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Transcript of PIRAEUS BANK 9M.2020 FINANCIAL RESULTS/media/Com/2020/Files/...0 500 1,000 1,500 2,000 2,500 3,000...
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PIRAEUS BANK9M.2020 FINANCIAL RESULTS23 November 2020
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01 Executive Summary
02 Financial Performance
03 Appendix
9Μ.2020FINANCIALRESULTS
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9Μ.2020FINANCIALRESULTS
01Executive Summary
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0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
Jan
uar
y
Feb
ruar
y
Mar
ch
Ap
ril
May
Jun
e
July
Au
gust
Sep
tem
ber
Oct
ob
er
No
vem
ber
Dec
emb
er
2019 2020
59% of total 12% of total 25% of total (average ‘17-19)
9M.20 revenues
€3.5bnor -78% yoy
GREEK ECONOMY: LATEST DEVELOPMENTS01
Executive Summary
Source: ELSTAT, Bank of Greece, European Commission DG-ECFIN, Piraeus Bank Research
Economic sentiment evolution
Travel revenues’ distribution across quarters
• The economy has restarted as of early May post lockdown, butNovember second lockdown has set a pause
• Unprecedented policy response to address Covid-19 impact
• Economic sentiment index points to a milder vs Euroarea impact for theGreek economy, but also a slower recovery to-date
• The development of revenue from tourism is crucial for Greece’s 2020 -21 GDP
• Fiscal stimulus of €80bn for the period 2021-2027 will support recovery,boosting jobs and growth
€mn
Nov.2091.0
Nov.2087.6
60
70
80
90
100
110
120
Jul-
12
No
v-12
Mar
-13
Jul-
13
No
v-13
Mar
-14
Jul-
14
No
v-14
Mar
-15
Jul-
15
No
v-15
Mar
-16
Jul-
16
No
v-16
Mar
-17
Jul-
17
No
v-17
Mar
-18
Jul-
18
No
v-18
Mar
-19
Jul-
19
No
v-19
Mar
.20
Jul.2
0
No
v.20
ESI - Greece ESI- Εuroarea
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
Jan
Jan
-Feb
Jan
-Mar
Jan
-Ap
r
Jan
-May
Jan
-Ju
n
Jan
-Ju
l
Jan
-Au
g
Jan
-Sep
Jan
-Oct
Jan
-No
v
Jan
-Dec
20192020
Private building activity (number of permits)
Real Estate FDI in Greece (€mn, annual cumulative flows)
156239
153222
415
1,128
1,450
58115 9190
148
379
737
371
0
200
400
600
800
1,000
1,200
1,400
1,600
2013
2014
2015
2016
2017
2018
2019
H1
.13
H1
.14
H1
.15
H1
.16
H1
.17
H1
.18
H1
.19
H1
.20
-
201917.3
18.1
17.1
0.0
5.0
10.0
15.0
20.0
25.0
30.0
20
012
002
20
032
004
20
052
006
20
072
008
20
092
010
20
112
012
20
132
014
20
152
016
20
172
018
20
192
020
(f)
20
21 (
f)
20191.6
-8.0
4.8
-10.0
-8.0
-6.0
-4.0
-2.0
0.0
2.0
4.0
6.0
8.0
20
012
002
20
032
004
20
052
006
20
072
008
20
092
010
20
112
012
20
132
014
20
152
016
20
172
018
20
192
020
(f)
20
21 (
f)
Real GDP growth rate
PB forecast
GREEK ECONOMY: CAUTIOUSLY OPTIMISTIC OUTLOOK02
Executive Summary
Real GDP % annual change
Unemployment % of labor force
Residential Real Estate% annual change
• Baseline scenario for a total -3%
contraction in the period 2020-
2021
• 9M.20 released data for real GDP
show a severe recession effect
• For unemployment and
residential real estate a
slowdown effect is likely
Commercial Real Estate% annual change
Source: Bank of Greece, ELSTAT, Piraeus Bank Research; 2019-2020 outlook: Piraeus Bank Research
H1.202.0
-14.0-12.0-10.0
-8.0-6.0-4.0-2.00.02.04.06.08.0
10.012.014.0
H1
.11
H2
.11
H1
.12
H2
.12
H1
.13
H2
.13
H1
-14
H2
-14
H1
-15
H2
-15
H1
-16
H2
-16
H1
-17
H2
-17
H1
.18
H2
.18
H1
.19
H2
.19
H1
.20
9M.20 (actual) -8.5% yoy
Q3.203.2
-14.0-12.0-10.0
-8.0-6.0-4.0-2.00.02.04.06.08.0
10.012.014.0
Q1.
11
Q4.
11
Q3.
12
Q2.
13
Q1.
14
Q4.
14
Q3.
15
Q2.
16
Q1.
17
Q4.
17
Q3.
18
Q2.
19
Q1.
20
Q2.
20
9M.20 (actual) 4.6% yoy
2019 (actual) 4.1% yoy
9M.20 (actual) 16.2%
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FUNDING WORTH ~40% OF GREEK GDP AVAILABLE IN THE NEXT 7 YEARS03
Executive Summary
amounts in €bn TOTALNext
Generation EU (N GEU)
National Strategic Reference
Framework (ESPA)
Common Agricultural Policy
2021-2027
National Development Programme
Competitive economy & digital transition 29 24 4 - 1
Direct payments 14 - - 14 -
Environment, energy 10 4 5 - 1
Infrastructure & transportation 9 3 3 - 3
Employment, education & social protection 9 1 6 - 1
Rural development 4 - - 4 -
Regional programmes 2 - - - 2
Spatial interventions & urban development 2 - 1 - 1
Reserve 1 - - - 1
Market measures 1 - - 1 -
Total 80 32 20 19 10
Source: Ministry of Development, Ministry of Rural Development & Food, Piraeus Bank Research
• The EU Recovery Fund will allow Greece, to cover the ground lost due to the Covid-19 pandemic, and also to lift its long-term growth
trend, as well to proceed structural reforms, through a specific plan required by EC, and targeted productivity enhancing investments
• The support can be up to 17%-18% of GDP, approximately €32bn. As this initiates, it will mean that starting from mid-2021 and spreadover the next 4 years, the Greek economy’s public investment resources may expand by more than 4% of GDP per annum
• Impact to GDP growth for the forthcoming years expected to be 1.5%-2.5% per annum
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EXECUTIVE SUMMARY
OUR RESPONSIVENESS TO SUPPORT OUR CLIENTS AND EMPLOYEES04
Executive Summary
€5.4bn €4.2bn €2.2bn
• new loans to clients year-to-date
• implemented debt moratoria for PEs
