DRAFT
Attica Bank
Q3 2018 Financial Results
www.atticabank.gr
Together we are stronger.
1
Table of Contents
MACROECONOMIC REVIEW
HIGHLIGHTS
FINANCIAL PERFORMANCE
ASSET QUALITY
FUNDING
APPENDIX
GLOSSARY OF TERMS
2
Macroeconomic Review
3
Economic Forecast for Greece & Recent Developments
Amounts in € bn
2017
(Current
Prices)
2017
(YoY%)
2018
(YoY%)
2019
(YoY%)
2020
(YoY%)
GDP 180.2 1.5 2.0 2.0 2.0
GDP Deflator 181.0 1.4 1.4 2.2 2.3
Private
Consumption 123.8 0.9 0.8 0.4 0.7
Public
Consumption35.7 -0.4 1.2 0.2 0.3
Gross Fixed
capital formation 23.2 9.1 -2.1 14.6 9.6
Exports 59.5 6.8 8.4 5.7 4.4
Imports 61.3 7.1 3.6 6.1 3.9
Unemployment
Rate21.5 19.6 18.2 16.9
Source: EC, Autumn 2018 Economic Forecast
The Greek economy continued to grow at a faster pace as GDPincreased by 2.0 y-o-y. This growth is mainly driven by a) theincrease in tourist arrivals, b) the increase in exports of goods andservices, c) the rebound of private consumption and d) thedecrease in unemployment.
Employment is recovering and exports are expected to performwell by historical standards.
Economic indicators suggest that economic growth is takinghold.
Based on the seasonally adjusted data published by the Hellenic Statistical Authority:
Unemployment stood at 18.6% on September 2018, compared to 20.8% and 18.9% on September 2017 and August 2017 respectively.
GDP in nominal rates increased by 1% in the 3rd quarter of 2018 compared to the 2nd quarter and 2,4% compared to the 3rd quarter of 2017, while Real GDP grew by 2% compared to Q3 2017.
Consumer Price Index (CPI) grew by 2% in September 2018 compared to August 2018 and 1.9% compared to September 2017.
Imports as at the end of Q3 2018 increased by €3,64 billion (+9.10%) amounting to a total of €40,03 billion, while exports increased by €3,49 billion (+16.78%) amounting to a total of €24,34 billion.
Key - Macro Indicators
Real GDP Evolution (in € bln)
5
Unemployment Rate (End of Year)
8.4%10.6%
14.7%
21.2%
26.4%27.4%
25.9%23.9% 23.4%
20.8%18.6%
0%
5%
10%
15%
20%
25%
30%
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Q32018
184
186
185
184
187
0
50
100
150
200
250
300+2,0%
increase as at
Q3.2018
0
10
20
30
40
50
60
70
80
90
100
Imports Exports
Evolution of Imports and Exports (in € bln) Economic Sentiment Indicator (ESI)
70
75
80
85
90
95
100
105
110
Highlights
6
Amounts in € mln 30.09.2018 31.12.2017 Change %
Gross Loans 2,593.7 2,666.7 (2.7%)
Loan Loss Allowances (LLAs) (578.6) (474.7) 21.9%
Deposits 2,112.8 1,924.1 9.8%
Total Assets 3,420.1 3,560.4 (3.9%)
Equity 583.9 632.7 (7.7%)
Amounts in € mln 30.09.2018 30.09.2017 Change %
Net Interest Income 56.1 59.3 (5.5%)
Net Fee and Commission Income 4.4 9.7 (54.7%)
Total Operating Income 62.6 139.2 (55.0%)
Total Operating Expenses
(excluding provisions) 69.8 63.4 10.1%
Profit / (loss) before taxes (37.9) 12.2
Pre-Provision Income (excl. NRIs)* 10.0 11.8
At a glance - Selected Balance Sheet and P&L items (consolidated accounts)
7
Total IFRS 9 impact at € 136mln; € 98,2 for on balance sheet loan exposures, € 11,3mln for off balance sheet exposures and € 26,8mln mainly from revaluation of financial instruments measured at FVOCI,
Net Fee & Commission Income down by 54.7%. If Fee Income amounting to € 4 mln of Q3 2017 (commission of Attica Bank acting as an intermediate operator) is excluded, the actual decrease reaches 6%.
