Crediabank S.a. · ATHEX:CREDIA
Crediabank — Attica Bank — Investor Presentation (November 2015)
76 slides from Crediabank's investor presentation, November 2015
Slide 1: Attica Bank Presentation November 2015
DRAFT Attica Bank Presentation November 2015 Together we are stronger 1 www.atticabank.gr
Slide 2: Table of Contents
DRAFT Table of Contents EXECUTIVE SUMMARY 2 BUSINESS DESCRIPTION 14 LOANS 20 FUNDING 29 CAPITAL 33 OPERATING INCOME - OPERATING EXPENSES 38 OPERATIONS - HR 41 APPENDIX APPENDIX 1 - MACROECONOMIC UPDATE 44 APPENDIX 2 – STEPS TO ENTER THE HFSF FRAMEWORK 50 APPENDIX 3 – IT INFRASTRUCTURE 51 APPENDIX 4
Slide 3: Executive Summary
DRAFT Executive Summary
Slide 4: An experienced management team
DRAFT EXECUTIVE SUMMARY An experienced management team Ioannis Gamvrilis, Chairman of the BoD Chairman of the BoD of Attica Bank since 2010 First Vice-Chairman of the Insurance Fund for Independent Professionals (ETAA), Chairman of the Insurance Fund for Engineers (TSMEDE) and member of the Repr
Slide 5: Strategic Objectives
DRAFT EXECUTIVE SUMMARY Strategic Objectives 1 A bank that is projected to grow in probably the most concentrated banking sector in Europe focusing on providing credit to sectors with positive growth prospects 7 2 Among the 10 banks worldwide which Asset portfolio clean up by use the latest Globus I
Slide 6: The Greek recovery and Attica Bank
DRAFT EXECUTIVE SUMMARY The Greek recovery and Attica Bank A Benefit from the Greek macro recovery in the medium to long term… B …In probably the most concentrated market in Europe with positive growth prospects post recovery… C …In which Attica is well positioned D Cleaned up legacy portfolio post
Slide 7: Benefit from the Greek macro recovery in the medium to long term
DRAFT A EXECUTIVE SUMMARY Benefit from the Greek macro recovery in the medium to long term… Key indicators evolution and forecasts Greek gross domestic product (constant prices) Significant progress has been made toward rebalancing the economy so that a 320 6.0 recovery started in 2014 after six y
Slide 8: Highly concentrated market with promising growth prospects
DRAFT B …In a highly concentrated market with promising EXECUTIVE SUMMARY growth prospects post recovery… Following Greek banking sector consolidation (acquisitions, mergers, exit of foreign players), the four systemic banks now represent 94% of the Greek market while at the moment the Greek banki
Slide 9: Attica is well positioned
DRAFT C EXECUTIVE SUMMARY …In which Attica is well positioned Comments Loans breakdown by segment - FY 2014 Traditional full service commercial bank with a clear focus on the SME segment Attica1 Sector2 Credit Cards Public Public 2% Sector Sector Credit Cards Consumer 5% Corporate Can leverage o
Slide 10: Cleaned up legacy portfolio with high cash provisions for NPEs
DRAFT D EXECUTIVE SUMMARY Cleaned up legacy portfolio post CA with high cash provisions for NPEs Amendment of the civil procedure code Concentration of NPEs – H1 2015 A recent reform of the civil procedure code for secured creditors is expected to Distribution of customers per NPEs cumulative bala
Slide 11: Clear governance with a 100% private shareholding
DRAFT E EXECUTIVE SUMMARY Clear governance with a 100% private shareholding Comments Shareholding structure (%) – Q3 2015 No integration burdens unlike systemic peers given no M&A during crisis 35.4 Clean slate to start with 57.2 66.2 66.9 100.0 Operations only in Greece providing pure play ma
Slide 12: Lower than system average dependence on Eurosystem Funding