• allocation to client financing programs sponsored by the State
498100% operational
• branches fully operational throughout
2nd lockdown
5.5mn
• active customers, with +95k new additions in
9M.20
94% digital transactions
• 600k customers transacting online per week, +26% yoy
86 TRI*Mindex
• client satisfaction ranking in the top 10% of European banking benchmark
81% pulse survey
• employee satisfaction with Bank’s responsiveness to Covid-19 crisis
*data as of mid November 2020; TRI*M index measures the strength of the relationship between the customer and the Bank
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05 NOTABLE OPERATING & FINANCIAL PROGRESS
Executive Summary
Performing Loans Group, €bn
New Loan Production Group, €bn
NII & NFI Group-recurring, €mn
Total Capital Ratio Phased-in, %
NPEs Group, €bn
Deposits (private sector) Group, €bn
Operating ExpensesGroup-recurring, €mn
Employees Greece, #
24.2 24.125.8
9M.18 9M.19 9M.20
28.5
25.7
22.7
9M.18 9M.19 9M.20
2.0
3.2
4.5
9M.18 9M.19 9M.20
38.040.4
43.8
9M.18 9M.19 9M.20
12.3k 11.4k 10.9k
9M.18 9M.19 9M.20
1,054 1,0721,10
7
215 227 231
9M.18 9M.19 9M.20
13.7%15.2% 16.1%
9M.18 9M.19 9M.20
765711
650
9M.18 9M.19 9M.20
1,269 1,2991,339
NII
NFI
* 9M.20 OpEx excludes fixed fee paid to NPE servicer; employee number for continued operations
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9M.2020 FINANCIAL TAKEAWAYS06
Executive Summary
Business Performance
• NIM of 2.2%
• New loan production at 3.7% yield
• Funding costs substantially improved
• NFI over assets at 0.5%
• 94% of revenues from NII & NFI
Cost Efficiency
• OpEx decrease 9% yoy
• C:I at 48%
• 1,000 VES applications received to-date,
c.€40mn expected
annual savings
• c.30 branch closures during 2020 to-date
Covid-19Impact
• Covid-19 impairments of €362mn
• Reflection of the revised macroeconomic
estimates to IFRS
impairment assessment
already booked in
Q1.2020
Capital &Liquidity
• LCR 157%, LDR 81%
• Capital ratio 16.1%
• CET1 ratio 14.1%
• Capital actions of c.€1bn underway to further
enhance capital position
and facilitate accelerated
NPE derisking
* OpEx decrease on a like-for-like basis, as defined in the APMs section
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FINANCIAL PERFORMANCE
07 9M.20 EXHIBITS SOLID OPERATING TRENDS
Group (€mn) 9M.19 9M.20 yoy
Net Interest Income 1,072 1,107 3%
Net Fee Income 227 231 2%
Core Banking Income 1,299 1,339 3%
Trading & Other Income 62 79 28%
Total Net Revenues 1,361 1,417 4%
Total Operating Costs (749) (686) -8%
Total Operating Costs (like-for-like) (711) (650) -9%
Pre Provision Income 612 732 20%
Pre Provision Income (like-for-like) 650 767 18%
Impairments (502) (845) 68%
o/w related with CVD-19 - (362) -
Associates Income (0) (19) -
Pre-Tax Result 110 (133) -
Pre-Tax Result (recurring) 146 229 57%
Note: like-for-like items are displayed in the APM section of the presentation; recurring pre-tax result excluding Covid-19 impact in 2020 and VES costs in 2019
Executive Summary
• Νet interest income at €1,107mn, +3% yoy, mainly on the back of improving funding costs and increased fixed income
holdings
• Net fee income at €231mn, +2% yoy, helped by new loan generation, asset management, investment banking and
bancassurance
• Operating costs continued their downward trend as per the Bank’s strategy (-9% yoy like-for-like)
• 150bps of underlying cost of risk in 9M.20
• 77bps Covid-19 loan impairment (non-annualized) mainly booked in Q1.20, incorporates the impact of the revised
macroeconomic assumptions
• Excluding Covid-19 impact of €362mn, pre tax profit amounted to €229mn in 9M.20, while incorporating this, it
stood at a loss of €133mn
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FINANCIAL PERFORMANCE
08IMPROVEMENT IN FINANCIAL KPIS
WITH NORMALISATION IN NIM AS EXPECTED
Executive Summary
Group 9M.19 9M.20
NIM 2.4% 2.2%
NFI/Assets 0.5% 0.5%
Cost/Income 52% 48%
Pre Provision Income/RWA 1.8% 2.2%
LDR 84% 81%
LCR 107% 157%
Total Capital | phased-in 15.2% 16.1%
Total Capital | fully loaded 12.5% 13.7%
RWA Density 78% 64%
• NIM at 2.2% over an expanded asset base
• NFI over assets at 0.5% in line with plan for enhanced fee income generating business
• Significant cost cutting effort displayed in lower cost-to-income (48%), mainly on the back of
reduced staff costs
• Pre provision income/RWA enhanced, indicating the strength of core Piraeus Bank
franchise
• Positive total capital trajectory on the back of solid operating income trends and RWA
ongoing optimization, helped by the increasing
contribution of sovereign fixed income holdings
from a very low starting point
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82
460
-234
22735 262
-159
103
-21
CoreRevenues
Operating Costs
Core PPI OtherIncome
PPI Impairments Pre TaxResult(rec.)
Cvd-19Impairments
Pre TaxResult
125
447
-225
22263 285
-143
142
-17
CoreRevenues
Operating Costs
Core PPI OtherIncome
PPI Impairments Pre TaxResult(rec.)
Cvd-19Impairments
Pre TaxResult
80
367
09PROFITABILITY IN Q3.20 DRIVEN BY
IMPROVEMENT IN ALL CORE P&L LINES
Executive Summary
Q1.20 Result | €mn Q3.20 Result | €mn
* includes associates’ result
-202-340
431
-227
204
-19
185
-16-324
CoreRevenues
Operating Costs
Core PPI OtherIncome
PPI Impairments Pre TaxResult(rec.)
