
- 0.25%
0.50% CET-1 Requirement 10.125% 10.50% 10.75% Pillar 1 AT1 1.50% 1.50% 1.50% Pillar 1 T2 2.00% 2.00% 2.00% Overall Capital Requirement (OCR) 13.625% 14.00% 14.25%
Note: pro-forma ratios for the RWA relief of the sale of NPE loan portfolios and for the impact from the agreement regarding NPE servicer; all figures incorporate profit for the period
Phased-In Fully Loaded Phased-In Fully Loaded
reported with 9M.19 profit pro-forma with 9M.19 profit
* fully phased systemic buffer level at 75bps as per BoG 2019 O-SII assessment
Q3.2019 Snapshot Across the Board
SLIDE 48
02
Financial Performance
9M.2019 FINANCIALS
SLIDE 49
Group Profit & Loss (€mn)
Q3.19 recurring OpEx decreased by 3% qoq and by 6% yoy in 9M.19, excluding the extraordinary cost associated with
- VES. Administrative expenses decreased in 9M.19 by 15%
- yoy. Main driver for this trend has been the Bank’s cost
reduction programme, as well as other actions aiming at administrative costs decline
1 2
NII performance for Q3.19 remained almost stable compared to the previous quarter, while yoy performance for 9M.19 was increased by 2%. NFI in Q3.19 increased 5% qoq at €81mn, while 9M.19 was up by 6% on a like for like basis Q3.19 loan impairment stood at €157mn against €146mn in Q2.19, incorporating €67mn for inorganic NPE projects
3 4
Q2.19 Q3.19 qoq 9M.18 9M.19 yoy Net Interest Income 359 353
- 1%
1,054 1,072 2% Net Fee Income 77 81 5% 263 227
- 14%
Net Fee Income (recurring) 77 81 5% 215 227 6% Core Banking Income 436 434 0% 1,317 1,299
- 1%
Core Banking Income (recurring) 436 434 0% 1,269 1,299 2% Trading Income (0) 20
- 44
24
- 46%
Other Income 13 13 2% 44 38
- 13%
Total Net Revenues 449 467 4% 1,405 1,361
- 3%
Total Net Revenues (recurring) 449 467 4% 1,357 1,361 0% Staff Costs (139) (135)
- 3%
(502) (394)
- 22%
Staff Costs (recurring) (123) (115)
- 7%
(366) (358)
- 2%
Administrative Expenses (92) (92) 1% (313) (265)
- 15%
Depreciation & Other (30) (30)
- 1%
(77) (91) 17% Total Operating Costs (261) (257)
- 1%
(892) (749)
- 16%
Total Operating Costs (recurring) (245) (237)
- 3%
(756) (713)
- 6%
Pre Provision Income 188 210 12% 513 612 19% Pre Provision Income (recurring) 203 231 13% 601 648 8% Result from Associates (0) 11
- (13)
- Impairment on Loans
(146) (157) 7% (461) (489) 6% Impairment on Other Assets (7) (11) 66% 7 (13)
- Pre Tax Result
34 53 54% 46 110 >100% Tax (16) (9)
- 43%
(10) (35) >100% Net Results Attrib. to SHs 20 44 >100% 40 78
- Minorities Attrib. to SHs
(2)
- (4)
(2)
- 46%
Discontinued Ops Result 1 5 >100% (339) 12
- 1
2 4 3
Q3.19 Group reported PPI increased 12% qoq, while on a yearly basis there was a 19% increase in 9M.19. Recurring PPI was up 13% in Q3.19 qoq and 8% in 9M.19 yoy
Notes: Non Recurring Items for 9M.18 include €136mn VES costs (reported in OpEx), while for 9M.19 they include €36mn related with VES of 2018 and 2019 (€6mn and €30mn respectively) 2019 loan impairment includes net modification losses
FINANCIAL PERFORMANCE
Financial Performance
49
GROUP P&L HIGHLIGHTS: STRONG PERFORMANCE IN COST CONTAINMENT
SLIDE 50
50
NET INTEREST INCOME BENEFITING FROM LOWER FUNDING COSTS
Financial Performance
Νet Interest Income on a yearly basis increased by 2% in 9M.19 Improvement mainly from the liability side and funding costs Impact from loan portfolio de-risking and mild yield compression is reflected in loan interest income, yet front book comes at higher rates vs stock ELA cost eliminated in mid-July 2018, while positive impact is derived from covered bonds eligibility for ECB use post their investment grade rating assignment in late Aug.18. Interbank repos at negative territory Increase of fixed income portfolio in Eurozone sovereign bonds 9M.18 9M.19 Net Loans 1,296 1,245 Fixed Income Securities 42 51 Other Assets 73 94 Interest Income 1,411 1,390 Customer Deposits 150 142 Due to Banks 44 11 Debt Securities 5 16 Other Liabilities 158 149 Interest Expense 357 318
