Eurobank Ergasias Services and Holdings SA is a holding company registered in Athens and listed on the Athens Stock Exchange. It is the parent company of the Eurobank Group, consisting of Eurobank SA and its subsidiaries.
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Eurobank Ergasias Services and Holdings SA (Eurobank Holdings) is a holding company registered in Athens (8 Othonos Street, 10557) and listed on the Athens Stock Exchange. Eurobank Holdings and its subsidiaries (Group) have €81.5 billion in total assets and 11,328 employees (data as at 31.12.2022).
Eurobank Holdings is the parent company of the Eurobank Group, consisting of Eurobank SA and its subsidiaries.
With a total network of 616 branches in Greece and abroad, the Eurobank Group offers a comprehensive range of financial products and services to its retail and corporate customers. In Greece, Eurobank operations encompass a retail banking network, dedicated business centres, a Private Banking network and a dynamic digital presence. The Eurobank Group also has presence in Bulgaria, Serbia, Cyprus, Luxembourg and the United Kingdom (London).
| Eurobank Holdings Key Figures | €billion |
|---|---|
| Gross loans | 43.5 |
| Deposits | 57.2 |
| Total assets | 81.5 |
| Total equity | 6.7 |
| Eurobank Group Client Service Network | 616 |
|---|---|
| Greece | 300 |
| International | 316 |
*Based on the information received from Fairfax Financial Holding Limited, on which the investment community was informed on 20.07.2021 by Eurobank Holdings, through a relevant corporate announcement.
**Based on the information received from the Capital Group Companies (CGC), on which the investment community was informed on 03.12.2020 by Eurobank Holdings, through a relevant corporate announcement.
As of 14.09.2022, due to a share capital increase following the exercise of stock option rights, the new total of the company's listed shares that are tradeable on the Athens Stock Exchange amounts to 3,710,677,508 common registered shares, on which the investment community was informed on 09.09.2022 by Eurobank Holdings, through a relevant corporate announcement.
Eurobank is active in all the banking sectors in Greece, offering a wide range of products and services to individuals, small and large businesses, and investors. By actively participating in major projects that have significant benefits for the economic growth of Greece, it supports the sustainability transition of the Greek economy. Beyond the Greek borders, it has presence in Bulgaria, Serbia, Cyprus, Luxembourg and the United Kingdom (London). In 2022 Eurobank continued its digital transformation, investing in strengthening its human capital in IT, supporting its operations more efficiently and making the most of innovative technologies.
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Retail Banking encompasses a range of products and services that meet the specific needs and requirements of individual customers and small businesses.
Deposits – Retail Banking encompasses all of the Bank’s deposits, both for individuals and businesses. Total deposits Bank-wide increased to €39.6 billion compared to €37 billion on 31.12.2021 at Bank level, despite the market challenges and the inflationary environment. The uncensored re-opening of the market along with the successful year for the tourism sector enhanced economic growth, especially for corporations.
In addition, supporting the savings effort of Greek households, with the Apotamievo and Megalono accounts as key ambassadors, more than 140,000 children held the Megalono savings account in 2022.
Deposit products and services remained available through e-Banking. Focusing mainly on optimal customer service and seamless customer transactions, new e-Banking functionalities were introduced and even more customers switched to e-Statements.
Transactions and services packages – A new era of benefits and discounts was launched with the My Advantage Banking programme for individuals. Customers may choose one of the My Silver, My Gold and My Platinum packages and make the most of their relationship with Eurobank, such as benefits at partner companies and savings on transactions every month by linking their account to a package. They can save up to €44 a month, depending on the package they choose, compared to carrying out each transaction separately. On 31.12.2022, retail customers held more than 100,000 My Advantage packages and Businesses more than 400,000 packages (Classic for Business and Advanced for Business).
Mortgage loans – Despite the new market conditions, namely the unstable macroeconomic environment which led to an upward trend in interest rates, the Bank managed to retain its leading position in the mortgage lending market and increase new mortgage loan disbursements by 21%, compared to the previous year. This was mainly due to the increased demand for fixed-rate mortgage loans or with a fixed rate for an initial period and floating rate afterwards, along with flexible repayment options. The Bank also offered innovative digital and phygital options for clients to apply for a mortgage loan through e-Banking, v-Banking or at a branch. At the same time, it continued to contribute to the residential green lending sector through Exoikonomo-Aftonomo and other subsidised programmes. By the end of 2022, the mortgage lending portfolio in Greece stood at €8.1 billion in total.
Consumer loans – Disbursements of amortising consumer loans stood at €177 million, up by 33% compared to 2021, the leading product being Payroll Personal Loan, accounting for 58% of total disbursements. During 2022, the Bank launched new, tailor-made consumer loans, such as the Personal Loan for Personal Banking clients and the Green Fast Loan, to meet special client traits and targeted needs. It expanded its alternative channel network even further and introduced the Digital Retailer Loan, featuring a fully digital, one-stop-shop process through major retailer digital stores. Furthermore, Fast Loans, available both through the branch network and digital channels (e-Banking and Eurobank Mobile App) contributed significantly to increased amortising loan disbursements, accounting for 39% of total disbursements. Despite the post-COVID-19 global disruptions in the car industry and its supply chain management, car loan disbursements in 2022 reached €131 million, mostly for new car purchases. By the end of 2022, the Bank’s consumer lending portfolio in Greece amounted to €1.7 billion, including credit card balances.
Cards Business – In 2022 Eurobank’s total card portfolio reached 3.4 million cards (debit, credit and prepaid). It is the 1st bank in Greece to offer the next generation of eco-friendly cards, made of biodegradable materials. The Bank continues to enhance its digital self-service solutions, by offering users an end-to-end digital, omni channel credit card application option through the Eurobank Mobile App – following its leading position in Greece, by introducing this service to e-Banking users back in 2019.