Cvd-19Impairments
Pre TaxResult
71
360NII
NFI
Q2.20 Result | €mn81
380NII
NFI
NII
NFI
Steady increase of core revenues, NII and NFI
Tight operating costs control to further intensify
Stabilization of organic impairments post Covid-19 charges in Q1
qoq impactedby non-core P&L lines
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(0.5) (0.5) (0.5)
(0.3) (0.3) (0.2)
10 CONTAINED NPE INFLOWS LED TO €0.3BN NEGATIVE FORMATION IN Q3.20
Executive Summary
10.2
11.4 collateral
provisions
0.2 0.1
0.2 0.1 0.1
95%
37.7 36.5 35.832.9
27.324.5 24.1
23.3 22.7
Sep.15 Dec.15 Dec.16 Dec.17 Dec.18 Dec.19Mar.20 Jun.20 Sep.20
Group NPE development | €bn
Coverage
- €15.0bn
Bank NPE movement | €bn
Re-defaults
Defaults
Curings,Collections,Liquidations
Write-offs
Q1.20
NPE 23.7 23.0
Q2.20
• curings as planned• lower liquidations
peak€130mn inflows
0.1
Q3.20
22.3
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11 PREPARATIONS FOR €7BN NPE SECURITISATIONS
Executive Summary
“Vega”
“Phoenix”
Note: senior tranches estimated based on latest perimeter information, pending rating confirmations
Retain 100%Senior Note
Gross Loans~€5.0bn
Junior
Mezzanine
Senior~€1.4bn
Retain at least 5% of
Mezz & JuniorNotes
Retain 100%Senior Note
Gross Loans~€1.9bn
Junior
Mezzanine
Senior~€1.0bn
Retain at least 5% of
Mezz & JuniorNotes
• The transaction will apply for the HAPS guarantee
• €1bn relates to mortgages and €4bn to commercial exposures
• The portfolio securitised in 3 SPVs (Vega I - II - III) to provide flexibility
• Business plan completed, pre-rating process initiated
• Targeted signing for transaction within Q1.2021
• Application for the HAPS guarantee on the Senior Note submitted inearly Aug.20 for the €1.9bn mortgage NPE transaction
• Commitment letter with Intrum AB for the purchase of 30% of Mezz andJunior notes. Distribution of 65% of the notes to the Bank’s shareholders
• Legal documentation to be concluded by the end-2020
• Preparation for dividend-in-kind process
• Targeted signing for transaction within Q1.2021
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EXECUTIVE SUMMARY
CORPORATE HIVE-DOWN PROCESS AT FINAL PHASE
The corporate hive-down plan includes:
Piraeus banking operations will be hived-down to a new wholly owned banking subsidiary (“NewCo”)
Certain non-banking activities will remain with the parent entity, which will evolve into a financial holding company (“HoldCo”)
In the context of the hive-down, all necessary preparations for €7bn NPE securitizations are taking place
The NewCo will hold no less than 5% of the Junior and Mezzanine Notes of the securitizations as required
The transformation balance sheet is based on the 31 July 2020 financial data
The corporate hive-down plan is subject to all the approvals by the relevant regulatory bodies and the GM of the Bank’s shareholders
12
Key steps
SPV setupJul.20
Expected demerger date30 Dec.2020
Derecognition of NPEsQ1-Q2.21
Executive Summary
Transformation B/S31 Jul.20
EGM approved HD10 Dec.2020
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MEASURES TO SUPPORT COVID-19 IMPACTED CUSTOMERS13
Executive Summary
Total client support measures | €bn
Programme Sponsor Program BeneficiariesPiraeus Bank
share
Hellenic Development Bank
Entrepreneurship Fund II
(“ΤΕPΙΧ ΙΙ”): Interest rate subsidy
(“new money”)
Impacted SMEs
~€0.6bnfunding
Guarantee Fund(“new money”)
SMEs & Corporates
~€1.6bn funding
Ministry of Development & Investments
Interest rate subsidy outstanding lending
facilities
ImpactedSMEs
~€1.8bn under
subsidy
Ministry of Finance
Installment Subsidy (“Gefyra”)
outstanding primary residence mortgages
Eligible impacted
individuals, professionals
~€1.7bnunder
subsidy
State schemes for financing support to clients
new loans under State
schemes
€2.2bn Total Financing €3.5bn Total subsidized loans
5.3
1.7
1.8
1.0
0.4
Debt moratoria
Gefyra mortgagesubsidy program
SME subsidyprogram
Guarantee Fund
TEPIX II2nd phase
€0.2bn
2nd phase €0.6bn
underprocessing
* debt moratoria refer to Bank data as of Sep.20
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14 DEBT MORATORIA INFORMATION
Executive Summary
Debt moratoria decomposition | €bn
FNPE
PE
SME & SB
Corporate
Mortgages
€5.3bn
Consumer
Business PE moratoria per sector | €bn
0.9
0.6
0.3
0.3
0.2
Hospitality and F&B
Transport & Logistics
Trade
Manufacturing
Real Estate &Construction
* debt moratoria refer to Bank data as of Sep.20
€5.3bn
• Demand for debt moratoria flattened
€4.2bn PE moratoria, split equally between households (€1.9bn) and businesses (€2.3bn)
€1.1bn moratoria provided to FNPE customers with
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15 Q3.2020 COVID-19 DEBT MORATORIA EVOLUTION
Executive Summary
4.8 +0.6
-2.9
+0.6
3.0
2.3
ActiveJun.2020
Granted Expired Expiredopted forextension
ActiveSep.2020
Expirednot opted for
extension
• Out of the €5.3bn total implemented moratoria, both PE & FNPE, at the end of Sep.2020:
€3.0bn were active
€2.3bn had expired and not opted for extension
• During Q3.2020, €2.9bn of debt moratoria have expired, of which:
€1.7bn show no arrears
€0.6bn show early arrears
€0.6bn have opted for extension
Q3.2020 implemented debt moratoria evolution | €bn
* debt moratoria refer to Bank data as of Sep.20
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16 COVID-19 DEBT MORATORIA MANAGEMENT STRATEGY
Executive Summary
4.2
0.6
0.5
1.4
0.7
1.0
PE moratoria
GefyraProgram
State supportschemes
Banksolutions
Naturalcurings
PotentialNPE inflow
