Alpha Bank Strategy Update - Investor presentation November 2019
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
From To Real GDP restored to stable and positive growth rate 0.7% ~2.0% The Greek economy has Real GDP average annual growth, % 2015-2018 2020-2022 entered a sustainable growth trajectory Declining unemployment 25% 14.5% Unemployment rate, % 2015 2022 Disposable income on the rise Disposable income, average annual 0.4% 2.5-3.0% growth % 2015-2018 2020-2022 Real estate market restarting House Price Index, average annual -1.7% 3.5-4.0% growth % 2015-2018 2020-2022 SOURCE: ELSTAT, Economist Intelligence Unit, ECB,EC 3 3
New policy mix and reforms aim to push for faster economic growth Key areas of reform Market momentum Already 22% average reduction in the real estate tax (ENFIA) Commercial Real Estate prices Net FDI1 in Real Estate Index 2010 = 100 EUR bn completed Corporate income tax rate from 28% to 24% 1.1 100 Retail price index Net FDI1 in RE 1.2 95 Office price index 1.0 Dividend tax rate reduced by half to 5% 90 86 0.8 85 0.6 Elimination of capital controls 0.4 79 80 0.4 0.2 0.2 75 0.1 0.2 0.2 0.1 0.1 A new growth (investment incentives) law 70 0 2010 11 12 13 14 15 16 17 18 19 20 21 2022 To be 40% discount on building upgrades Greek 10year bond spread and ASE index completed Bond spread, bps (LHS) ASE, index (RHS) soon 500 1,000 Asset Protection Scheme for NPLs (Hercules) 800 400 +42% 600 300 60% Flagship investments and privatizations 400 200 200 100 0 3-year VAT suspension on new building permits Jan Mar May Jul Sep Nov 1 Foreign Direct Investments 4
Negative interest rate environment over the medium term At the same time, we are Pressure on spreads, especially for large corporates that operating in a challenging can access capital markets directly market context Rising expectations for better customer experience that is seamless across all channels Commoditization of banking services, with digital attackers competing for part of the profit pools of banks Increased regulatory and compliance pressure 5 5
Alpha Bank will build upon a set of strong assets to return to sustainable profitability Utilize our market-leading capital position1 in quantum and quality for decisive NPE resolution, within comfortable capital envelope Empower our committed, loyal and motivated Mobilize change with a new, talented management team employees, to drive innovation and execution Capitalize on our brand which stands for credibility and Drive the NPE resolution agenda leveraging our proven reliability2, combining with a unique customer experience expertise in successful transactions3 offering Further penetrate our large customer base of ~3.1mn Increase cost efficiency, building on our successful track customers, increasing average product holding from 1.3 to record and expertise in cost reduction, achieving 20% 2.5 in line with European peer average reduction over the past 5 years Build on our competitive advantage in selected customer segments and products ▪ Award winner for best Private Banking and Affluent Banking offering ▪ Market leader in credit cards ▪ Proven expertise in Structured Finance ▪ Traditionally the bank of choice for Corporate customers 1 Based on CET1 2019 Q2 disclosed figures 2 Based on customer survey among Alpha Bank customers, March 2019. "Reliability" ranks as the top attribute that customers relate to the Alpha Bank brand 3 EUR 3.5bn of successfully executed NPE portfolio transactions to date 6
Our vision for Alpha Bank for 2022 Customers Be the preferred Bank in Greece for our target segments, offering best-in-class customer experience Shareholders Achieve market-leading efficiency and profitability, through a combination of targeted growth and cost efficiency Employees Strengthen our organizational effectiveness by developing a strong meritocratic culture and appropriate governance structures 7
From To Q3 2019 2022 Decisive de-risking of NPE ratio1 44%
