Alpha Bank Strategy Update - Investor presentation November 2019
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Alpha Bank Strategy Update 2020 – 2022 Investor presentation November 2019
Our vision for the
future
Vassilios E. Psaltis, CEO
2
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 3New 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
4Negative 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 5Alpha 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
6Our 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
7From 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 toWe 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
11We 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
12Business 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
13Individuals 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
14International 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
15We 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
16We 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
17We 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
18Strategy Update:
Financial
performance
Lazaros A. Papagaryfallou, CFO
19The 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
21Decisive 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
22Transaction 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%
24Cost 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 30Creating 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
26Maintaining 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
27We 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
28Aiming 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
29Group 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
30Businesses: 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
31Individuals: 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
32Net 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
33Capital 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%
34Despite 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
35We 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
36Committed 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
38Our 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
39Q&A
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