• A bottom-up assessment for loans under debt moratoria has taken place for commercial customers, assuming moratoria expire at the end of 2020, with the exception of hospitality sector
• Maximization of the utilization of State support schemes funding
• c.40% of Gefyra program eligible borrowers under moratoria
• Targeted solutions per industry offered by the Bank for a smooth transition post the expiration of moratoria
• Actions are expected to reduce potential inflows to c.€1bn, or c.25% of PE debt moratoria (gross figure)
Performing debt moratoria management | €bn
Assumedgross inflows
* debt moratoria refer to Bank data as of Sep.20
State sponsored schemes
Bank management
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17CREDIT ORIGINATION IN GREECE PICKING-UP
TO FACILITATE DEMAND
33.9
31.7
26.5
23.7 23.4 22.621.9
Dec.16 Dec.17 Dec.18 Dec.19 Mar.20 Jun.20 Sep.20
27.4
24.9
23.9 23.7 24.124.5
25.4
Dec.16 Dec.17 Dec.18 Dec.19 Mar.20 Jun.20 Sep.20
Performing exposures | €bn
Non-performing exposures | €bn
14.0 13.7 13.8 14.314.7 15.5
Dec.17 Dec.18 Dec.19 Mar.20 Jun.20 Sep.20
PE business loans | €bn PE individuals loans | €bn
10.9 10.2 9.8 9.8 9.9 9.9
Dec.17 Dec.18 Dec.19 Mar.20 Jun.20 Sep.20
* year-end loan figures exclude seasonal agri-loan
Executive Summary
• The elevated liquidity demand by the market due to Covid-19 outbreak has been facilitated by the banking sector
• Piraeus Bank has maintained its leading position with regards to performing loan balances which have increased by €1.7bn year-to-date
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EXECUTIVE SUMMARY
STRONG LIQUIDITY & FUNDING POSITION 18
Executive Summary
Domestic deposits | €bn
Interbank funding | €bn
• Domestic private sector deposit balances increased by €2.3bn year-to-date in 9M.20
• Domestic private sector deposits grew 9% yoy at the end of Sep.20
• New time deposit costs
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19 IMPROVEMENT IN CAPITAL ADEQUACY
Executive Summary
• Post supervisory flexibility provided to
European banks to operate below combined
buffers in reaction to Covid-19, the capital
requirement has been effectively set to
11.25% until end-2022
• The change of P2R mix as per CRD V has
provided European banks with more flexibility
€bn | % Sep.20 Sep.20
CET-1 Capital 6.1 4.9
Total Capital 7.0 5.8
RWAs 43.6 42.4
CET-1 ratio 14.1% 11.6%
Total ratio 16.1% 13.7%
Capital ratio
SREP capital requirement
• Increase of capital ratio by ~13bps in Q3.20 to
16.1%
• Significant improvement of RWA density to
64% vs 78% a year ago
% 2020 2020
Pillar 1 CET1 4.50% 4.50%
Pillar 2 Requirement (P2R) 3.25% 1.83%
Capital Conservation Buffer (CCB) 2.50% -
Other Systemically Important Institutions 0.50% -
CET-1 Requirement 10.75% 6.33%
Additional Tier 1 1.50% 2.11%
Tier 2 2.00% 2.81%
Overall Capital Requirement (OCR) 14.25% 11.25%
Phased-In Fully Loaded
reported
effective requirementpost July 2020
ECB communication
-
15.6%
-0.5% -0.6%
+1.1% +0.3% +0.6%
-0.3%
16.1%
Dec.19 IFRS9phasing
Cvd-19impact
T2issue
9M.20result
RWAimpact
Otheradjustments
(eg. DTA)
Sep.20
RESILIENT REGULATORY CAPITAL LEVEL20
10.7%12.2% 12.9%
13.5% 13.7%
10.2%
Jun.18 Dec.18 Jun.19 Dec.19 Jun.20 Sep.20
Total regulatory capital (fully loaded)
+350bps
• 9M.20 regulatory capital ratio drivers include (apart from regulatory
adjustments):
€0.1bn organic capital generation
from P&L and reserves
€0.3bn Covid-19 impact (Q1)
€0.5bn Tier2 issuance (Q1)
€1.3bn RWA relief (incl. SME &
infrastructure lending factors)
Total regulatory capital (phased in)
• Capital enhancement plan executed since mid-2018 included internal generating
actions, NPE servicer deal & Tier 2 issues,
adding 350bps to capital
+210bps from T2 issuance
+140bps from organic actions
Executive Summary
-
EXECUTIVE SUMMARY
CONTIGENT CONVERTIBLE SECURITY
Latest developments & expected impact
ECB and subsequent Piraeus BoD decisions will lead to non-payment of CoCo coupon in December and conversion of the €2bn CoCo into Piraeus ordinary shares, as per terms of securities
394mn new shares will be issued based on 2015 recapitalization subscription price (calculated at €6.00 currently)
HFSF shareholding will increase to 61% from 26% currently
Tangible book value increase by €2bn
The fully discretionary non-payment of the coupon and the resulting CoCo conversion do not constitute a default in payment and do not trigger any cross-default clauses
The enhanced capital trajectory is expected to accelerate the Bank’s NPE reduction strategy in the forthcoming period
21
Key steps
Cancellation ofcoupon
Introductionof new shares in ATHEX
Executive Summary
Conversion & issuanceof new shares
-
EXECUTIVE SUMMARY
Capital enhancing actions Benefit (est.) Timing (est.)
A. Cards merchant acquiring business carve-out ~€0.3bn Q1
B. Performing loan synthetic securitization ~€0.3bn Q1, Q4
C. Participations portfolio reorganisation ~€0.1bn Q1
Plus 2020-2021 CoCo coupon savings ~€0.3bn Q4
Subtotal ~€1.0bn 2021
E. Unrealized profits in securities portfolio ~€0.4bn
F. Debt capital markets issuance ~€0.6bn
Total ~€2.0bn
Capital position to be strengthened by the end-2021 through a combination of strategic initiatives
CAPITAL ENHANCING ACTIONS UNDER WAY
Executive Summary
Capital actions to provide additional buffer of
c.€1bn on top of the Bank’s debt issuance plan as
following:
• Cards acquiring business carve-out: competitive
sale process launched, NBOs received, BOs
expected in Q1.21
• Synthetic securitization: PE loan size