The Cards Control feature, available through the Bank’s online platform, allows cardholders to manage a range of card functionalities, without the need to visit a branch or speak to a dedicated EuroPhone agent. This is a feature that proved very useful during the pandemic.
A series of tailor-made card use and acquisition campaigns were launched in 2022, further rewarding cardholders for their day-to-day card spending, while helping boost turnover.
Eurobank offers an array of digital wallets (Apple Pay, Google Pay and Garmin Pay), catering to all cardholder needs and allowing both iOS and Android device users to make payments using their Eurobank Visa or Mastercard cards.
The leading loyalty programme in Greece, €pistrofi, rewards clients with actual euros rather than points, which can be redeemed through a wide network of 8,500 affiliated merchants. The programme continued to build the business bond between existing and prospective customers by rewarding their overall relationship with the Bank and increasing the value of transactions. Since 2006 €200 million have been returned to clients through the €pistrofi loyalty programme.
Eurobank remains a leader in the field of cobranded credit cards, delivering value to its customers’ day-to-day transactions through exclusive partnerships with entities that include Greece’s largest telecommunications provider (COSMOTE World Mastercard), the largest shopping malls in the country (YES Visa), a high-end retail store (Reward World Mastercard) and a major supermarket chain (masoutis Visa).
As part of the acquiring business spin-off and its sale to Worldline GR in June 2022, Eurobank acts as merchant servicer and offers a wide variety of POS products across all channels, such as POS, ePOS, Payment Link and Smart POS, while it is the first bank in Greece that offers glass payments. Turnover for 2022 increased by 27% y-o-y to €11.5 billion and gross merchant commission (GMC) by 31% y-o-y to €81 million. Furthermore, the GMC rate increased by 2bps to 0.70%, while POS terminals reached 22.8K (+10% y-o-y) within the year.
Bancassurance – Eurobank achieved high performance and results in bancassurance activity, reaching €470 million and remains the bancassurance market leader in life insurance. General insurance products also remained one of the Bank’s priorities, with remarkable results compared to the previous year. Aiming to meet all market needs, Eurobank launched a new capital accumulation programme for individuals, and new health and property programmes for businesses.
The vision of Eurobank Personal Banking is to become the most recognised Personal Banking segment in the Greek banking market. Its mission is to provide a unique banking experience to its clients through dedicated products and services. The Personal Banking Relationship Managers apply an integrated approach in meeting their clients’ financial goals, through a variety of products and services, offered in cooperation with Eurobank Asset Management MFMC, Eurolife FFH Insurance and Eurobank Equities SA.
2022 was a milestone for Personal Banking, due to new sub-segmentation approach. Aside from asset balances, the client’s entire relationship with Eurobank and the multitude of their active banking products are taken into consideration, for them to be classified as Prime or Top Prime customers.
In 2022 the Personal Banking Segment:
The Personal Banking loan portfolio rose to 5% of retail balances (mortgage and consumer loans), as the Segment:
Individual Banking remained focused on developing and serving 87% of the Bank’s active customers (2.7 million) retaining 85% of consumer loan balances and 83% of mortgage loan balances. By launching a comprehensive commercial plan, Individual Banking carried out more than 13 million contacts with individual customers, 92% of which were through digital and alternative channels, aiming to efficiently meet the whole array of their banking needs. Furthermore, with the integration of advanced analytics and special credit models, it managed to increase consumer lending and maintain portfolio quality.
Moreover, major initiatives led to significant accomplishments:
Eurobank’s strategy for small businesses focuses on companies with:
The loan portfolio for Retail Business Banking amounted to €3.3 billion as at 31.12.2022.
During 2022, the Segment:
As a result of these initiatives, the Bank extended new credit limits and term loans amounting to €797 million.
Corporate and Investment Banking (CIB) provides fully integrated business solutions and excellent customer service to large and complex corporate customers, medium-sized enterprises and institutional clients in Greece and SE Europe. Furthermore, it is responsible for managing the liquidity and funding needs of the Bank, as well as handling its trading and investment portfolio. CIB’s structure is designed to be responsive to market conditions and to the expectations and needs of its sophisticated client base, and aims at ensuring efficient provision of services based on market and industry expertise and know-how.
Eurobank serves as the main point of contact for financial solutions and products to major clients. At the end of 2022 it managed a portfolio that exceeded €4.6 billion (incl. corporate bond loans) and included more than 120 groups of companies, mainly operating in the energy, manufacturing, retail, services, health and construction industries.
In 2022 LC continued to support strategic sectors of the Greek economy through leading roles in flagship transactions such as:
The lending portfolio of CB amounted to €3.67 billion in 2022. CB is responsible for managing relationships with MidCaps nationwide, through its network of business centres. Further to a recent restructuring of CB network, currently the BCs are strategically located to ensure close coverage and quality service to clients, especially those based outside Athens metropolitan area. In 2022 CB contributed to the successful completion of important transactions, such as:
Eurobank offers comprehensive services through 5 dedicated departments:
The SF departments coordinate the actions of all Group companies, while they are responsible for handling both performing portfolios and certain non-performing loans. On 31.12.2022, the performing portfolio managed by SF exceeded €4 billion, achieving a significant net credit expansion, mainly attributable to the Project Finance portfolio, with all other departments recording very strong performance.
In 2022 the Bank continued to strengthen its position in strategic projects, such as its participation with multiple roles and facilities in the following landmark transactions:
The Department is responsible for structuring and arranging a broad range of special and structured financing deals, including corporate syndicated loans and bond loans, leveraged buyout structures, and convertible and exchangeable bonds.
SDS also manages secondary loan trading activity, liaising with international bank trading desks, funds and brokers aiming to optimise and enhance the Issuer’s portfolio and market position. In 2022 the Bank maintained its leading position in the market, with the transaction volume reaching around €3.5 billion.