We have identified tangible value creation levers, which we will use to deliver value to our shareholders 1 2 3 Project Galaxy Operating model Customer-centric growth ~Up to EUR 12bn NPE ~EUR 120mn (>10%) reduction in Increase penetration from 1.3 to securitization, ~EUR 7bn total Group cost from 2019E to ~2.5 products per customer servicing outsourcing, and NPE 2022 through branch network and platform carve-out to central function optimization, NPE ~9% cost reduction and G&A discipline Increase NPS3 by 15-20p.p. independent entity Group CoR from 200bps1 in 9M EUR 14bn of new disbursements 2019 down to
We will decisively reduce NPEs through a large scale transaction within a comfortable capital envelope Project i ii iii Galaxy Front-loaded, substantial NPE reduction Carve-out of NPE platform and outsourcing of Hive-down of core banking assets and through a large securitization transaction servicing to independent entity in order to liabilities to a new Banking entity support Galaxy and business model efficiency ▪ Securitization of up to EUR 12 bn Retail and ▪ Cepal Hellas as carve-out vehicle 2 ▪ Creation of Holdco and spin off of banking Wholesale NPEs using the Hercules Asset business into a new entity in line with market ▪ Appropriate execution capacity and Protection Scheme (HAPS) precedents expertise deployed on the NPE book resolution ▪ Immediate de-risking of the balance sheet ▪ Management team with proven track record and strong positive effect on Cost of Risk post de-consolidation ▪ Compliance with SRT3 requirements 1 ▪ Enhanced flexibility in NPE cost management, ▪ Transaction execution well within a controlled capital envelope due to the outsourced servicing of the NPE platform ▪ Execution within the first half of 2020 NPL1 ratio NPE1 ratio CAD ratio CoR ~10% ~20% ~16%
Our operating model will be transformed to radically improve productivity and efficiency Operating Recurring Group Opex model EUR mn NPE management a ▪ NPE operations carved-out ▪ Achieve cost reduction in line with NPE deleveraging 1,077 Operating model efficiency ▪ New cost governance framework -11% ▪ Zero-based end-to-end process re-engineering/ Automation 2 ▪ Internal demand management b ▪ Outsourcing ~960 ▪ Further reduction of our property and facility management expenses ▪ Reduction of outsourcing costs Branch network ▪ Complete the successful transaction migration program c ▪ Shift simple sales and servicing activities to alternative channels ▪ Remove administrative tasks from branches 2019E1 2022 ▪ Further rationalize footprint 1 Annualized 9M 2019 Group OpEx 11
We will put our customers at the center of what we do Customer- … what we will do to cover their centric growth What our customers need… needs Key targets a Fast and reliable service Make customer satisfaction a strategic priority Highest NPS1 among Greek banks Redesign our back-office operations to Seamless omnichannel increase efficiency and reduce response Reduce onboarding time b experience with digital product and service offering times by ~85% 3 Digitally transform key customer Significantly reduce journeys time-to-yes and time-to- Proactive, customized value c proposition to individual needs money through STP2 and machine-assisted digital Remove non-value-added activities, underwriting increasing client-facing time Deep expertise and high- Migrate majority of Instill cross-functional, agile collaboration d quality relationship management for models to enable fast delivery and quick response to client needs products and servicing to digital channels complex needs 1 Net Promoter Score 2 Straight Through Processing 12
Business Banking: A revamped product and service offering through an efficient service model and rigorous capital profitability management Greek Operations Customer- centric growth Key areas of focus for businesses Key figures Corporate, SME and Structured Gross new disbursements Finance disbursements Provide an enhanced digital offering: EUR mn % of disbursements by sector ▪ Enhance digital product portfolio (e.g., a transaction banking) ▪ Reinforce web banking platform Other ▪ Digitize/ automate credit process 2,800 2,900 Energy EUR 9bn Hospitality 22% 9% Retail/Trade 19% Streamline our service model, simplifying Manufacturing 20% 3 b our frontline and back-office processes, improving customer experience and and Industry 31% increasing client-facing RM1 time 2018 2019-22 annual 2019-2022 RM time spent in client-related Fee and commission revenue Deliver rigorous management of portfolio activities EUR mn profitability: ▪ Increase share of wallet in 50-60% ~170 underpenetrated high-potential corporate 120 c groups in line with Risk Appetite ▪ Increase synergies with Investment 30% Banking and Capital Markets for high- value customers Alpha European 2018 2022 ▪ Manage fee leakage Bank Benchmark 1 Relationship Manager 13