DRAFT F EXECUTIVE SUMMARY Lower than system average dependence on Eurosystem Funding Comments Reliance on Eurosystem funding as a percentage of total assets as at 30/09/2015 stood at c. 25% against a sector average of c. 33%. Since the end of 2014 deposits balances have deteriorated due to incre
Slide 13: Sound financial structure post capital increase
DRAFT G Sound financial structure of the Greek EXECUTIVE SUMMARY banking sector post capital increase European banks - Benchmark of Basel III CET1 ratio (fully-phased) – Attica Bank based on a € 750 m capital increase (pro forma) Average CET1 fully- phased Basel III: 12.8% (1) 24.0% 19.2% 15.8% 15.7
Slide 14: Key terms of the share capital increase
DRAFT EXECUTIVE SUMMARY Overview of the key terms of the share capital increase ISSUER Attica Bank SA (“Attica” or the “Company”) Share capital increase with preferential subscription rights TRANSACTION STRUCTURE ETAA / TSMEDE, which owns 50.67% of Attica Bank’s capital, has already expressed
Slide 15: HFSF Contingent Convertible Bonds (CoCos)
DRAFT HFSF Contingent Convertible Bonds (“CoCos”) are classified in equity EXECUTIVE SUMMARY according to IFRS and eligible for Common Equity Tier 1 capital HFSF participation to cover the capital needs related to the adverse scenario done through a mix of common equity and Cocos (25%/75%), Common s
Slide 16: Business Description
DRAFT Business Description
Slide 17: Business Description
DRAFT BUSINESS DESCRIPTION Business Description Loans/deposits breakdown – Q3 2015 Business description Loans Deposits Other State Leasing Credit 1.4% 0.9% 7.7% cards Consumer Attica Bank focuses on providing credit to small and medium enterprises and private 1.6% loans Public 6.1% Sector individu
Slide 18: Distribution – Branch network
DRAFT BUSINESS DESCRIPTION Distribution – Branch network Branch network background and strategy Branch network overview Attica's branch network expanded significantly in the previous decade peaking at 80 branches from 61 in 70 branches, including 2005. The growth was organically driven, as the b
Slide 19: Distribution – E-banking
DRAFT BUSINESS DESCRIPTION Distribution – E-banking The e-banking services ensure that banking transactions can be entered into round the clock, 7 days a week, and is particularly user friendly for the Bank’s customers. The number of users of Attica Bank’s e-banking services has increased in recen
Slide 20: Loans - Deposits
DRAFT BUSINESS DESCRIPTION Loans - Deposits Breakdown of Loan Portfolio by Type – Q3 2015 (Loans before provisions: € 3.8bn) Breakdown of Due to Customers per Type – Q3 2015 Credit cards 1.6% Other Current State Leasing Consumer 0.9% 7.7% loans 1.6% 0.5% 6.1% Sight Mortgages 17.4% Savings 13.3% 18.3
Slide 21: Subsidiaries
DRAFT BUSINESS DESCRIPTION Subsidiaries Turnover FY 2014 Turnover FY 2014 Bancassurance (retail banking) € 1.1 million Venture capital (corporate banking) €1 million Attica Bancassurance agency offer products through the Bank’s network and are Attica Bank was the first bank to participate in a v
Slide 22: Synergies with Cooperative Banks
DRAFT BUSINESS DESCRIPTION Synergies with Cooperative Banks Attica Bank aims to collaborate with the Cooperative Banks to provide them a set of products and services: MANAGEMENT AND CLEARING OF ATM AND EFT/POS SENDING 180 COMMON ATM MACHINES (ALREADY AND RECEIVING IN OPERATION) REMITTANCES NETWORK T
Slide 23: Loans
DRAFT Loans
Slide 24: Loan Portfolio Overview
DRAFT LOANS Loan Portfolio Overview Comments Attica Bank keeps providing the Greek economy with liquidity – Expanding total loan book amounting €3.8bn as of 30 September 2015 The Bank holds c. 78% of total portfolio in total business lending, c. 14% in mortgage loans and a remaining 8% in other