corresponding to ~€2bn RWA, execution in 2
tranches, for the first one VDR opened, NBOs
expected in late Q4.20
• Participations portfolio: assignment of c.€0.4bn
portfolio management to third-party
• CoCo coupon savings
Indicatively, such actions could facilitate c.€5bn
of extra NPE derecognition by the end of 2021
22
-
23 PIRAEUS BANK’S TRANSFORMATION PROGRAM
Executive Summary
Implementation of a transformation program, capitalizing on the progress of 2017-2019, aiming a fresh & agile business model
• Step up the commercial proposition,
boosting origination via digital and
automation, fully exploiting high-potential
businesses
• Become the Bank of choice, through a
customer centric, digitally enabled and
targeted segment value proposition
• Enhance and empower the Bank’s talent
through a leaner and more rewarding
staffing profile
• Promote simplification and end-to-end
automation across the board to lower cost
to serve and free-up commercial focus
Design phase concludedend Sep.2020
HR and talent management
Technology and data management
Funding structure and securities portfolio5
6
7
Efficiency and simplification
Commercial customer proposition
Retail customer proposition
2 3 4Asset quality and
de-risking
1
Strategic initiativesalready under way
-
24
Leaner
>€150mn cost reduction(~20% drop)
Diversified
~30-70% NFI/NII mix (from ~20-80%)
Productive
Growth in volumes and core revenues /
FTE
Focused
>50% of branch time dedicated to revenue generating activities
Digital
3x increase in remote sales (from ~7% to
>20%)
De-risked
Single-digit NPE ratio (from ~47%)
Innovative
increase IT time invested in change initiatives
by 35%
Executive Summary
2020
• Program kicked-off in May & its design phase concluded in September
• Bottom-up approach with 17 initiative themes, >200 projects, >100 operational key value
drivers
• 1,000 FTEs utilizing VES program; expected savings of c.€40mn per annum
• Reduction of network by 40 branches
• New IT sourcing model (“factories”) kicked-off
• Further footprint rightsizing by 25 branches & operational model revamp
• Sales capabilities boost (digital & remote sales, commercial time increase, etc)
• Headquarters & back-office transformation
• Lending process redesign
• G&A savings of c.€15mn reallocated towards IT investment
• IT transformation & factories roll out
PIRAEUS BANK’S TRANSFORMATION PROGRAM
Full-scale engagement during the design phase, shaping collectively the underlying strategic directions of the Program
2021
-
0.7k 0.9k
2.5k
1-year before 2020pre lock-down
2020 post March lock-
down to date
25 DIGITAL BANKING BEHAVIOUR STANDING OUT
Executive Summary
Online registrations per week Customers transacting online per week winbank transactions penetration
89% 90%94%
1-year before 2020pre lock-down
2020post March lock-
down to date
400k440k
520k
1-year before 2020pre lock-down
2020post March lock-
down to date
Increase in winbank online registrations
3x to 328k ytd
More people transacting online and more often
600k users login/week
Increasing winbank penetration to cash
transactions
+21% in payments
-
9Μ.2020FINANCIALRESULTS
02Financial Performance
-
26 ASSETS & LIABILITIES OVERVIEW
• Loan-to-Deposit ratio at 81% and LiquidityCoverage ratio at 157%
3.9
6.5
0.32.1
38.3
1.3
7.3
8.0
2.1
7.6
47.1
1.40.5
9.0
Other*
Cash
AssetMix
Total
Securities
Net Loans
Fixed Assets
67.7
amounts in €bn
Total
ECB
Interbank Repos
Deposits
Total Equity
Other
67.7
FundingMix
Sep.20 Sep.20
Debt Securities
• Funding mix enhanced on the back of thedecision to utilize lower Eurosystem fundingcosts and switch interbank repo positions toECB TLTRO funding
• Customer deposits comprise 70% of liabilities and equity
• Customer loans comprise 57% of assets
(*) Other includes “other assets” (€3.6bn) and “goodwill & intangible assets” (€0.3bn)
Interbank Loans
DTA
Disc’d Ops & Held for Sale
Financial Performance
• Increase of ~€3bn ytd in fixed income portfolio; higher GGB holdings post the lift of the 2015 supervisory cap in early Mar.20
• €0.9bn Tier 2 issued in 2019 & 2020 with afocus on capital enhancement
-
27 BALANCE SHEET EVOLUTION
Group, €mn Sep.19 Jun.20 Sep.20 yoy
Cash/Interbank 3,757 7,267 9,212 >100%
Net Loans 37,953 37,792 38,280 1%
Securities 4,334 6,428 7,336 69%
Other Assets 13,046 12,895 12,865 -1%
Total Assets 59,089 64,382 67,693 15%
Interbank 3,032 7,583 9,445 >100%
Deposits 45,172 45,706 47,088 4%
Debt Securities in Circulation 925 1,369 1,386 50%
Other Liabilities 2,202 2,077 2,126 -3%
Equity 7,758 7,648 7,648 -1%
Total Liabilities & Equity 59,089 64,382 67,693 15%
4.9 5.1 5.1 5.2 5.3 5.3 5.1 5.2 5.2
Sep.18 Dec.18 Mar.19 Jun.19 Sep.19 Dec.19 Mar.20 Jun.20 Sep.20
Tangible Book Value | €bn
Liquidity Coverage Ratio | %
28%61% 67%
99% 107%117% 131%
169% 157%
Sep.18 Dec.18 Mar.19 Jun.19 Sep.19 Dec.19 Mar.20 Jun.20 Sep.20
Financial Performance
impacted by Covid-19
impairments
-
LIQUIDITY
40.9 +0.5 +0.5 +0.8+1.8 44.5
-0.9
+1.1 +0.2+2.2 47.1
-0.6 -0.9
+1.4 46.9
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.19 Δ Q1.20 Δ Q2.20 Δ Q3.20 Sep.20
27% 27%
73% 73%
Sep.20 Sep.20
Business Retail
34% 30%
66% 70%
Sep.20 Sep.20
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)
PiraeusFY.18delta
FY.19delta
Q1.20delta
Q2.20delta
Q3.20delta
Sep.20 balance
Mass|Farmers +1.1 +1.1 - - +0.1 18.0
Affluent|Private Banking +1.0 - - - -0.1 15.3
SB -0.1 +0.7 +0.1 +0.3 +0.4 4.6
SME - +0.2 +0.2 -0.1 +0.3 1.7
Corporate - +0.1 +0.3 +0.1 +0.3 3.4
Govt & Other +1.6 +0.5 -1.2 -1.2 +0.4 3.9