Net interest Income
1,054 1,072
NIM 1
2.45% 2.42%
- 1. on assets excluding discontinued operations
Net Interest Income Decomposition (€mn)
SLIDE 51
FINANCIAL PERFORMANCE
Q1.18 Q2.18 Q3.18 Q4.18 Q1.19 Q2.19 Q3.19 Deposits 0.46% 0.44% 0.42% 0.42% 0.42% 0.40% 0.39% Sight 0.52% 0.51% 0.49% 0.50% 0.50% 0.49% 0.46% Savings 0.07% 0.06% 0.05% 0.05% 0.05% 0.05% 0.05% Time 0.75% 0.73% 0.70% 0.67% 0.69% 0.67% 0.65% avg 3m euribor
- 0.33%
- 0.33%
- 0.32%
- 0.32%
- 0.31%
- 0.33%
- 0.40%
Loans 3.60% 3.52% 3.40% 3.42% 3.33% 3.32% 3.27% Mortgages 2.15% 2.12% 2.03% 2.01% 1.99% 2.00% 1.97% Consumer 6.84% 6.60% 6.46% 6.83% 6.77% 6.76% 6.97% Business 3.90% 3.81% 3.69% 3.70% 3.61% 3.58% 3.46%
Actual rates shown above refer to total Greek banking operations, quarterly averages
Customer Rates: Time Deposit Rate Declines Further
Loan Rates Q3.19 Total Stock Front Book Mortgages 2.0% 3.2% Consumer 7.0% 10.0% Business 3.5% 4.4% Total 3.3% 4.8%
Loan Rates: Front Book Rates Steadily Above Legacy Book
Business Loan Rates Q3.19 Total Stock Front Book Corporate & SME 3.2% 4.1% SBL 5.2% 6.4% Total 3.5% 4.4%
51
DOMESTIC LOAN PORTFOLIO YIELDS: FRONT BOOK LOAN PRICING HIGHER VS STOCK
Financial Performance
SLIDE 52
52
NET FEE & COMMISSION INCOME GROWING
Financial Performance
(€mn) 9M.18 9M.19 % Assets Cards Business 78 80 0.18% Asset Management & Brokerage 16 20 0.04% Bancassurance* 30 27 0.06% Funds Transfer 38 39 0.09% Letters of Guarantee 26 25 0.06% Loans 31 42 0.09% Payments 17 19 0.04% FX Fees 19 21 0.05% Other 27 28 0.06% Gross Fee Income 283 300 0.68% Fee Expense
- 68
- 73
- 0.16%
Net Fee Income 215 227 0.51% Enhancement initiatives implemented to boost fees from all areas of business at par with gradual macroeconomic recovery Fees stemming from transaction banking, credit cards business, payments and asset management / brokerage are expected to perform in line with our strategy
- Fee Income to Grow Along with the Macro Recovery & Increasing Penetration to Specific Areas of Business
* 9M.18 on a recurring basis for €48mn extraordinary quality commission
SLIDE 53
53
STAFF & G&A COSTS SOLID REDUCTION
Financial Performance
(€mn) 9Μ.18 9Μ.19 yoy Staff costs (reported) 502 394
- 22%
Staff costs (recurring) 366 358
- 2%
G&A costs 313 265
- 15%
Taxes & Duties 57 55
- 2%
Fees & Third Parties 66 52
- 22%
Banking Products (credit cards, insurance, etc.) 15 15 4% Promotion & Advertising 14 15 4% Rents 23 6
- 76%
Other 138 122
- 12%
Depreciation 77 91 17% Total Costs (reported) 892 749
- 16%
Total Costs (recurring) 756 713
- 6%
Current run rate for costs of high single-digit reduction yoy Efficiencies to be further increased along with increasing digitalization, as well as the implementation of the NPE servicing agreement
- Total Costs Running at -6% Reduction Rate Boosting the Bank’s Efficiency Ratio
SLIDE 54
03
Asset Quality
9M.2019 FINANCIALS
SLIDE 55
55
GROUP NPE & NPL RATIOS
Asset Quality
NPLs (€mn) Sep.19 Mix Business 10,200 60% Mortgages 4,799 28% Consumer 1,973 12% TOTAL 16,972 100%
Group NPL Ratio per Product Category Group NPL Mix
34% 33% 34% 46%
Total Business Mortgages Consumer
Sep.19
NPEs (€mn) Sep.19 Mix Business 17,289 67% Mortgages 6,120 24% Consumer 2,280 9% TOTAL 25,689 100%
Group NPE Ratio per Product Category Group NPE Mix
52% 55% 44% 53%
Total Business Mortgages Consumer
Sep.19
SLIDE 56
56
CASH COVERAGE PER SEGMENT
Asset Quality
NPE Coverage Ratio per Product NPL Coverage Ratio per Product
LLRs (€mn) Sep.19 LLR/ Loans Business 8,436 27% Mortgages 1,731 12% Consumer 1,638 38% TOTAL 11,805 24% LLRs (€mn) Sep.19 LLR/ Loans Greece 11,314 23% International 491 38% TOTAL 11,805 24% 70% 83%
36% 83%
Total Business Mortgages Consumer Sep.19
Group LLRs at 24% Over Loans
Cumulative provisions at 24% over Group gross loans NPE cash coverage ratio at 46% and NPL coverage at 70% 46% 49% 28% 72%
