Strategic Report

Eurobank Ergasias Services and Holdings SA (Eurobank Holdings) is a holding company registered in Athens (8 Othonos Street, 10557), listed in the Athens Exchange. Eurobank Holdings and its subsidiaries (Group) hold €77.9 billion in assets and employ 11,935 people. Eurobank Holdings is the parent company of the Eurobank Group, which consists of Eurobank SA (Eurobank) and its subsidiaries.

With a total network of 668 branches in Greece and abroad, Eurobank Group offers a comprehensive range of financial products and services to its retail and corporate customers. In Greece, Eurobank operations encompass a retail banking network, dedicated business centres, a Private Banking network and a dynamic digital presence. Eurobank Group also has presence in Bulgaria, Serbia, Cyprus, Luxembourg and United Kingdom (London).

* With the limitations provided for in Greek Law 3864/2010, as in force.
** Based on the information received, from the company “Fairfax Financial Holding Limited”, for which the investment community was informed on 20.07.2021 by Eurobank Holdings, through relevant corporate announcement.
*** Based on the information received, from the company “The Capital Group Companies (CGC)”, for which the investment community was informed on 03.12.2020 by Eurobank Holdings, through relevant corporate announcement. 
**** Based on the information received, from the company “Helikon Investments Limited”, for which the investment community was informed on 23.07.2021 by Eurobank Holdings, through relevant corporate announcement.

Eurobank started off as a pioneer. Infusing international perspectives and talent has made us a constant source of energy and innovation in banking. During tough times, our ingenuity, agility and stamina helped us to emerge even stronger. We gained the best position to revive our pioneering spirit again.

Today’s world needs a new concept of prosperity. One that creates opportunities for more and momentum for tomorrow. To find new paths and enable holistic growth, we need to support the pioneers. Those, who question the status quo, embrace the new, take the lead and push society forward.

To turn our customers’ ambitions into reality, we need to be pioneers ourselves. As Eurobankers, we use our entrepreneurial drive and redesign banking to make it better. With our long-term perspective, we create sustainable value for all stakeholders. And as a strong team, we offer products, services and solutions that are faster, simpler and more easily accessible. To advance us all, we must go ahead and unleash potential everywhere.

PROSPERITY NEEDS PIONEERS

Principles for Responsible Banking

 

In September 2019 Eurobank signed the Principles for Responsible Banking, affirming its commitment to play an active role in implementing the UN Global Sustainable Development Goals (SDGs) and the Paris Agreement on Climate Change. The Principles for Responsible Banking are supported by over 220 banks around the world and were shaped by the global banking industry through the United Nations Environment Programme Finance Initiative (UNEP FI).

The six (6) Principles are the following:

1. Alignment
   We will align our business strategy to be consistent with and contribute to individuals’ needs and society’s goals, as expressed in the Sustainable Development Goals, the Paris Climate Agreement and relevant national and regional frameworks.
2. Impact and Target Setting
   We will continuously increase our positive impacts while reducing the negative impacts on and managing the risks to, people and environment resulting from our activities, products and services. To this end, we will set and publish targets where we can have the most significant impacts.
3. Clients and Customers
   We will work responsibly with our clients and our customers to encourage sustainable practices and enable economic activities that create shared prosperity for current and future generations.
4. Stakeholders
   We will proactively and responsibly consult, engage and partner with relevant stakeholders to achieve society’s goals.
5. Governance and Culture
   We will implement our commitment to these Principles through effective governance and a culture of responsible banking.
6. Transparency and Accountability
   We will periodically review our individual and collective implementation of these Principles and be transparent about and accountable for our positive and negative impacts and our contribution to society’s goals.

In full compliance with its obligations relating to implementing the Principles for Responsible Banking, on 22 March 2021 Eurobank completed and published its first Self-Assessment (Progress) PRB Report. To fulfil its commitments to the UNEP FI PRB, for the first time Eurobank is issuing its 2nd Self-Assessment (Progress) PRB Report as part of the 2021 Annual Business and Sustainability Report, for the period from 23.03.2021 to 23.03.2022 (Annex VII). Furthermore, it has compiled a 3-year implementation roadmap, aiming at fully embedding the PRB principles by 2024.

All actions towards implementing the Principles for Responsible Banking are of immense importance, as these Principles define the role and responsibilities of the banking sector in shaping a sustainable future, allowing banks to include sustainability in all their activities and identify areas that need improvement. Eurobank, true to this vision, shall continue its efforts to make a difference in promoting sustainable development. 

UN Global Compact

We are committed to contributing to the achievement of the United Nations Sustainable Development Goals (SDGs) and the UN 2030 Agenda, as signatory to the UN Global Compact since 2008, actively promoting its fundamental principles and applying the Precautionary approach.

Each year, the Bank publishes a report with the activities that reflect its commitments to these principles. The UN Global Compact is an international voluntary initiative designed to promote sustainability and responsible business. It provides a framework of 10 internationally accepted principles in the areas of human rights, labour rights, environmental protection and anti-corruption, on the basis of which the companies that participate in it commit themselves to align their strategy and operations to these principles.

Principles for Responsible Investing (PRI)

Subsidiary Eurobank Asset Management MFMC was the first asset management company in Greece to sign the PRI (Principles for Responsible Investment) Initiative in 2018, as part of the broader policy of the Eurobank Group to support sustainability and responsible entrepreneurship. The PRI numbers over 4,000 signatories, representing USD 100 trillion in assets under management, which integrate environmental, social and governance (ESG) factors into their investment decisions as part of their strategy.

This initiative commenced in 2006, endorsed by the United Nations (UN) and the United Nations Environment Programme Finance Initiative (UNEP FI) and supports the 17 Sustainable Development Goals adopted by the UN in 2015.

Environmental and Energy Management

Eurobank has a standing commitment for Environmental and Energy Management, in line with relevant ISO certifications and as reflected in the independently audited EMAS report. Specifically, the ISO 14001 certification has been active since 2004 and the ISO 50001 certification since 2015, while EMAS reporting is being implemented and independently assessed annually since 2008. The certification for Greenhouse Gas Emissions per the ISO 14064 Standard is scheduled for 2022, in line with the prevailing best practice and emerging regulation.

Zero Tolerance Commitments

• Respecting Human Rights
  Eurobank is committed to respecting and protecting human rights, and avoiding unintentionally causing or contributing to adverse human rights impacts that may affect its employees, suppliers, contractors, clients and other parties directly linked to its operations, products or services. The Bank encourages its people to treat each other with dignity and respect, and does not tolerate discrimination, bullying, harassment or victimisation on any grounds. In line with leading international practices, it has established relevant policies, such as its Code of Conduct and Ethics, that reflect this commitment. It applies pertinent processes aiming to identify, prevent and mitigate any impact on human rights, as well as processes that enable the remediation of any such adverse impact. Processes include the monitoring process to measure the effectiveness of the human rights commitments, through established grievance mechanisms.
• Diversity, Equity and Inclusion
  Eurobank recognises the significance and the impact of its activities on social equity for employees, customers and society. The Bank is committed to fostering a culture of Diversity, Equity and Inclusion whereby pertinent principles are integrated throughout the everyday working practices of the organisation, its governance model and related commitments. In line with international practice, Eurobank has documented corporate values, related policies, scope, definitions, commitments and approach in place for incorporating applicable regulatory requirements, as well as discretionary initiatives towards forming a diverse, equitable and inclusive working environment, responsive to different cultures and groups, where everyone can have the opportunity to flourish. It welcomes and embraces multiple viewpoints and perspectives within the organisation to help it become more open and inclusive.
• Anti-harassment
  Eurobank has introduced a framework for preventing, addressing and combating violence and harassment at work. It outlines Eurobank’s commitment in providing a work environment where people are treated with dignity, decency and respect. The framework outlines Eurobank's zero-tolerance approach for various types of violations, including but not limited to verbal, physical, psychological, moral and sexual violence, insulting, degrading or disparaging behaviour, offensive or inappropriate comments, and sexually offensive behaviour. All employees and any other person who collaborates with Eurobank are encouraged to raise issues of concern, speak up and use both available external and internal reporting channels.
• Anti-Bribery and Corruption
  Eurobank's Anti-Bribery and Corruption Policy sets clear definitions on active and passive bribery, as well as what cases can lead to corruption (internal document provided). Furthermore, Eurobank's Code of Conduct and Ethics describes how Eurobank prevents instances of bribery and corruption and how it promotes integrity within the business environment.
• Reporting Unethical Conduct (Whistleblowing)
  In order to ensure independent reporting mechanism for anonymous reporting of unethical conduct, and to ensure that reports are treated confidentially, Eurobank has established the Policy for Reporting Unethical Conduct.
  