Individuals Banking: a cost efficient, digitally-enabled value proposition; focus on high potential under-penetrated segments Greek Operations Customer- centric growth Key areas of focus for individuals Key figures Serve all customers through a low-cost, Gross new disbursements Bancassurance & asset management digital (mobile)-first, lean core offering, EUR mn revenue, EUR mn which caters to the needs of most ~600 ~80 customers and delivers scalability: a ▪ Launch digital sales customer 200 40 journeys for mortgages, consumer loans, and credit cards ▪ Digitize/ automate credit process 2018 2019-22 annual 2018 2022 3 Focus on high-value customers (Private, Opportunity to increase product penetration Affluent, and credit-worthy/ high-value Mass) combining our strong brand with Penetration of mortgages in mass Investments/ AuM for Affluent tailored value propositions added on top customers of the lean core offering: 8-15% 40-50% b ▪ Use Advanced Analytics through a Center of Excellence to identify underpenetrated credit-worthy customer 3.4% segments 6.4% ▪ Revise retail product offering based on customer needs Alpha European Alpha European Bank Benchmark Bank Benchmark 14
International presence to benefit from disciplined capital allocation across jurisdictions, with Romania the key contributor of growth Targets for 2022 Target RoE 9% Target CAD Romania Albania Advance to Tier 1 bank status1 ▪ Retain a self-funded and profitable position ▪ Take advantage of high growth environment ▪ Focus on maximizing value contribution to the Group driven by convergence to EU levels of financial and review strategic direction intermediation ▪ Spur growth in both Wholesale and Retail segments Overall target RoE for ▪ Increase retail client base by enhancing our product and service offering and digital ~8% ~17% international subsidiaries transformation ▪ Increase SME revenue through a new sales Cyprus approach and fee income focus ▪ Strengthen Wholesale topline through an ▪ Restart the good bank through new loan production enhanced product and service offering and enhance profitability through operational ▪ Leverage strong capital position to explore efficiency consolidation options ▪ Leverage strategic partnerships to clean NPE book ▪ Focus on maximizing deployed capital productivity ~10% ~19% Luxembourg & UK ▪ Support the wealth management business of the group ▪ Optimize operating model >10% ~19% ~9% ~18% 1 Tier 1 banks in Romania defined as top 7 banks with >5% assets market share 15
We have appointed a new management team and strengthened our corporate governance Organizational effectiveness Management team1 Chief Executive Officer General Manager Member of the V. Psaltis Executive Committee Growth & Innovation S. Filaretos Chief Human Resources Officer (CHRO) F. Melissa2 Communication & 4 External Engagement G. Terzis Chief Operating Retail Banking Wholesale Non- Chief Financial Chief Risk Chief Legal International Chief Officer Banking Performing Officer Officer and Network Transformation Loans Governance Officer Officer Soon to be S. Filaretos I. Passas I. Emiris A. Theodoridis L. Papagaryfallou S. Andronikakis N. Salakas S. Oprescu announced New management team Governance ▪ New CEO ▪ Clear delegation of authority from the BoD to the CEO and a ▪ New members in the top management team with proven experience b from the CEO to the management team ▪ Redefined structure and role of governance committees to ▪ New organizational structure in line with our new strategy enable faster decision-making 1 The following divisions, also reporting to the CEO, not depicted: CEO office, Internal Audit, Economic Research 2 F. Melissa will assume her role in early 2020. Until then P. Konidari will continue serving the Bank as Executive General Manager of Human Resources. Thereafter, she will be appointed Senior Advisor to the CEO 16