Total Business Mortgages Consumer Sep.19
NPE mix 67% 24% 9% NPL mix 60% 28% 12%
SLIDE 57
57
SIZEABLE CURING POTENTIAL FROM FORBORNE LOANS UNDER PROBATION
Asset Quality
(€bn) 0 dpd 1-89dpd >90dpd Denounced NPEs Business 5.2 1.8 2.1 8.1 17.3 Mortgages 0.6 0.7 0.9 3.9 6.1 Consumer 0.1 0.2 0.5 1.4 2.3 TOTAL 6.0 2.7 3.6 13.4 25.7
NPEs per Bucket (Sep.19)
46% 49% 28% 72% 70% 83% 36% 83% Total Business Mortgages Consumer NPE NPL
Cash Coverage Ratio per Product and Status (Sep.19) Forborne Loans (Sep.19, €11.8bn)
€4.3bn forborne with 0dpd (€3.6bn business & €0.7bn retail) Pace of NPE exits from curings/restructurings/liquidations: €0.6bn in Q3.19 This trend is expected to further enhance as per 2021 NPE reduction plan
NPΕ mix 23% 11% 14% 52% 100% [1] [2] [3] [1+2+3+4] [4]
NPEF 0dpd 37% NPEF 1-30dpd 12% NPEF 31-90dpd 8% NPEF >90dpd 17% PF 26%
SLIDE 58
58
PERSONAL BANKRUPTCY LAW REPLACED BY BETTER, STRICTER FRAMEWORK
Asset Quality
Retail Loan Balances Under the Protection of L.3869/2010 (old bankruptcy law for individuals)
Secured Loans Unsecured Total Secured & Unsecured in €mn | Sept 2019 Total Mortgages Consumer Total Total 2,951 2,549 402 560 3,511
- /w final court decision
1,276 1,111 165 230 1,506
- in favor of customer
659 581 78 117 776
- in favor of the Bank
617 530 88 113 731 % of court decisions in favor of Bank 48% 48% 53% 49% 49%
49% of the €1.5bn of cases that had been filed and were dealt by the courts, have been rejected [data up to Sep.19] Rejected cases by the court of €731mn [data up to Sep.19] have to be repaid at par from the customer, as the court decided that they have the “ability” to repay the debt in full This law expired at the end of Feb.19 and was replaced by a new law. The new framework, which is in force from 30 April 2019 to 30 April 2020, is characterized by strict eligibility criteria, process acceleration, reduction of recovery time and includes a state subsidy. Eligibility criteria:
- Objective value <=€250k and <=€175k for SBL
- Family income <=170% of reasonable living expenses
- Total debt (capital interest expenses)<=€130k for mortgages and <= €100k for SBL
- Value of deposits & financial products <=50% of total debt to be settled
- Value of immovable property <=200% of the total debt to be settled
SLIDE 59
59
AUCTIONS’ PROGRESS (NPE COLLATERAL)
Asset Quality
28% 64% 8%
successful not completed at current attempt cancelled due to debtor request for restructuring
Feb.18 - Dec.19
8.0k auctions
Property auctions 2014 2015 2016 2017 2018 2019 FY.19
budget
# auctions carried
- ut by Piraeus
124 124 219 396 3,269 4,664 ~3.6k Auctions Q2.18 1,021 Q3.18 623 Q4.18 1,441 Q1.19 891 Q2.19 833 Q3.19 1,204 Q4.19 1,736
Piraeus Bank has bid for the
73% of successful auctions
in 2019 vs. 85% in 2018
SLIDE 60
60
KEY DATA OF COMPLETED NPE SALES
Asset Quality
Amoeba Arctos Nemo Total Gross Book Value (€bn) 1.4 0.4 0.5 2.3 Price over GBV (%) 30% 13% 47% 30% Provision Coverage (%) 73% 90% 45% 70% RWA (€bn) 0.4 0.1 0.3 0.8 Collateral (€bn) 0.5 n.a. 0.3 0.8 Discount over Collateral Value (%) 15% n.a. 4% Buyer Bain Capital APS DK Servicer Special Financial Solution APS Recovery Greece QQuant Master Service Borrowers 173 137k 12
All 3 Sales Transactions have been Capital Accretive for Piraeus Bank (~25bps in total)
SLIDE 61
04
Liquidity
9M.2019 FINANCIALS
SLIDE 62
LIQUIDITY
100 120 140 160 180 200 220 240 260 280
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Deposits Loans
40% 60% 80% 100% 120% 140%
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
20 40 60 80 100 120 140 160
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
ELA ECB Eurosystem at €8bn in Nov.19 (ELA €0bn, ECB €8bn), -€119bn vs. Jun.15 peak
Eurosystem Funding (€bn) Deposits & Βanknotes in Circulation (€bn)
Banknotes at €29bn in Nov.19,
- €22bn vs. Jun.15 peak