Human Rights statement, Diversity Equity and Inclusion Policy, as well as Eurobank Reporting of Unethical Conduct Policy Statement are available on eurobank.gr.

Eurobank is undertaking projects to fulfil goals with a national reach: sustainable development for all, rapid recovery of the investment grade for Greece and change in the production model, driven by investments. Eurobank has long supported major infrastructure projects and smaller businesses, and will continue to do so, aiming to distribute growth across society. Focused on a new perspective for banking, Eurobank is applying a phygital model, which combines technology with the people’s experience, to support its clients and ALL the businesses.

A Bank for Development

Growth with a social footprint and cutting-edge technology for a people-centred banking service model

The Bank is getting ready, planning and shaping “Eurobank 2030 | The Bank for Development”. It is investing in the People – Technology – Sustainability three-fold, by combining cuttingedge technology and the expertise of its highly trained staff, using best practices to contribute to the national effort for sustainable development for all. Its 10-year operational plan is based on 3 central pillars, and has already been put into action:

• Financing landmark projects and investments of large and medium businesses. The aim is to shift to a new production model and reduce the investment gap created in the country during the financial crisis, mainly through investments based on ESG (Environmental, Social and Governance) criteria.
• Fully supporting smaller businesses, in combination with the major funding potential available through European and/or Greek programmes for small businesses, aiming to boost their competitiveness and distribute growth across society. Eurobank provides investment loans to businesses at a fixed rate for the entire investment period.
• Developing a people-centred phygital model that combines state-of-the-art technological infrastructure with the human factor, offering simple, fast, personalised and safe services 24/7.

New Generation of Branches

The new-era branches offer an upgraded banking experience, based on a people-centred operational model. Transactions are carried out easier, by making the most of technology. The aim is for clients to be able to build their relationship with the people of Eurobank, so they may receive support in their day-to-day lives, their plans for the future, and their progress on a personal, family and professional level.

In the new generation of branches, personal communication is coupled with advanced digital options. The innovations adopted fully respect people and the environment. These include:

• The Touch and Go Service Bar: a fast customer service point (2-5 minutes). 
• A priority system for all service points within the branch.
• Consultation services, supported by digital learning points, e.g. automatic service zones.
• Conversation booths for interaction with clients in utter privacy.
• Specially designed meeting rooms for Personal Banking and Business Banking clients.

The Changing Image of Eurobank

The brand image is what people see, listen to, recognise and believe for us and our Bank. It is the combination of all our features, which makes us stand out and makes clients want to work with us. Brands have a name, an identity, a personality and a vision. Traditionally, brands change their image when they want to showcase a major change in their course, their strategy and their vision.

Eurobank has set off on a major change in its business planning for 2030. The new brand embodies Eurobank’s progress to date, reflects its heritage, values and pioneering vision, and signals a new era. It is plainer, but at the same time, more institutional and powerful. Driven by innovation and originality, two components fully integrated in Eurobank’s DNA, the Bank is introducing this change through the motto “We are all pioneers”. Being a pioneer is something simple that happens every day and can move us all forward.

Eurobank aspires to support long-term prosperity by financing sustainable development, delivering value to all stakeholder groups and creating a positive economic, social and environmental impact through all aspects of its activities. Focusing on Environmental, Social and Governance (ESG) issues is essential to its business strategy and transformation.

The Bank approaches ESG in a holistic manner, in line with the commitments it has undertaken, the regulatory framework requirements and the globally acknowledged best practices. In this respect, it has established an ESG governance structure that includes a dedicated ESG Management Committee for the oversight of respective plans, actions and performance.

Eurobank has given priority to managing and mitigating any underlying economic, environmental and social risks arising as an integral part of developing products and services, while complying with the applicable regulatory framework. Furthermore, it develops and improves mechanisms to identify, measure and communicate impact, across the entire range of its activities.

Committed to contributing to the achievement of the United Nations Sustainable Development Goals (SDGs) and the 2030 Agenda, Eurobank is a signatory of the UN Global Compact since 2008, actively supporting and promoting its fundamental principles and driving progress with activities that reflect this commitment. In line with the SDGs and the Paris Agreement on Climate Change, Eurobank is also a signatory of the UNEP FI Principles for Responsible Banking (PRB) since 2019, acknowledging and embedding its six principles shaped by the global banking industry in the Bank’s strategy and operations. In 2021 it issued and publicly disclosed its first Progress Report on the UNEP FI PRBs and established a three-year roadmap for implementation. The 2nd Progress Report is embedded herein.

Eurobank advances sustainable finance, committed to being transparent about its ESG approach and ensuring that decision-making is in line with environmental protection and sustainability. Eurobank has developed its Sustainable Finance Framework in accordance with internationally recognised industry guidelines and principles, in order to classify sustainable lending solutions offered to its customers, specifying the applied classification approach and the activities defined as eligible for accessing sustainable financing. Moreover, Eurobank has established and published the Green Bond Framework. The framework was prepared in accordance with global best practices and standards, and considers EU Taxonomy eligibility criteria to classify potential investments as green.

The Bank actively participates in internationally recognised ESG ratings, aiming to continuously improve its environmental, social and governance performance, enhance its related disclosures and further build the trust of the investment community in the Bank.

Eurobank is redesigning its strategy both in terms of its financing and other products, and in terms of its internal environment and how it is organised and operates. To this end, it redefines sustainable development actions and goals, taking into consideration the Principles for Responsible Banking and other international agreements and trends. For 2022, Eurobank will be updating its ESG strategy and the operation of its ESG frameworks and governance, including the Sustainability Policy Framework. The ESG strategy balances objectives, in line with the Bank’s corporate Purpose (“Prosperity Needs Pioneers”) and across two distinct levels of impact: Financed Impact and Operational Impact.

Eurobank’s strategic objective is to adapt its business in a way that addresses climate change challenges, to accommodate social needs within its banking business model, and to safeguard prudent governance for itself and its counterparties, in accordance with supervisory initiatives.

The Bank’s ESG initiatives aim to support long-term prosperity by:

• Financing sustainable development.
• Delivering value to all stakeholder groups.
• Creating positive economic, social and environmental impacts through all aspects and areas of the Bank’s activities. 

Eurobank is developing its ESG initiatives taking into consideration regulatory expectations, international standards, agreements and best practices balancing objectives across two distinct levels of impact: Financial Impact and Operational Impact. 

Steering Clients and Portfolio towards Green transition

• Direct Financing(s): Loans that aim to finance projects that meet green eligibility criteria, or Sustainability Linked Loans, focusing on leveraging clients’ commitments towards green transition and climate neutrality.
• Green and Sustainability Linked Bonds: Acquisition or Bank’s participation in Green or Sustainability Linked debt issuances.

Increase Clients’ Engagements and Awareness

• Engage with clients: The Bank will support clients with financing and advise them in their climate transition effort. Leveraging on the climate risk assessment exercises and the Group’s Sustainable Finance Framework, our strategic approach is to support green transition efforts, through financing and advisory solutions to current and potential clientele. It is also noted that a significant number of Greek Large Corporates have already initiated specific green and Net Zero strategies.