Eurobank has 30 years of experience in shipping finance, having established a strategic position as lender to a large number of Greek shipping companies. It holds a leading position in the Greek shipping arena, with a global shipping portfolio of around USD 3.1 billion (plus commitments of USD 350 million) as at 31.12.2022.
The clientele consists of shipping groups of Greek beneficial ownership, with an established presence and medium to large fleets. The Bank finances vessel trading in the main sectors of shipping, i.e. dry bulk cargo, wet and containers. Shipping loans are purposed to finance the acquisition of second-hand tonnage of young age and the construction of newbuilding vessels, aiming to support the renewal of the Greek merchant fleet.
The Shipping Division is based in Piraeus and also acts as a Shipping Hub for the Group, serving Greek shipping companies through Eurobank Cyprus and Eurobank Private Bank Luxembourg SA.
It offers strategic financial advisory services to corporate clients and their shareholders for mergers, acquisitions, disposals and capital restructurings, as well as for raising capital, either through private equity transactions or through the capital markets.
In 2022 the Bank provided strategic financial advisory services to a number of corporate clients looking for strategic advice in executing their growth or divestment opportunities, such as PPC, Volterra, ELLAKTOR and OPAP, as well as clients seeking to raise capital through the bond and equity capital markets, such as Lamda Development and DIMAND.
Eurobank provides quality transaction banking services to corporate and institutional clients. The following business units operate within GTB:
2022 was another milestone year for Eurobank Factors SA, which remains a market leader in factoring in Greece, recording a new historical high in turnover and lending balances. Interim figures showed an equally outstanding performance in terms of profits. The company also added a silver world medal for its performance in Export Factoring and a bronze in combined Export-Import Factoring in Europe, to its long list of international awards. The company solidified its strong position in reverse factoring/suppliers’ financing in SE Europe by successfully launching its new electronic platform.
During 2022, Eurobank Leasing further grew its business with €134 million in new disbursements (+3% y-o-y) and an overall market share of 26% (new products), despite the 20% market containment, ranking 2nd amongst the financial leasing companies operating in Greece. In the industrial and office equipment asset subcategory, Eurobank Leasing was ranked in 1st place with a share of 46%, while it held the 2nd place in passenger vehicles. (Source: Association of Greek Leasing Companies).
The company provides financing solutions in the form of leasing for manufacturing equipment, vehicles and selective real estate assets. It also played a significant role in initiatives that have a positive impact on the environment, such as electromobility, optical fibre and solar parks. In 2022 Eurobank Leasing reinvented vendor financing, by establishing new ecosystems with reputable vendors in the IT and medical equipment sectors.
The Markets Sales and Structuring teams have been instrumental in providing clients with value-added solutions and hedging strategies in a volatile market landscape. Eurobank focused on offering products and services that promote environmental and social issues, and contribute positively to society. Concurrently, there was a strong push towards digital solutions. Eurobank became the first bank in Greece to offer comprehensive and fully automated foreign exchange digital services around the clock (24/7). The Markets Trading team also successfully navigated portfolio risks through unchartered market conditions and managed to outperform for yet another year. Treasury (a part of Markets) is active in the wholesale capital markets as well as the interbank market, so as to manage the interest rate and currency risks of the banking book, as well as Eurobank’s liquidity and cost of funding, in compliance with the established risk management framework and business objectives. In this context, and in light of the changing interest rate outlook in 2022, Treasury was also actively engaged in the capital markets, with the successful execution of 2 transactions, to ensure the Bank’s continued compliance with its MREL requirement, with the Bank issuing:
These transactions further boosted the Bank’s MREL ratio to levels well above the January 2023 interim non-binding MREL target. Treasury also maintains a dedicated Correspondent Banking Division, offering dedicated relationship management to all its clients, and providing centralised services for the Eurobank Group, enabling cost effective payments, execution and optimal cash management solutions.
In each country, Markets operations are standardised and report directly to Markets International in Greece and to the local CEO. The Group’s strategic objective is to preserve and develop its important regional footprint in the areas of liquidity management, foreign exchange, interest rates, bonds and derivative trading, as well as sell financial and investment products in the local markets. International subsidiaries promoted a wide variety of ESG-related products and services across their clientele base, whereas local Markets teams successfully weathered market challenges and unforeseen risks, delivering exceptional results on a recurring basis.
The Group sets strict limits for transactions it enters into, which are monitored on a daily basis. Limits include exposures towards individual counterparties and countries, as well as VaR limits. The Group uses an automated transaction control system, which supports Markets in monitoring and managing positions and exposures.
Eurobank actively participates in projects that have significant benefits for the economic growth of Greece and support the sustainability transition of the Greek economy. Its position as the Development and Prosperity Bank was strengthened through its leading role in almost all flagship projects carried out in 2022, but also through continuously supporting strategic sectors of the Greek economy and financing sound business plans, this way encouraging the growth efforts of businesses, their investment plans and their extroversion. In 2022 Eurobank financed landmark projects, such as:
Eurobank Asset Management MFMC holds the leading market position in Greece, with over €4.7 billion in total assets under management and supervision on 31.12.2022:
Eurobank additionally has presence is present in the Luxembourg funds industry, one of the major global fund hubs, through its 100% subsidiary Eurobank Fund Management Company (Luxemburg) SA. The Company offers a wide variety of UCITS funds under the umbrellas (LF) Funds, (LF) Fund of Funds and (TLF) Funds, distributed in Greece, Luxembourg, Bulgaria and Cyprus. The UCITS funds cover a broad range of all asset classes, with geographical diversification.
Group Private Banking offers a wide range of investment products and services (execution-only, advisory and discretionary) as well as wealth management and structuring services (lending facilities, family office structuring and servicing, fund administration services). Besides the in-house funds, the 3 Private Banking units in Greece, Luxembourg and Cyprus also distribute approximately 3,000 UCITS funds from 14 international fund managers.
