Group and Bank Six-month Financial Report

for the period ended 30 June 2023

July 2023

Table of Contents

At a glance

3

Chairman's Statement

5

Chief Executive Officer's Statement

6

Certification of the Board of Directors

7

Board of Directors Report

9

Independent Auditor's Report

43

Statement of Financial Position

45

Income Statement - 6-month period

46

Statement of Comprehensive Income - 6-month period

47

Income Statement - 3-month period

48

Statement of Comprehensive Income - 3-month period

49

Statement of Changes in Equity - Group

50

Statement of Changes in Equity - Bank

51

Cash Flow Statement

52

NOTE

1

General information

53

NOTE

2

Summary of significant accounting policies

54

2.1

Basis of preparation

54

2.2

Going concern

54

2.3

New and Amended Standards and Interpretations

56

2.4

Critical judgments and estimates

57

NOTE

3

Segment reporting

59

NOTE

4

Net trading income / (loss) and results from investment securities and Gains / (losses) arising from the derecognition of

financial assets measured at amortised cost

62

NOTE

5

Credit provisions and other impairment charges

63

NOTE

6

Restructuring costs

63

NOTE

7

Tax benefit /(expense)

63

NOTE

8

Earnings per share

64

NOTE

9

Loans and advances to customers

64

NOTE

10

Property and equipment, Right of Use ("RoU") assets and lease liabilities

70

NOTE

11

Assets and liabilities held for sale and discontinued operations

70

NOTE

12

Due to banks

72

NOTE

13

Due to customers

72

NOTE

14

Contingent liabilities, pledged assets and commitments

73

NOTE

15

Share capital, share premium and treasury shares

74

NOTE

16

Tax effects relating to other comprehensive income / (expense) for the period

75

NOTE

17

Related party transactions

76

NOTE

18

Capital adequacy

78

NOTE

19

Fair value of financial assets and liabilities

80

NOTE

20

Acquisitions, disposals and other capital transactions

86

NOTE

21

Group companies

89

NOTE

22

Events after the reporting period

90

Table of Contents

At a glance

National Bank of Greece S.A.

Who we are: National Bank of Greece S.A. (hereinafter "NBG" or the "Bank") was founded in 1841 and

its shares have been listed on the Athens Exchange since 1880. The Bank's headquarters are located at 86 Eolou Street, 10559 Athens, Greece, (Register number G.E.MH. 237901000), tel. (+30) 210 334 1000, www.nbg.gr. By resolution of the Board of Directors, the Bank can establish branches, agencies, and correspondence offices in Greece and abroad. In its 182 years of operation, the Bank has expanded on its commercial banking business by entering into related business areas. The Bank and its subsidiaries (hereinafter the "NBG Group" or "Group") provide a wide range of financial services including mainly retail, corporate and investment banking, non- performing management & Specialized Asset Solutions, transactional banking, leasing, factoring, brokerage, asset management, real estate management and insurance related services. The Group operates mainly in Greece but also abroad through its branch in Cyprus and its subsidiaries in North Macedonia, Cyprus, Romania, Bulgaria, Luxembourg, Netherland and U.K. Following the respective Bank's decision in 2021, the Group ceased its operation in Egypt, Malta and NBG London Branch; and therefore the NBG Egypt Branch, the NBG London Branch and the subsidiaries NBG Malta Ltd (formerly known as NBG Bank Malta Ltd) and NBG Malta Holdings Ltd are currently under liquidation.

The Bank is one of the four systemic banks in Greece and one of the largest financial institutions in Greece by market capitalization, holding a significant position in Greece's financial services sector.

About our Purpose, Vision and Values

In NBG, our purpose statement is "Together we create Future".

Our vision is to be the "Bank of First Choice" for customers, talent and investors.

A trustworthy, human, responsive bank that acts as a catalyst for sustainable growth and unlocks potential for households, businesses, communities and our employees.

Throughout our history, from 1841 until today, we recognize that our successful business activity is mainly based on the fact that we operate guided by our values and our principles. Those values are, and will remain, etched in our DNA in order to move forward together to the next day.

We are:

Α Growth

Human

Trustworthy

Responsive

Catalyst

We place the needs and

We operate with

We provide flexible

We accelerate

choices of our customers

transparency,

solutions tailored to

sustainable progress

at the centre of

knowledge, and

the needs of our

and prosperity.

everything we do.

experience.

customers.

Table of Contents

About Environment, Social and

Governance

Since 2021, NBG has launched a holistic Environmental, Social and Governance ("ESG") effort to ensure compliance with evolving regulatory framework, fulfilment of its commitment to the Principles for Responsible Banking ("PRB") of the United Nations Environment Program Finance Initiative ("UNEP-FI") and implementation of ESG best practices across the organization (covering management of credit and other types of risk, business strategy, products and services, reporting, as well as efforts to reduce NBG's direct and indirect emissions footprint). As its relevant practices mature, NBG continues to further integrate ESG aspects into its business strategy and operating model.

Our ESG Management Committee, chaired by the Chief Executive Officer ("CEO"), governs all strategic decisions related to ESG, while the Board Innovation & Sustainability Committee has come into force to oversee ESG forward-looking matters. NBG has integrated the management of ESG topics across the three lines of defence, with the appointment of specific roles and responsibilities within existing organizational units, as well as the establishment of ESG related teams. In this context, the Climate & Environmental Strategy Independent Sector within the Group and Bank Transformation, Strategy & International Activities, has been set up to define, coordinate and monitor implementation of Climate & Environmental Strategy across the first line. A dedicated Group Corporate Social Responsibility & Sustainable Development Division has been established within the Group Compliance and Corporate Governance to oversee compliance and reputational risk matters pertaining to corporate social responsibility, sustainability, and climate change. Finally, a dedicated team within the Strategic Risk Management Division oversees Climate & Environment risk factors.