Slide 25: Loans – Mortgage loan products
DRAFT LOANS Loans Mortgage loan products Evolution of spreads on mortgages (%) Attica Bank offers a large variety of home loan products that pertain to the market (including the purchase of a plot), construction, completion, expansion and repair of a 7.50 house or professional premises: 5.81 5.78
Slide 26: Loans – Consumer credit products
DRAFT LOANS Loans Consumer credit products Consumer credit products Attica Bank offers competitive consumer loan products, among them indicatively the Attica Bank issues the following credit and debit cards: following: Visa credit cards Attica Interest loan (for covering personal and consume
Slide 27: Asset Quality - Portfolio Overview
DRAFT LOANS Asset Quality - Portfolio Overview Total portfolio NPE € 2.1bn as of 30/9/2015 50.9% of NPES are covered by provisions and 50.1% from collateral Stock of NPEs (€bn) and NPE ratio (%) Stock of provisions (€m) and NPEs provision coverage (%) 1.200,00 50.9% Χιλιάδες 3,00 55.8% 50% 44.8%
Slide 28: NPE Portfolio Overview
DRAFT LOANS NPE Portfolio Overview NPE (%) – Q3 2015 NPE Coverage ratio – Q3 2015 58% 127% 56% 50% 109% 45% 101% 42% 83% 50% 60% 51% 53% 52% 49% 44% Peer 1 Peer 2 Peer 3 Peer 4 Peer 1 Peer 2 Peer 3 Peer 4 Cash coverage ratio NPE Collateral coverage Evolution of Cost of Risk NPE Breakdown – Q3 2015 3
Slide 29: Asset Quality - Portfolio Overview
DRAFT LOANS Asset Quality - Portfolio Overview Attica Bank presents an NPE collateral coverage ratio of 50.1% as of 30.09.2015 All collateral presented at Fair Value (real estate valuations adjusted by BoG HPI and CPI) and exclude personal and corporate guarantees Evolution of total portfolio an
Slide 30: NPL management
DRAFT LOANS NPL management New organisational structure The dedicated administrative unit has been designed based on the best national and international practices and was established in accordance with the provisions of Act No 42 of the Executive Committee of the Bank of Greece and reports directl
Slide 31: NPL management
DRAFT LOANS NPL management Attica Bank has recently reorganised the NPL management unit by creating a clear and efficient organisation scheme to address the growing need for the optimisation of the arrears management process. More specifically, the Bank has launched an ambitious project for the de
Slide 32: Impact of the project
DRAFT LOANS Impact of the project Project implementation, in conjunction with new Special Account Management Department, is expected to have significant impact in asset quality and profitability. Cost savings of €2.5m formed in Q3 2015 Impact on asset quality Legal expenses Moreover, the Bank, i
Slide 33: Funding
DRAFT Funding
Slide 34: Eurosystem Funding
DRAFT FUNDING Eurosystem Funding Comments Evolution of Eurosystem funding (% of total assets) Reliance on Eurosystem funding as a percentage of total assets as at Q3 2015 stood at 1000 24.6% 30% 25% against a sector average of c. 32%. 17.7% Since the end of 2014 deposits balances have deteriorat
Slide 35: Funding and Liquidity
DRAFT FUNDING Funding and Liquidity Main factors influencing liquidity in the Greek Banking system Net loans to Deposits ratio (%) Shrinking deposit balances due to the deterioration of the macroeconomic environment and introduction of capital 105% controls since June 2015 In 2015 deposits amoun
Slide 36: Evolution of Deposits
DRAFT FUNDING Evolution of Deposits As at 30 September 2015, deposits stood at € 2.6bn. The Bank’s deposits are generated mainly from retail clients Sight and savings deposit represent 36.2% of total deposits. Evolution of deposits by segment (€m) Evolution of deposits by customer (€m) 3,313 3,2