On 31.12.2022, Private Banking served approximately 12,000 clients, with assets under management reaching €9.1 billion.
The Group’s Next Generation Private Banking model is based on a strategic nationwide homogenisation of operations and establishment of a single customer journey, which will be technologically supported by the newly acquired capabilities of the Temenos digital Wealth Management platform, already rolled out in Cyprus in April 2023 and expected to be launched in Luxembourg shortly.
Offering access to a full range of investment products, including trading in stocks, derivatives, bonds and mutual funds around the globe, Eurobank Equities SA is a leader in the industry.
In 2022 it accounted for 16.9% of the volume of transactions in the Athens Exchange, solidifying its position as one of the brokers of choice for the institutional investors active in the Greek market, in addition to thousands of private investors.
The award-winning Eurobank Equities Research Division – ranked as No. 1 provider of Greek Research by Institutional Investor/Excel 6 times in the last 10 years – is committed to generating actionable investment ideas by providing timely research and insights on the multiple sectors that it covers. Its research universe includes more than 20 listed companies, accounting for approximately 85% of the ATHEX capitalisation and 90% of the traded value. Eurobank Equities Research also provides secondary coverage on the largest foreign markets and listed large cap names.
The Eurobank Equities Market Making Division provides liquidity on the shares of 39 listed corporate entities, 6 corporate bonds and 38 derivatives, capitalising on its extensive experience and proprietary technology.
In 2022 Eurobank’s approach to public sector and NPO banking focused on supporting the government initiative for digital transformation in the public sector. Eurobank provides services for automatic collection of payments due, to support the digital transition of state authorities.
The Segment continued to sponsor public hospitals in their effort to deal with the challenges created by the pandemic, as well as to support the Social Groceries and other initiatives, according to the priorities set by the authorities. At the same time, it used all the available networks and product units of the Group, offering a wide range of insurance products, flexible financing solutions and tailor-made payroll packages.
The Retail International Customers Segment, Eurobank’s One-Stop-Hub for clients residing outside Greece, continued to expand its offering on products and services.
Through Eurobank’s digital and phygital channels, existing and new clients have access to a wide range of tailor-made products and services, such as mortgage loans through a fast-track application process launched in 2022. In the same year, the Digital Customer Onboarding service was made available to residents of the European Union, Iceland, Norway and Switzerland, allowing them to become Eurobank clients from their country of residence through the Eurobank Mobile App.
Business Exchanges is an important vehicle for the Group’s digital transformation programme, providing digital B2B services to the Group and other businesses. It is also one of the Group’s key hubs for the restructuring and consolidation of its financial and HR services.
For the 22nd consecutive year Eurobank, through its subsidiary Business Exchanges SA, successfully operated in the B2B transaction sector, offering value-added digital services to its customers.
Business Exchanges assists businesses, including the Group, to streamline their supply chain through e-auctions, e-procurement and e-invoicing services. During the year, the company successfully upgraded the e-Procurement platform for the Group, providing a modern cloud-based solution for streamlined purchases, enhancing internal digitisation, cost efficiencies and services to the Group’s suppliers.
After the strategic partnership with doValue SpA and the smooth transition to the new operating model for remedial management, the Group is implementing its NPE Strategy Plan through doValue Greece for the assigned portfolio and successful securitisation transactions. The NPE strategy lays out the Bank’s approach and objectives regarding the effective management (i.e. maximised recoveries) and reduction in NPE stock in a clear, credible and feasible manner for each portfolio.
In this respect, in March 2022, the Group submitted its NPE Management Strategy for 2022-2024, along with the annual NPE stock targets at both Bank and Group level. According to the plan, the Group NPE ratio is expected to drop from 5.8% in FY 2022 (actual figure: 5.2%, mainly due to higher NPE outflows than initially anticipated) to 4.8% in 2024.
Remedial management encompasses a range of policies and strategies, including the collection of early arrears loans starting from the 12th delinquent day of each month, in accordance with the current legislation.
In the Retail portfolio, a micro-segmentation approach has been developed to facilitate collections, with all relevant channels (including the branch network) heavily involved in achieving specific monthly collection targets. To prioritise collections, decision trees are used daily to identify the most critical sub-segments for achieving the NPE reduction targets.
doValue employees that manage the ERB portfolio are properly trained in the Bank’s product features, policy and procedures, as well as in debt collection techniques. Special communication scenarios adapted to the strategy/segmentation are applied, aiming at proper communication, quality management and customer service for all retail products, and at informing customers about their rights and obligations. Customer communication is personalised and highlights the benefits of repaying overdue amounts on time and the consequences of payment delays.
In the Corporate portfolio, dedicated relationship managers continually monitor any delinquencies and take appropriate action as needed.
As regards the Remedial Management for Retail (mortgages, consumer loans, SBB and professionals), the Bank proceeded with the following strategic and operational actions in 2022:
As regards the Remedial Management for Corporate, the Bank proceeded with the following strategic and operational actions in 2022:
Eurobank Cyprus Ltd (Eurobank Cyprus) managed to demonstrate satisfactory financial performance in 2022, despite the effects of the Russia-Ukraine war, disruptions in the supply chains and rising inflation in the local as well as the global economy. Costs, including cost of risk and asset quality, were maintained within the bank’s expectations. Balance sheet growth was mainly led by increased deposits, which fuelled the expansion of the bank’s loan book and bond portfolio.
Net profit after tax amounted to €104.8 million. Eurobank Cyprus holds a strong capital position, with the Capital Adequacy and Common Equity Tier 1 (CET1) ratios remaining strong, at 27.3% in 2022, and a strong excess liquidity, with deposits reaching €7.2 billion. Eurobank Cyprus has maintained its strong liquidity position with a loan-to-deposit ratio at 35.0%, largely driven by a higher increase in deposits versus loans.