Deposits Increase by 15.03%(q-o-q) and 9.8% compared to Dec-17.
Net Loans to Deposits at 95% vs 114% as at Dec-17.
Staff costs down by 6% on comparable terms (excluding the cost of VEP).
Cost of Risk at 1.3%.
NPE ratio currently at 44.821%
Bottom line result impacted by the full cost of VEP c.17mln and the results of investments in associates (2,9mln).
1Includes on and off balance sheet items
Consistent increase in customer base - Volumes
E-Banking Users, Q3 2017 – Q3 2018Number of customers, Q3 2017 – Q3 2018
Evolution of POS, Q3 2017 – Q3 2018 Evolution of Debit Cards, Q3 2017 – Q3 2018
8
31,525 31,748 32,414
683,770 685,230 693,318
Q3 2017 FY 2017 Q3 2018
Corporates Individuals
715,295 716,978 725,732
7,052 7,318 8,057
37,575 38,82242,476
Q3 2017 FY 2017 Q3 2018
Corporates Individuals
46,140 50,533
Total E-banking
Users
44,627
24,309
27,239
36,134
Q3 2017 FY 2017 Q3 2018
+12%
+33%
Plus 13,799 through
collaboration with Cooperative
Banks 91,100
89,756
100,387
Q3 2017 FY 2017 Q3 2018
Plus 134,544 through
collaboration with Cooperative
Banks
9
Financial Performance
Effective NPE Management
10
In the last two years,Attica Bank has managedto reduce its NPE stock by€ 2bn.
Attica Bank through thetwo securitizationsdemonstrates the Bank’sfirm commitment inreducing credit risk andrapidly deleveraging itsNPE stock throughinnovative transactions.
NPE ratio (pro forma 31.12.2018): 35% from 61% (31.12.2016)
Bond
Issuance/Securitization
Senior Notes €525 million
Junior Notes €806 million
Attica Bank S.A. Artemis Finance
S.ar.l.
Artemis Securitization
(Special Purpose Vehicle)
Thea Artemis (Asset
Management Company)
€806 million
Junior Notes
Payment of:
€70 million for Junior Notes
€80,000 for Thea Artemis
stake
80% of Thea
Artemis Shares
Servicing of
Loans
Payment of
Servicing Fees
Non-performing
Loan Portfolio
€1.3 Billion
a) Artemis Securitization - € 1,3bn NPE nominal value, capital gain of €70mln from junior note sale
b) Metexelixis Securitization - € 701mln NPE nominal value, capital gain of 47mln from junior note sale
QUANT
Metexelixis
SPV
Senior
Tranche
Mezzanine
Tranche
Attica Bank
10 year Servicing
Fee
Senior
Coupon
Investors
Junior
Coupon
Acquisition of
Class B Notes
Junior
Tranche
Stronger Liquidity Basis
11
Strong rebound of deposits by 15% yoy (€ 280 mln)
ELA Funding as at 18.12.2018: €176 mln. Aggregate decrease of ELA funding more than
750 million from December 2017.
+€280
mln yoy
FY 2015FY 2016
FY 2017Q1 2018
H1 2018Q3 2018
30/11/201818/12/2018
2525
4056
58
780 1,015 929 885665
500
395
176
ECB Funding ELA Funding
Repo Bond Pillar II
€175 mln
Share Capital
Increase
€89 mln
Strong Rebound
of Deposits by
€350mln yoy
(November)
Capital Adequacy
12
€206 mln
Share Capital Increase 2018 of € 89 mln
Tier II issuance for the repayment of preference share of € 100.2 mln (issued on
20.12.2018)
1st Securitization (Artemis) € 70 mln capital gain
2nd Securitization (Metexelixis) € 47 mln capital gain
Total CET1 Ratio (pro-forma): 13.2%
15%
11.2%12.7%
16.2%
13.2%
2.9%
0.6%2.6%
3.0%
1.4% 0.9%
FY 2017 Prefs IFRS 9 Q1 2018 ΑΜΚ H1 2018 Tier II Metexelixis Q3, Q4results
Pro FormaCAR 31/12/18
Pro FormaCET 31/12/18
Rationalization of costs, optimization of procedures and ongoing transformation
13
49 46 4839
31
4237 32
31
25
6
66
7
7
98
89 86
76
64
2014 2015 2016 2017 2018e
Personnel cost General operating expenses Depreciation Total
81.0% 75.4% 82.8% 78.8% 76.6%
VEP cost of 2016 & 2018 excluded from personnel cost.
