National Bank of Greece S A : 2Q22 Results Press Release

	NBG Group	1H22 Results

NBG Group

1Η22 Financial Results

PRESS RELEASE

1Η22: Group PAT from continuing operations at €490m; COP at €280m

1H22 COP up by 40% yoy, reflecting impressive core income recovery, near flat costs and CoR normalization

1. 2Q22 NII recovered sharply (+8% qoq) driven mostly by accelerating PE loan expansion (+€1.1b qoq), putting 1H22 NII back on a growth trajectory (+1% yoy), despite the full absorption of the impact from Frontier deconsolidation

1. Strong fee income growth is sustained (+23% yoy) supported by retail and corporate loan origination, as well as card, payments and trade finance fees

1. Despite surging inflation throughout 1H22 and the roll out of our strategic IT investment plan, operating expenses were kept near flat yoy (+1% yoy), reflecting rigorous demand management and sustained personnel cost containment (-2% yoy); domestic C:CI improves to 50.1% from 52.1% in 1H21 (48.8% in 2Q22), driven by core income growth

1. CoR on a normalizing trend, settling at 68bps in 1H22, consistent with formation trends and high coverage o Including trading gains, discontinued operations and other one offs, attributable net profit reached €546m

Domestic disbursements1 pick up sharply in 2Q22 (+c80% qoq), driving PEs higher by €1.1b qoq

1. Loan disbursements1 accelerated in 2Q22 reaching €1.9b, driven by corporates

1. 1H22 disbursements1 amounted to €3.0b, up by c50% yoy, pushing domestic PEs higher by €2.3b yoy

Domestic NPE stock declined further to €1.9b or €0.4b net of provisions; NPE ratio at 6.1%

1. Despite lower FNPEs, organic NPE flows remained negative in 2Q22 (-€0.1b qoq), reflecting successful restructurings

1. NPE ratio of 6.1% in Greece (6.3% at the Group level), down by a further c40bps qoq and c670bps yoy, aligned with FY22 guidance

1. Domestic NPE coverage at 80.8% in 2Q22, up by c320bps ytd despite CoR normalization, reflects sustained negative organic formation

1. Despite persisting inflationary pressures including the sharp increase in energy costs, there are no signs of pick up in NPEs either from NBG clients receiving State and Bank sponsored programs or other clients

1. Frontier II transaction signing envisaged imminently

CET1 FL and total capital ratio FL at 15.0%2 and 16.12 respectively

1. CET1 FL and total capital ratio FL reached 15.0%2 and 16.1%2 respectively, supported by strong 2Q22 profitability (+c50bps) absorbing loan-induced RWA expansion (-c30bps) and increased turbulence in bond markets impacting FVTOCI marginally

1. The closing of the agreement with EVO Payments, expected in 4Q22, will add c60bps to capital ratios, pushing CET1 FL and CAD FL ratios to 15.6% and 16.7%, respectively

The strong momentum of our successful Transformation Program continues to provide impetus to rapid change

1. Highlights of the Transformation Program in 1H22 comprise progress in our commercial effectiveness, with significant boost in fees in the retail and corporate segments. In terms of our operating model, we have registered significant progress in our journey to upgrade to a new Core Banking System, further increased the level of centralization and automation of loans and LG/LC processes, and implemented actions to reduce real estate spend

1. Our digital strategy continues to deliver impressive results, with digital subscribers reaching 3.5m (+10% yoy) and active users 2.6m (+14% yoy) in 2Q22, while the sale of products to both households and corporates via our digital channels, including third party agreements, surged by 58% yoy. Our expanding network of partners continues to be a competitive advantage, as we maintain a market share above 50% in consumer loans through third party retailers

1. On ESG, NBG successfully completed the ECB-led 2022 Climate risk Stress Test, with the overall performance standing in line with the average of the EU-wide participating institutions and our business viability assessed at relatively lower risk. The outcome reflects our firm commitment and progress already achieved in ESG, setting the basis for an effective climate risk management framework and timely adaptation of processes and strategies

1. NBG has exited the Restructuring Plan agreed between the Hellenic Republic and the EC post the receipt of State Aid by the Bank in 2012, following the closing of Ethniki Insurance transaction as well as other smaller commitments

Athens, July 29, 2022

1 Loan disbursements for the period/year, not considering rollover of working capital repaid and increase of unused credit limits / 2 Including period PAT

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NBG Group

1H22 Results

"Economic activity in Greece during 1H22 overcame headwinds from geopolitical tensions and surging inflation, delivering a performance that consistently exceeded expectations. Targeted fiscal support measures combined with increasing employment and wages alleviate pressure on real household disposable income, providing domestic demand with substantial resilience. At the same time, encouraging signs from high frequency indicators and a strong tourism season that is set to exceed pre Covid 2019 record levels point to the maintenance of Greece's growth momentum throughout 2H22.