Slide 37: Deposit Pricing
DRAFT FUNDING Deposit Pricing Stock of Deposits costs (bps) Term Deposits costs (bps) 178 216 176 214 174 212 172 210 170 168 208 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Decrease of the deposits cos
Slide 38: Capital
DRAFT Capital
Slide 39: 2015 comprehensive assessment results
DRAFT CAPITAL 2015 comprehensive assessment results 2015 comprehensive assessment results Following the 19 August 2015 agreement between Greece and the Institutions, the ECB was requested to provide a forward-looking view of the capital needs of the four Greek systemic banks while the Bank of Gree
Slide 40: AQR adjustments determined with a gone concern approach
DRAFT AQR adjustments have been determined with a gone concern CAPITAL approach applied with discounted collateral valuations… More than 80% of Attica AQR adjustments relates to its corporate loan book which is mainly collateralized with real estate assets (43%) Discount applied on collaterals in ca
Slide 41: Adequate provisioning position vs. peers
DRAFT CAPITAL …which leads to adequate provisioning position vs. peers Post AQR NPE classification as per EBA definition applied in CA Post AQR 2015 – NPE Ratio (Retail and Corporate Portfolios) Post AQR 2015 – NPE Coverage Ratio (Retail and Corporate Portfolios) 57.6% 56.8% 54.9% 55.6% 54.9% 44.7
Slide 42: Stress test approach under adverse assumptions
DRAFT CAPITAL Stress test approach has been performed under adverse assumptions Methodology and macro assumptions PPI Higher CET1 ratio targets vs. 2015 exercise 2014 2015 PPI 2015 H1 x2 68 Baseline 8.0% 9.5% -22% Adverse 5.5% 8.0% 2017 Baseline scenario 53 No further DTA creation over the 2.5 y
Slide 43: Preference shares and guaranteed bonds
DRAFT €100.2 million of preference shares qualifying as CAPITAL Core Tier I capital and €215 million of guaranteed bonds Preference shares Greek Government guarantees scheme Jan 2009 – Since the beginning of 2009, the Bank is participating in the government Pillar III Bond with Face Value of suppo
Slide 44: Operating Income - Operating Expenses
DRAFT Operating Income - Operating Expenses
Slide 45: Operating Income, Operating Expenses
DRAFT OPERATING INCOME - OPERATING EXPENSES Operating Income, Operating Expenses Evolution of key P&L aggregates (€m) Operating income by source (€m) 531.0 OPERATING INCOME Q3 2014 Q3 2015 Net interest income 70.6 67.1 Net fee and commission income 16.6 15.2 64.1 47.4 34.0 Gain/ loss from securities
Slide 46: Operating Income, Operating Expenses
DRAFT OPERATING INCOME - OPERATING EXPENSES Operating Income, Operating Expenses NII breakdown (€m) Net Interest Margin – NIM (%) 2.80% 2.63% 126.6 106.5 19.1 9.1 6.8 6.2 (47.8) (78.0) (7.0) (3.8) Q3 2014 Q3 2015 Q3 2014 Q3 2015 Total NII: 70.6 67.1 Other interest expense(including due to financial
Slide 47: Significant improvement of cost income ratio
DRAFT OPERATING INCOME - OPERATING EXPENSES Significant improvement of cost income ratio Cost / Income Ratio (excl. provisions) Breakdown of general operating expenses ( € 22.5 m as at 30.09.2015) Q3 2014 Q3 2015 66.9% Rents 16.4% 18.9% Advertising and promotion expenses 6.5% 2.0% 56.2% Telecommunic
Slide 48: Operations - HR
DRAFT Operations - HR
Slide 49: Organizational Structure
DRAFT OPERATIONS - HR Organizational Structure AUDIT COMMITTEE RISK MANAGEMENT COMMITTEE BOARD OF DIRECTORS REMUNERATION COMMITTEE CORPORATE GOVERNANCE & NOMINATION COMMITTEE CHAIRMAN OF THE BoD EXECUTIVE COMMITTEE STRATEGY & COMMUNICATION COMMITTEE LAW COUNSELOR INTERNAL AUDIT HUMAN RESOURCES CHIEF
Slide 50: Organizational Structure