We have implemented changes that will empower our people and promote a performance-based culture Organizational effectiveness a Strengthened New performance scorecards for management team, connected to performance a variable remuneration scheme management Clear accountability and ownership of targets, continuous monitoring, and consequence management Financial performance measurement in a Value-Based- 4 Management basis b Enhanced Special focus on attracting and managing talent (~150 new hires employee value per year) proposition Revamped value proposition around compensation, benefits, career opportunities and work environment New ways of working that promote empowerment, bottom-up innovation, transparency, and trust Structured communication plan that relays our mission and values to our employees 17
We are setting up a dedicated Transformation Office to deliver our Strategy Plan Transformation Office A Chief Transformation Officer (CTO), member of the Executive Committee will soon be appointed to oversee the delivery of the transformation program. A Transformation Office of 10-15 senior dedicated members with technical expertise will support the CTO. Key pillars of the transformation program a b c Detailed transformation plan Performance governance Change management plan ~30 workstreams with detailed ▪ Dedicated performance ▪ Compelling change story shared based on a multi- initiatives, targets and milestones, monitoring infrastructure channel communication plan led by the respective business ▪ Weekly meetings at top- ▪ Leadership development program for top management owners management level ▪ Targeted initiatives aiming at cultural shifts and new way of working ▪ Reinforcement of a performance culture, promoting meritocracy and accountability, linking performance to incentives 18
Strategy Update: Financial performance Lazaros A. Papagaryfallou, CFO 19
The three pillars of performance re-rating Key components of the strategy Key areas of improvement ▪ Up-front de-risking of our CoR, bps 2001
Overview of our NPE acceleration plan (project Galaxy) Project Galaxy Alpha Bank AE Non-Core NPEs – Project Galaxy i iii 100% Hive-down Mortgage loans Senior SPV notes Retail Secured “New” Alpha Bank Wholesale DTC Retail Unsecured Performing assets Core NPEs New CEPAL (Servicer) Mezzanine/Junior 11 ii Servicing SPV notes Carve-out Investor(s) CEPAL Servicing platform Controlling SLA stake ▪ Alpha Bank to sell up to EUR 12bn portfolios of non-core mixed type NPEs to 3rd party investors primarily via securitization Non-Core NPEs – Project SPVs i Galaxy ▪ Alpha Bank to apply for HAPS guarantee for senior notes to be retained ▪ Investors to acquire a controlling stake in New Cepal, an entity consisting of Alpha Bank’s existing NPE management platform and Cepal Hellas S.A.1 ii New CEPAL (Servicer) ▪ Alpha Bank to enter into long-term SLA with New Cepal for the servicing of its Core NPEs ▪ New Cepal to continue to service existing and newly acquired portfolios for investors ▪ Hive-down of Alpha Bank’s core operations to new 100%-owned subsidiary iii Hive-down 1 Cepal Hellas to become 100% owned by Alpha Bank control prior to the sale to a 3rd party investor 21
Decisive action on Non-Core NPEs to reach SSM targets well ahead of plan Bank perimeter in Greece Project Galaxy NPE ratio1, % 44.1 ~20 NPL ratio1, % 27.8 ~10 Alpha Bank intends NPE stock, 18.9 to apply to the EUR bn ~0.5 Up to 12 recently approved Hercules Asset ~7 Protection Scheme 1i Q3 2019 Further reduction Securitization Pro forma for (HAPS) for up to in 2019 securitization EUR 3.7bn of 16% 15% 25% Project Galaxy guarantees on senior 2% notes 10% NPE securitization 54% ▪ Size: Up to EUR 46% 39% 75% 12bn 18% ▪ Type: Mixed Individuals Consumer Corporate 90 dpd January 2020 SBL SMEs 1 Basis for ratio includes senior notes 22
Transaction opens clear path towards an NPE ratio