Our 1H22 financial results demonstrate sustained strength across business lines: core profitability keeps improving, up by 40% yoy, in line with our FY22 guidance, the quality of our balance sheet nears that of European peers, with net NPEs at €0.4b and no signs of pick up in NPE formation due to high cost inflation, and our capital buffers remain robust, with CET1 at 15.0% on FL basis, which will increase further by c60bps upon completion of the merchant acquiring JV in 4Q22.

A review of the composition of profitability reveals strong performance in all main categories. Specifically, NII benefitted from the expansion of our PE loan book, which was up by €2.3b yoy and a strong +€1.1b in a single quarter. Furthermore, fee income grew by an impressive 23% yoy, while OpEx was near flat despite high inflation and CoR continued to normalize at a steady pace to c70bps. Overall, 1H22 group COP accelerated to €280m, while attributable PAT reached €546m.

Looking into 2H22 and beyond, the challenges will continue, with uncertainty remaining high. However, Greece is coming out with confidence from a period of significant restructuring and the economy will be relatively resilient. Over the past several years, NBG has transformed itself, becoming far more dynamic and agile, and thus at this critical junction, we will also play our role in leading the economy - comprising of many of our current and future clients - through this period of turbulence".

Athens, July 29th, 2022

Pavlos Mylonas

Chief Executive Officer, NBG

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NBG Group1H22 Results

Key Financial Data

P&L | Group

€ m	1H22	1H21	YoY	2Q22	1Q22	QoQ
NII	600	596	1%	312	288	8%
Net fee & commission income	170	138	23%	86	85	1%
Core income	770	734	5%	398	373	7%
Trading & other income	301	449	-33%	181	120	50%
Total income	1,072	1,183	-9%	579	493	17%
Operating expenses	(386)	(383)	1%	(194)	(192)	1%
Core PPI	384	351	9%	204	181	13%
PPI	686	800	-14%	385	301	28%
Loan impairments	(104)	(151)	-31%	(49)	(56)	-13%
Core Operating Profit1	280	200	40%	155	125	24%
Operating profit	582	649	-10%	336	245	37%
Taxes	(91)	(5)	>100%	(54)	(37)	44%
PAT (continuing operations)	490	645	-24%	282	208	36%
Discontinued operations, minorities & other	56	(69)	n/m	(96)	152	n/m
PAT (reported)	546	575	-5%	186	360	-48%

1 Calculated using U/L CoR

Balance Sheet1 | Group

€ m	2Q22	1Q22	4Q21	3Q21	2Q21	1Q21
Total assets	79,446	80,192	83,958	81,610	81,148	78,326
Loans (Gross)	35,974	35,005	32,093	32,555	32,835	29,750
Provisions (Stock)	(1,612)	(1,653)	(1,655)	(2,625)	(2,685)	(2,696)
Net loans2	34,362	33,352	30,439	29,930	30,150	27,053
Performing loans	28,041	26,984	26,691	25,676	25,660	25,444
Securities3	14,212	14,708	15,251	16,093	16,152	17,000
Deposits	54,292	53,059	53,493	51,572	51,652	48,732
Equity	5,906	5,815	5,750	5,692	5,490	5,477
Tangible Equity	5,517	5,441	5,397	5,368	5,192	5,193

1 Group Balance Sheet has been adjusted for the reclassification of NBG Cyprus from HFS / 2 Includes the reverse repo facility of c€3b in 2Q22, 1Q22, 3Q21 and 2Q21, as well as Frontier senior note as of 4Q21 /3 Includes investment securities and financial assets at fair value through profit or loss

Key Ratios | Group

		2Q22	1Q22	4Q21	3Q21	2Q21	1Q21
	Liquidity
	L:D ratio1	58%	57%	57%	52%	53%	56%
	LCR	259%	255%	242%	266%	259%	250%
	Profitability
	NIM (bps)	194	182	206	216	214	213
	C:CI ratio	49%	52%	55%	49%	51%	53%
	Core PPI (bps)	264	238	237	288	266	253
	CoR (bps)	63	73	71	96	110	113
	COP margin2 (bps)	201	164	168	191	156	140
	Asset quality
	NPE ratio	6.3%	6.7%	7.0%	11.9%3	12.7%3	13.1%3
	NPE coverage ratio	80.3%	81.4%	77.2%	69.8%	66.4%	64.8%
	Capital
	CET1 ratio4	16.0%	16.1%	16.9%	16.4%	16.0%	16.1%
	CET1 FL ratio4	15.0%	15.1%	14.9%	14.2%	13.8%	14.0%
	RWAs (€b)	35.1	34.4	34.7	36.7	36.7	36.6

1 Including Frontier senior notes as of 4Q21 / 2 Calculated using U/L CoR / 3 Including Frontier senior notes / 4 Including period PAT

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NBG Group						1H22 Results
P&L | Greece
€ m	1H22	1H21	YoY	2Q22	1Q22	QoQ
NII	564	562	0%	294	270	9%
Net fee & commission income	160	130	24%	80	80	1%
Core income	725	692	5%	375	350	7%
Trading & other income	288	448	-36%	178	111	60%
Total income	1,013	1,140	-11%	552	461	20%
Operating expenses	(360)	(353)	2%	(181)	(179)	1%
Core PPI	365	339	7%	194	171	13%
PPI	653	787	-17%	371	282	32%
Loan impairments	(96)	(145)	-33%	(46)	(50)	-9%
Core operating profit1	268	195	38%	148	121	22%
Operating profit	557	643	-13%	325	231	41%
Taxes	(89)	(2)	>100%	(55)	(33)	66%
PAT (continuing operations)	468	641	-27%	270	198	36%
Discontinued operations, minorities & other	62	(73)	n/m	(88)	150	n/m
PAT (reported)	530	568	-7%	182	348	-48%

1 Calculated using U/L CoR

P&L | International1

€ m	1H22	1H21	YoY	2Q22	1Q22	QoQ
NII	36	34	7%	18	18	0%
Net fee & commission income	10	9	15%	5	5	11%
Core income	46	42	9%	23	23	2%
Trading & other income	13	1	>100%	3	10	-65%
Total income	59	43	36%	27	32	-18%
Operating expenses	(26)	(30)	-14%	(13)	(13)	-2%
Core PPI	20	12	66%	10	10	7%
PPI	33	13	>100%	14	19	-29%
Loan impairments	(8)	(7)	20%	(3)	(5)	-50%
Core operating profit	12	5	>100%	8	4	77%
Operating profit	25	6	>100%	11	14	-21%
Taxes	(3)	(3)	4%	1	(4)	n/m
PAT (continuing operations)	22	4	>100%	12	10	23%
Discontinued operations, minorities & other	(7)	4	n/m	(8)	1	n/m
PAT (reported)	16	8	>100%	4	11	-64%

1 International (continuing) operations include the Group's business in North Macedonia (Stopanska Banka), Malta (NBG Malta), Cyprus (NBG Cyprus) and Egypt (NBG Egypt)

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NBG Group

1H22 Results

Profitability

Greece

PAT from continuing operations amounted to €468m in 1H22, with core operating profit up by 38% to €268m, contributing substantially towards achieving our FY22 Group COP target of €0.5b. Main contributors to this performance were NII reverting to a growth trajectory, solid fee income growth, personnel cost containment despite surging inflation and normalizing CoR. Including discontinued operations and other one-offs,1H22 PAT reached €530m.

Despite negative NPE clean up base effects post Frontier deconsolidation in mid-December 2021, NII impressively edged slightly higher yoy at €564m, as lower NPE NII accruals were offset by the higher income from bonds, the repricing of time deposits, but mainly from the accelerating expansion of the Bank's PE book (+€2.3b yoy). In 2Q22, NII was up by 9% qoq to €294m, reflecting impressive PE loan additions of €1.1b in the quarter from €0.3b in 1Q22, with NIM 11bps higher qoq to 189bps.

Net fee and commission income surged by 24% yoy to €160m in 1H22, supported by retail and corporate loan origination, as well as card, payments and trade finance fees.

Trading and other income reached €288m in 1H22, incorporating the benefit from derivative positions.

Operating expenses increased by 2% yoy to €360m in 1H22, reflecting increased G&As and higher depreciation charges driven by the Bank's IT investment strategy centering around the ongoing replacement of our Core Banking System. Demand management and reduced personnel expenses due to lower headcount (-235 FTEs yoy) acted to absorb the aforementioned factors, keeping costs contained.

Loan impairments amounted to €96m or 66bps over net loans in 1H22, pushing NPE coverage up by c320bps ytd.

International:1

In International1 operations, the Group reported PAT (continuing operations) of €22m in 1H22 from €4m in 1H21. The profitably improvement was due to strong core income (+9% yoy), increased trading gains (€13m from €1m in 1H21) and rigorous cost cutting (-14% yoy).

1 International (continuing) operations include the Group's business in North Macedonia (Stopanska Banka), Malta (NBG Malta), Cyprus (NBG Cyprus) and Egypt (NBG Egypt)

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