At the same time, Eurobank Cyprus maintains a very good loan portfolio quality, as the non-performing loan ratio (NPE) ratio, according to the directives of the European Banking Authority (EBA), remains very low at 2.7%. The cost-to-income ratio at 27.2% improved compared to last year’s ratio of 31.3% , and reflects the very efficient operation of Eurobank Cyprus. With the upcoming digital transformation of the bank, more economies of scale are expected in this area in the years to come.
Eurobank Private Bank Luxembourg SA was established in Luxembourg in 1986 and operates a branch in London and a representative office in Athens.
Luxembourg is a leading financial hub and an international Wealth Management Centre of Excellence, having a AAA credit rating and well-functioning institutions. Along with London’s global reach, they constitute key factors for attracting new clients.
The bank offers services in Private Banking, Wealth Management and Investment Fund Services, as well as selected Corporate Banking services. Through a wide range of innovative products and services, and highly qualified and experienced staff, it follows a targeted business model, along with a conservative approach in terms of risk taking.
During 2022, Eurobank Private Bank Luxembourg maintained satisfactory profitability levels and continued to attract new clients, while at the same time keeping its capital adequacy and liquidity at very high levels. At the end of 2022, the capital adequacy ratio stood at 22.7%, and the liquidity coverage ratio at 357% (under Basel III), while the loan-to-deposit ratio (excluding cash collateral loans) stood at 37.7%.
In the area of Private Banking, in 2022 Eurobank Private Bank Luxembourg significantly expanded its clientele as well as the total portfolios of its clients. In cooperation with the bank’s dedicated Investment Advisory team, Private Banking offered its clients investment products that address market challenges, and comply with the new and more demanding regulatory framework. In addition, the extensive upgrade cycle of its systems and technology landscape is already underway. This substantial investment and respective transformation will significantly enhance the bank's strategic position in terms of operational efficiency, digital channels and services, and superior overall client experience.
2022 was one of the best years in the history of Eurobank Bulgaria AD (Postbank). It recorded a healthy increase in its loans and deposits, solid improvement in its income and profitability, and stable capital adequacy, risk and liquidity ratios. Profit after tax rose to €96.0 million. Return on equity improved considerably by 1.7 percentage points to 12.7%, while return on assets was just below 1.3%.
On 05.12.2022 Postbank signed a put option letter in favour of BNP Paribas Personal Finance SA for the acquisition of its business in Bulgaria. After the successful completion of the consultation process, Postbank and BNP Paribas Personal Finance SA signed a business transfer agreement on 20.01.2023.
The acquired business is one of the leaders in the consumer finance market in the country and this acquisition presents a huge opportunity for Postbank to enter a new fast-developing and high-margin segment. In the last 15 years, BNP Paribas Personal Finance has built a recognisable franchise, which Postbank wants to expand and enhance. The acquisition not only enables Postbank to increase its market share and target the second place in the segment, but also offers opportunities for cross selling and new ways to serve customers.
Serbian economy was heavily impacted by the crisis instigated by inflation that reached 15% in 2022. Resulting increase in interest rates brought consumer lending to a slowdown.
In this environment, Eurobank Direktna managed to further increase its deposit base and offset the lags in the consumer portfolio with business and corporate lending. It has also restructured its retail network to 95 branches from 126. Recurring PAT (Profit after Tax) was €11 million, CAD remained strong at 18.72%, while the NPE ratio improved significantly to 5.8%.
Corporate social responsibility remains an integral part of the Eurobank Direktna business strategy. More than €4.8 million have been invested in the local community so far through key CSR pillars: education, healthcare, environment, culture and inclusion. Additionally, the bank remained sensitive to environmental matters, obtaining the EBRD Award for Green Trade facilitation for 2022.
On 02.03.2023, the Group announced that it signed a binding share purchase agreement with AIK Banka a.d. Beograd (AIK) for the sale of its holding in its subsidiary in Serbia, Eurobank Direktna a.d. Consequently, as of 2023 the subsidiary was classified as held for sale and its results will be presented in discontinued operations. The transaction is expected to contribute around 50 bps to Eurobank Holdings’CET1 ratio (based on the Q1 2022 ratio) and is expected to be completed within the later second half of 2023.
Information Technology is at the core of Eurobank’s strategic growth and a critical enabler to the strategic objectives of the Bank. Two major transformation initiatives have been launched to upgrade the IT architecture towards a flexible model to support growth and efficiency. To this end, the Group has embarked on an ambitious long-term project to shift its IT infrastructure to the cloud and to implement a new data and analytics platform. Cloud computing will play a vital role in the Bank’s sustainability and ESG endeavours, by reducing carbon dioxide emissions.
Eurobank continued its digital transformation, investing in strengthening its human capital in Technology, supporting its operations more efficiently and making the most of innovative technologies.
In line with these objectives, the General Division of Information Technology mainly focused on:
More than 290 projects were delivered in 2022, with the availability of all IT services exceeding 99.994%. From an operating model perspective, more than 30% of the deliverables were completed using agile methodology, further expanding the DevSecOps way of working and consistently scaling the design thinking approach in the product management process. Furthermore, the technical and security infrastructure was enhanced significantly, ensuring uninterrupted services for increased business transactions.
The IT transformation journey is also continuing in the international subsidiaries. The Temenos platform is already rolled out in Cyprus as of April 2023. The platform acts as a blueprint to be later retrofitted in Luxembourg. Several digital transformation initiatives are also in progress in Bulgaria.
Eurobank has forged partnerships with national and international associations, organisations and initiatives and it has received multiple awards for yet another year.
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To enhance its ESG approach, Eurobank participates, inter alia, in national and international associations, organisations and initiatives.
UNEP FI participant since 2005; founding signatory to the Principles for Responsible Banking since 2019.
Active supporter of the UN SDGs.
Chair of the Coordinating Committee for Sustainability, Governance and Green Banking.
Signatory to the 10 Principles of the UN Global Compact since 2008. Member of the Global Compact Network Hellas.
