National Bank of Greece S.A

Ladies and gentlemen, thank you for standing by. I am your chorus call operator. Welcome and thank you for joining the National Bank of Greece conference call to present and discuss the full year 2025 financial year. At this time, I would like to turn the conference over to Mr. Pavlos Milonas, CEO of National Bank of Greece. Mr. Milonas, you may now proceed.

Good morning, everyone. Welcome to our fourth quarter financial results call. I'm joined by Christos Christopoulou, the group CFO, and Greg Papagioris, group head of IR. After my introductory remarks, Christos will go into more detail on our financial performance, and then we will turn to questions and answers. As usual, I will address Greece's macroeconomic developments first, then turn to our fourth quarter results, and I will conclude with guidance for the next three years, 2026. So let's begin. The Greek economy remains on a steady trajectory, notwithstanding the system's volatility intensifying geopolitical tensions, with the EU appearing particularly exposed to ongoing structural shifts. Within the challenging environment, Greece has delivered not only a resilient performance, but also a more balanced and higher quality growth pace. Indeed, the recovery has become more broad-based, with manufacturing, high-value-added services, and construction increasingly complementing tourism. The economy remains attracted to investment, and the loss of economic formation is projected to rise to 18% of GDP in 2025, the highest level since the onset of the global crisis. While foreign direct investment inflows also reach a direct high, S.A S.A S.A S.A. S.A. Approximately $12 billion of RRF funds is scheduled to be injected into the real economy over the next few quarters, while up to another $12 billion is passed from the remaining RRF funds. This influx is expected to lead to public investment to record levels. Four, ongoing revaluations in collateral values. The real estate price is currently 5% above the agreed price's peak in normal terms to support private sector spending as well as investments. It is important to note that despite the large increase in real estate values, they are still 15% off their pre-crisis peak in real terms, in contrast to European governments. All of the above catalysts are expected to enable the Greece economy to see solid growth, even in an inherently volatile international landscape. Growth that will be, for the most part, bag-financed. Now let me turn to our financial results. for your company five financial performance has showed significant strengths having exhibited impressive resilience to sharply lower benchmark interest rates which came down by almost 200 base points from there performance has been the result of the confluence of a positive macroeconomic environment our robust balance sheet characterized by superior capital and equity as well as our multi-year transformation with strong investment in human capital, technology, and digital services. Despite positive revisions to our guidance in July, especially in the area of credit growth and fee regeneration, we have outperformed the revised targets. Specifically, our full-year 0.25% profit after tax before 1-0 was 1.3 billion euros, resulting in a return on tangible equity of 15.5%. before just capital buffers. Return on tangible equity will be 20% on a normalized capital price of 14%. Turning to the main drivers of our results, resilience was reflected in the net interest margin remaining above 280 base points, around by less than 40 base points from its beginning. Benefiting from solid liability management and robust lending, It's important to note that net income proffered in the third quarter and is now on a steady upward trend. As regards credit expansion, our performance exposures grew by a noteworthy 3.5 billion euros per quarter on a year-on-year basis, far exceeding the upgraded guidance of greater than 2.5 billion. Corporate credit continues to be the main driver of long growth, up by 13% year-on-year. Grover corporate credit demand was diversified across a broad range of sectors, production, energy, transportation, shipping, accommodation, and light metal. A final point on the position of credit, encouragingly the retail sector offers solid growth according to small business lending of 16% year-on-year and consumer lending of 7%, resulting in noteworthy market share gains in both sectors. Thank you. also more had a close to you with a positive result on the net cases for the first time in 15 years. Following a strong where we hold a 28% market share. Turning to commissions, our fee business growth despite the impact of government measures. The most notable was a cross-sell of investment products to our large deposit base resulting in strong mutual fund market share gains six percentage points over the past two years. An impressive investment fee growth of 70% year-on-year. It is noteworthy that despite these flows, household deposits maintain their high market share. On the cost side, we have kept a balanced approach weighing efficiency as evidenced by a cost-to-income ratio of 34%, with judicious sector-lending investments in technology and people who can provide relative advantages going forward. The completion of the bank's full migration to the new cloud-based core banking system marks a defining milestone in our multi-year transformation and growth journey, providing a modern technological backbone that enhances our agility and productivity in elevating our customers' experience. Despite impressive credit growth and the highest payout accruals in the sector, our capital positions have been further throughout 2025, with a safety base point of 18.8% in-year. The safety percent payout equates to an ordinary distribution of €0.7 billion, implying a total payout per share of 77 cents. Of the €700 million ordinary distribution, S.A. S.A. economic conditions, our inherent competitive advantages, and our strong track record for transformation determination. The resulting guidance is to attain a return of central equity of 17% in 2028 and enhance our earnings share from the current €1.38 to over €1.70 in 2028. These achievements are based on a solid recovery in our profitability S.A. S.A. S.A. The few targets do not factor in any imminent developments in our bank assurance business. And to preempt your questions, I would like to ask you to have a bit more patience on what is happening on bank assurance. We are in the process of choosing a new partner and should have tangible news in a few weeks' time. Turning to operating costs, you will benefit from cash having been paid. And FPE rejuvenation through the implementation In fact, we are announcing a new DES in the next few days. As a result, the cost-income ratio will be 36% in 2028. And a final point, the cost of risk will continue to converge to European levels during the three-year period. The output of this quality remains denied. The 2026-2028 business plan also contains accelerated capital utilization while maintaining satisfactory capital resources. S.A I strongly believe that 2026 is a year of great opportunity for India. The successful execution of our strategy during the past several years has been the main reason for our outperformance. To describe all the achievements of the past years, even in summary, would take too long, so I urge you to look at the relevant pages of the presentation on our transformation. However, it is very important to understand that significant necessary conditions have now been met S.A. S.A. S.A. S.A. S.A. S.A. S.A. S.A. S.A. S.A. S.A. S.A. S.A. S.A. S.A S.A S.A