DRAFT OPERATIONS - HR Organizational Structure Comments Branch network evolution 10 branches have been closed within 2014 80 The Group headcount has decreased in the last few years from 932 in 2013 down to 902 in September 2015. Attica Bank has put in place cost cutting initiatives involving s
Slide 51: Employee profile
DRAFT OPERATIONS - HR Employee profile Gender – Q3 2015 Education – Q3 2015 Location – Q3 2015 15% 16% 44% 44% 15% 56% 29% 69% 12% Master's degree Bachelor's degree Male Female Attica Rest of Greece Northern Greece Higher education Secondary education Source: Company Information 43
Slide 52: Appendix
DRAFT Appendix
Slide 53: Appendix - Macroeconomic Update
DRAFT Appendix 1 - Macroeconomic Update
Slide 54: Greece concluded negotiations with its European Partners
DRAFT Greece successfully concluded its APPENDIX 1 - MACROECONOMIC UPDATE negotiations with its European Partners Following the adoption of so-called prior reforms by the Greek Parliament in July, the Greek authorities and the institutions agreed in August on a third bailout worth €86bn that will co
Slide 55: Action plan to tackle the NPLs issue
DRAFT APPENDIX 1 - MACROECONOMIC UPDATE A detailed action plan to tackle the NPLs issue Target Responsible Timing Key actions party Adopt the amendments to the corporate insolvency law PRIOR ACTIONS ALREADY Adopt legislation to establish a regulated profession of insolvency administrators Govern
Slide 56: Elections' outcome point to a stable coalition government
DRAFT APPENDIX 1 - MACROECONOMIC UPDATE Elections’s outcome point to a stable coalition government Parliamentary Elections of Jan.-2015 Last Parliamentary Elections of Sept.-2015 54% 89% Both Pro-Euro and 35% Pro-Euro against Pro-Euro 13 13 10 17 11 17 149 75 76 145 11% 9 11% 17 Against 18 Against 1
Slide 57: Update on capital controls
DRAFT APPENDIX 1 - MACROECONOMIC UPDATE Update on capital controls Timeline Comments Increased penetration of debit cards 27 June – Number of active Visa debit cards in Greece more than double in Athens Stock Exchange closed July from previous months 28 June • 135% increase in card transactions in
Slide 58: Infrastructure sector and SMEs to benefit from recovery
DRAFT Infrastructure sector and SMEs will significantly benefit from APPENDIX 1 - MACROECONOMIC UPDATE the Greek economy recovery Positive growth prospects Pipeline of Greek Infrastructure projects (2014-2022) Total pipeline of unfunded Large Infrastructure projects in Greece is estimated at Budge
Slide 59: Total Infrastructure Budget
DRAFT APPENDIX 1 - MACROECONOMIC UPDATE Total Infrastructure Budget Breakdown of infrastructure budget per sector Subsector and Project Budget Waste Transport Energy Management 4% 28 Rail 7% 5.08 4.89 Energy 34% 2.96 2.73 12 Urban Rail 10 25% 1.32 7 5 5 1.13 3 0.87 Tourism Infrastructure (airports,
Slide 60: Appendix – Steps to enter the HFSF framework
DRAFT Appendix 2 – Steps to enter the HFSF framework
Slide 61: Steps to enter the HFSF framework
DRAFT APPENDIX 2 – STEPS TO ENTER THE HFSF FRAMEWORK New HFSF Framework First week of November 2015 Submission of Capital Plan to Bank of Greece Second week of November 2015 Submission of the restructuring plan to DGcomp Third week of November 2015 Application to enter the HFSF framework 50
Slide 62: Appendix – IT Infrastructure
DRAFT Appendix 3 – IT Infrastructure
Slide 63: IT – High end organisation and structure
DRAFT APPENDIX 3 – IT INFRASTRUCTURE IT – High end organisation and structure Main applications Markets Data Flow Core Applications The Group IT is based on the following main applications – Host: Temenos T24 KeyData Temenos T24 – Portfolio Management Systems – Financial Messaging: Swift – Dealing