Total +3.6 +2.6 -0.6 -0.9 +1.4 46.9
28 DOMESTIC DEPOSITS
Financial Performance
-€2.4bn ytd from State deposits
-
29 NET INTEREST INCOME BENEFITING FROM LOWER FUNDING COSTS
Νet interest income resilient in Q3.20 at €380mn, increase by
3% qoq. NII, on a yearly basis, also increased by 3% in 9M.20
Customer deposit costs trending lower, as well as reduced
cost of wholesale funding (Eurosystem and market repo)
Improvement mainly from the liability side and funding costs
Increase of fixed income portfolio in Eurozone sovereign
bonds supports NII
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
NIM slightly lower qoq on the back of the inflated asset size
Q2.20 Q3.20
Net Loans 395 399
Fixed Income Securities 25 27
Other Assets 32 36
Interest Income 452 463
Customer Deposits 24 19
Due to Banks 1 1
Debt Securities 19 19
Other Liabilities 42 45
Interest Expense 85 83
Net interest Income 367 380
NIM 1 2.3% 2.2%
1. on assets excluding discontinued operations
Net interest income decomposition (€mn)
●
●
●
●
●
Financial Performance
●
-
FINANCIAL PERFORMANCE
Q3.19 Q4.19 Q1.20 Q2.20 Q3.20
Deposits 0.39% 0.33% 0.24% 0.18% 0.15%
Sight 0.46% 0.44% 0.27% 0.19% 0.18%
Savings 0.05% 0.05% 0.04% 0.03% 0.03%
Time 0.65% 0.51% 0.43% 0.35% 0.27%
avg 3m euribor
-0.40% -0.40% -0.41% -0.30% -0.47%
Loans 3.27% 3.29% 3.35% 3.29% 3.24%
Mortgages 1.97% 1.93% 1.92% 1.91% 1.89%
Consumer 6.97% 7.33% 7.43% 7.56% 7.30%
Business 3.46% 3.50% 3.59% 3.49% 3.44%
Actual rates shown above refer to total Greek banking operations, quarterly averages
Time deposit rate declines further, resiliency in loan rates
Loan Rates
Q3.20 Total Stock Front Book
Mortgages 1.9% 2.5%
Consumer 7.3% 9.8%
Business 3.4% 3.4%
Total 3.2% 3.6%
Loan rates: front book rates above legacy book
Business Loan Rates
Q3.20 Total Stock Front Book
Corporate & SME 3.2% 3.0%
SBL 5.0% 4.8%
Total 3.4% 3.4%
30DOMESTIC YIELDS:
CONTINUOUS IMPROVEMENT IN DEPOSIT RATES
Financial Performance
-
31NET FEE & COMMISSION INCOME RESILIENT DESPITE
TOUGH EXTERNAL ENVIRONMENT
(€mn) Q2.20 Q3.20 % Assets
Loans & Cards Business 42 42 0.25%
Funds Transfer 12 14 0.08%
Bancassurance 10 11 0.07%
Letters of Guarantee 8 8 0.05%
Payments 8 8 0.05%
Asset Management & Brokerage 8 7 0.04%
FX Fees 4 4 0.02%
Other 7 11 0.06%
Gross Fee Income 99 105 0.62%
Fee Expense (19) (24) -0.14%
Net Fee Income 80 81 0.48%
NFI in Q3.20 increased to €81mn, 1% qoq despite a
significant fall in transaction volumes during lockdown. In
9Μ.20 NFI increased by 2% yoy to €231mn
Fees stemming from funds transfer and bancassurance
were the key contributors of the increasing trend
witnessed in Q3.20
●
●
Financial Performance
Net fee income stable qoq, absorbing external headwinds
-
32 STAFF COSTS SOLID REDUCTION
(€mn) 9M.19 9M.20 yoy
Staff costs 394 319 -19%
G&A costs 265 280 6%
Taxes & Duties 55 58 4%
Fees & Third Parties 52 48 -7%
Products (cards, insurance, collections, etc.)1 15 43 >100%
Promotion & Advertising 15 13 -14%
Rents 6 5 -8%
Other 123 113 -8%
Depreciation 91 86 -5%
Total operating costs (reported) 749 686 -8%
Total operating costs (like-for-like)2 711 650 -9%
9M.20 performance in line with Bank’s budget
Staff costs declined by 19% yoy (-11% yoy adjusted for
2019 VES), as the Bank realised the benefits of the carve-
out of the NPE servicing platform and the 2019 voluntary
exit scheme programme
Cost to income in 9M.20 stood at 48% vs 52% the same
period last year
Efficiencies to be further increased along with ongoing
digitalisation, as well as the implementation of the new
transformation plan
●
Costs running at -9% rate on a like-for-like basis, supporting the Bank’s efficiency ratio
●
Financial Performance
●
●
(1) 9M.2020 including the fee paid to the NPE servicer
(2) like-for-like items are displayed in the APM section of the presentation
-
33 GROUP NPE & NPE COVERAGE RATIO
NPEs (€mn) Sep.20 Mix
Business 14,909 66%
Mortgages 5,647 25%
Consumer 2,119 9%
TOTAL 22,675 100%
Group NPE ratio per product category
Group NPE mix
48%51%
42%
52%47% 48%
42%
51%
Total Business Mortgages Consumer
Jun.20
Sep.20
Financial Performance
NPE coverage ratio per product
LLRs (€mn) Sep.20LLR/
Loans
Business 6,889 22%
Mortgages 1,742 13%
Consumer 1,577 38%
TOTAL 10,208 21%
LLRs (€mn) Sep.20LLR/
Loans
Greece 9,694 20%
International 515 44%
TOTAL 10,208 21%
Group LLRs at 22% over loans
45% 46%
31%
75%
45% 46%
31%
74%
Total Business Mortgages Consumer
Jun.20
Sep.20
-
34 CURING POTENTIAL FROM FORBORNE LOANS
(€bn) 0 dpd 1-89dpd >90dpd Denounced NPEs
Business 3.5 0.9 2.1 8.4 14.9
Mortgages 0.6 0.4 0.6 4.0 5.6
Consumer 0.1 0.1 0.5 1.4 2.1
TOTAL 4.3 1.4 3.2 13.8 22.7
NPEs per bucket (Sep.20)
Forborne loans (Sep.20, €9.0bn)
NPΕ mix 19% 6% 14% 61% 100%
[1] [2] [3] [1+2+3+4][4]
NPEF 0dpd38%
NPEF 1-30dpd7%
NPEF 31-90dpd7%
NPEF >90dpd18%
PF31%
Financial Performance
46%
46%
Cash coverage Collateral coverage
74%
23%
Cash coverage Collateral coverage
* pre-haircut tangible collateral (guarantees not included) capped at loan amount
Mortgages
Business
Consumer
Total 93%
Total 101%
Total 98%
31%
71%
Cash coverage Collateral coverage
Cash & collateral coverage
-
35 PRE WRITE-OFF NEGATIVE FORMATION IN Q3.20
-187
-740
-612
-381
-247
-460
-189-143-124
-272-381
-53
56 31
-63-9 -55 -28
-133 -69-149 -91-61 -38
-2 -21
18
-52 -29 -26 -6 -39 -18
Q1.
18
Q2.
18
Q3.
18
Q4.
18
Q1.
19
Q2.
19
Q3.
19
Q4.
19
Q1.
20
Q2.
20
Q3.
20
Q1.
18
Q2.
18
Q3.
18
Q4.
18
Q1.
19
Q2.
19
Q3.
19
Q4.
19
Q1.
20
Q2.
20
Q3.
20
Q1.
18
Q2.
18
Q3.
18
Q4.
18
Q1.
19
Q2.
19
Q3.
19
Q4.
19
Q1.
20
Q2.
20
Q3.