Provisions for other risks excluded from general operating expenses
Cost/ / Income ratio
Branch network restructuring (relocation and closure of branches,
renegotiation of rents)
Centralization of operations
Automation of various time-consuming procedures
Subsidiaries Opex reduction
6.3
7.1
Q3 2017 Q3 2018
Investments in IT andDigital Infrastructure
14
Asset Quality
The Bank’s current loan structure remains skewed towards corporate lending
Loans to Individuals by Type(Total as at 30.09.2018: EUR 0.6 bn)
Loans to Businesses by Sector (Total as at 30.09.2018: € 1.9 bn
15
Gross Loans (Total as at 30.09.2018: € 2.59 bn)
Gross Loans by type of product(Total as at 30.09.2018: € 2.59 bn)
Loans to Individuals
23.0%
Loans to Corporates
70.4%
State1.2%
Leasing5.4%
Large Corporate
31.6%
SMEs24.8%
SBLs14.7%
Mortgage16.8%
Consumer5.3%
Credit Cards1.2% Other
5.7%
Credit Cards5.3%
Consumer Loans23.3%
Mortgages70.6%
Other0.8% Agriculture
0.2% Trade14.8%
Industry9.6%
Manufacturing1.2%
Tourism9.9%
Shipping1.7%Construction
30.3%
Other32.1%
Loans’ stage breakdown
Loan cash coverage per Type & Stage
16
Balances and LLAs per Loan category - SMEs & SBLs
Balances and LLAs per Loan category - Large Corporates
Balances and LLAs per Loan category – Retail & Other
FY 2017 Q1 2018 H1 2018 Q3 2018
Stage 1 1,038.1 978.7 873.7 843.3
Stage 2 439.5 456.1 451.0 390.3
Stage 3 1,189.2 1,243.1 1,291.4 1,361.3
Balance LLAs
Stage 1 431.4 5.0
Stage 2 200.4 4.7
Stage 3 188.5 88.2
Balance LLAs
Stage 1 216.1 10.0
Stage 2 115.7 8.6
Stage 3 692.2 312.8
Balance LLAs
Stage 1 195.8 2.3
Stage 2 74.2 10.1
Stage 3 480.5 137.0
Forbearance for Performing Loans & NPEs, 30.09.201890dpd bridge to NPEs
17
NPE analysis as at Sep-18
30.09.2018
NPEs Concentration, 30.09.2018
517.5
1,189.2
200.4
409.636.2
0.0
200.0
400.0
600.0
800.0
1,000.0
1,200.0
1,400.0
NPL not forborne Denounced NPF UTP NPE
31.12.2017
707.3
1,361.3
298.3
235.1 120.5
0.00
200.00
400.00
600.00
800.00
1,000.00
1,200.00
1,400.00
1,600.00
NPL not forborne Denounced NPF UTP NPE
4.1%16.1%
43.5% 27.3%
9.1%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
Performing NPEs
PE
PF
Other
NPL
NPF
57.1%
75.1%
83.2%
91.8%
98.5% 99.1% 99.5% 99.8% 99.9% 100.0%
110550
1,100
2,200
5,500
6,600
7,700
8,800
9,90011,000
0%
20%
40%
60%
80%
100%
0
2,000
4,000
6,000
8,000
10,000
12,000
1% 5% 10% 20% 50% 60% 70% 80% 90% 100%
% of total NPES (cumulative balances) No. customers (cumulative)
Pro forma NPEs 30.9.2018– post Metexelixis transaction completion
18
NPE Portfolio collateral and cash coverage, 30.09.2018
71%
52%
21%
40%
8% 8%
0%
20%
40%
60%
80%
100%
30.09.2018 Pro-forma
Business Mortgages Consumer Source: Attica Bank Q3 Results & IR Analysis
Much “lighter” pro forma NPE
book
No alarming drop in pro forma
NPE cash coverage (c.34% on
balance sheet items cash coverage).