Improved quality of retained NPE portfolio will be a key component of the value creation strategy Bank perimeter in Greece Project Transformation plan materially Galaxy addressing high risk areas... …resulting in a significantly better portfolio quality Retail NPEs Wholesale NPEs Evolution of total portfolio, Galaxy Core Galaxy Core % pro forma change for transaction, based on perimeter perimeter perimeter perimeter H1 2019 14% -73% 90 dpd >90 days due 68% 86% 1i -75% Non-denounced Denounced 36% 31% 25% Denounced 44% exposures 64% 56% 69% 75% 9% -84% Non-L.3869 Retail exposures 34% L.3869 under L.3869 66% Not applicable 91% 24
Cost of Risk is expected to be significantly reduced post transaction Project Main driver of Cost of Risk is the management of troubled assets, we therefore expect Cost of Risk Galaxy normalization in line with NPE ratio reduction Group Cost of Risk, bps Group NPE ratio2, % 250 Galaxy 50 ~46 NPE ratio2 Cost of Risk 40 200 ~200 1i 150 30
Creating a market-leading servicer by combining the capabilities of Alpha Bank’s and CEPAL’s servicing platforms Project CEPAL Alpha Bank Servicing Platform Galaxy A Leading servicer in the market with: First licensed servicer by the Bank of Established platform with wide ▪ End-to-end servicing capability, meeting HAPS Greece (2016) resource base covering all asset classes requirements ▪ Top caliber management team with significant experience in NPE management Scaled multi-customer platform with Specialized capacity for Retail and >10 NPL portfolio migrations from 3 Wholesale banking portfolio, tailored ▪ Unique proposition in Greece and proven track record in joint servicing of Banking and investor systemic Banks around performance strategies owned NPL portfolios ▪ Scalable capacity to manage additional business 1ii Extensive local experience in servicing Nationwide footprint through NPL Hubs, A well diversified portfolio of up to EUR 27bn and a both Secured (55%) and Unsecured (45%) branches and a wide network of external NPL portfolios vendors clear set of objectives Portfolio AuM Mandate Diversified client base and fully Robust data analytics framework and Deliver securitization customized solutions per portfolio, portfolio segmentation tools, allowing a Galaxy c.12bn business plan oriented around recovery maximization fully customer-centric approach Deliver investor value 3rd party c.8bn and develop business Advanced IT infrastructure including Fully autonomous platform including featuring an internally developed data operational support functions (credit Achieve SSM targets with Core c.7bn warehouse with detailed reporting & operations, legal support etc.) focus on re-performance decision making tools Monetize RE assets REO c.0.5bn through holistic asset management 26
Maintaining strong capital ratios and ample buffers above requirements remains core to our strategy Phase-in of capital requirements vs. capital targets Key capital Capital as % of RWAs management targets De-risking of our balance sheet ~17.0% should allow ~2.0% Tier 2 13.75% 14.5% reduction of our O-SII 0.25% 1.0% future capital ~15% CCB1 2.5% 2.5% requirements Pillar 2R 3.0% 3.0% ~15.0% CET1 CET1 ratio Pillar 1 (TC) 8.0% 8.0% 2019 requirement 2022 requirement 2022 target ~17% CAD target ▪ We plan to maintain our CET1 ratio above regulatory minimum levels throughout the period ▪ As part of our focus on capital structure optimization, we will consider filling our Tier 2 bucket of 2% over time, subject to market conditions ▪ Alpha Bank is subject to an Other Systemically Important Institution (O-SII) buffer of 1%, phasing-in by 0.25% each year from 1 January 2019 to 1.0% on 1 January 2022 1 Capital Conservation Buffer 27
We will retain a controlled capital buffer above Tier 2, % CET1, % minimum requirements Minimum regulatory requirements 2022 RWAs ~47 ~43 EUR bn 18.3% 2.4% 2.4% ~17% 3.5% ~2.0% ~2% 14.5% (OCR) 11.0% (CET1) ~15% PF Q3 20191 NPE Tier 2 capital Organic capital IFRS 9 2022 transaction generation3 Phase in (Galaxy)2 1 Pro-forma for deconsolidation of Neptune 2 Includes loss from sale of mezzanine and junior notes, gain from sale of servicing platform, RWA relief 3 Including dividend payments (~10% payout ratio) from 2021 onwards, subject to SSM approval 28