Enablers and Tools

• Sustainable Finance Framework: The Bank has approved its Sustainable Finance Framework which supports the identification and classification of sustainable/green financings. Moreover, the Bank has approved the Green Bond Framework and is in the process of finalizing its Sustainable Investment Framework which specifies the classification process and the relevant criteria for the selection of investments for the Bank’s banking book bond portfolio with sustainable characteristics (pertinent statement will be made publicly available).
• Green Products: The Bank has developed sustainable products, focusing on specific sectors and clients. In addition, the Bank recently introduced ESG Deposits.
• Other Initiatives: The Bank has introduced awareness programs, for its clients regarding ESG transition.

Committed to being transparent about its ESG approach and to ensure that the decisionmaking is in line with environmental protection and sustainability, Eurobank developed its Sustainable Finance Framework and the Green Bond Framework.

In 2021, Eurobank documented and approved its Sustainable Finance Framework (SFF), being the first Greek bank that formally established a Sustainable Finance Framework. This Framework encompasses a wide range of sustainable-green lending activities and supports the identification and classification of sustainable-green financings, covering both Wholesale and Retail banking portfolios, financing the transition of the Bank’s clients.

The Framework focuses on climate transition, through the determination of specific investments which promote climate change mitigation and adaptation. In particular, the framework specifies the classification approach applied by the Bank, the activities defined as “eligible” to access sustainable financing, eligible green and social assets, along with their respective eligibility criteria. The Bank developed its Sustainable Finance Framework in accordance with internationally recognized industry guidelines and principles, indicatively:

a) The International Capital Market Association (ICMA) principles.

b) The EU Taxonomy Climate Delegated Act.

Furthermore, the SFF incorporates eligible project categories, approved through the Greek Recovery and Resilience Facility.

Eurobank developed and made publicly available its Green Bond Framework. This framework facilitates the Bank in order to meet its environmental/sustainability commitments and finance projects that will deliver environmental benefits to the economy and support Bank’s business strategy and vision.

The Green Bond framework was prepared in accordance with global best practices and standards and considers EU Taxonomy eligibility criteria to classify potential investments as green. The Framework determines in the respective chapters the use of proceeds, the process for project evaluation and selection, the management of proceeds as well as the relevant reporting obligations.

Furthermore, the Framework has been externally reviewed by an established and reputable independent opinion provider through a Second-Party Opinion (SPO) process.

 

Eurobank is committed to improving existing and introducing new sustainable product offerings. ESG products and services offered by the Bank include among others the following:

ESG Programme for Hotels

In 2021, the Bank has launched 2 ESG programmes for Hotels:

The "Doing Business Sustainably in Tourism" (Epixeiro Viosima ston Tourismo) programme aims to provide incentive (in the form of margin reduction) to existing borrowers of the Bank, subject to their acceptance to adhere to certain sustainability performance targets. The programme is aimed at both educated and advanced in ESG principles hotel groups / companies, but also at those performing their initial steps towards sustainable future.

The "Constructing Sustainably in Tourism" (Kataskevazo Viosima ston Tourismo) programme aims to provide incentive (in the form of margin reduction) to new financings of the Bank, provided that they adhere to certain environmental output specifications, related to a new construction / development or an upgrade of existing hotel infrastructure, and they meet specific thresholds.

Financing Clean Energy Projects and other Environment-Friendly Energy Source

Supporting investments in Renewable Energy Sources (RES) has been a standing priority for the Bank, as part of its broader goal of financing the economy and supporting the development of the country. The Bank fosters large RES investments through specialized banking products, with a strong focus on project financing principles.

Power Production Green Transition

The Bank is active in financing other necessary for the green transition investments, such as investments in the construction of gas-fired power generation plants to replace outdated more polluting and less efficient ones run by lignite or oil, which provides the required flexibility to the system in order for the later to be able to support more RES units. 

The Bank’s target for 2022 is to further expand its RES project lending portfolio and to continue to support Greek and foreign investors operating in this sector.

Sustainable Bonds

Supporting the development of the sustainable bond market in Greece, the Bank participates in all major transactions, with exceptional deal execution performance, as well as strong distribution and placement capacity.

ESG Deposits

The Bank was the first Greek bank to offer ESG deposits to its corporate clients. ESG deposits are time deposits in EUR, where invested money is being used by the Bank to finance or refinance eligible sustainable loans/projects that meet the eligibility criteria defined in the Sustainability Finance Framework of the Bank. ESG Deposits provide an innovative deposit solution that supports client’s sustainability agenda, by investing liquidity in sustainable projects and allows them to demonstrate their commitment towards a low-carbon and sustainable environment.

Green Mortgage Loans

Eurobank has significantly contributed to energy-saving actions and in particular to the upgrade of the energy performance of private homes in Greece, by actively participating in all the “Saving at Home” (“Exoikonomisi Kat’ Oikon” and “Exoikonomo”) development programmes from 2011 to date.

Since December 2020, the Bank has further solidified its presence in the area of green mortgage loans by participating in the (currently active) Energy Saving and Autonomy (Exoikonomo – Aftonomo) development programme. The programme is funded by the European Regional Development Fund (ERDF) and national resources. It offers a subsidy and an interest-subsidised loan from the Bank to all eligible households, so they may carry out green interventions in their homes to optimise their energy-efficiency, install domestic photovoltaic systems for energy autonomy, create the proper infrastructure to buy an electric or hybrid vehicle, and install smart home automation systems. The Bank is participating in the Energy Saving and Autonomy programme with streamlined processes for quicker loan processes, financing tools to strengthen the liquidity of associated companies that undertake to carry out works as part of the programme, and additional incentives for those who choose to take out a loan from Eurobank. During 2021, the Bank confirmed its participation in the new Exoikonomo 2021 programme and, in partnership with the Hellenic Bank Association and its members, it vitally contributed to the formation of the programme’s Framework and Guide.

In addition, Eurobank offers the Green Mortgage Loan – Saving Energy to those who are not eligible to participate in the Exoikonomo programmes. This product finances green repairs that improve the energy efficiency of properties (such as installing photovoltaic systems for domestic energy production, replacing the existing heating system, installing latest technology ACs, replacing insulation, etc.).

The Bank’s valuable experience and expertise in green loans are always the starting point for future initiatives. The ultimate goal is to actively contribute to meeting the national environmental targets and to protecting the environment through dedicated green banking products that offer the most cost-efficient financing solutions and cover all potential green needs a citizen may have.

Retail Banking

2021 was a challenging year, albeit a year of growth and recovery. The vaccination programme supported the return to normal social life and economic improvement, following the appearance and spread of COVID-19 in 2020. Eurobank carried on showing flexibility and adaptability to ensure the health and protection of staff and customers.

All network branches remained open, branch staff worked with flexibility and were redeployed in order to cover critical positions. Despite the difficulties in the majority of channels, the Net Promoter Score increased.

On 31.12.2021 bank deposits increased to €53.2 billion, compared to €47.3 billion on 31.12.2020. During 2021, deposits increased for businesses and individuals, although at a lower rate compared to 2020, as the liquidity enhancement measures adopted in 2020 were retained. Moreover, the partial re-opening of the market enhanced economic growth, especially for corporations. In addition, supporting the savings effort of Greek households, with key ambassadors the Apotamievo and Megalono accounts, more than 150,000 children held the Megalono savings account in 2021.

At the same time deposit products and services remained available through e-Banking. Focusing mainly on optimal customer service and uninterrupted customer transactions, new e-Banking functionalities were introduced and more customers switched to e-Statements, contributing to the improvement of their daily lives.