Total coverage above market
average for Mortgage (market at
107%) and Consumer (market at
97%) portfolios
Attica Bank - NPEs Total CoverageAttica Bank - NPEs Mix
in € million
Attica BankPro-forma
Contribution
Contribution
30.09.2018
CategoryLoan Balance
(Gross)LLAs
Collateral
CoverageTotal Coverage Loan Balance (Gross)
Business 360 47% 89% 51.8% 70.9%
Mortgages 277 98% 118% 39.8% 20.9%
Consumer 58 68% 110% 8.4% 8.2%
Total 695 234 69% 103% 100.0% 100.0%
NPL 327 47.1% 52.0%
NPF 104 15.0% 17.3%
UTP 98 14.1% 8.9%
Other 166 23.8% 21.9%
89%
118%
110%
0%
20%
40%
60%
80%
100%
Attica Bank
Business Mortgages Consumer
Almost half relates to non NPLs and non
Denounced
19
Funding
119.3%113.9%
108.0%99.2% 95.4%
Q3 2017 FY 2017 Q1 2018 H1 2018 Q3 2018
Strong rebound of deposits – year on year increase of 15%
Net loans to Deposits ratio (%)
Deposit Balances 30.09.2017 - 30.09.2018
20
+ 15% y-o-y
€420mln deposits increase as at 20.12.2018
Loan Balances 30.09.2017 - 30.09.2018
1,600
1,700
1,800
1,900
2,000
2,100
2,200
1,900
2,000
2,100
2,200
2,300
Composition of Deposits
(68.6%)
(63.9%)
(25.7%)
(63.2%) (61.3%)
(58.4%)
(77.5%) (75.5%)(77.5%) (75.5%)
21
Breakdown of deposits by type of product
(Total as at 30.09.2018: ~ € 2.11 bn)
Breakdown of deposits by type of customer
(Total as at 30.09.2018: ~ € 2.11 bn)
Cost of Deposits: Total Deposits (stock) Cost of deposits: Term deposits (stock)
Current accounts
24.5%
Savings accounts
17.6%
Time Deposits57.4%
Other0.5%
Individuals63.7%
Corporates12.2%
Public Sector21.1%
Other2.9%
141 141141
136 136 136 135 135 136 136 136 136 136
100
110
120
130
140
150
Oct-17 Jan-18 Apr-18 Jul-18 Oct-18
bp
s107 107
107
103
107
108
107 107 107 107 107 107 107
100
105
110
Oct-17 Feb-18 Jun-18 Oct-18
bp
s
Appendix
22
Group P&L and balance sheet
Amounts in €mln Q3 2018 FY 2017 Change %
ASSETS
Cash and balances with central bank 33.8 38.5 (12.1%)
Due from other financial institutions 2.0 2.7 (27.6%)
Derivative financial instruments - assets 0.6 0.2 210.5%
Financial instruments at fair value through P&L 1.7 3.5 (53.2%)
Net loans and advances to customers 2.015,1 2,192.1 (8.1%)
Financial assets available for sale 549.6 573.1 (4.1%)
Financial assets at fair value through other total
income0.0 0.0 -
Investments held to maturity 9.9 9.9 -
Investments in associates 3.6 6.8 (46.7%)
Property, plant & equipment 31.8 28.7 (10.9%)
Investment property 58.0 58.0 -
Intangible assets 50.1 46.7 (7.3%)
Deferred tax assets 417.6 376.4 10.9%
Other assets 246.4 223.8 10.1%
Total assets 3,420.1 3,560.4 (3.9%)
LIABILITIES
Due to financial institutions 637.6 943.5 (32.4%)
Due to customers 2,112.8 1,924.1 9.8%
Derivative Financial Instruments 0.0 0.1 (100.0%)
Defined benefit obligations 10.8 14.3 (24.5%)
Other provisions 56.4 27.5 105.6%
Deferred tax liabilities 0.0 0.0 -
Other liabilities 18.7 18.2 2.5%
Total liabilities 2,836.2 2,927.7 (3.1%)
EQUITY
Share capital (common Shares) 138.4 701.8 (80.3%)
Share capital (preference Shares) 100.2 100.2 -
Reserves 478.8 246.6 94.2%
Retained earnings (133.5) (415.9) (67.9%)
Equity attributable to parent owners 583.9 632.7 (7.7%)
Total equity 583.9 632.7 (7.7%)
TOTAL LIABILITIES & EQUITY 3,420.1 3,560.4 (3.9%)
23
Amounts in €mln Q3 2018 Q3 2017 Change %
Interest and similar income90.34 97.59 (7.4%)