Slide 64: Appendix – Risk Management
DRAFT Appendix 4 –Risk Management
Slide 65: Risk management
DRAFT APPENDIX 4 –RISK MANAGEMENT Risk management Credit, Market, Liquidity & Operational Risks are independently managed INDEPENDENT RISK MANAGEMENT Market and liquidity risk Credit risk management points Operational risk management points management points Credit Departments Assets Liabilities
Slide 66: Underwriting policy
DRAFT APPENDIX 4 –RISK MANAGEMENT Underwriting policy SME/SBL/corporate Retail Identification of business needs Identification of customer needs Proposal of products Proposal of products Collection of documentation Collection of documentation Branch Preparation of profile assessment
Slide 67: Credit approval process
DRAFT APPENDIX 4 –RISK MANAGEMENT Credit approval process Consumer loans The Group uses credit scoring for consumer loans. The final algorithm is determined by the RT ICAP S.A (stepwise logistic regression) and takes into account factors such as payment history, demographic components (age, place
Slide 68: Appendix – Financial Information
DRAFT Appendix 5 – Financial Information
Slide 69: P&L Highlights
DRAFT APPENDIX 5 – FINANCIAL INFORMATION P&L Highlights Amounts in €m GROUP Impact on asset quality Q3 2015 Q3 2014 yoy 1 1. Decrease in Interest income (- 20.0% vs. Q3 2014) Interest and similar income 122 152 (20.0%) – This decrease is owed to one-off interest income from a specific category of Le
Slide 70: Group P&L and balance sheet
DRAFT APPENDIX 5 – FINANCIAL INFORMATION Group P&L and balance sheet Amounts in €m GROUP Amounts in €m GROUP CAGR CAGR Q3 2015 2014 2013 2012 12-14 Q3 2015 2014 2013 2012 12-14 ASSETS Interest and similar income 122 195 191 216 (5.0%) Cash and balances with central bank 65 107 71 110 (1.3%) Less: In
Slide 71: Group results by segment
DRAFT APPENDIX 5 – FINANCIAL INFORMATION Group results by segment Q3 2014 FY 2014 Q3 2015 Total Investment Investment Investment Business Banking & Business Banking & Business Banking & Amounts in €m Retail Banking Treasury Retail Banking Treasury Retail Banking Treasury Q3 2014 Q3 2015 Change % Ope
Slide 72: Key financial ratios, Q3 2014 – Q3 2015
DRAFT APPENDIX 5 – FINANCIAL INFORMATION Key financial ratios, Q3 2014 – Q3 2015 Group Bank BALANCE SHEET STRUCTURE Q3 2014 FY 2014 Q3 2015 Q3 2014 FY 2014 Q3 2015 Due to Customers / Loans and Advances to customers 87.35% 87.03% 68.24% 87.77% 87.40% 68.65% (before provisions) Due to customers / Tota
Slide 73: Key financial ratios, Q3 2014 – Q3 2015
DRAFT APPENDIX 5 – FINANCIAL INFORMATION Key financial ratios, Q3 2014 – Q3 2015 Group Bank Q3 2014 FY 2014 Q3 2015 Q3 2014 FY 2014 Q3 2015 Total operating expenses less provisions / Total Assets 2.33% 2.54% 2.15% 2.25% 2.45% 2.07% Operating expenses less provisions / Total operating 66.91% 82.79% 5
Slide 74: Appendix – Corporate Governance
DRAFT Appendix 6 – Corporate Governance
Slide 75: Board of Directors and Main Committees
DRAFT Board of Directors and APPENDIX 6 – CORPORATE GOVERNANCE Corporate Governance-Main Committees Consists of 14 members with 4 independent non–executive members BOARD OF DIRECTORS Mr. Ioannis Gamvrilis, who is also chairman of the Engineers and Public Constructors Pension Fund, is chairman of
Slide 76: DRAFT
DRAFT By receiving this document, the Recipient accepts and agrees to be bound by the following obligations and limitations: The above material has been prepared by Attica Bank for the exclusive use of the selected parties to whom it is delivered. Neither the whole ore any part of the information in