In 2021 the Bank achieved the highest performance and results ever in bancassurance activity, with product sales reaching €491 million. General insurance products were one of the Bank’s priorities, achieving remarkable results. Moreover, Eurobank, as an insurance agent, aiming to meet all market needs, started distributing a new single-payment, insurance-based investment product by Eurolife FFH Life Insurance SA. This product offers high yield prospects, combining a modern form of investment with life insurance and providing a type of portfolio protection. In addition, a new property insurance product by Eurolife FFH General Insurance SA started being distributed. Also in 2021, the Bank started distributing an innovative programme by Eurolife FFH General Insurance SA, which provides cyber-risk protection to individuals.

Eurobank Personal Banking remained focused on its primary goal of providing personal banking customer service of the highest standards through dedicated and certified Personal Banking Relationship Managers (RMs). The Personal Banking RMs offer an integrated approach in fulfilling their clients’ financial goals, through a series of products and solutions that are offered in cooperation with Eurobank Asset Management MFMC, Eurolife FFH Insurance and Eurobank Equities SA. As a result of this cooperation, the Megatrend mutual fund, which exclusively adopts ESG criteria, was promoted.

The segment contributed to increasing lending and improving portfolio quality by launching the new PB Personal Loan, with premium interest rate for prime customers. It also expanded its mortgage product offering with Ekkinisi Stegi, which combines a premium fixed rate and discounted home-related insurance products. In 2021, as reasonably expected, special emphasis was placed on expanding the transactional activity of personal banking customers through the transition to alternative and digital channels. By the end of 2021, Personal Banking managed to significantly increase its client base, resulting in business growth, as demonstrated through the acquisition of products and services, and the high satisfaction rate from the service. In addition, the segment contributed to the improvement of the cost-to-income ratio by changing the deposit mix. Personal Banking managed to decrease the time deposit amount and thus optimise its pricing policy.

Individual Banking remained focused on developing and serving 87% of the Bank’s active customers (2.7 million customers) retaining 85% of consumer loan balances and 83% of mortgage loan balances. In 2021, by launching a comprehensive commercial plan, Individual Banking carried out 12 million communications with individual customers, 92% of which were through digital and alternative channels, aiming to efficiently meet the whole array of their banking needs. Furthermore, with the integration of advanced analytics and specialised credit models, Individual Banking managed to increase consumer lending and maintain portfolio quality.

Moreover, major initiatives led to significant accomplishments, such as acquiring 102,000 new individual customers and upgrading 32,000 individuals to the Personal Banking segment, while 160,000 individual clients acquired a basic banking relationship with the Bank and more than 108,000 public and private sector employees and pensioners trusted the Bank with their regular source of income (excluding employees from CIB clients). Additionally, more than 90 automated customer journeys were implemented through digital and alternative channels, developing a step-by-step individual customer relationship with the Bank and offering a unique customer experience.

Despite the continuous adverse conditions, in 2021 the Bank managed to retain its leading position in the mortgage lending market and increase new mortgage loan disbursements by 35%, compared to the previous year. This was mainly due to the increase in the demand for fixed-rate mortgage loans, which also provide flexible instalment options, and the option of taking out a mortgage either through the newly launched video-banking service or a branch. At the same time, the Bank continued to contribute to the residential green lending sector through the Exoikonomo-Aftonomo programme and other subsidized programmes. By the end of 2021, the Bank’s mortgage lending portfolio in Greece stood at €8.3 billion in total. In addition, Eurobank successfully participated in the state-sponsored Gefyra I programme, aimed at borrowers with loans secured with their main residence who were affected by the COVID-19 pandemic, in order to ensure the smooth repayment of loan instalments.

In the Consumer Credit Sector, disbursements of amortised consumer loans stood at €133 million, up by 97% compared to 2020, the leading product being Payroll Personal Loan, accounting for 34% of total disbursements. In addition, the newly introduced Fast Loan, which is available through the Bank’s branches and digital channels (e-Banking and the Eurobank Mobile App), contributed significantly to the increase in amortised loan disbursements, accounting for 26% of total disbursements. Disbursements of car loans in 2021 reached €135 million, up by 16% compared to 2020. This increase is mainly due to the financing of new cars (€95 million), which constitutes the main part of car loans. By the end of 2021, the Bank’s consumer lending portfolio in Greece amounted to €1.8 billion in total, including credit card balances.

In 2021 the total Eurobank card portfolio exceeded 3.15 million cards. Eurobank is the first and only bank in the Greek market to offer the next generation of cards, made of eco-friendly biodegradable materials, having adopted the latest international environmental protocols and, therefore, demonstrating Eurobank’s long-term commitment to promote environmentallyfriendly initiatives.

During the year, Eurobank completed its xPays range of products, offering a comprehensive, end-to-end solution to its cardholders, by launching 3 new digital wallets: Apple Pay, Google Pay and Garmin Pay. This allowed Eurobank Visa and Mastercard cardholders to make payments directly using their iOS/Android mobile devices.

Eurobank continues to enhance its digital self-service solution offering via its Cards Control feature, available through the Bank’s online banking platform. Cards Control allows cardholders to manage a range of card functionalities, without the need to visit a branch or speak to a dedicated EuroPhone agent, a feature that proved very useful during the pandemic.

During 2021, a series of tailor-made card use and acquisition campaigns were launched, further rewarding cardholders for their day-to-day card spending, while simultaneously helping boost turnover.

The €pistrofi loyalty programme continued to facilitate the business bond between existing and prospective customers by rewarding their overall relationship with the Bank, achieving an increase in the value of transactions, despite the adverse conditions prevailing in the retail market. Since 2006 €200,000,000 returned to clients through the €pistrofi loyalty programme.

Eurobank remains a leader in the field of co-branded credit cards, delivering value to its customers’ day-to-day transactions through exclusive partnerships with entities that include Greece’s largest telecommunications provider (COSMOTE World Mastercard), the largest shopping malls in the country (YES Visa), a high-end retail store (Reward World Mastercard) and a major supermarket chain (Masoutis Visa).

Since the beginning of the COVID-19 pandemic crisis, Small Business Banking has acted proactively, keeping close contact with clients, in order to:

• Ensure business continuity for small businesses, by employing all available online resources and alternative channels.
• Offer relief to businesses directly affected by the lock-down, by making the most of the government’s relevant moratoria. Especially for the hotel sector, additional measures were taken.
• Provide businesses with the essential liquidity for restarting the economy, by participating in all State and EU available funding programmes.

In the context of the wider support to small businesses and in order to support their competitiveness and digital transition, Eurobank continued to foster its business ecosystems by entering into agreements with dedicated companies, offering them access to quality nonbanking services, (e.g. digital marketing, hotel management, certifications, training, equipment, logistics, couriers).

As a result of these initiatives, the Bank extended new credit limits and term loans amounting to €516 million.

Corporate and Investment Banking

The Group Corporate and Investment Banking (GCIB) General Division provides fully integrated business solutions and excellent customer service to its clients, consisting of large and complex corporate customers and medium-sized enterprises, both in Greece and SE Europe. The main client service pillars are the Large Corporate Unit, the Commercial Banking Unit, the Structured Finance Unit and Shipping.

In 2021, for yet another year, the effect of the COVID-19 pandemic continued and priority was given to protecting employees and providing seamless service to all clients. The necessary measures for protecting the GCIB staff were adopted and modern digital tools and equipment were provided for teleworking, resulting in more efficient cooperation with clients and colleagues, and offering a high level of service. GCIB executives were able to make the most of the opportunities created by the pandemic, with outstanding performance during the year.

During the first quarter of 2021, emphasis was placed on implementing the temporary financial relief measures introduced in 2020, so corporate customers affected by the pandemic could join the temporary moratorium and freeze their arrears. In collaboration with the State, support solutions were offered to customers through Eurobank’s participation in the COVID-19 Loan Guarantee Fund, within the context of the Business Financing – Entrepreneurship Fund (TEPIX) II programme and the Working Capital with interest rate subsidy by the Hellenic Development Bank (HDB) subprogramme, with new disbursements amounting to around €747 million in total.