S.A. Our net interest income declined by 9% year-on-year, in line with our expectations and planning. Strong economic dynamics and our effective liability management initiatives, including depositages and emerald instruments financing, absorbed most of the negative inflation rates on our NII, sustaining a class-leading net interest margin of up to 180 basis points, in line with our plans. Most importantly, S.A. S.A. Our fee income remained on a solid roadmap, increasing by 10% year-on-year. This performance was taken by the corporate sector shown on slide 33. Our market share in neutral funds increased by 3.6 points year-on-year and 6.2 points over the past two years as we continued cross-selling fee generated in neutral funds, driving our total funds under management by 2.3 billion, 25% higher year-on-year to 9.3 billion. The lower top line operating expenses were 7.1% year-on-year and below on slide 34. S.A. S.A. S.A. S.A. S.A. S.A. S.A. S.A. S.A. S.A. S.A. S.A. S.A. Our total capital ratio stood at 21.5%, or 32.7% pro forma for our 8-1 issuance in 2016, while our MRL ratio stands well above our MRL target of 26.7%. Reflecting our capital strength and our confidence in the bank's outlook, we are also accruing the highest national yield in the sector, We intend to propose an additional capital distribution of 0.3 billion in 2026 in respect to regulatory approval in April 2020. This decision reaffirms our commitment to deliver class-leading shareholder returns while maintaining a tangible tonality for future growth opportunities. Now let me walk you through the highlights of our balance sheet summarized in slide 23. As referred to earlier, we grew our performing loan book by $3.5 billion a year on the back of approximately $8 billion in investments, allocating across multiple sectors, with a strategic emphasis on energy and renewables, tourism, shipping, manufacturing, and production as shown on slide 28. Adding to this, we continue to gain momentum throughout 2025, increasing by 3% or $0.8 billion a year on year. We experienced solid growth in small business and consumer lending at 16% and 7% respectively, with growth in net consumption gaining maximum share, while mortgages are also showing encouraging signs of growth. In the liability side, deposits remained on an upward trend in 2025, as shown on slide 29, increasing by 2 billion year-on-year on sustained inflows of low-cost retail core deposits, while time-deposit-migration-tributaries have continued, benefiting our total-emission cost. Improving deposit mix, with current deposits comprising 81% of the total stock, and the growth from 10-term-deposit issues at 2 basis points quarter-on-quarter to 124 basis points in Q4, drove our overall deposit growth below 30 basis points, the lowest in the domain. S.A. S.A. S.A. S.A. which causes comprising more than 90% of our total funding. Now a few words on our quality from slides from S.A. of Greece. Our current P.S.O.G. of 0.9 billion translating to an improving N.T. ratio of 0.4%, we then hit average exceeding 100%. At the same time, our leading average across stages by European studies comprises another strength of our balance sheet, providing a cushion during uncertain times. S.A. S.A. S.A. As already stated by Pavlos, we aspire to obtain a sustainable return on tangible equity of 17% in 2028, driven by higher profitability and high capital utilization, targeting an EPS of over €1.7 per share in 2028 versus €1.38 in 2035. This performance hinges on strong NII dynamics, a sophisticated diet, S.A. S.A. S.A S.A S.A S.A S.A S.A S.A S.A S.A S.A S.A. S.A. S.A. S.A. S.A. created from as well as part of our existing capital offers to consistently increase payouts using share payments as an additional shareholder remuneration tool. Our capital plan targets a set one ratio of below 16% in 2028, also preserving our strategic capability. Leveraging this solid performance and the strength and resilience of our business model The first question is from the line of David Roberts, Benjamin with Goldman Sachs International. Please go ahead.