€0 €8 €130 €42 €33 €152
Net Loans to Deposits Ratio (%) Loans & Deposit Balances (private sector, €bn)
LDR at 84% in Dec.19,
- 53pp vs. Jun.15 peak
Deposits up €9bn in Dec.19 yoy Loans down €16bn yoy in Nov.19, o/w €6bn write-offs
€154 €143 84%
Source: Bank of Greece; on top of write-offs, the loan market has been impacted by c.€9bn other adjustments (including NPE sales) yoy
10 20 30 40 50 60
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
100 150 200 250 300
Deposits Currency in Circulation
€29 €159
2019 2019 Note: Currency in Circulation and Eurosystem Funding according to the latest available data from Bank of Greece (Nov.2019) 2019 2019
62
GREEK MARKET LIQUIDITY GRADUALLY RESTORED
Liquidity
SLIDE 63
LIQUIDITY 36.1
- 1.0
+0.4 +0.9 +2.9 39.3
- 1.3
+0.2 +0.9 +1.8 40.9 +0.5 +0.5 +0.8 +1.8 44.5
- 0.9
+1.1 +0.2 +2.2 47.1
Dec.15 Δ Q1.16 Δ Q2.16 Δ Q3.16 Δ Q4.16 Dec.16 Δ Q1.17 Δ Q2.17 Δ Q3.17 Δ Q4.17 Dec.17 Δ Q1.18 Δ Q2.18 Δ Q3.18 Δ Q4.18 Dec.18 Δ Q1.19 Δ Q2.19 Δ Q3.19 Δ Q4.19 Dec.19e
27% 24% 73% 76%
Dec.19 Dec.19 Business Retail
36% 38% 64% 62%
Dec.19 Dec.19 Time deposits Savings-Sight deposits
Domestic Deposit Mix (%) Deposit Movement by Segment (€bn)
Greek market Piraeus - Greece Greek market Piraeus - Greece
Customer Deposit Movement in Greece (€bn)
Piraeus FY.18 delta Q1.19 delta Q2.19 delta Q3.19 delta Q4.19 delta Dec.19e balance Mass|Farmers +1.1
- 0.1
+0.3 +0.1 +1.0 17.8 Affluent|Private Banking +1.0
- +0.1
+0.1
- 0.2
15.0 SB
- 0.1
- +0.3
+0.2 +0.1 3.8 SME
- 0.1
+0.1 +0.1 +0.1 1.2 Corporate
- 0.1
+0.2
- 2.8
Govt & Other +1.6
- 0.6
+0.1
- 0.2
+1.3 6.6 Total +3.6
- 0.9
+1.1 +0.2 +2.2 47.1
63
Liquidity
DOMESTIC DEPOSITS PICKING UP
e: estimate
SLIDE 64
- IV. Appendix
Appendix
SLIDE 65
65
ASSETS & LIABILITIES OVERVIEW
Appendix
- Loan-to-Deposit
ratio at 84%, Liquidity Coverage ratio at 107% and Net Stable Funding ratio at 102%
4.1 6.6 0.2 2.2 38.0 1.3 4.3 2.5 2.6 7.8 45.2 0.9 1.8 0.8
Other* Cash
Asset Mix
Total
Securities Net Loans Fixed Assets
59.1
amounts in €bn Total
ECB Interbank Repos Deposits Total Equity Other
59.1
Funding Mix
Sep.19 Sep.19
Debt Securities
- Funding mix enhanced on the back of ELA
elimination, improved interbank market access, customer deposits restoration process and Tier 2 issue
- Interbank repo balances lower yoy on the
back of covered bond pool ECB eligibility, partially transferred to Main Refinancing Operations
- Customer
deposits comprise 76%
- f
liabilities and total equity
- Customer loans comprise 64% of assets
(*) Other includes “other assets” (€3.7bn) and “goodwill & intangible assets” (€0.4bn)
Interbank Loans DTA Disc’d Ops & Held for Sale
SLIDE 66
66
GROUP RESULTS | QUARTERLY EVOLUTION
Appendix
(€mn) Q1.17 Q2.17 Q3.17 Q4.17 Q1.18 Q2.18 Q3.18 Q4.18 Q1.19 Q2.19 Q3.19 Net Interest Income 420 414 415 390 353 352 349 355 360 359 353 Net Fee Income 70 72 112 76 69 70 124 76 69 77 81 Net Fee Income (recurring) 70 72 77 76 69 70 76 76 69 77 81 Trading & Other Income 27 69 24
- 1
26 36 26 45 15 13 33 Total Net Revenues 517 556 551 464 448 458 499 477 445 449 467 Total Net Revenues (recurring) 497 510 516 454 448 458 451 477 445 449 467 Staff Costs (132) (133) (128) (153) (259) (125) (117) (114) (120) (139) (135) Staff Costs (recurring) (132) (133) (128) (137) (127) (125) (114) (96) (120) (123) (115) Administrative Expenses (107) (102) (108) (145) (97) (113) (103) (129) (80) (92) (92) Depreciation & Other (24) (23) (24) (28) (27) (25) (26) (26) (30) (30) (30) Total Operating Costs (263) (258) (260) (325) (383) (262) (246) (269) (231) (261) (257) Total Operating Costs (recurring) (263) (258) (260) (309) (251) (262) (243) (250) (231) (245) (237) Pre Provision Income 255 298 291 139 64 196 253 208 214 188 210 Pre Provision Income (recurring) 234 252 256 144 196 196 209 226 214 203 231 Result from Associates (7) (19) 4 (8) (8) (16) 11 28 (10) (0) 11 Impairment on Loans* (258) (264) (310) (1,189) (163) (149) (149) (137) (186) (146) (157) Impairment on Other Assets (9) (16) (7) (118) (8) 20 (4) (64) 5 (7) (11) Pre Tax Result (20) (2) (21) (1,176) (115) 51 110 34 23 34 53 Tax 13 10 2 1,181 35 (29) (17) 103 (9) (16) (9) Net Result Attributable to SHs (7) 10 (18) 6 (79) 24 94 145 14 20 44 Minorities (1) (1) (2) (1) (2) (1) (7) (2) Discontinued Operations Result (1) (77) 5 (119) (3) (310) (27) (4) 5 1 5