Eurobank’s position as the Development and Prosperity Bank was strengthened through the leading role in all flagship projects carried out in 2021, but also through continuously supporting strategic sectors of the Greek economy and financing sound business plans, this way encouraging growth efforts of businesses, their investment plans, and their extroversion.

GCIB played a key role in some of the most important projects for the development of the Greek economy, participating in projects that foster sustainability, such as the €300 million sustainability-linked syndicated revolving bond loan granted to PPC SA and the issuance of multiple bond loans amounting to €507.5 million to Sani/Ikos. On top of these transactions, Eurobank acted as MLA, facility agent and bondholder in a €435 million facility to DESFA SA, as coordinator, arranger and bondholder in two syndicated facilities amounting to €130 and €140 million to ElvalHalcor (also acting as facility agent in the latter facility), and successfully completed many smaller but equally important transactions. The Bank’s participation in these transactions showcases its ability to plan, organise and carry out complex projects, supporting them both financially and through multilateral banking services, and to innovate by bringing solutions to the market that are compatible with the new reality faced by clients.

Large Corporate (LC) serves as the main point of contact offering financial solutions and products to major clients, and manages a portfolio which, at the end of 2021, exceeded €4 billion (incl. corporate bonds). The portfolio included more than 120 groups of companies, mainly operating in the energy, manufacturing, retail, services, health and construction industries. In 2021 LC continued to support strategic sectors of the Greek economy and financed large-scale robust business plans, achieving a net credit expansion of approximately 4.1% compared to 2020. A significant achievement of the unit was its participation in the €125 million syndicated bond loan (Eurobank participation: €62.5 million) to Sunlight SA, to refinance loan commitments and finance the company’s five-year (2021-2026) business plan.

The Commercial Banking (CB) lending portfolio amounted to €3.47 billion in 2021. The CB network is responsible for managing relationships with MidCaps nationwide, through its network of business centres. This arrangement ensures proximity, closer monitoring of customer operations and performance, and proactive risk management, aiming to maintain the Bank’s asset quality. In 2021 CB contributed to the successful completion of important transactions. These include Asso.subsea, with a €30 million working capital credit line with a 3-year tenor for financing the group's development plans (total capex: €44 million – new special purpose ship and equipment / renovations-reconstructions), given the high demand for RES projects and interconnection internationally; and the new syndicated bond loan amounting to €30 million in total (Eurobank participation: 50%), issued by Melissa Kikizas SA for fully (100%) acquiring Terra Creta SA (operating in the food industry) and refinancing the existing debt of the company.

Structured Finance (SF) offers full and integrated services through five dedicated departments: Project Finance, Commercial Real Estate Finance, M and A Financing and Structured Solutions, M and A and Sponsors Financing, and Hotels and Leisure Finance. Based on their industry know-how and expertise, the SF departments coordinate the actions of all Group companies, both in Greece and abroad, while they are responsible for handling both performing portfolios and certain non-performing loans. The Unit manages a performing portfolio of €2.7 billion, achieving a net credit expansion of approximately 10% compared to 2020. In 2021 the Bank continued to strengthen its position in strategic projects, such as its participation with multiple roles in a syndicated bond loan of €626 million issued by Olympia Odos.

The Syndicated Debt Solutions Unit is responsible for the structuring and arrangement of a broad range of dedicated and highly structured syndicated financings, including corporate bond loans, convertible bond loans, merger and acquisition financings, as well as debt restructurings. In 2021 the Bank maintained its leading position in the market, holding an active role in the structuring of the majority of syndicated loans/bond loans granted by the Greek banking system within the year, with the volume of transactions reaching around €2.8 billion. The Unit is also actively engaged in the secondary loan market, contributing to optimising the Bank’s portfolio through loan asset acquisitions/disposals, and retaining communication with international and domestic investors to identify opportunities.

Eurobank has the leading position among local banks and the 2nd among international lenders to Greek shipping, according to Petrofin Research for 2021. As of Dec 31 December 2021, the global shipping portfolio of Eurobank Group amounted to USD 3.38 billion, an increase of almost 29% compared to the previous year. Having developed a solid, high quality shipping portfolio, Bank’s strategy is to grow it further by enhancing the partnerships with existing clients and establishing new relationships very selectively, with new shipping groups that meet the Bank’s lending criteria. The growth of the shipping book also gave rise to ample cross-selling opportunities with the shipping clientele. Bank activates in the main shipping sectors, dry, tankers and container, financing both newbuildings and second-hand vessel acquisitions. The Shipping Division is based in Piraeus and constitutes the Bank’s “Shipping Hub”, overviewing the shipping desks of Eurobank Cyprus and Eurobank Private Bank Luxembourg.

Investment Banking offers strategic financial advisory services to corporate clients and their shareholders for mergers, acquisitions, disposals and capital restructurings, as well as for raising capital either through private equity transactions or through the capital markets. In 2021 the Bank provided strategic financial advisory services to a number of corporate clients, including the Public Power Corporation (PPC) for the sale of its 49% stake in HEDNO at €2.1 billion, as well as for PPC’s share capital increase of €1.35 billion, acting as joint lead underwriter for the public offering in Greece and as joint bookrunner for the international offering. Eurobank has demonstrated an excellent track record in debt capital markets and in domestic investment banking, and has participated in a number of marquee transactions.

Global Transaction Banking (GTB) provides quality transactional banking products and services to corporate and institutional clients. The following business units operate within GTB:

• Cash and Trade Services: The Unit offers comprehensive and innovative transactional banking services for Eurobank’s corporate and SME clients, by assisting them in streamlining and automating their daily processes, mitigating risk and expanding their reach. The key services are payment and cash management, trade and supply chain finance, payroll and bancassurance.
• Securities Services: Eurobank is the only provider in Greece offering a full range of products, including local and global custody, issuer services, derivatives clearing, margin lending, middle-office services and fund accounting, to both local and foreign investors, across all types of instruments. In 2021 the Securities Services Sector continued to provide quality posttrade services to the Group’s institutional clients and expanded its products and services to new market segments, while offering innovative solutions, in accordance with the investors’ expanding needs.

Eurobank Factors’ figures experienced a significant rebound in 2021, reaching a historical high in turnover (total assigned receivables) and a peak in both outstanding lending balances and profitability, despite persisting pressure on pricing. The company managed to reverse the negative situation related to the pandemic crisis, performing better than its peers. An incontestable market leader for the last 15 years, the company maintains its positioning among the top ten performers in cross-border factoring according to Factors Chain International (the representative world factoring body), while holding a leading position in suppliers’ financing/ reverse factoring in the region of SE Europe, further investing in a fully automated platform, soon to be launched.

Eurobank Leasing SA increased new business during 2021 by 42% compared to 2020, with over €130 million in new disbursements, around 26% in movable assets overall, 42% in industrial equipment/all types of machinery and 18% in passenger vehicles. (Source: Association of Greek Leasing Companies). Eurobank Leasing’s key strength is its extensive experience in the Greek leasing market, which has led to a sound knowledge of all financial leasing products and services. Eurobank Leasing operates as a separate product centre within the Group, enabling the company to make use of important financial and cost synergies, while at the same time retaining its independence, which ensures flexibility and speed in dealing with the key business, risk and legal aspects of leasing.

Eurobank Leasing’s main goals are to provide financing mostly to export-oriented and industrial companies in the form of leasing for production equipment, vehicles and selective real estate. Operational improvement efforts through restructuring and streamlining the company’s efforts, methods and procedures continued in 2021. Eurobank Leasing played a significant role in ESG investments during the year, especially in electromobility and optical fibre, while at the same time the company tried to revitalise its role in vendor financing, by creating new ecosystems with important vendors in the IT, electric vehicle and medical equipment sectors.