Aiming at bringing Group Opex down building on proven executional ability Operating Strong track record of reducing Group costs model Group recurring Opex and C/I, EUR mn and % C/I 64% 54% 48% 51% 55% 20% 1,117 1,097 1,077 Historical decrease >10% of cost to 960 income 20131 2014 2016 2018 2019E2 2022 1 2012 and earlier not comparable due to Emporiki acquisition 2 Annualized 9M 2019 Group OpEx 29
Group Opex reduction to ~EUR 960mn will be attained through a combination of NPE savings and key efficiency levers Operating Reduction in Group recurring Opex model EUR mn Main levers of productivity & efficiency enhancement 2019E Opex1 1,077 ▪ New cost governance framework: Clear cost ownership and accountability, coupled with redesigned approval process and cost control for G&A ▪ Process efficiency: Zero-based process redesign, removing non-value adding 2019 VSS activities already ~35 captured ▪ IT enablement: Migration to higher cost-efficiency technologies and deployment/ integration of IT systems required to automate manual tasks 2 ▪ Outsourcing: Outsourcing of tasks which the Bank is not best positioned to Net NPE cost deliver efficiently and renegotiation of key existing contracts ~35 reduction ▪ Demand management: Removal of demand peaks leading to excess capacity requirements Productivity & ▪ Property related expenses: Location consolidation and maintenance cost efficiency ~50 rationalization enhancement ▪ Branch network optimization: Selective reduction of footprint from ~430 branches in 2018 to ~350 in 2022 ▪ Branch network operating model: Migration of transactions and simple sales to 2022 Opex 960 digital channels and streamlining of in-branch processes 1 Annualized 9M 2019 Group OpEx 30
Businesses: key metrics and levers Greek Operations, EUR mn Customer- centric growth Gross disbursements 2019-22 SME and Corporate: 3,800 3,800 ▪ Focus credit growth on sectors driving economic growth (60-70% of new disbursements in energy, 3,200 hospitality and industry/ manufacturing) ▪ Increasing RM-time spent in client-related activities from 30% to 60% (European benchmark) through digitized processes 900 Shipping and Structured Finance: ▪ 20+ years of market-leading expertise SME Shipping & Corporate Small ▪ Increased activity in newbuilding expected to drive shipping credit growth Str. Finance Business ▪ Strong pipeline of large scale projects in energy, infrastructure, and real estate sectors Fee and commission revenue Small Business: Grow our market share by: 3 23 ~170 ▪ Leveraging our premium service model of Gold SB RMs 20 7 ▪ Targeting specific under-penetrated portfolio subsegments 120 ▪ Decreasing time-to-money and improve end-to-end customer experience through a new, digitally- enabled credit process F&C from lending activities: Grow in line with loan volumes and reinforce pricing discipline to manage fee leakage 2018 Lending Payments/ LCs/LGs, 2022 activities transfers Imports/Exports, Payments/ transfers: Upgrade our transaction banking product offering in payments and digital and Other platforms Expected spread evolution, Δ of spread1 vs Q3 2019 Other F&C: Enhance cross-selling of other trade finance products (LG/LC, Import/Exports and other) ~40 bps ~60 bps Price pressure: Positive effects of volumes will be coupled with expected pressure on margins, mainly driven by the By 2020 By 2022 Corporate and large SME portfolio 1 Spread versus Euribor 31
Individuals: key metrics and levers Greek Operations, EUR mn Customer- centric growth Gross disbursements 2019-22 Consumer lending: Increase our market share in new originations: ▪ Underpenetrated customer base (~8% vs. European benchmarks of 9-14%) 1,100 ▪ Development of fully digital products enabled by digital credit engine 1,000 ▪ Expansion to new market segments (e.g., used cars) Mortgage lending: Maintain our market share and capturing the market growth: ▪ Underpenetrated customer base (~3.5% vs. European benchmarks of 4.5-7%) ▪ New streamlined, digitally-enabled credit process ▪ Increased REO financing, at the back of growing economy and growing foreign investments in Real Estate ▪ Greek home-owners