Less: Interest expense and similar charges
(34.27) (38.26) (10.4%)
Net interest income56.07 59.33 (5.5%)
Fee and commission income10.71 16.33 (34.5%)
Less: Fee and commission expense(6.32) (6.65) (5.0%)
Net fee & commission income4.39 9.69 (54.7%)
Profit / (loss) from trading portfolio0.96 0.94 1.5%
Profit / (loss) from investment portfolio0.59 70.0 (99.2%)
Other Income0.58 (0.8) (175.6%)
Total Operating income62.60 139.22 (55.0%)
Personnel expenses(25.92) (27.38) (5.3%)
General operating expenses(21.01) (21.22) (32.8%)
Depreciation(5.70) (4.78) 19.3%
Profit/ (Loss) before taxes and provisions9.97 85.84 (85.9%)
Provisions for credit risks(24.62) (62.70) (60.7%)
Provisions for other risks(2.88) (10.04) -
Staff Retirement Compensation(17.21) - -
Income from investment in associates(3.15) (0.9) 248.8%
Profit / (Loss) before tax (37.90) 12.20 (410.6%)
Less: Income tax(1.18) (4.75) (124.9%)
Profit /(Loss) for the period (36.72) 7.45 (592.8%)
Key financial ratios
BALANCE SHEET STRUCTURE Q3 2018 FY 2017
Due to Customers / Loans and Advances to customers (after provisions) 104.8% 87.8%
Due to customers / Total Assets 61.8% 54.0%
Loans and Advances to customers (after provisions) / Total Assets 58.9% 61.6%
Total Equity / Total Assets 17.1% 17.8%
Total Equity / Due to Customers 27.6% 32.9%
NPE Ratio 52.4% 44.6%
Provisions / NPEs 42.5% 39.9%
CAPITAL
CET I Ratio12.2% 14.7%
Total Capital Adequacy Ratio12.2% 14.7%
EFFICIENCY Q3 2018 Q3 2017
Profit (Loss) before taxes / Average Equity (RoAE) (6.0%) 2.6%
Profit (Loss) before taxes / Average Total Assets (RoAA) (1.1%) 0.9%
Total Operating Expenses less provisions for credit risks / Total Assets 2.1% 2.4%
24
Glossary of Terms
Terms Definitions
Common Equity Tier 1 ratio (CET 1) Common Equity Tier 1 regulatory capital as defined by Regulation (EU) 573/2013.
Capital Adequacy ratio (CAD) Total regulatory capital divided by total Risk Weighted Assets, as defined by Regulation (EU) 573/2013.
Cost of Risk (CoR) Loan Loss Reserves for the period divided by Gross Loans of the relevant period.
Deferred Tax Assets (DTA)Amounts of income taxes recoverable in future periods, in respect of deductible temporary differences, unused
tax losses that can be carried forward and unused tax credits.
Deferred Tax Credit (DTC) Amounts of tax credits that are eligible for conversion in tax credits under specific circumstances.
Forborne ExposuresAn exposure where forbearance measures have been extended, i.e. concessions, such as a modification or
refinancing of loans and debt securities, has been granted as a result of a counterparty's financial difficulty.
Loan Loss Allowances (LLAs) Provisions to cover credit risk.
Net Interest Margin (NIM) Net Interest Income for the period, annualized and divided by average Total Assets of the relevant period.
Non-Recurring Items (NRIs)
Expenses or income that occurs only for the period under examination.
* For the calculation of PPI on p.7, the following NRIs are excluded: Artemis securitization servicing fees (€4
mln) + Investment gain from Artemis Securitization (€70 mln) + Provisions for other risks (€10 mln).
Net Interest Income (NII) Interest Income less Interest Expense.
Net Commission Income (NCI) Commission Income less Commission Expense.