The Global Markets (GM) Sales and Structuring teams have been instrumental in providing clients with value-added solutions and hedging strategies in a volatile market landscape. In a zero-yield world, Eurobank focused on structured notes, becoming the first bank in Greece to offer ESG and climate-change related exposure to its clients. Its aim is to actively engage in offering products and services that promote environmental and social issues, and contribute positively to society. The Sales Team has been focusing on hedging strategies and enhancing its digital GM presence. Eurobank became the first bank in Greece to offer round the clock (24/5) online spot FX services and it is expanding its digital offering to provide its clients with a comprehensive and truly integrated GM digital offering. On the syndication front, the Bank maintained its leading role and was successfully involved in most Greek corporate issues that came to the market in 2021.

Treasury (a part of GM) is active in the wholesale capital markets as well as the interbank market, so as to manage the interest rate and currency risks of the banking book, as well as Eurobank’s liquidity and cost of funding in compliance with the established risk management framework and business objectives. In the second half of 2020, and in anticipation of the Bank’s senior preferred issuance planned for 2021, Treasury engaged with supranational organisations with the objective to establish a cooperation framework that would support lending to eligible green projects through its EMTN issuance. This framework was finalised and became operational in early 2021, and enabled their participation in the Bank’s successful – in terms of cost and broad reach of international investors – issuance of €1 billion in 6NC5 senior preferred bonds (in April and September 2021). These marked the return of the Bank to the capital markets (of senior unsecured bonds) since 2014, but also enabled it to meet its 2021 minimum requirement for own funds and eligible liabilities (MREL) requirement target. In addition, working with Sustainalytics as the external second-party opinion provider, Treasury also established the Bank’s Green Bond framework, with the aspiration to issue such bonds, when appropriate, to further support green lending. Treasury also maintains a dedicated Correspondent Banking Division, offering dedicated relationship management to all its clients, and providing centralised services for the Eurobank Group, enabling cost-effective payments, execution and optimal cash management solutions. 

In each country, GM operations are standardised and report directly to GM International in Greece and to the local CEO. The Group’s strategic objective is to preserve and develop its important regional footprint in the areas of liquidity management, foreign exchange, interest rates, bonds and derivative trading, as well as the sale of financial and investment products in the local markets. Postbank Bulgaria has been the first bank in Bulgaria during 2021 to offer ESG climate-change exposure to its clients via structured deposits.

The Group sets strict limits for transactions it enters into, which are monitored on a daily basis. Limits include exposures towards individual counterparties and countries, as well as VaR limits. The Group uses an automated transaction control system, which supports GM in monitoring and managing positions and exposures.

Major Projects

Eurobank is actively participating in projects that have significant benefits for the economic growth of Greece and support the sustainability transition of the Greek economy. It finances landmark projects, such as the Metropolitan Pole of Hellinikon, Agios Kosmas and the CreteAttica electrical interconnection. Overall, in 2021 it approved approximately €1 billion in loans with sustainable characteristics.

Eurobank documented and approved its Sustainable Finance Framework, which assists in identifying sustainable/green financing opportunities (financing the transition of the Bank’s clients, while preparing to finance eligible projects in the context of the Recovery and Resilience Facility). 

• Public Power Company SA (Sustainability-Linked Syndicated Revolving Bond Loan). Eurobank acted as Mandated Lead Arranger and Initial Bondholder in an up to €300 million Sustainability-Linked Syndicated Revolving Bond Loan (Eurobank’s participation: 50%), with a 3-year tenor, granted to PPC SA. The loan has a sustainability performance target included in the facility, for a 40% reduction in the company’s CO2 emissions by December 2022 (using 2019 as the base year), and a respective incentive to the company. The target is aligned with the overall PPC sustainability strategy.
• Sani/Ikos Group (Sustainability-Linked Syndicated Bond Loans). Eurobank acted as Coordinator, Mandated Lead Arranger and anchor Bondholder for €507.5 million in Sustainability-Linked Syndicated Bond Loans granted to the Sani/Ikos Group. The loans include a set of sustainability performance targets that support the group’s sustainability strategy: CO2 emission reduction, energy efficiency and circular economy (zero plastic and recycling). This transaction is part of the ESG Program for Hotels "Doing Business Sustainably in Tourism" (Epixeiro Viosima ston Tourismo) that the Bank has established.

The Bank’s target for 2022 is to further expand its RES project lending portfolio and to continue to support Greek and foreign investors operating in this sector.

Sustainable Bonds Projects

In 2021, we acted as joint-lead arranger for €2.5 billion in green and sustainable bonds issued by Greek corporates:

• Gek Terna SA (€300 million, 2.30% Sustainability-linked senior notes due in 2028, listed in the ASE) – This was the first fixed-income transaction in the Greek market to be certified as sustainability bond with its coupon linked to CO2 emissions reduction targets. Eurobank acted as sole Advisor to the issue.
• Noval Property REIC (€120 million, 2.65% Green senior notes due in 2028, listed in the ASE).
•  Prodea Investment REIC (€300 million, 2.30% Green senior notes due in 2028, listed in the ASE). 
• PPC SA (€775 million, 3.875% Sustainability-linked callable senior notes due in 2026 and €500 million, 3.375% Sustainability-linked callable senior notes due in 2028).
• Mytilineos SA (€500 million, 2.25% Green senior notes due in 2026). 

ESG Deposits Transactions

The €200 million raised from 49 companies during the first “wave” of ESG deposits, have already been allocated by the Bank towards sustainability-linked loans.

Wealth Management - Asset Management

Mutual Fund Management

Eurobank Asset Management MFMC maintained its leading position in Greece, with €4.5 billion in total assets under management as of 31 December 2021. Specifically, regarding mutual funds, for 13th consecutive year the company maintained the 1st place among management companies in Greece, with a 28.8% market share and €3.3 billion in assets under management (according to the HFAMA).

The majority of net flows has been directed to Greek bond funds as well as other funds used as underlying assets for bancassurance products. Funds with global strategies in their investment objective, absolute return funds and ESG funds also gathered significant flows.

The quality of the Company’s fixed income management expertise was acknowledged by Citywire Global, the international mutual fund asset manager rating agency.

2021 was a particularly good year for institutional asset management, in terms of relative returns, with total assets under management reaching €534 million. Respectively, positive returns were recorded in the portfolios managed on a discretionary basis for Private Banking clients in Greece, Cyprus and Luxembourg, with total assets amounting to €619 million.

Finally, total funds under distribution to Eurobank’s Private Banking clients, supported by the Company in terms of analysis, evaluation, classification and selection of UCITS managed by third asset managers, amounted to €476 million in 2021.

Private Banking

2021 was yet another very challenging year for Private Banking, with most private banks feeling the deep need to revamp. Making the most of the negative interest rate environment, the industry enjoyed normalised trading activity and, despite the effects of the pandemic on society and the real economy, the Group Private Banking Division witnessed a significant inflow of new clients, resulting in an impressive increase in assets under management (16%) and a healthy increase in the loan portfolio (11%).

However, with the pandemic accelerating the expectations of clients, transformative initiatives have been more than necessary. In this particular crisis, clients valued the ability to continue operating without restrictions, as well as accessing secure communication channels with their Investment Advisors. At the same time, it has become more than obvious that clients are now placing great value on the ability to access all services online.

To address this new mandate, Private Banking remains deeply focused on implementing the New Generation Private Banking, which aims at business simplification and alignment of products, processes and IT systems, this way ensuring the best experience for customers. Human resources, processes and technology are combined and interact, so as to facilitate access to a reliable digital environment, with a customer-centric orientation and adaptability to market conditions and dynamics. This transformation project has been deployed and is expected to be fully operational as soon as possible, so as to further enrich the services in the four regions Group Private Banking is present: Luxembourg, United Kingdom, Greece and Cyprus. This new operational model will offer shared experiences for all Private Banking customers, regardless of where the customer will retain their investment funds. This model will allow every customer, wherever they are located, to enjoy the same top quality services, in a digitalised manner. The target is to become the strongest Private Banking service provider in the region.

