Financial and ESG Performance Review slide image

Financial and ESG Performance Review

2023 outlook set to deliver the next stage of novobanco's development, competing as a strong and independent domestic bank Guidance update supported by: NET INTEREST MARGIN -> 2023 guidance¹ > 2.20% Assuming 2.7% DFR; 20-30% deposits beta IDE SOUND COMMERCIAL ACTIVITY backed by improved customer experience, including implementation of an omnichannel structure on the retail side, a sectorial approach for corporates, enhanced clients' journey and improved know your customer tools and time-to-market COST-TO-INCOME COR (bps) LOAN BOOK REPRICING at current interest rate scenario STRICT COST CONTROL with impact from inflation mitigated by continued implementation of efficiency € measures DE-RISKING STRATEGY with strong coverage levels NPL RATIO RECURRENT PBT CAPITAL GENERATION CET1 FUNDING ↑ ↑ ↑ ↑ ↑ ↑ < 40% ~ 50 bp < 4.5% > €600mm > 2.5% of RWAS (FL basis) Medium-term target of c. 12% Implying €2.6bn CET 1 capital in 2023E Organic capital generation and balance sheet optimisation expected to satisfy MREL capital needs in 2023. New market issuance subject to novobanco's improved credit quality being reflected in tighter credit spreads and/or in context of optimising capital structure. novobanco (1) Guidance and expectations are based on the assumption that there is no severe deterioration of the economic environment 35
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