The only Greek Bank participating in the Priceless Planet Coalition since 2020.
Eurobank Asset Management subsidiary a signatory to the UN Principles for Responsible Investment (PRI) since 2018.
Member of the CSR Hellas network since 2003.
Participant in the Eco-Management and Audit Scheme register for following the EC Regulation on eco-management.
Member of the EC’s Energy Efficiency Financial Institution Group (EEFIG) since 2013.
Member of the International Capital Markets Association (ICMA) since 2020.
Find out more at ESG Partnerships and initiatives.
To enhance its ESG approach, Eurobank participates, inter alia, in national and international associations, organisations and initiatives.
Find out more at Our Awards.
Risk undertaking is an integral part of the Eurobank Group’s operations, to meet its strategic and business objectives. To this end, there are adequate mechanisms in place to identify and monitor risks, and assess their potential impact.
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The Group acknowledges that risk undertaking is an integral part of its operations, to meet its strategic and business objectives. Therefore, the Group has established adequate mechanisms to identify and monitor these risks in a timely manner and assess their potential impact on meeting its corporate objectives. The ultimate responsibility for the Group’s risk management lies with the Board of Directors (Board or BoD).
The BoD has delegated to the Board Risk Committee (BRC) specific responsibilities as to designing and formulating the risk management strategy, managing assets and liabilities, and establishing effective mechanisms to identify, assess and manage risks that derive from the Group’s overall activities. The BRC consists of 5 Non-Executive Directors of the Board, convenes on a monthly basis and reports to the BoD on a quarterly basis. In accordance with the European Central Bank (ECB) expectations, the BoD has appointed a specific BoD member as responsible for the climate-related and environmental (CR and E) risks at Group level. The appointed BoD member updates the BRC and the BoD on climate change and environmental related risks at least on a semi-annual basis.
The Group has allocated adequate resources for updating its policies, methods and infrastructure, to ensure the Group’s compliance with the requirements of the ECB, the Single Supervisory Mechanism (SSM), the Single Resolution Mechanism (SRM), the guidelines of the European Banking Authority (EBA) and the Basel Committee on Banking Supervision, as well as in alignment with best international banking practices.
Eurobank applies the following processes and tools to ensure efficient risk management:
The RIMA process sets the appropriate mechanisms to identify, measure and monitor risks at an early stage, as well as to control their potential impact on the achievement of the Group’s objectives. In this context, RIMA is an essential part of the overall risk appetite process, enabling the Group to build its risk inventory, identify the risks that the Group is or might be exposed to, assess their relevance and materiality, and eventually define appropriate risk appetite metrics to monitor the risks assessed as material. The Group applies a formal RIMA process, as demonstrated in the RIMA Framework, to ensure that all relevant risks are captured in the Group’s Risk Library. The risks assessed as relevant and material are then included in the Group’s Risk Inventory.
The RAF defines the process whereby the Group develops its Risk Appetite Statements, including the governance and methodologies for their selection, calibration, monitoring and escalation in case of a breach. Additionally, through the RAF, the Group strengthens risk governance and supports the formulation of the Group’s business strategy and objectives under both normal and adverse economic conditions.
The Group articulates its Risk Appetite through a set of qualitative and quantitative statements relating to, inter alia, solvency, liquidity, profitability, asset quality and other areas related to material risks. It sets indicators and thresholds to support the evaluation as to whether the Group operates within its risk appetite. The outcome of this process is the Risk Appetite Statements (RAS) document whereas the principles, process and governance aspects related to the RAS are outlined in the RAF. The RAS are complemented by a set of Business Line Statements (BLS), which constitute operational metrics (and limits) at the level of business where the risks are undertaken.
The RAF, RAS and BLS documents are cascaded within the Group, and shape its risk undertaking and management culture, forming the foundation on which risk policies and risk thresholds are established both overall and per business activity.
The Stress Testing process follows a comprehensive approach, starting with identifying material risks and incorporating these risks into a set of coherent stress testing scenarios. The scenarios are processed through an analytical framework, consisting of risk models, which are used to forecast the Group’s expected profitability, capital and financial position under the assumed stress scenario conditions. The Group leverages the Stress Testing Framework for a number of internal risk and planning processes, including Business and Capital planning, the RIMA process, ICAAP, liquidity management/ILAAP, recovery planning, risk appetite calibration and regulatory stress testing.
The Group has established a standardised and regular flow of information to ensure ongoing and accurate monitoring of all risks. Appropriate arrangements and reporting lines have been put in place across the Group Risk Management General Division (GRMGD), using quality and consistent information and metrics.
The GRMGD, which is headed by the Group Chief Risk Officer (GCRO), operates independently from the Business Units and is responsible for identifying, assessing, measuring, monitoring and managing the risks the Group is exposed to.
A Risk Management Executive Committee has also been established, to regularly review key risk and other issues of the General Division, so as to ensure that Risk Unit Heads are appropriately and timely informed on all of the above issues, and that closer coordination and cooperation amongst Risk Units is achieved.
* SRRP Sector has a dual reporting line to the Group CRO (Group Chief Risk Officer) and to the Group CFO (Group Chief Financial Officer).
The GRMGD is independent from the Business Units and has full responsibility for setting the risk strategy and RAF, and subsequently, as a 2nd line of defence, for assessing and monitoring the Material Risks, as assessed through the RIMA process, undertaken by the Group. Moreover, it is responsible for establishing the necessary policies and procedures, methodologies and tools to effectively monitor risk levels within the Group.
The main responsibility of the GCGD is to assess and mitigate the credit risk undertaken by the Bank, in alignment with the provisions of the Credit Policy Manuals (CPMs) and the RAF. In particular, the GCGD is responsible for reviewing and evaluating credit limit applications for:
All these are determined in accordance with thresholds set by the Bank.