Equities Brokerage

In 2021 Eurobank Equities SA accounted for 18.3% of the volume of transactions in the Athens Exchange, solidifying its position as one of the brokers of choice for the institutional investors active in the Greek market, in addition to thousands of private investors.

The Company is a leader in the industry, offering access to a full range of investment products, including trading in stocks, derivatives, bonds and mutual funds around the globe. Qualified officers and exclusive representatives and associates provide services to retail investors, while EurobankTrader is the company’s digital image. The latter was recently upgraded and is constantly developed, exhibiting a plethora of features for retail investors, such as real time price-feed from various exchanges, access to technical analysis tools, economic news and the company’s research.

Eurobank Equities’ award-winning Research Division (ranked by Institutional Investor/Excel as No1 provider for Greece Research 6 times in the last 9 years) is committed to generating actionable investment ideas by providing timely research and insights on the multiple sectors that it covers. Its research universe includes more than 20 listed companies, accounting for approximately 85% of the ATHEX capitalisation and 90% of the traded value. Eurobank Equities Research also provides secondary coverage on the largest foreign markets and listed large cap names.

Finally, the Market Making Division of Eurobank Equities provides liquidity on the shares of 40 listed corporate entities, 3 corporate bonds and 32 derivatives, capitalising on its extensive experience and proprietary technology.

Other Operations

Public Sector Banking

In 2021 public sector and NPO banking focused on supporting the government initiative for digital transformation in the public sector. For a second consecutive year, Eurobank was the top choice among institutions for automatic collection of payment dues (26 out of 61 institutions chose Eurobank), meeting the target set to support the digital transition of state authorities.

The Segment continued to sponsor public hospitals in their effort to deal with the challenges created by the pandemic. In the context of cooperating with local authorities, the Public Sector Segment, continued to support the Social Groceries and other initiatives, according to the priorities set by the authorities. At the end of the year the Segment held a 23.02% market share in local authorities deposits.

Retail International Customers Segment

In 2021 Eurobank established the Retail International Customers Segment, a One Stop Hub for clients residing outside Greece. The dedicated International Customers team focuses on offering continuous support and developing new products so that non-resident customers can make the most of what Greece has to offer as a top investment destination.

Tailor-made products and services were offered to cover the investment, housing and other banking needs in Greece both for the Bank’s existing client base as well as for new clients. Customers benefit from Eurobank’s strong digital background and phygital services, with access to a range of products and services, such as remote services, mortgage loans, consultancy and support services in real estate and taxation issues, dedicated International Banking helpline and dedicated international v-Banking RMs. 

Non-Banking Services for Businesses (Business Exchanges SA)

At a time when efficient management and cost-cutting are a priority for all businesses in Greece, services such as e-procurement and e-invoicing contribute to achieving these goals. Business Exchanges is an important vehicle for the Group’s digital transformation programme and one of the Group’s key hubs for the restructuring and consolidation of its financial and HR services.

For the 21st consecutive year Eurobank, through its subsidiary Business Exchanges SA, successfully operated in the B2B transaction sector, offering value-added digital services to its customers. Business Exchanges assists businesses, including the Eurobank Group, to streamline their supply chain through e-auctions, e-procurement and e-invoicing services. Also, it offers financial management as well as accounting services for businesses to 5 Group subsidiaries and 13 SPVs.

In addition, Business Exchanges provides the Bank with product support and intermediation services (for consumer loans, mortgage loans and bancassurance products), through outsourcing agreements with EuroPhone Banking and Telemarketing.

During the year, the Company successfully carried out 312 sourcing events (93 e-auctions and 219 RFPs) vs. 165 sourcing events in 2020, for the Eurobank Group, private sector companies and public sector organisations. Regarding the Group’s e-procurement, transaction turnover through the e-procurement platform reached to €91.7 million in 2021. Revenues from e-auctions and e-procurement increased by 99% and 11% vs. 2020, respectively. At the same time, for e-invoicing activities, the turnover related to the digital filing and distribution of invoices increased by 4% compared to 2020.

Remedial Management

After the strategic partnership with doValue SpA and the smooth transition to the new operating model for NPE management, the Group is implementing its NPE Strategy Plan through doValue Greece for the assigned portfolio and the successful securitisation transactions. 

At the same time the Group made the most of all the Greek State measures (Bridge Programmes) and planned solutions that will gradually lead its clients to the pre-COVID-19 payment schedules. In this respect, and in line with the regulatory framework and SSM requirements for NPE management, in March 2021 the Group submitted its NPE Management Strategy for 2021-2023, along with the annual NPE stock targets at both Bank and Group level. The plan had taken into account the successfully implemented “Mexico” NPE securitisation of gross carrying amount of around €3.1 billion and forecasted the decrease in the Group NPE ratio to 8.8% by the end of 2021 (actual figure: 6.8%, partly due to lower than expected actual NPE formation and partly to higher new originations), 6.4% in 2022 and below 6% in 2023. 

Retail Remedial Management

As regards the Remedial Management for Retail (mortgages, consumer loans, SBB and professionals), the Bank proceeded with the following strategic and operational actions:

• Exceeded the annual targets with respect to the NPE stock reduction submitted to the Single Supervisory Mechanism (SSM).
• Defined and implemented a set of emergency relief measures for those affected by the COVID-19 pandemic. This included moratoria on interest and capital payments for mortgage and consumer loans, and moratoria on capital payments for small business loans and professionals.
• Minimised the impact of the emergency relief measures expiration, by successfully implementing the government subsidy to loans in order to protect primary residences (Bridge I and II Programmes). 
• Redesigned modification solutions, in order to ensure the subsidy was maintained during the modification and gradual increase in loan instalments upon expiration of the subsidy, to achieve smooth transition to a viable repayment plan (preventing a cliff effect).
• Designed and provided specific modification solutions to debtors who were not eligible for inclusion in the Bridge Programme.
• Continued to enrich collection strategies, aiming at reducing the default rate of new modifications and optimising the management administration cost per borrower segment based on their risk profile and payment history.

Corporate Remedial Management

As regards the Remedial Management for Corporate, the Bank proceeded with the following strategic and operational actions in 2021:

• Exceeded the annual targets with respect to the NPE stock reduction submitted to the Single Supervisory Mechanism (SSM).
• Continued monitoring the NPE inflows-outflows, with a view to substantially reducing NPEs.
• Closely monitored the assigned and securitised portfolio of SMEs managed by dVG, in order to implement a more effective NPE target reduction strategy.
• Defined and implemented emergency relief measures for companies affected by the COVID-19 pandemic, including moratoria on capital payments.
• Designed and implemented a specific support framework for hotels, which included moratoria on capital instalments with an equal increase in loan term.
• Minimised the impact of the emergency relief measures expiration, by providing targeted facilitations and adjusted modification solutions.

Eurobank Cyprus Ltd (Eurobank Cyprus) continued its profitable growth path in 2021 with steady steps, strengthening its position in the banking sector of Cyprus and consolidating for yet another year its leading presence in the fields of International Business, Wealth Management, Corporate and Commercial Banking, and Capital Markets.

Net profit amounted to €73 million after taxes. Eurobank Cyprus holds a strong capital position, with the Capital Adequacy Ratio amounting to 25.4%, and a strong excess liquidity, with deposits reaching €6.6 billion. The loans-to-deposits ratio (excluding loans secured by deposits) stood at 29%. At the same time, Eurobank Cyprus maintains a very good loan portfolio quality, as the non-performing loan ratio (NPE) ratio, according to the directives of the European Banking Authority (EBA), remains very low at 2.6% and on a statutory basis the NPE ratio is 2.4%. The cost-to-income ratio at 31.3% reflects the very efficient operation of Eurobank Cyprus.