* 2019 loan impairment includes net modification loss
SLIDE 67
67
PIRAEUS CORE BANK AND PIRAEUS LEGACY UNIT KPIs | 9M.19
Appendix
* Legacy includes NPE, international operations, REO, holdings, discontinued operations and non-core Greek assets ** Including net modification loss & associates’ income
PIRAEUS GROUP
1,072 227 1,361 (749) 612 (502) 110 2.4% 0.5% 55% 1.7% 0.2% 78%
LEGACY*
258 5 268 (152) 116 (421) (306) 1.9% 0.0% 57% 3.6% <0% 101%
PIRAEUS CORE BANK
814 221 1,093 (597) 496 (81) 416 2.7% 0.7% 55% 0.4% 1.4% 68% A. P&L (€mn)
1
NII
2
NFI
3
Net revenues
4
Operating costs
5
PPI
6
Total impairment**
7
Pre-tax income B. Ratios
8
NIM over assets
9
NFI over assets
10
Cost-to-income
11
Cost of risk**
12
Pre-tax RoA
13
RWA density
SLIDE 68
68
RETURN TO NORMALISATION ALLOWS FOCUS ON CORE ACTIVITIES
Appendix
* Legacy includes NPE portfolio, international operations, REOs, holdings, discontinued operations and non-core Greek assets ** Impairment includes associates’ income n.m.: non-meaningful Note: reported figures including VES costs of €36mn for 9M.19
CORE BANK
9M.2019 | €mn Retail CIB Markets Corp.Center CORE TOTAL Legacy GROUP NII 401 315 76 22 814 258 1,072 NFI 129 83 4 6 221 5 227 Other Income 5 (9) 52 10 57 4 62 Net Revenues 535 389 132 38 1,093 268 1,361 OpEx (341) (104) (19) (133) (597) (152) (749) PPI 194 285 113 (95) 496 116 612 Impairment** 9 (75) 8 (22) (81) (421) (502) PBT 203 210 120 (117) 416 (306) 110 NIM over Assets 5.3% 3.2% 1.5% 0.3% 2.7% 1.9% 2.4% NFI over Assets 1.7% 0.8% 0.1% 0.1% 0.7% 0.0% 0.5% Cost to Income 64% 27% 14% n.m. 55% 57% 55% Cost of Risk
- 0.1%
0.8% n.m. n.m. 0.4% 3.6% 1.7% PPI over RWA 4.5% 3.3% 6.7% <0% 2.4% 0.8% 1.8% Pre-tax RoA 2.7% 2.2% 2.4% <0% 1.4% <0% 0.2% RWA Density 57% 90% 34% 74% 68% 101% 78%
SLIDE 69
69
LOAN & DEPOSIT PORTFOLIOS
Appendix
Gross Loans Evolution (€mn)
Dec.16 Dec.17 Sep.18 Dec.18 Jun.19 Sep.19 qoq yoy Group 64,947 58,627 52,788 51,475 50,757 49,758
- 2%
- 6%
Business 42,511 37,962 33,233 32,144 31,839 31,369
- 1%
- 6%
Mortgages 16,162 15,183 14,627 14,523 14,179 14,068
- 1%
- 4%
Consumer 6,274 5,482 4,928 4,808 4,739 4,322
- 9%
- 12%
Greece 61,296 56,597 51,687 50,382 49,521 48,474
- 2%
- 6%
Business 39,792 36,317 32,310 31,215 30,760 30,235
- 2%
- 6%
Mortgages 15,707 14,973 14,574 14,474 14,134 14,025
- 1%
- 4%
Consumer 5,797 5,307 4,803 4,693 4,627 4,214
- 9%
- 12%
Int’l 3,650 2,030 1,101 1,093 1,236 1,285 4% 17% Business 2,719 1,645 922 928 1,079 1,134 5% 23% Mortgages 455 210 53 49 44 43
- 3%
- 19%
Consumer 476 175 125 116 112 107
- 4%
- 14%
Deposits Evolution (€mn)
Dec.16 Dec.17 Sep.18 Dec.18 Jun.19 Sep.19 qoq yoy Group 42,365 42,715 42,886 44,739 44,890 45,172 1% 5% Savings 14,995 15,134 14,496 15,323 15,251 15,522 2% 7% Sight 11,190 11,682 11,245 12,013 12,238 12,513 2% 11% Time 16,179 15,900 17,146 17,402 17,401 17,137
- 2%
0% Greece 39,322 40,889 42,687 44,536 44,685 44,916 1% 5% Savings 14,613 14,825 14,481 15,309 15,237 15,508 2% 7% Sight 10,536 11,125 11,157 11,927 12,153 12,376 2% 11% Time 14,172 14,938 17,048 17,300 17,295 17,032
- 2%
0% Int’l 3,043 1,826 200 203 204 255 25% 28% Savings 382 309 15 14 14 14
- 1%
- 5%
Sight 654 556 87 86 85 136 60% 56% Time 2,007 961 98 102 105 105 0% 8%
Notes: loan balances exclude seasonal agri-loan of €1.7bn for Dec.16 & €1.6 for Dec.17 and Dec.18; Serbian operations excluded from Jun.17 onwards, Romanian operations from Dec.17 onwards Bulgarian and Albanian operations from Jun.18 onwards