Good morning. Thank you very much for the presentation. I have just a few questions for me. Firstly, on loan growth, could you just comment if there are any particular areas where you're seeing more upside risks and then also any downside risks? A very clear message around the below 60% CC1, which optionality. Could you just recap where you're currently sitting, your internal C1 targets, in which you're measuring that extra capital, and then what your order of priority is within your capital allocation framework between any extra M&A and further payout space? Thank you.

Okay. On other sides, in long growth, I think it's the big... if it's not a project of... Greece that are the upside risk if they move faster and give the size of their tickets I think that's the upside I really don't see any check with downside risk in view of the economic developments that will occur in Greece right now so probably more upside risk than downside risk On the second question, on the internal set 1, it's 14%. If we utilize the full H1 capacity we have, that could go down. Now between M&A and payouts, clearly, it's a good question because the question is the quality of the M&A. If you have a high quality M&A which creates value, clearly that would be the preferred way to go. If that doesn't appear, then you're in the higher payouts.

The next question is from the line of . Go ahead. Hi. Good morning.

Thanks very much for the presentation. I have just a couple of questions for myself. One on the NIM output. You're assuming a notable increase in NIMS in 2028. And I see that you're using also an assumption of a higher arrival . the case, and secondly, how does this output change if your eyeball were to stay flat, and there's no changes in the output there, and would you keep an infinite time, or would you continue to remain stable? And the second question is on the payout. Now, obviously, it is higher than expected initially, and as you've guided previously, 300 million you haven't really increased capital position, you've just replaced the one with the other, at least partially. So can I ask what your thinking is when it comes are you still conservative for the time being and what's the rationale otherwise behind the 81 issuance that you've done this year and maybe partly the 81 issuance as of the first quarter did it bring down your confidence that you've done it thank you very much

Okay, let me start from the NIEM question. So, to clarify on the Euribor outlook, you use, I think, the graphic slide here, which has one theme. Actually, our outlook for Euribor from 2026 onwards is having the area of 36 points, so a point to make there. Clearly, the dynamics for NIEM and NII going forward, starting with 2026, first we have to do with... the tailwind that we have from the expansion, slight increase in our securities and to a lesser effect the further improvement of our deposit mix and deposit costs will support NIM which is and then given the full rate normalization ending to go up to over 690 basis points in 2028. And with regards to our NII sensitivity, our sensitivity is at 25,425 basis points on an annualized basis. So that's the dynamics. With regards to the payout, yes, you are right that we've issued an H-1 at the beginning of February. Clearly, AT1 was an instrument that we haven't utilized so far. The decision to issue an AT1 was in line of us optimizing our fabulous technology, especially at times of favorable spreads and base rate conditions. So that was one of the drivers. The other was to strengthen our position in looking at assessments, especially in the context of Moody's CMDI application as well. With regards to our internal CR1 target, yes, we are competitive. As Pablo said, to the extent that we have the ability to utilize this instrument, to the extent that we will go to the full effect of our project, then absolutely that's the reason we are below 13.5%.

question is on the line of the line of the line of the line of the line of the line of the line of the line of the line of the line of the line of

S.A. S.A. that's the other one and I would like to follow up finally on the NII outlook which I believe is pretty backlogged so those are the digits in 2020 7% bigger this implies more like 9% bigger I believe more than 9% for 2027 and 2028 so just based on the rate sensitivity you mentioned I'm not sure I would ask you that's also there, so maybe you could elaborate on this further. I believe you mentioned a second question coming from other drivers. Did you expect to influence EON increases?

Let me take the buyback question for the 300. It will be solely buyback, okay? And it will be part of the... It will be integrated into the normal buyback... program that we have. Now, the other two are .