25
Glossary of Terms
Terms Definitions
Non Performing Exposures (NPEs)
An exposure that is a) 90 days past-due (material exposure) and b) unlikely to be repaid in full
without collateral realization (irrespective of any past-due amount or of the number of days
past-due).
Non Performing Exposures Coverage (NPE coverage) Loan Loss Reserves divided by Non Performing Exposures for the period.
Pre Provision Income (PPI) Total Operating Income for the period less Total Operating Expenses for the period.
Preference Shares
Non-transferable redeemable preference shares of a nominal value of €0.35 each. The shares
were issued pursuant to the provisions of Law 3723/2008 on enhancement of the liquidity of
the Greek economy to limit the impact of the international financial crisis.
Risk Weighted Assets (RWAs)
Risk Weighted Assets are the Bank’s assets and off-balance sheet exposures, weighted
according to risk factors based on the Regulation (EU) 575/2013 for credit, market and
operational risk.
Tier II instrumentSecondary component of the bank capital, in addition to Tier 1 capital, that makes up the
bank's required regulatory reserves.
Stage 1Loan Loss Reserves for exposures classified under Stage 1 are calculated from the initial
recognition of the loan on a 12-months period. (Expected Credit Losses).
Stage 2Loan Loss Reserves for exposures classified under Stage 2 are calculated for the lifetime
of the exposure. (Lifetime Expected Credit Losses).
Stage 3Includes credit impaired exposures. Loan Loss Reserves for exposures classified under
Stage 3 are calculated for the lifetime of the exposure. (Lifetime Expected Credit Losses).
Unlikely to pay (UTP)
The debtor is assessed as unlikely to pay its credit obligations in full without realization of
collateral, regardless of the existence of any past-due amount or of the number of days
past due (Regulation (EU) 575/2013).
Voluntary Exit Plan (VEP) A plan that provides an incentive for employees to retire early.
26
ATTICA BANK S.A.
Contact Information:Strategy and Financial Planning Department
23 Omirou Str. 106 72. Athens. Greece
e-mail: [email protected]
Tel.: +30 210 3669000
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 this presentation may be disclosed to or used by any other person or used for any other
purpose without the prior consent of Attica Bank.
Neither Attica Bank nor any of its connected persons accept any liability or responsibility for the accuracy or completeness of. nor
make any representation or warranty, express or implied, with respect to the information on which this material is based or that this
information remains unchanged after the issue of this presentation. In addition, the reader of the material agrees that Attica Bank
and all “connected persons” neither owe nor accept any duty or responsibility to the former, whether in contract or in tort (including
without limitation, negligence and breach of statutory duty), and shall not be liable in respect of any loss, damage or expense of
whatsoever nature which is caused by any use the reader may choose to make of this material, or which is otherwise consequent
upon the gaining of access to the report by the reader.
The content of this material should not be construed as a solicitation or a recommendation. It has been prepared for information
purposes only and is purely indicative. It does not constitute an offer or invitation for sale or purchase of securities or any of the
businesses or assets described herein or any form of commitment, advice, recommendation or valuation opinion on the part of Attica
Bank or its connected persons. No part of this material should form basis of or can be relied upon in connection with any contract or
investment decision or commitment relating thereto.
This material should not be regarded by the Recipient as a substitute for the exercise of its own judgment and the Recipient is
expected to rely on its own due diligence if it wishes to proceed further.
Additionally, the Recipient should not construe the contents of this material as legal, tax, accounting or investment advice. The
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concerning any transaction described herein. This material does not purport to be all-inclusive or to contain all of the information that
the Recipient may require or request.
The present material may contain targets, prospects, returns and/or opinions which obviously involve elements of subjective
judgment. Any opinions expressed in this material are subject to change without notice. Forward looking statements may also be
contained. Attica Bank gives no undertaking and is under no obligation to update these targets, prospects or potential statements for
events or circumstances that occur subsequent to the date of this material or to update or keep current any of the information
contained herein and this material and there exists no representation that it will do so.
Actual results will vary from the projections or targets mentioned and such variations may be material.
In this notice “Attica Bank” means Attica Bank S.A. and its “connected persons” means the shareholders, subsidiaries and the
respective directors, officers, employees and agents of each of them.
27