Introduction

We had a milestone year in 2021. For Eurobank, the end of the year marked the beginning of a new chapter.

In 2019, just before the outbreak of the pandemic, we had announced a bold plan to clean up our balance sheet from the burden of the NPE stock, accumulated during an unprecedented 10-year crisis. Despite the various challenges that emerged, we continued to implement the three-fold plan. First, thanks to your support, we strengthened our capital base through the merger with Grivalia as well as a number of non-dilutive capital enhancement transactions. Then, we delivered on timely NPE reduction, pioneering a scheme that was also implemented by our Greek peers. Thus, in our 2021 full-year results, we became the first Greek bank to report a single-digit NPE ratio at 6.8% - down from a peak of 45.2% as recently as in 2016. This was a prerequisite for the last remaining part of our plan, achieving sustainable double-digit return on equity. In 2022 we are fulfilling our pledge, as we enter full growth mode.

Growth is key for our Bank, but also for all our core markets. Post-pandemic recovery was among the fastest in Europe at 8.3% for Greece, 5.5% for Cyprus, 7% for Serbia and 4.2% for Bulgaria. Greece, our main market, was expected to grow at an average rate of 3.5-4% for the next 5 years, before new challenges emerged at the end of 2021, which became much more pronounced at the beginning of 2022. Rising energy prices, disruption of global supply chains and Russia’s invasion of Ukraine create an environment of acute inflationary pressures, successive rate hikes and economic and geopolitical uncertainty of unknown duration, which hamper growth prospects. Inflationary pressures are bringing the negative rate period to an end. Higher interest rates, if inflation is kept under control without bringing about a recession, are favourable for the profitability of banks. Yet, rate increases will inevitably lower the pace of growth. However, Greece’s potential for growth has not dissipated, as the country is on track to regain investment grade, economic sentiment remains positive, tourism and manufacturing exports are flourishing despite the negative juncture, the banking system has successfully dealt with legacy issues, there is ample liquidity in the economy (€35 billion increase in deposits during the pandemic, close to €40 billion State cash buffer, participation in ECB’s PEPP and TLTROs) and there is a total of €90 billion in EU funds earmarked to support growth over the next 7 years (RRF, MFF, EIB, etc.), rendering Greece the highest beneficiary in the EU as a share of its GDP. Within this context, we have prepared our Bank to be at the forefront of the upward cycle.

We were only able to turn to growth because the Bank continued to perform solidly throughout the pandemic. In 2021, while drastically slashing the NPE stock, we recorded a pre-provision income of €900 million and a near €500 million core operating profit, mainly thanks to the cost of risk reduction. Customer deposits increased by almost €6 billion in a single year, providing the necessary liquidity for new loan disbursements of €7.8 billion in Greece alone. Not only is our NPE ratio by far the best among peers, but we also have a high provision coverage ratio at 69.2%, up by 7.4 percentage points in 2021. Total capital adequacy rose to 16.8%, while our fully loaded Basel 3 CET1 increased by 160 bps to 13.6%.

Our international operations remain a key and integral part of our vision for Eurobank, and we continued to grow them both organically and by exploiting market opportunities. In Bulgaria, Postbank is the third largest bank by assets, while Eurobank Cyprus is the most robust and profitable bank in the country. In 2021, we strengthened our position in Serbia through the merger of Direktna Bank with Eurobank Serbia, holding a 70% stake in the combined bank. In Cyprus, we acquired a 12.6% stake in Hellenic Bank, the country’s second largest by assets. Overall, our international activities brought €148 million to our net profits on a total loan portfolio of near €10 billion. The Group does not have any material exposure to either Ukraine or Russia, and Greece’s direct exposure is minimal (only around 2% of Greek exports and tourism concern these two markets). While the total macroeconomic impact of the military conflict, counting in spillovers, especially regarding energy prices, will depend upon several factors, we are convinced that all our subsidiaries are well-placed to manage the impact. We have the most diversified and resilient business model, based on three revenue streams – the Greek bank, international activities and a top-of-class real estate business, expertly managed by Grivalia Management Co.

On the back of solid performance, we were able to shift to growth mode and set ambitious goals in our business plan for the next three years. We aim for a sustainable 10% return on equity, a 13% average earnings per share growth, frontloaded in 2022, organic capital generation of more than 100 bps per year to finance asset growth, distribution of dividends and further enhancement of our capital ratio. We expect a cost of risk as low as 50 bps in 2024, for a core pre-provision income of €1.1 billion. Despite the headwinds that emerged after the announcement of our 2022-2024 business plan, we remain committed to the set targets. Based on this forecast, we have commenced the required institutional dialogue with our regulator, aiming to initiate dividend distribution out of 2022 profits.

Our values, purpose, business targets and roadmap have been integrated in our business plan as “The Bank for Growth”. Our operating model continuously evolves around three central pillars. The first pillar focuses on the very foundations of growth, through financing landmark projects and investments of large and medium businesses. Eurobank is spearheading financing of the flagship Hellinikon project and practically all projects of vital infrastructure, including the Attica-Crete electrical interconnection, both Egnatia Odos and Olympia Odos motorways, as well as the construction of the new Natural Gas Plant (CCGT) in Komotini. We are the bank of choice for most top international investors, as Greece comes again under their radar.

We have also strategically streamlined resources towards the successful launch of the Greece
2.0 plan through a comprehensive, collaborative market approach, so as to absorb the available funds more efficiently and infuse them into new investments, contributing to a more sustainable, extrovert, green and digital future for the Greek economy.

The second pillar combines growth and inclusiveness. In this vein, we support SMEs in making the most of the available EU funds to boost their competitiveness, gain access to international markets and create jobs, as they form the backbone of the economy and they are instrumental in distributing the benefits of growth across society. We are the leading bank in small-business lending as well as in personal loans, credit card issuing and mortgage lending, after a ground- breaking campaign initiated in 2019. On the third pillar, we are developing a digitally enabled yet human-centric model that combines state-of-the-art technological infrastructure with our outstanding human resources, a major competitive advantage of the Group in all our markets and activities.

To stand up to this challenge, we have given priority to swiftly and efficiently managing the transition to the new model. Digitisation is the main lever for transformation. We continue to heavily invest in technology as well as in human capital, and have become a leading technology hub. We have added 150 IT specialists and embarked on revamping our systems with cutting- edge components, including a new Temenos core system, which we have started deploying for our international operations. Valuing the increasing importance of digital technology, yet convinced that human interaction will remain an integral part of banking relations, we have opted for a phygital distribution model. Phygital, a hybrid of physical and digital, aims to bring the best of both worlds together, offering reduced service cost, while retaining the physical touchpoint for high-value customer interactions. The phygital concept is best expressed in the new generation of branches that we began opening at the end of 2021. Innovative and environmentally friendly, they offer a fast customer service point (2-5 minutes), priority system for all service points, conversation booths and specially designed meeting rooms and, overall, the automation and privacy needed as we move from a transaction-based to a consultation- driven banking model. We aim for simplicity and efficiency in providing excellent, easy and fair service to our customers, at a reduced cost, with increased resilience in managing risks, in order to become a bank recognised for its ESG policies, including being employer of choice in Greece and the region.

ESG criteria now form a core part of our business strategy, our risk management and our daily routine. We approach ESG in a holistic manner. We are committed to contributing to the achievement of the United Nations Sustainable Development Goals (SDGs) and the UN Agenda 2030, as signatory to the UN Global Compact since 2008 and by actively promoting its fundamental principles. We are also a signatory of the UNEP FI Principles for Responsible Banking since 2019, acknowledging and embedding its six principles in the Bank’s Strategy and Operations, as publicly disclosed in 2021, in our first Self-Assessment Report. Our ESG vision is enabled via a governance structure that includes a dedicated ESG Management Committee for the oversight of respective plans, actions and performance. In 2021 Eurobank implemented a corporate-wide project that set the foundations for ESG integration into our policies and products. Aiming at ensuring compliance with existing and upcoming sustainability-related regulations (i.e. ECB guidelines on climate risks, EU Taxonomy Regulation, etc.), we developed a detailed roadmap for the effective management of climate-related and environmental risk, integrating climate-related and broader ESG risks in the Bank’s risk management, governance arrangements, policies and procedures, as well as reporting and disclosure frameworks. The second phase of this project shall be deployed in 2022. The Bank will continue to work with all its customers, irrespective of their current carbon footprint, and will support them with financing and advisory in their transition effort. Eurobank’s environmental performance in 2021 was in line with the objectives set for greenhouse gas emissions, reducing overall energy consumption, and for the accelerated paperless operation, enabled by tech solutions and, more importantly, a change of culture. Green procurement practices are applied, embedding environmental specifications and guidance for selection of products and suppliers. The major environmental challenge for the years ahead for Eurobank shall be the effort to neutralise carbon emissions, in the spirit of the EU Green Deal.

Eurobank’s social impact in 2021 included a major, long-term initiative to address the demographic challenge in Greece, providing support to young parents and families, focusing on geographic areas where population depletion is more acute. In the wake of the wildfires that swept through Greece in the summer of 2021, we announced a €1 million donation to the relief effort.

Diversity and inclusion emerge as critical challenges in the post-pandemic era. We are committed to promoting gender diversity, through the Women in Banking (WiB) Leadership Mentoring Programme and our announced sponsorship of “The Boardroom”, an initiative that offers an integrated approach in preparing women to join company boards in our market. We aim for Eurobank to be at the forefront of Diversity, Equity and Inclusion (DEI) in workplace initiatives. The inclusion of these principles in a new policy framework, putting in place transparent, anti-harassment procedures, and participation in the 2022 Bloomberg Gender Equality Index (GEI), one of only five companies in Greece, evidence our strong commitment to diversity and inclusion as a value and a business driver.

We are at the forefront of socially responsible banking initiatives, providing microfinancing through our cooperation with the non-profit Action Finance Initiative (AFI) to create jobs and support financial inclusion for small-scale entrepreneurs.

Eurobank is continuously and consistently strengthening its Governance aspect through respective policies and disclosures. The value of transparency was reflected in the significant improvements in our ESG Ratings: in 2021 Eurobank achieved a world-class score of 15.3 points in the Sustainalytics ESG Risk Rating and was included in the Bloomberg Gender Equality Index. Eurobank’s culture drives solid business ethics, reflected in the fact that, in 2021, 93% of the Bank's employees were certified in Anti-Money Laundering.

Dear Stakeholders,

Eurobank is moving ahead with confidence. We have a strong franchise and we are leveraging technology to create a simple, data-driven yet humane and client-centric bank, ready to perform and thrive. We have completed the NPE management phase, and we are ready to make the most of the upcoming opportunities. By financing the milestone projects of future sustainable growth, by serving our customers, by assisting businesses to grow and households to fulfil their dreams. Our values support a strong yet adaptive business culture and our revamped purpose statement, “Prosperity needs pioneers”, expresses our vision to become the leading bank in creating prosperity for all stakeholders – customers, employees, shareholders and society at large. Leaving behind the financial and debt crises and their legacy, we can now focus on expanding our business, creating value for our shareholders, supporting inclusive growth, enhancing our social footprint, and contributing to a widely shared prosperity for the countries and communities we serve.

• The Great Moment for Education Awards.
• 9th Cycle of the egg enter•grοw•go Programme.
• Energy Saving Bridge Financing Programme.
• Participation in the ESIF - EAFRD Greece Guarantee Facility

• Issuing of €500 million in senior preferred debt.

• Sponsorship of Emilia Tsoulfa  and Ariadne Spanaki sailing duo.

• Launch of the Moving Family Forward initiative for the demographic issue in Greece.

• Agreement for the merger of Eurobank’s Serbian subsidiary, Eurobank a.d. Beograd, with Direktna Banka a.d. Kragujevac.
• Acquisition of a 9.9% holding in Hellenic Bank.
• 2021 SSM Stress Test Results.

• Issuing of €500 million in senior preferred debt.
• €354,000 donation to the Hellenic Army Academy for the renovation of building infrastructure.

• Agreement between Eurobank Holdings and the doValue Group for a) the sale of 95% of the mezzanine and junior securitisation notes in the context of the securitisation of mixed pool of NPEs (Mexico transaction), and b) the servicing of the portfolio by the doValue Group.
• Vote of confidence in DESFA by the National Bank of Greece, Eurobank, Alpha Bank, and Piraeus Bank. Signing of €505 million Common Bond Loan for the financing of the investment plan.
• Growth Awards 2021.

• Presentation of Eurobank’s transformation programme 2030 and launch of its new brand identity, signalling a new era.
• €750 million to support enterprises in Greek tourism.

• Completion of the sale of 95% of the mezzanine and junior securitisation notes in the context of the Mexico transaction.
• Ministerial Decision in relation to the provision of guarantee by the Greek State to the senior noteholders of the Mexico securitisation transaction, in favour of Mexico Finance Designed Activity Company, in the context of the Hellenic Asset Protection Scheme (Hercules Scheme).
• Completion of merger of Eurobank’s Serbian subsidiary, Eurobank a.d. Beograd, with Direktna Banka a.d. Kragujevac.
• Strategic partnership with Worldline B.V. for the merchant acquiring business.
• Completion of two synthetic securitisations for a total €1.7 billion portfolio of performing SME and large corporate loans (Project Wave I and II).
• Acquisition of an additional 2.7% holding in Hellenic Bank.
• Launch of Eurobank ESG Deposits: €200 million raised for ESG Investment Financing.