Investor Presentaiton
B. Preliminary Group Financial Results - Underlying Basis (continued)
B.2. Balance Sheet Analysis (continued)
B.2.5 Loan portfolio quality (continued)
Non-performing exposures reduction
Non-performing exposures (NPEs) as defined by the European Banking Authority (EBA) were reduced by €607 mn,
or 60% in 4Q2022, compared to a reduction of €150 mn in 3Q2022, to €411 mn at 31 December 2022 (compared to €1,018
mn at 30 September 2022 and €1,343 mn at 31 December 2021). The reduction in 4Q2022 is mainly driven by the
completion of Project Helix 3 of € 550 mn and the net organic NPE reductions of €57 mn (inflows minus outflows).
As a result, the NPEs account for 4.0% of gross loans as at 31 December 2022, compared to 9.3% at 30 September 2022
and 12.4% as at 31 December 2021.
The NPE coverage ratio stands at 69% at 31 December 2022, compared to 60% as at 30 September 2022 and 59% as at
31 December 2021. When taking into account tangible collateral at fair value, NPEs are fully covered.
Project Helix 3
In November 2022, the Group completed Project Helix 3, that refers to the sale of a portfolio of loans with a gross book
value of €555 mn (of which €551 mn relate to non-performing exposures), as well as real estate properties with a book
value of €88 mn as at 30 September 2022, to funds managed by Pacific Investment Management Company LLC, the
agreement for which was announced on 15 November 2021.
Cash consideration of c.€350 mn was received by completion, reflecting adjustments resulting from, inter alia, loan
repayments received on the Portfolio since the reference date of 31 May 2021.
The Transaction represented a milestone in the successful delivery of one of the Group's strategic priorities of improving
asset quality through the reduction of NPEs with the NPE ratio reducing below 5%.
Project Sinope
In December 2021, the Bank entered into an agreement for the sale of a portfolio of NPES, with a contractual balance of
€146 mn and a gross book value of €12 mn as at 31 December 2021, as well as properties in Romania with carrying value
€0.6 mn as at 31 December 2021 (known as 'Project Sinope'). Project Sinope was completed in August 2022.
Overall, since the peak in 2014 and following the completion of Helix 3, the stock of NPEs has been reduced by
€14.6 bn or 97% to €0.4 bn and the NPE ratio by 59 percentage points, from 63% to 4%.
B.2.6 Real Estate Management Unit (REMU)
The Real Estate Management Unit (REMU) is focused on the disposal of on-boarded properties resulting from debt for
asset swaps. Cumulative sales since the beginning of 2017 amount to €1.5 bn and exceed properties on-boarded in the
same period of €1.4 bn.
The Group completed disposals of €162 mn in FY2022 (compared to €140 mn in FY2021), resulting in a profit on disposal
of €16 mn for FY2022 (compared to a profit of €14 mn for FY2021). Asset disposals are across all property classes, with
half of sales by value in FY2022 relating to land.
During FY2022, the Group executed sale-purchase agreements (SPAs) for disposals of 674 properties with contract value
of €184 mn, compared to SPAs for disposals of 703 properties, with contract value of €149 mn for FY2021.
In addition, the Group had a strong pipeline of €70 mn by contract value as at 31 December 2022, of which €47 mn related
to SPAs signed (compared to a pipeline of €109 mn as at 31 December 2021, of which €47 mn related to SPAs signed).
REMU on-boarded €86 mn of assets in FY2022 (compared to additions of €34 mn in FY2021), via the execution of debt for
asset swaps and repossessed properties.
The carrying value of assets held by REMU that were classified as "non-current assets and disposal groups held for sale"
since 2021 and amounting to €88 mn as at 30 September 2022 were derecognised with the completion of Project Helix 3.
They comprised stock of properties of €83 mn and investment properties of €5 mn.
As at 31 December 2022, assets held by REMU had a carrying value of €1,116 mn (comprising properties of €1,041 mn
classified as 'Stock of property' and €75 mn as 'Investment properties'), compared to €1,215 mn as at 31 December 2021
(comprising properties of €1,112 mn classified as 'Stock of property' and €103 mn as 'Investment properties').
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