20
Greek NPE Formation by Segment |€mn
Business Mortgages Consumer
NPE Greece | €mn
NPE formation continued
its negative pace in Q3.20
in all segments
Financial Performance
24,83826,473
-238 -215
26,020
-567 -211
25,242
-246 -176 -658
675
-302 -400 -405
23,730
-199 -150
23,381
-461 -333
22,587
-490 -160
21,938
Dec.18 NPE formation
W/Oclean-up
Mar.19 NPEformation
W/Oclean-up
Jun.19 NPEformation
W/Oclean-up
Sales (NPE
portion)
Technical adjustment
Sep.19 NPEformation
W/Oclean-up
Sales (NPE
portion)
Dec.19 NPEformation
W/Oclean-up
Mar.20 NPEformation
W/Oclean-up
Jun.20 NPEformation
W/Oclean-up
Sep.20
* write-offs related with clean-up actions appear in separate, whereas debt forgiveness write-offs are included in NPE formation
-
9Μ.2020FINANCIALRESULTS
03Appendix
-
36 GROUP RESULTS | QUARTERLY EVOLUTION
Appendix
(€mn) Q3.17 Q4.17 Q1.18 Q2.18 Q3.18 Q4.18 Q1.19 Q2.19 Q3.19 Q4.19 Q1.20 Q2.20 Q3.20
Net Interest Income 415 390 353 352 349 355 360 359 353 363 360 367 380
Net Fee Income 112 76 69 70 124 76 69 77 81 91 71 80 81
Net Fee Income (recurring) 77 76 69 70 76 76 69 77 81 91 71 80 81
Trading & Other Income 24 -1 26 36 26 45 15 13 33 359 (19) 63 35
Total Net Revenues 551 464 448 458 499 477 445 449 467 813 412 510 496
Total Net Revenues (recurring) 516 454 448 458 451 477 445 449 467 462 412 510 496
Staff Costs (128) (153) (259) (125) (117) (114) (120) (139) (135) (110) (107) (105) (107)
Staff Costs (recurring) (128) (137) (130) (125) (120) (121) (120) (123) (115) (115) (107) (105) (107)
Administrative Expenses (108) (145) (97) (113) (103) (129) (80) (92) (92) (121) (91) (91) (98)
Depreciation & Other (24) (28) (27) (25) (26) (26) (30) (30) (30) (32) (29) (29) (28)
Total Operating Costs (260) (325) (383) (262) (246) (269) (231) (261) (257) (264) (227) (225) (234)
Total Operating Costs (recurring) (260) (309) (254) (262) (249) (275) (231) (245) (237) (269) (227) (225) (234)
Pre Provision Income 291 139 64 196 253 208 214 188 210 549 185 285 262
Pre Provision Income (recurring) 256 144 193 196 203 202 214 203 230 193 185 285 262
Result from Associates 4 (8) (8) (16) 11 28 (10) (0) 11 5 (16) 0 (4)
Impairment on Loans* (310) (1,189) (163) (149) (149) (137) (186) (146) (157) (221) (438) (142) (146)
Impairment on Other Assets (7) (118) (8) 20 (4) (64) 5 (7) (11) (55) (72) (18) (30)
Pre Tax Result (21) (1,176) (115) 51 110 34 23 34 53 279 (340) 125 82
Tax 2 1,181 35 (29) (17) 103 (9) (16) (9) (88) 110 (41) (79)
Net Result Attributable to SHs (18) 6 (79) 24 94 145 14 20 44 192 (230) 85 3
Minorities (1) (2) (1) (2) (1) (7) 0 (2) 0 (2) 0 (1) 0
Discontinued Operations Result 5 (119) (3) (310) (27) (4) 5 1 5 (2) (2) (2) (2)
* for 2019 and onwards loan impairment includes net modification loss
-
37 PIRAEUS CORE BANK AND PIRAEUS LEGACY UNIT KPIs | 9M.20
Appendix
* Legacy includes NPE, international operations, REO, holdings, discontinued operations and non-core Greek assets** Including net modification loss & associates’ income. The illustration refers to underlying impairment, excluding Covid-19 impact of €362mn
PIRAEUS GROUP
1,107
231
1,417
(686)
732
(503)
229
2.2%
0.5%
48%
1.5%
0.5%
64%
LEGACY*
290
9
314
(90)
224
(322)
(98)
2.3%
0.1%
29%
3.1%
-
38 FOCUS ON CORE ACTIVITIES
Appendix
* Legacy includes NPE, international operations, REO, holdings, discontinued operations and non-core Greek assets** Including net modification loss & associates’ income. The illustration refers to underlying impairment, excluding Covid-19 impact of €362mnn.m.: non-meaningful
CORE BANK
9M.20 | €mn Retail CIB Markets Corp.Center CORE TOTAL Legacy* GROUP
NII 349 348 104 16 817 290 1,107
NFI 135 84 4 1 223 9 231
Other Income 6 2 20 36 64 15 79
Net Revenues 490 433 127 53 1,104 314 1,417
OpEx (339) (102) (20) (134) (595) (90) (686)
PPI 151 331 107 (81) 508 224 732
Impairment** (55) (58) (21) (48) (181) (322) (503)
PBT 96 273 86 (128) 327 (98) 229
NIM over Assets 4.5% 3.2% 0.9% 0.2% 2.1% 2.3% 2.2%
NFI over Assets 1.7% 0.8% 0.0% 0.0% 0.6% 0.1% 0.5%
Cost to Income 69% 24% 16% n.m. 54% 29% 48%
Cost of Risk** 0.8% 0.5% n.m. n.m. 0.6% 3.1% 1.5%
PPI over RWA 3.6% 4.0% 6.2%
-
39 LOAN & DEPOSIT PORTFOLIOS
Appendix
Gross Loans Evolution (€mn)
Dec.17 Dec.18 Sep.19 Dec.19 Mar.20 Jun.20 Sep.20 qoq yoy
Group 58,627 51,475 49,758 48,600 48,676 48,306 48,488 0% -3%
Business 37,962 32,144 31,369 30,498 30,744 30,489 30,783 1% -2%
Mortgages 15,183 14,523 14,068 13,914 13,781 13,669 13,551 -1% -4%
Consumer 5,482 4,808 4,322 4,188 4,151 4,149 4,154 0% -4%
Greece 56,597 50,382 48,474 47,399 47,481 47,126 47,327 0% -2%
Business 36,317 31,215 30,235 29,413 29,664 29,423 29,733 1% -2%
Mortgages 14,973 14,474 14,025 13,879 13,747 13,635 13,519 -1% -4%
Consumer 5,307 4,693 4,214 4,106 4,069 4,068 4,075 0% -3%
Int’l 2,030 1,093 1,285 1,201 1,196 1,180 1,161 -2% -10%
Business 1,645 928 1,134 1,084 1,078 1,066 1,050 -1% -7%
Mortgages 210 49 43 35 34 33 32 -4% -26%
Consumer 175 116 107 82 83 81 79 -2% -27%
Deposits Evolution (€mn)
Dec.17 Dec.18 Sep.19 Dec.19 Mar.20 Jun.20 Sep.20 qoq yoy
Group 42,715 44,739 45,172 47,351 46,697 45,706 47,088 3% 4%
Savings 15,134 15,323 15,522 16,660 17,198 17,705 18,211 3% 17%
Sight 11,682 12,013 12,513 12,656 12,648 13,402 14,492 8% 16%
Time 15,900 17,402 17,137 18,035 16,851 14,598 14,386 -1% -16%
Greece 40,889 44,536 44,916 47,099 46,452 45,504 46,882 3% 4%
Savings 14,825 15,309 15,508 16,647 17,185 17,693 18,199 3% 17%
Sight 11,125 11,927 12,376 12,567 12,564 13,311 14,397 8% 16%
Time 14,938 17,300 17,032 17,885 16,703 14,499 14,285 -1% -16%
Int’l 1,826 203 255 251 245 202 206 2% -19%
Savings 309 14 14 13 13 12 11 -6% -20%
Sight 556 86 136 89 83 91 94 3% -31%
Time 961 102 105 150 149 99 101 2% -4%
Notes: loan balances exclude seasonal agri-loan of €1.6bn for Dec.17 & Dec.18 and €1.5bn for Dec.19
-
40 IFRS9 STAGE ANALYSIS | GROUP
Appendix
Gross Loans (€bn)
Dec.171 Mar.18 Jun.18 Sep.18 Dec.181 Mar.19 Jun.19 Sep.19 Dec.191 Mar.20 Jun.20 Sep.20 Δ yoy
Stage 1 19.1 18.9 18.6 18.4 17.6 18.2 18.2 18.2 18.4 18.5 18.6 20.1 11%
Stage 2 6.9 7.0 5.9 5.9 5.9 5.9 5.8 5.2 5.0 5.4 5.7 5.0 -4%
Stage 3 32.3 31.8 29.3 28.5 28.0 27.5 26.7 26.3 25.2 24.8 24.0 23.3 -11%
Total 58.3 57.7 53.7 52.8 51.5 51.6 50.8 49.8 48.6 48.7 48.3 48.5 -3%
Coverage (%) Sep.20 Mortgages Consumer Business Total
Stage 1 0% 2% 1% 1%
Stage 2 1% 11% 7% 5%
Stage 3 29% 67% 44% 42%
Total 13% 38% 22% 21%
(1) excluding seasonal agri-loan of €1.6bn for Dec.17 & Dec.18 and of €1.5bn for Dec.19Loans for all periods exclude balances accounted for at FVT P&L
-
GLOSSARY