Depending on the loan portfolio and the loan request, the GCGD proceeds with issuing an independent credit opinion for the applicable credit applications, which includes an assessment of the customer credit profile based on the risk factors identified – followed by a focused sector analysis, if possible – and recommendations on the structure, so as to ensure a bankable, appropriately secured and well controlled credit limit/transaction.
The GCGD participates with voting right in all Credit Committees, as per the credit approval procedure, as well as in other Bank committees, as stipulated by the Group Corporate Governance principles.
The GCCS facilitates the implementation of a sound credit risk management framework throughout the Group and is responsible for identifying, monitoring, analysing, measuring, managing and reporting credit risks, and providing a comprehensive assessment of the credit risk profile of the Bank, on a solo or consolidated basis. It challenges and assists in implementing risk management measures by Business Units, to ensure that the processes and controls in place in the 1st line of defence are properly designed and effective. The Sector is responsible for formulating the fundamental credit risk policies of the assigned portfolios, reviewing the design and regulatory alignment of various credit risk related documents issued by other areas, and providing continuous update to Management on risk-related developments, emerging trends and best practices.
The Sector is also responsible for assessing and monitoring the compliance of Business Units to relevant credit policies and procedures, including the Collateral Valuation Policy, and Credit Committee decisions, through field and thematic reviews conducted. Moreover, the Sector participates in projects related to international subsidiaries’ credit portfolio restructuring and reporting (i.e. sale of credit portfolio, sale/acquisition of subsidiaries, special portfolio reporting), as directed by the Group CRO.
The GCCS is independent from the credit underwriting activity of the Bank. The Head of the Sector and the Heads of the Sector Divisions participate in Bank committees, as specified in the relevant Group Governance documents.
The main responsibilities of the GORS are to establish an effective operational risk management framework for the Group, aligned with best practices, and to provide oversight regarding its implementation by Business Units, which are primarily responsible for managing the operational risks in their business area. The Sector supports the Business Units in identifying, assessing, mitigating, monitoring and reporting operational risks, and introduces risk identification processes to be used by them. Through these, it monitors the level and features of the most significant operational risks for the Group and undertakes appropriate Group-wide initiatives to increase operational risk awareness towards further strengthening the culture of proactive operational risk management.
The GORS manages the Group’s crime, professional indemnity, cyber and D&O liability insurance policies. Furthermore, the GORS operates and safeguards the implementation of the governance framework for all products and services under the responsibilities of the Products and Services Committee, throughout their lifecycle, according to which, financial and non-financial risks are assessed, taking also into account their financial performance. Furthermore, GORS uses communication and training as tools to address proactive risk management and foster a strong operational risk culture across the Group.
The GORS participates in Bank committees, as specified in the appropriate Group Governance documents. The Sector submits quarterly reports to the Board Risk Committee/Audit Committee on operational risk matters.
To further strengthen the existing Operational Risk Framework according to increased regulatory expectations as defined in the relevant EBA Guidelines and BCBS Principles, the BoD has identified that the management of Non-Financial Risks (NFRs) has become increasingly critical for the Group and decided to address them holistically.
The main responsibilities of the GMCRS are to identify, measure, monitor, control and report the following types of risks: market risk, counterparty and issuer risk, liquidity and funding risk, and interest rate risk from banking book activities (IRRBB).
In the context of monitoring the risk types above, GMCRS additionally:
The Sector submits, on a monthly basis, reports to G-ALCO, Management Risk Committee, BRC and, on a quarterly basis, to the BoD.
The Head of Sector participates in Bank Committees, as specified in the relevant Group Governance documents, being member of the G-ALCO and acts as the Secretary of the Global Markets Credit Committee.
The main responsibility of the GCRCACS is to control, measure and monitor the capital requirements arising from the Bank’s loan portfolios, along with the relevant reporting to Management and Regulators (ECB/SSM); to develop and maintain the credit risk models for the Bank’s loan portfolio; to measure the credit risk parameters (PD, LGD, EAD as applicable) for the loan portfolios; and to coordinate the stress testing exercises at Group level.
The Head of the Sector and the Heads of the Sector Units participate in Bank committees, as specified in the appropriate Group Governance documents.
The scope of the GMVGS is to:
The Head of the Sector and the Heads of the Sector Units participate in Bank committees, as specified in the appropriate Group Governance documents.
The scope of the GRMSPO is to contribute to developing the Group’s Risk Management Strategy, monitoring its implementation, and coordinating and monitoring and project managing key strategic Risk Management projects. Moreover, the Division monitors all operational issues of the GRMGD, and proposes changes and actions to improve the operational efficiency of the General Division.
The SRRPS has a coordinating and supervisory role for projects and initiatives associated with the perimeter of the SSM and the SRM, and constitutes the Bank’s primary link with them, aiming to respond efficiently to regulatory requirements, and actively and effectively manage the relationship with supervisory authorities.
The Head of the SRRPS acts as a principal advisor to the Group CFO and the Group CRO on SSM/SRM issues and related initiatives. The SRRPS works closely with the Bank’s Group Finance, Group Risk Management, Group Strategy and Group IT Sectors, and disseminates regulatory requirements to the Bank’s units and subsidiaries as appropriate.
The Head of the Sector participates in Bank committees, as specified in the appropriate Group Governance documents, and acts as the Secretary of the Risk Management Executive Committee and the Bank’s Resolution Planning Committee.
The RAD was set up in August 2020 with a key mandate to develop and deploy advanced analytics solutions through the use of big-data sources and innovative modelling techniques, such as machine learning.
The underpinning objective of these solutions is to deliver risk-reward improvements across the credit cycle: from credit origination through to account management and collections.
Furthermore, the RAD aims to improve the operational efficiency of the credit origination process, by enabling automation and digital transformation. These advanced analytics solutions also aim to optimise business decisions as well as product pricing.