With regard to , I think we have a slide 18 where we suggest that we expect to generate availability of around 10 basis points over the three years. We are going to use that through growth in the area of 350 basis points. Again, our intention, including the $0.3 billion that we are expecting to use through share buybacks in 2016, goes down to less than 60%, which implies a use of capital for distributions north of 9%. So that's how we view our capital deployment going forward. With regards to interest rates, I think I've implied that, yes, the growth in our NII in 2026 will be more modest compared to the outer years. That is solely affected by the fact that we expect the average URI to go down in 2026. So our guidance is for low single-digit growth of NII in 2026. And then, of course, it will accelerate so that we deliver

I said I got that we are creating now in our case and just had worked on what is the center of the capital deployment so you need to not forget that there is an agreement for the regulatory overlay of the DC of 30 about 30 of the of the payout so so We think that as NBG we have the capital to be able to handle the payouts that we're describing.

Just a small follow-up on the capital deployment points. You have the 300 million in there, obviously, but no more special distributions for the next three years? Is that correct?

We don't define that enough. The next question is from the line of Raza Robert with TKOBT Securities. Please go ahead.

S.A. S.A. it's a cool and it's nice it's it's it's it's it's it's it's it's it's it's it's it's

Okay, so I have two questions noted. So the first one is pretty straightforward. The SPS, our SPS of over 1.7%, obviously taking into account the buyback that we'll execute. Your second question on the carceral law, I think will not differentiate from what we heard yesterday from the other banks. You know, why wait for the script of the law to become available? Even that will expose nearly all our exposure to the perimeter. This is, even if the law has to be prosecuted, we don't expect it to be of any issue to our budget. With regards to the question on page two, you should not expect anything there. I think what we had this quarter, we had one account that was flagged as significant risk. S.A. S.A. S.A. S.A. you see the appreciation. So while our technology has peaked, we are still seeing the effect of that in our depreciation. So that's one line that is in August in the next three years. And the other one, as we repeated, is our is our people. We are investing in people, not just on wages, but also to increase productivity through schemes of variable innovation, and also to bring the talent to, let's say, fill in the gaps, especially with regards to areas like technology and digital. Dona's estimate also I think like cloud licenses, we are also expecting our OPEX GNAs, but I have to assure you that especially with the line of admin expenses, we are very disciplined, and we don't overspend in that line. It's just staff cost and research. We believe that the situation is fair, hopefully, even the growth that we anticipate to achieve as well as the spending

The next question is from the line of Novoselsky and Elia with Group of America. Please go ahead.

Thank you for your question. I have one question on your AI function. I can see in your NII right now So let me start with the hedges

So clearly, it's a dynamic exercise. We can be teaching that every quarter. The way that the NDC relates to people in the future, the biggest assumption is that NMD hedges will go down gradually in the future. And with regards to your question on our sensitivity on NII, whether it will increase or go down, I would say that that's really a subject of our current surveys. Other than that, we are always trying to optimize user sensitivity as we go along. With regards to RPLs, the answer is no. We have not implemented in our business plan anything with regards to performing loans. to be either on our loan book or on our NII. We will only do that once we have a tangible transaction ahead of us. With regard to your question on the NII deposit cost pickup in Q4, that was, you know, I think a billion is an ounce, but it's solely volume-driven. Nothing else. Our deposit is between Q4 and I think that's the reason for that. With regards to the effect of our NMD hedges 2.3 versus 2.4 we are at the same level and lastly on your question on MRL expenses for us the MRL instruments is something that will help balance it forward so if you take out some opportunities we have for optimized costs because of the financings of existing MRL instruments towards the end of our business horizon I think the expectation is that MRL costs yes will go up Thank you.

We have a follow-up question from Sophie with JP Morgan. Please go ahead.

Hi, again. Thanks very much for taking my follow-up question. I just wanted to ask one question. S.A S.A So far, the daily purchases are below a million euros. So how successful are you that you can do that in the emerging markets this year? Or is there maybe another methodology there? Thanks very much.

Okay, so the current program is running well. I think it's approaching 80% execution, so we're nearly there. New Biobank programs will start after the AGM of April, so sometime June, I suppose. We're comfortable having looked at the numbers with our consultants, but without new, let's say, technologies, as you suggested, we'll be able to tackle this.

ladies and gentlemen there are no further questions at this time I will now turn the conference over to Mr. Milonov for any closing comments thank you okay thank you all for joining us for this full year and fourth quarter financial results call any further questions you may have we are on standby and I guess we'll see you in London in the conference. Thank you all and see you soon.