increasing their investments in real estate, driven by the rising RE price index 3 200 Credit cards: Maintain our market leadership: ▪ Market-leading loyalty program ( ) Consumer Mortgages Credit Cards ▪ Capitalizing on our superior product offering Bancassurance & asset management revenue Asset management product revenue ▪ Increase penetration of investments over AuM (currently at 7%) to converge to European ~10 ~80 benchmarks ~30 ▪ Capitalize on increased customer appetite for shift of assets to investment products amid a negative interest rate environment 40 ▪ Build on our award-winning Private and Affluent banking to capture the expected AuM inflow in the banking system Bancassurance ▪ Maintain bancassurance fee income growth momentum (+17% for 2017-18), by further increasing 2018 Asset Bancassurance 2022 penetration across our customer base management ▪ Further enrich our product suite 32
Net Loan evolution and lending spreads per segment Bank perimeter in Greece Customer- centric growth Net Loan evolution, EUR mn Lending spreads evolution, bps 35.0 Medium and Large Businesses 32.9 SBL Consumer 3.4 3.6 Consumer 1,000 Mortgage 900 862 Mortgage 12.6 8.9 ~840 3 800 700 3.0 SBL 3.2 579 600 ~500 500 398 400 ~350 Medium and Large 15.9 17.5 300 251 ~230 Businesses 200 100 0 Q3 2019 2022 Q3 2019 2022 33
Capital reallocation to the healthy part of the book Customer- From To centric growth Q3 2019 2022 Performing exposures & securities 52% 68% 3 NPEs 31% Tangible assets 12% 3% 5% DTA & Other 14% 14% 34
Despite NPE deleveraging, assets will grow by ~10% through new lending and investments in securities EUR bn Customer- centric growth 67.1 ▪ Reduction in Net Loans due 0.4 Net Loans to Project Galaxy and additional core NPE workout 3.0 ▪ Targeted growth in performing volumes, driven mainly by business lending 61.0 4.6 3 1.9 ▪ Re-leveraging of investment Securities securities to comply with LCR requirements and to support income generation ▪ Galaxy-retained senior note Total Net loan Securities Senior note Other Total to gradually amortize over the Assets evolution1 (NPE Assets Assets period 2018 securitization) 2022 1 Includes loan deleveraging as part of Galaxy project and core NPE management 35
We target to further increase our deposit base by ~EUR 5bn, in line with expected market growth Greek operations Customer- centric growth Key remarks LDR2, % 106 ~93 ▪ System deposits are increasing due to the restoration of customers’ confidence in the banking system, the abolishment of capital controls, and favorable +16%1 ~38 macroeconomic conditions 33 Deposit ▪ Alpha Bank has outperformed the market in deposit volumes growth over the last year, attracting higher volumes of non- EUR bn ~60% Core 57% state deposits than its competitors ▪ Last year’s increase was driven by Affluent/ Private and 3 Term 43% ~40% Corporate customers, segments in which we have historically been market leaders, and which had disproportionately withdrawn deposits during the crisis 2018 2022 ▪ Going forward, we expect to continue gaining our fair Core Term share in deposit attraction 90 Deposit ▪ A large part of the deposit rate decrease expected in 2020 interest has already been implemented, while deposit volumes ~55 increased rates bps ~35 15 ~10 ~10 2018 2020 2022 1 20% increase excluding state deposits 2 Basis for ratio includes senior notes 36
Committed to our Digital Transformation program, which is already delivering results Customer- Where we want centric growth Program highlights Transformed customer journeys to be in 2022 Retail onboarding time Business legalization/ 3-year plan aiming at minutes onboarding time, days transforming the top 60 10 a 15 customer journeys and deploying key 3 >90%
Closing remarks Vassilios E. Psaltis, CEO 38
Our vision for 2022 Be the preferred Bank in Greece for our target segments, offering best- in-class customer experience Achieve market-leading efficiency and profitability, through a combination of targeted growth and cost efficiency Strengthen our organizational effectiveness by developing a strong meritocratic culture and appropriate governance structures 39
Q&A 40
You can also read