SLIDE 70
70
IFRS9 SEGMENT & STAGE ANALYSIS | GROUP
Appendix
impact
€1,621mn
Gross Loans (€bn) Dec.171 Mar.18 Jun.18 Sep.18 Dec.181 Mar.19 Jun.19 Sep.19 Δ yoy Stage 1 19.1 18.9 18.6 18.4 17.6 18.2 18.2 18.2
- 1%
Stage 2 6.9 7.0 5.9 5.9 5.9 5.9 5.8 5.2
- 11%
Stage 3 32.3 31.8 29.3 28.5 28.0 27.5 26.7 26.3
- 8%
Total 58.3 57.7 53.7 52.8 51.5 51.6 50.8 49.8
- 6%
Coverage (%) Sep.19 Mortgages Consumer Business Total Stage 1 0% 2% 1% 1% Stage 2 2% 11% 7% 5% Stage 3 26% 64% 47% 43% Total 12% 38% 27% 24%
(1) excluding seasonal loan to farmers (€1.6bn). Loans for all periods exclude balances accounted for at FVT P&L
SLIDE 71
71
SHAREHOLDER STRUCTURE
Appendix
HFSF
26%
Institutional Investors & Legal Entities
66%
Individuals
8%
Piraeus Shareholder Structure (Dec.19)
Shareholder structure of Piraeus Bank presents great diversity; total number of common shareholders 27.2k The Hellenic Financial Stability Fund holds 26% of
- utstanding common shares
The remaining 74% is held by the private sector; 66% by legal entities and 8% individuals Strong international presence with significant part of free float held by foreign institutional investors Common Shares Private sector 322 mn HFSF 115 mn Total 437 mn
SLIDE 72
72
PIRAEUS BANK LEADING POSITION IN GREECE | Q3.19
Appendix
8,080 8,643 8,741
11,382
20% 20% 23%
29%
20% 22% 27%
29%
Gross Loans-Greece (%) Customer Deposits-Greece (%) Greek Branch Network (#)
Source: Bank of Greece for Greek market data and financial information for Greek banks, as of Sep.19
Headcount-Greece (#)
350 397 414
535
Peer Peer Peer Peer Peer Peer Peer Peer Peer Peer Peer Peer
SLIDE 73
73
CONTINGENT CONVERTIBLE BONDS
Appendix
Term & Ranking Payment of interest Perpetual Pari passu with common equity, junior to all claims of all creditors (including subordinated) at special liquidation of issuer Annual Fully discretionary & paid in cash or shares Coupon is tax deductible, impacting directly equity position as dividend No dividend shall be paid on the issuer’s common stock if issuer has decided not to pay the previous coupon payment in full Coupon Initial 7 years 8% per annum (initial interest rate) Post 7 years, interest rate calculated as prevailing 7y Mid-swap rate + (8% less 7y Mid-swap rate at issuance: 7.543 per cent, p.a.) Conversion events The securities shall automatically convert into ordinary shares if:
- At any time the CET1 ratio, calculated on a consolidated basis or a solo basis, falls below 7%
- 2 annual coupons are missed (in whole or in part, and do not need to be consecutive)
Optional to the holder at 7th anniversary of issuance Conversion consideration The number of common shares issued on conversion is determined as 116% of the nominal amount of the outstanding securities divided by the conversion price which shall be equal to the offer price subject to market standard adjustments in the event of certain corporate actions Option to repay The issuer may, in its sole discretion, repay all or some only of the bonds at any time subject to approval by the ECB acting within the framework of SSM, at their initial nominal amount plus any interest accrued but unpaid, unless cancelled Applicable law Greek law Basel III Classification Classified as Common Equity Tier 1 Transferability Transferable by HFSF to another holder with the consent of the issuer and the regulator, per Art. 7(5)(b) of the HFSF Law Issue Size €2,040,000,000
SLIDE 74
74
CREDIT RATINGS
Appendix
Piraeus Bank | Long Term Rating
1
Aaa AAA AAA AAA
2
Aa1 AA+ AA+ AA high
3
Aa2 AA AA AA
4
Aa3 AA- AA- AA low
5
A1 A+ A+ A high
6
A2 A A A
7
A3 A- A- A low
8
Baa1 BBB+ BBB+ BBB high
9
Baa2 BBB BBB BBB
10
Baa3 BBB- BBB- BBB low
11
Ba1 BB+ BB+ BB high
12
Ba2 BB BB BB
13
Ba3 BB- BB- BB low
14
B1 B+ B+ B high
15
B2 B B B
16
B3 B- B- B low
17
Caa1 CCC+ CCC CCC high