Key initiatives relevant to the implementation of the Climate & Environmental strategy and related risk management are being included in the Transformation Program to ensure high level of focus and execution discipline in the aforementioned critical areas (see section "Transformation Program").

Chairman's Statement

Chair man's Statement

Gikas A. Hardouvelis

Chair of the Board of Directors

In the first half of 2023, NBG continued its successful transformation journey, operating in an economic environment of rapid monetary policy tightening and a global growth slowdown. Despite the headwinds, NBG focused on growth-enhancing initiatives and further investments in technology and people. Despite the adverse international economic environment, economic activity in Greece showed remarkable strength. It grew by a robust 5.9% in 2022 and 2.1% in 1Q.23, reflecting the increased competitiveness of the Greek economy following a multi-year restructuring effort.

Expected Gross Domestic Product (GDP) growth in FY.23 is around 2.5%, more than two times higher than the euro area average. All major activity components showed robust growth with private consumption and investment on a solid upward trend. Positive wealth effects and rising collateral values due to increasing equity and real estate prices along with strong private sector liquidity buffers broadly offset the pressure on financial conditions from interest rate hikes.

The tourism sector's performance recovered more rapidly than initially expected, converging to its pre-pandemic highs of 2019. Tourism revenue will most probably reach new record levels in 2023, having a strong and positive direct and indirect impact on economic activity and employment.

The relatively rapid deceleration in headline inflation due to falling energy prices and the resilience of the labor market set the stage for real wage increases in 2023, boosting domestic demand. Moreover, declining prices for production inputs support corporate profitability, while the rapid absorption of Recovery and Resilience Facility (RRF) funds and the lagged impact of related spending will further bolster investment.

Fiscal rebalancing accelerated with Greece recording the largest fiscal improvement (in primary fiscal balance and public debt as a percent of GDP) among euro area countries in 2022. This positive fiscal momentum is maintained in 2023, supporting Greece's effort to regain investment grade status in the coming months. The combination of the positive macroeconomic backdrop, with the results of the multi-year transformation and our solid balance sheet have allowed us to deliver a strong set of results in the first half of 2023. Our profitability has been expanding strongly, underpinned by the solid expansion of our core income on the back of a sharp recovery in Net Interest Income (NII), while operating costs and credit risk charges remained relatively

contained, despite abating but still high inflationary pressures. Our capital position continues to strengthen, driven by solid organic generation, with Common Equity Tier 1 (CET1) at 17.3%. Finally, the Bank's asset quality profile remains resilient, with NPEs at 5.4%, a coverage of above 82%, and early delinquencies remaining contained and within our expectations for FY.23. During the first half of the year, our core domestic business continued to grow in line with our mission to facilitate a healthier and more sustainable future for businesses and households. In corporate banking, we launched the roll-out of a new, more centralized service model, and further enhanced our workflow to reduce time to money for our clients. We also progressed well in implementing our new Core Banking System, starting with corporate loans. In retail banking, our digital footprint continued to expand, with a new business banking application and 2.8 million active users on our mobile and internet banking platforms during the last 12 months.

In line with our strategy to build value-adding partnerships, we purchased 7.5% of the share capital of Epsilon Net S.A. We entered a long-term, exclusive cooperation for the joint development and distribution of products and solutions in the fields of business software, electronic payments, and embedded banking. Our partnership with Epsilon Net S.A. will address the digital transformation needs of Greek businesses through a seamless customer experience.

We continued to invest in further enhancing our ESG capabilities and infrastructure. In climate and environment issues, we upskilled our management and our technical working teams, detailed our strategy to capture emerging opportunities from the transition of the Greek economy to net zero, and strengthened our climate and environment risk management. For all our efforts, we received the year's Diamond ESG & Social Responsibility award by the Corporate Responsibility Institute (CRI). This is the 5th time we receive the award since it was launched 15 years ago in Greece.

Our people were at the forefront of these achievements, which would not have been possible without their strong dedication and tireless efforts. Our aim is to continue to build a modern people management framework, enabling us to attract, develop and retain the best talent in the market.

Looking forward, strong growth catalysts and reform continuity are expected to provide sufficient impetus to overcome the challenges posed by persisting geopolitical tensions, sluggish core and food inflation, energy transition challenges, and the increasing toll on euro area growth from monetary and fiscal tightening.

The substantial results of our transformation effort and the revamping of our service and operating model, including our impressive digital footprint, have put us in a position of strength in the Greek banking sector. We can support and advise our clients in achieving their targets, while promoting the sustainable growth of the Greek economy.

At NBG we aim high, work as a team, and deliver tangible results. The Bank's Purpose Statement remains pivotal to our activities: "Together We Create Future." Together with our people and our customers, we adhere to our four core values: We aspire to a Bank that is Human, Trustworthy, Responsive and a Growth Catalyst.

Athens, 31 July 2023

Gikas A. Hardouvelis

Chair of the Board of Directors

5

Attachments

  • Original Link
  • Original Document
  • Permalink

Disclaimer

National Bank of Greece SA published this content on 02 August 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 02 August 2023 18:34:16 UTC.