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Investor Presentaiton

E. Strategy and Outlook (continued) During 2022 the Group delivered strong financial results, exceeding its 2022 financial targets. This was marked by the recovery of revenues driven by the expansion in net interest income, lower operating expenses despite inflationary pressures and strong performance in asset quality, delivering NPE ratio of sub-5%. As a result the Group achieved a double- digit recurring ROTE in 2022, building momentum throughout the year. In 2023 the momentum is expected to continue, leading to an upgrade of targeted ROTE to over 13% from 10% facilitated by the positive gearing to rising interest rates, improved efficiencies, healthy loan portfolio and robust capital position. This lays the foundations to commence meaningful dividend distributions from 2023 onwards, subject to regulatory approval and market conditions. The Group expects to achieve ROTE over 13% for 2024, on the back of stabilising margins and growth of the loan portfolio. Key Metrics 2022 Guidance FY2022 FY2023 Previous FY2023 Updated guidance Date NII guidance November 2022 November 2022 February 2023 >€350 mn €370 mn €450-470 mn 40-50% yoy (€520-550 mn) Cost to income ratio¹ Low-50s 49% c.50% mid-40s Return on Tangible Equity (ROTE)² 4.3% c.10% (recurring) >10% >13% 11.3% (recurring) NPE ratio <5.0% 4.0% <5% <5% 50-80 bps Cost of risk 1. 2. Mid-40 bps 44 bps 50-80 bps Calculated using total operating expenses which comprise staff costs and other operating expenses. Total operating expenses do not include the special levy on deposits or other levies/contributions and do not include any advisory or other restructuring costs. Return on Tangible Equity (ROTE) is calculated as Profit after Tax (annualised) divided by average Shareholders' equity minus intangible assets. 35
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