18
Caa2 CCC
- CCC
19
Caa3 CCC-
- CCC low
20
Ca CC CC CC
21
C C C C
22
- SD
RD SD
23
- D
D D
Greece: Country Rating Greece: Country Ceiling Piraeus: Bank Rating Piraeus Covered Bond
I n v e s t m e n t G r a d e N o n - I n v e s t m e n t G r a d e
Nov-10 Mar-11 Jul-11 Nov-11 Mar-12 Jul-12 Nov-12 Mar-13 Jul-13 Nov-13 Mar-14 Jun-14 Oct-14 Feb-15 Jun-15 Oct-15 Feb-16 Jun-16 Oct-16 Feb-17 Jun-17 Oct-17 Feb-18 Jun-18 Oct-18 Feb-19 Jun-19 Oct-19 Jan-20 Moody's S&P Fitch
A2/A A3/A- Baa1/BBB+ Baa2/BBB Baa3/BBB- Ba1/BB+ Ba2/BB Ba3/BB- B1/B+ B2/B B3/B- Caa1/CCC+ Caa2/CCC Caa3/CCC- Ca/CC Ca/C RD D
Piraeus: Sub/ed Rating
SLIDE 75
GLOSSARY
GLOSSARY | DEFINITIONS OF ALTERNATIVE PERFORMANCE MEASURES
75
1 Adjusted total assets Total assets excluding assets amounting to: 1) €3.3bn in Dec.2018 of discontinued operations in Albania and Bulgaria, the OPEKEPE seasonal agri-loan, and other discontinued
- perations 2) €1.2bn in Mar. 2019 of discontinued operations in Bulgaria and other discontinued operations 3) €0.1bn in June 2019 of discontinued operations 4) €0.1bn in
September 2019 of discontinued operations 5) €1.7bn in Dec.2019 of the OPEKEPE seasonal agri-loan plus discontinued operations 2 CET1 Capital Ratio on Pro-forma Basis CET1 capital as defined by Regulation (EU) No 575/2013, with the application of the regulatory transitional arrangements for IFRS 9 impact over RWAs taking into account RWAs relief of €0.4bn from the sale of NPE portfolio as well as profits for the period 3 CoR from Organic NPE Flow CoR minus losses booked for inorganic activity, i.e. NPE sales 4 Core Banking Income or NII+NFI Net interest income plus net fee and commission income 5 Cost of Risk (CoR) ECL impairment losses on loans and advances to customers at amortised cost of the period annualized over Net Loans 6 Cost to Income Ratio (CIR) Total operating expenses before provisions over total net income excluding one-off items related to the corresponding period as per item #3 7 Cumulative provisions (LLRs) over gross loans Cumulative provisions over Gross Loans 8 Cumulative provisions (Loan loss reserves – LLR) Accumulated ECL allowance on loans and advances to customers at amortised cost gross of PPA adjustment 9 Deposits or Customer Deposits Due to customers 10 DTAs Deferred Tax Assets 11 DTC Deferred Tax Credit 12 Gross Book Value (GBV) Gross loans 13 Gross Loans Loans and advances to customers at amortised cost before ECL allowance gross of PPA adjustment 14 Liquidity Coverage Ratio (LCR) Liquidity coverage ratio is the amount of sufficient liquidity buffer for a bank to survive a significant stress scenario lasting one month 15 Loan impairment charges (Provision Expenses)/impairments ECL impairment losses on loans and advances to customers at amortised cost 16 Loans to Deposits Ratio (LDR) Net loans over Deposits 17 Net Fee Income (NFI or NF+CI) Net Fee and Commission Income 18 Net Interest Margin (NIM) Net interest income over Adjusted total assets 19 Net Loans Loans and advances to customers at amortised cost 20 Net NPE ratio NPEs net of cumulative provisions over Gross Loans 21 Net Results or Net Profit Profit / (loss) for the period attributable to shareholders of the Bank 22 Net Revenue Total Net Income 23 New Loan Generation New loan disbursements that were realized after previous end period 24 NFI over Assets Net fee and commission income over Adjusted total assets
SLIDE 76
GLOSSARY
GLOSSARY | DEFINITIONS OF ALTERNATIVE PERFORMANCE MEASURES (cont’d)
76
25 NII Net Interest Income 26 Non Performing Exposures (NPEs) On balance sheet credit exposures before ECL allowance for impairment on loans and advances to customers at amortised cost gross of PPA adjustments that are: (a) past due