GLOSSARY | DEFINITIONS OF ALTERNATIVE PERFORMANCE MEASURES41
1 Adjusted total assetsTotal assets excluding assets amounting to: 1) €1.2bn as at 31 March 2019 of discontinued operations in Bulgaria and other discontinued operations 2) €1.7bn as at 31 December 2019 of discontinued operations and seasonal OPEKEPE agri-loan 3) €0.1bn of discontinued operations as at 30 June 2019, 30 September 2019, 31 March 2020 , 30 June 2020 and 30 September 2020
2 Core Banking Income or NII+NFI Net interest income plus (+) net fee and commission income
3 Cost of Risk (CoR)ECL impairment losses on loans and advances to customers at amortised cost of the period annualised over (/) Net Loans, with the exception of the Covid-19 impact element that is not annualised in the ratio
4 Cost of Risk UnderlyingCost of risk minus (-) ECL impairment losses due to Covid-19, as per item #6, minus (-) ECL impairments losses corresponding to NPE sales, minus (-) success fee paid to NPE servicer over (/) Net loans
5 Cost to Income Ratio (C:I)Total operating expenses before provisions over (/) total net income excluding one-off items related to the corresponding period as per item #28
6 Covid-19 impactCovid-19 impact of €324mn for Q1.2020, €17mn for Q2.2020 and €21mn for Q3.2020 referring to incremental ECL impairment losses on loans and advances to customers and on other assets, to reflect worsening economic outlook as a result of Covid-19
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
9 Deposits or Customer Deposits Due to customers
10 Private Sector Deposits Deposits minus (-) Greek Ministry of Finance deposits with the Bank
11 DTAs Deferred Tax Assets
12 Gross Book Value (GBV) Gross loans
13 Gross Loans Loans and advances to customers at amortised cost before ECL allowance
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
15Loan 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 NFCI) Net Fee and Commission Income
18 Net Interest Margin (NIM) Net interest income annualised over (/) Adjusted total assets
19 Net Loans Loans and advances to customers at amortised cost
20 Net Results or Net Profit Profit / (loss) for the period attributable to shareholders of the Bank
21 Net Stable Funding RatioThe portion of liabilities and capital expected to remain with the Bank for more than one year over (/) The amount of stable funding that the Bank is required to hold given the liquidity characteristics and residual maturities of its assets and the contingent liquidity risk arising from its off-balance sheet exposures
22 Net Revenue(s) Total Net Income
23 New Loan Generation New loan disbursements that were realised after previous end period
-
GLOSSARY
GLOSSARY | DEFINITIONS OF ALTERNATIVE PERFORMANCE MEASURES (cont’d)42
24 NFI over Assets Net fee and commission income annualised over (/) Adjusted total assets
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 that are: (a) past due over 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 Bank Non Performing Exposures (NPEs) Non Performing Exposures of the parent entity excluding intragroup lending NPEs
28 Non-Recurring (One-off) ItemsNon Recurring Items for FY.19 include €351mn capital gain from the NPE servicing platform carve-out (included in trading Income), €36mn related with VES costs (out of which €20 mn in Q3.2019) and €5mn other offsetting cost adjustments (both reported in OpEx).
29 NPE (Cash) Coverage Ratio Accumulated ECL allowance over (/) NPEs
30 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
31 NPE Ratio Non Performing Exposures over (/) Gross Loans
32 Operating Costs - Expenses (OpEx) Total operating expenses before provisions
33 OpEx/Assets Total operating expenses over (/) Adjusted total assets
34 OpEx (like for like) Operating costs, minus (-) non-recurring VES costs in Q2.2019 and Q3.2019, minus (-) the cost of the assets under management fee paid to the NPE servicer
35 Performing Exposures (PE) Gross Loans minus (-) Non Performing Exposures
36 Pre Provision Income (PPI) Profit before provisions, impairments and income tax
37 PPI, like for likePPI minus (-) non-recurring VES costs in Q2.2019 and Q3.2019, minus (-) assets under management fee paid to the NPE servicer in 9Μ.2020
38 PPI / RWA Pre Provision Income over (/) Risk Weighted Assets
39 Pre Tax Results/Pre Tax profits (PBT) Profit / (loss) before income tax
40 Recurring Operating expenses (Recurring OpEx) Operating Expenses excluding "Non Recurring (One-off) Items“ as per item #28
41 Recurring Pre Provision Income (Recurring PPI) PPI excluding one-off items related to the corresponding period as per item #28
42 Recurring Pre Tax Result Pre Tax Results excluding one-off items related to the corresponding period as per item #28 and Covid -19 impact as per item # 6
43 Recurring Total Net Revenues Total net income minus (-) one-off income related to the corresponding period as per item #28
44 Return on Assets (RoA) Profit before income tax for the period annualised over (/) Adjusted total assets
45 RWA density Risk Weighted Assets over (/) Adjusted total Assets
46 Tangible book value Total equity minus the nominal value of cocos minus intangible assets
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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 followsshall 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 oraccessing 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 orimproper circulation of the presentation or any information contained herein.
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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 andanticipated 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 andinvolve 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-lookingstatements. 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 knowwhat 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 onthese 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 toany 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.
9Μ.2020FINANCIALRESULTS
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Investor Relations ContactsChryssanthi Berbati Antonis Sagris Xenofon Damalas, CFA George Doukas Amalia Missailidi
4 Amerikis St., 105 64 AthensTel. : (+30 ) 210 [email protected]
Bloomberg: TPEIR GA | Reuters: BOPr.AT ISIN: GRS014003024 www.piraeusbankgroup.com
9Μ.2020FINANCIALRESULTS
mailto:[email protected]://www.piraeusbankgroup.com/
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PIRAEUS BANK GROUP HEADQUARTERS
4, Amerikis Str., 105 64 Athens, GreeceT. +30 210 333 5026 www.piraeusbankgroup.com