The Bank’s approved governance structure has prescribed the establishment of a dedicated GCRD for the integration of the CR&E risks into the Bank’s risk management framework.
The GCRD was established in early 2022 and operates as Project Office for implementing the climate-related and environmental risk roadmap, with a coordinating and supervisory role on all related project streams, to ensure alignment with the Bank’s business strategy and the Supervisor’s expectations.
For more information on the GCRD and the management of climate-related and environmental risks, refer to the “ESG Governance and operating model” and “ESG in risk management” sections.
The scope of the RMEC is to:
For information on the Bank’s risk management, refer to the consolidated Pillar 3 report.
In 2022 Eurobank demonstrated improved operating performance in terms of profitability, asset quality and capital strength. Review the financial figures of Eurobank Holdings, and the direct economic value generated and distributed by Eurobank SA.
GRI 201-1
The operating performance of Eurobank in 2022 was robust and exceeded the initial guidance1 in terms of profitability, asset quality and capital strength. Core pre-provision income increased to €1.2 billion in 2022, from €900 million in 2021, EPS rose to €0.182, from €0.113 in 2021 and the return on tangible book value grew to 11.4%2 in 2022, from 8.2%3 in 2021. Specifically:
1 As presented in March 2022.
2 Adjusting net profit for the year by normalising Other Income (after deducting significant trading income items) and excluding Triangle gain and restructuring costs.
3 Adjusted net profit.
4 As presented in March 2022.
5 Pro-forma for Solar securitisation. Reported CET1 16.0%, CAD 19.2%, FLB3 CET1 15.2%. Including period profits, subject to AGM approval.
6 As presented in March 2022.
| P and L | 2022 | 2021 | Change |
|---|---|---|---|
| Net Interest Income | €1,550m |
€1,321m
|
17.4% |
| Net Fee and Commission Income | €543m |
€456m |
19.1% |
| Total Operating Income | €2,811m | €1,904m | 47.6% |
| Total Operating Expenses | €917m | €876m | 4.7% |
| Core Pre-Provision Income | €1,176m | €900m | 30.6% |
| Pre-Provision Income | €1,893m | €1,028m | 84.1% |
| Loan Loss Provisions | €291m | €418m | -30.5% |
| Core Operating Profit pre-tax | €885m | €482m | 83.5% |
| Adjusted Net Profit | €1,174m | €424m | >100% |
| Net Profit | €1,330m | €328m | >100% |
| Balance Sheet | 2022 | 2021 |
|---|---|---|
| Consumer Loans | €3,354m | €3,241m |
| Mortgages | €10,204m | €10,097m |
| Small Business Loans | €3,842m | €3,752m |
| Large Corporates and SMEs | €21,199m | €18,604m |
| Senior and Mezzanine Notes | €4,911m | €5,116m |
| Total Gross Loans | €43,466m | €40,839m |
| Total Customer Deposits | €57,239m | €53,168m |
| Total Assets | €81,460m | €77,852m |
| Financial Ratios | 2022 | 2021 |
|---|---|---|
| Net Interest Margin | 1.94% | 1.84% |
| Cost to Income | 32.6% | 46.0% |
| NPEs Ratio | 5.2% | 6.8% |
| Provisions / NPEs | 74.6% | 69.2% |
|
Provisions to average Net Loans |
0.72% | 1.11% |
| Return on Tangible Book Value | 11.4%2 | 8.2%3 |
| Earnings per Share | €0.182 | €0.113 |
| Common Equity Tier 1 (CET1) | 16.0%5 | 13.7% |
| Total Capital Adequacy (CAD) | 19.0%5 | 16.1% |
1 As presented in March 2022.
2 Adjusting net profit for the year by normalising Other Income (after deducting significant trading income items) and excluding Triangle gain and restructuring costs.
3 Adjusted net profit.
4 As presented in March 2022.
5 Pro-forma for Solar securitisation. Reported CET1 16.0%, CAD 19.2%, FLB3 CET1 15.2%. Including period profits, subject to AGM approval.
6 As presented in March 2022.
| Direct economic value generated and distributed in 2022 (in €million) Eurobank SA |
|
|---|---|
| Direct economic value generated | € 3,421 |
| Revenues | € 3,594 |
| Impairment losses relating to loans and advances to customers | € 173 |
| Economic value distributed | |
| Operating expenses of which: |
€ 246 |
| Sponsorships | € 3 |
| Wages and employees benefits (Staff costs) of which: |
€ 250 |
| Wages, salaries and performance remuneration | € 208 |
| Medical, Retirement and other benefits | € 42 |
| Voluntary Exit schemes and other related costs | € 59 |
| Other restructuring costs | € 28 |
| Interest Expense & banking fee and commission expense | € 854 |
| Other impairment losses and provisions | € 125 |
| Payments to Hellenic public excluding payroll tax | € 118 |
| Payments to government | € 20 |
| Social security contributions | € 43 |
| Contributions to resolution and deposit guarantee funds | € 55 |
| Economic Value distributed | € 1,680 |
| Economic Value retained | € 1,741 |
| Income Tax | € 352 |
| Payroll & other solidarity taxes | € 36 |
| Economic value retained including employee and income taxes | € 1,352 |
The Annual General Meeting of shareholders that convened on 21.07.2022 assigned the statutory audit of the Eurobank Holdings annual financial statements (separate and consolidated) for the 2022 fiscal year to KPMG Certified Auditors SA, which appointed:
To safeguard the independence of external auditors, the Eurobank Holdings Group has been consistently implementing a:
As part of the policy on external auditors’ independence, the rules concerning the service provided by external auditors are founded on 3 key principles, the violation of which could affect the auditors’ independence:
Regarding the tendering policy that the Eurobank Holdings Group follows to assign the statutory audit of its financial statements to external auditors, the main objective is to define the framework by which the Eurobank Holdings Group receives offers from candidate auditing firms on a regular basis, to ensure that:
