ESG Strategy and Digital Transformation
① NII growth driven by loan expansion and margin stabilisation
Drivers
Conservative interest rate assumptions
Well positioned for faster rising rates
•
TLTRO favourable terms not expected to be extended
post June 2022
Factoring in increased funding cost from further MREL
issuance
• Conservative assumptions for Fixed Income investments
Conservative interest rate assumptions
2.33%
2.31%
0.04
2021
2022
-0.49
2023
-0.30
2024
02.09
2025
-0.54
3M Euribor 1
BOC Base rate
2022 Outlook
• NII impacted by de-risking, end of TLTRO favourable
terms and potential further MREL issuance4
Interest on Net NPEs not received in cash, fully provided
Recovery from 2023
Well positioned for faster rising rates
Impact of parallel
shifts in interest curves 2,3
Upward scenario*
Downward scenario*
Y1
Y2
Y3
c.30 mn
c.40 mn
c.45 mn
c.-30 mn
c.-30 mn
c.-35 mn
50 bps parallel shift in EUR interest rates and 60 bps in USD rates
Changes in the Bank base rates are highly correlated to changes in Bank's fixed deposit rates. Bank's fixed deposit rates are currently assumed to have zero sensitivity to +/-50 bps change in EUR market rates and hence no change in Bank base rate is assumed
Refer to slide 84 for further details
7237
Based on Market forward rates as of December 2021 (Source Bloomberg)
2)
3)
4)
Subject to market conditions
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