- ver 90 days; (b) impaired or those which the debtor is deemed as unlikely to pay (“UTP”) 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) subject to contagion under EBA rules or other unlikely to pay (UTP) criteria 27 Non Recurring (One-off) Items Non Recurring Items for FY.18 include €48mn extraordinary quality commission (reported in Net Fee Income), €154mn VES costs and €28mn other offsetting cost adjustments (both reported in OpEx) Non Recurring Items for FY.19 include ~€349mn capital gain from the NPE servicing platform carve-out (included in trading Income), €36mn related with VES costs and €5mn
- ther offsetting cost adjustments (both reported in OpEx)
28 NPE (Cash) Coverage Ratio Accumulated ECL allowance gross of PPA adjustment over NPEs 29 NPE Formation Change of the stock of NPEs after adding back write-downs or other adjustments i.e. loan sales or debt to equity transactions over loans and advances to customers at amortised cost 30 NPE Ratio Non Performing Exposures over Gross Loans 31 NPL Ratio Non-performing loans over Gross Loans 32 NPL (Cash) Coverage Ratio Accumulated ECL allowance gross of PPA adjustment over NPLs 33 NPL Formation Change of the stock of NPLs after adding back write-downs or other adjustments i.e. loan sales or debt to equity transactions over loans and advances to customers at amortised cost 34 NPLs - Non Performing Loans Gross Loans in arrears over 90 days past due 35 Operating Expenses (OpEx) Total operating expenses before provisions 36 OpEx/Assets Total operating expenses over Adjusted total assets 37 Performing Exposures (PE) Gross Loans minus Non Performing Exposures 38 PPA adjustment Purchase price allocation (PPA) adjustments relating to the acquisition of the seven banks [i.e. former ATEbank, the Greek banking operations of Cypriot Banks in Greece (Bank of Cyprus, Cyprus Popular Bank, Hellenic Bank), Millennium Bank S.A., Geniki Bank S.A. and Panellinia Bank S.A.] amounting to €4.25bn at the end of Sep.18, €3.5bn at the end of Dec.18, €3.3bn at the end of Mar.19, €3.2bn at the end of Jun.19, €2.9bn at the end of Sep.19 and €2.8bn at the end of Dec.19 based on preliminary data 39 Pre Provision Income (PPI) Profit before provisions, impairments and income tax 40 Pre Tax Results/Pre Tax profits (PBT) Profit / (loss) before income tax 41 Recurring Core Pre Provision Income Recurring PPI excluding : a) net gain/(losses) from financial instruments measured at fair value through profit or loss; b) results from the disposal of participation of subsidiaries and associates; c) net gain/(losses) from financial instruments measured at fair value through other comprehensive income; and d) net other income/(expenses) 42 Recurring NPE Reduction NPE change in 9M.2019 adjusted for the Q3.2019 €0.7bn loan exposures that were classified as NPEs for technical reasons reflecting prudent approach the Bank has followed 43 Recurring operating expenses (Recurring OpEx) Operating Expenses excluding "Non Recurring (One-off) Items" 44 Recurring Pre Provision Income (Recurring PPI) PPI excluding one-off items related to the corresponding period as per item #3 45 Return on Assets (RoA) Profit before income tax for the period annualized over Adjusted total assets 46 RoTE (Return on Tangible Equity) Profit before income tax for the period annualized over Tangible Book Value 47 RWA density Risk Weighted Assets over Adjusted total Assets 48 Tangible Book Value Total equity minus contingent convertible bonds (€2,040mn) minus intangible assets
SLIDE 77
MARKET UPDATE
Investor Relations Contacts
Chryssanthi Berbati Antonis Sagris Xenofon Damalas,CFA George Doukas Αmalia Missailidi
4 Amerikis St., 105 64 Athens
- Tel. : (+30 ) 210 3335026
investor_relations@piraeusbank.gr Bloomberg: TPEIR GA | Reuters: BOPr.AT ISIN: GRS014003024 www.piraeusbankgroup.com
Latest Update: March 2020
SLIDE 78
PIRAEUS BANK GROUP HEADQUARTERS 4, Amerikis Str., 105 64 Athens, Greece
- T. +30 210 333 5026
www.piraeusbankgroup.com