Eurobank Cyprus shows profound dedication to clients and their financial needs, by constantly improving the products and services provided. Currently, Eurobank Cyprus is at the last stage of introducing a new state-of-the-art core IT system based on business simplification and the alignment of products, processes and procedures, to ensure the best experience for customers. Human resources, processes and technology will be combined to facilitate access to a reliable digital environment, which will be customer-focused and dynamically oriented to the changing market conditions. This transformation will contribute to further strengthening Eurobank Cyprus’ services and its competitive leading position in wholesale banking in Cyprus.

Based on the customer-centric operating model, albeit with rational risk management, Eurobank Cyprus continues to support the economy and sustainable development initiatives in Cyprus, but also to create new jobs, based on developing its own business. In the context of its corporate social responsibility strategy, Eurobank Cyprus undertakes initiatives that are aligned with the values and principles of the Group, by focusing on areas that are reflected both in the society and the economy of Cyprus. Since its inception, Eurobank Cyprus has been supporting the Cypriot economy and sustainable developmental initiatives, promoting productive investment, innovation and entrepreneurship, and actively participating in the social and cultural life of the country, always operating with respect towards the environment.

Eurobank Cyprus is committed to supporting innovation and entrepreneurship though the following initiatives:

• Cyprus Seeds aims to help in the transition of academic research from the university laboratory to the marketplace, by creating a pipeline for research projects to make it to the market. Besides the investment and growth opportunities and the creation of new business ventures, this programme could help retain talented researchers in Cyprus, and hopefully assist in restraining the brain drain of post-doc and PhD students of various universities, who would have been unable to complete their research due to the limited funding and resources. Besides monetary funding, Cyprus Seeds is offering the opportunity for one-to-one mentoring along with a series of practical workshops aiming to change the mindset of the academic researchers and help transform the research projects into presentable, investable startups. This year, the most mature research work will be presented abroad to potential investors in an event sponsored by Eurobank Cyprus.
• RISE is the first Research Centre on Interactive Media, Smart Systems and Emerging Technologies in Cyprus, with the goal to assist in and facilitate scientific and innovation-led economic growth of Cyprus. This instrument will come in the form of a Centre that combines research and innovation competence, enabling researchers to extend their research and collaborate with other researchers.
• Education and Culture. Eurobank Cyprus has completed its sponsorships to doctoral and postgraduate scholars of the School of Molecular Medicine, Institute of Neurology and Genetics of Cyprus, and is a sponsor of the Medical School of the University of Cyprus. As an active social citizen, Eurobank Cyprus endorses culture by supporting local artists and cultural events, encouraging volunteering within the organisation, funding various charitable foundations, and acting as a protector of the environment through reduction of its own carbon footprint. 

Eurobank Private Bank Luxembourg SA (Eurobank Private Bank Luxembourg) was established in Luxembourg in 1986 and operates a branch in London and a representative office in Athens. Luxembourg is a leading financial centre and international Wealth Management Centre of Excellence, having a AAA credit rating and well-functioning institutions. Along with London’s global reach, they constitute key factors for attracting new clients.

The bank offers services in Private Banking, Wealth Management and Investment Fund Services, as well as selected Corporate Banking services. Through a wide range of innovative products and services, and highly qualified and experienced staff, the bank follows a targeted business model, along with a conservative approach in terms of risk taking.

During 2021 the bank maintained satisfactory profitability levels and continued to attract new clients, while at the same time keeping its capital adequacy and liquidity at very high levels. At the end of 2021, the capital adequacy ratio stood at 25.2%, and the liquidity coverage ratio at 410% (under Basel III), while the loans-to-deposits ratio (excluding cash collateral loans) stood at 36.07%. Furthermore, Eurobank Private Bank Luxembourg has launched a major project to upgrade its systems, whereby, through state-of-the-art technologies, it aims to remain highly competitive in the new digital era.

In the area of Private Banking, in 2021 the bank expanded significantly its clientele as well as its clients’ total portfolios. In cooperation with the bank’s dedicated Investment Advisory and Wealth Structuring teams, Private Banking offered its clients investment products that address market challenges and comply with the new and more demanding regulatory framework. In addition, the completion of the Eurobank Private Bank Luxembourg all-new transactional e-Banking further improved the overall client experience.

In Bulgaria, the Group operates through its subsidiary Eurobank Bulgaria AD (Eurobank Bulgaria). At the end of 2021 Eurobank Bulgaria had a network of 205 branches throughout the country and close to 3,000 employees. 

In 2021 Eurobank Bulgaria continued to deliver solid financial results, leveraging on the recovery of the Bulgarian economy and the strong demands for loans from the clients. Gross loans increased by 16.5% to €4.7 billion, 44% of which were loans to households and 56% loans to business. Market share rose by another 40bps to 12.0%. Total deposits increased by 20% to €6.3 billion, corresponding to a market share of 11.3%. Liquidity remained strong with the net loans-to-deposit ratio at 72.6% as of 31 December 2021. Total income rose by 6% to €246.6 million, while net profit reached €76.4 million.

For another year Eurobank Bulgaria kept its excellent profitability ratios – return on equity was 10.9%, while the cost-to-income ratio improved slightly to 46.73%. The NPE ratio dropped by more than 1.7pp to 4.9%, 170bps below the market average. In 2021 Eurobank Bulgaria maintained its solid capital buffers. The capital adequacy ratio was 20.6%, well above the regulatory requirements.

The strategy of Eurobank Bulgaria remains unchanged and rests on three pillars: organic growth, digitalisation and innovation, and customer service. Several transformation initiatives are underway aiming to increase the speed to market, simplicity and lean thinking. 

In 2021, on the occasion of its 30th anniversary, Eurobank Bulgaria launched its largest, innovative and completely online-based corporate social responsibility initiative “A Universe of Opportunities’’, supporting social entrepreneurship and contributing to the positive change within the community. 

In June 2021, for another year in a row, Eurobank Bulgaria was a key partner in the “Postbank Business Run” charity relay run, annually organised by the Runner club. In support of two causes, 240 teams from 87 companies competed and raising funds over €5,000.

In July 2021 Eurobank Bulgaria and Mastercard developed a joint project for reconstruction and expansion of the park infrastructure at Vitosha Natural Park, creating a place for innovative learning or fun: the “Green Classroom”. 

In 2021 Eurobank Bulgaria started its strategic partnership with the Finance Academy in an educational project aimed to increase financial literacy. 

Eurobank Bulgaria started a long-term cooperation with Sofia University, providing lecturers for the Finance and Banking Master’s programme of the Faculty of Economics and Business Administration. 

In Serbia the Group’s subsidiary marked a significant milestone, as Eurobank a.d. Beograd joined forces and legally merged with Direktna Banka a.d. Kragujevac in December 2021. The combined bank, now operating under the name Eurobank Direktna a.d. Beograd (Eurobank Direktna) is the 7th largest lender, taking up 5.7% of the Serbian asset base, or over €2.4 billion in total. As of 31 December 2021 Eurobank Direktna ran 127 branches and 5 business centres.

Despite the challenging circumstances caused by the COVID-19 pandemic, the Serbian economy rebounded strongly in 2021, following a mild contraction of 0.9% in 2020, recovering faster than projected. The flash estimate shows a rise in the output by a full 7.5% for 2021, outpacing regional peers. Altogether, the GDP in Serbia is expected to remain on its strong path, rising by 4.0% to 5.0% in the next three years, unless inflation spirals out of control or global uncertainties in the geopolitical arena take a turn for the worse. The banking business in Serbia is increasingly competitive, as market conditions remain challenging with record-low interest rates in both local and foreign currencies, bringing the net lending interest margins at a decade low of around 2.7%, down by 0.3pp y-o-y. Total assets for the banking sector increased by 9.6%, to around €42.9 billion, and stand at 81% of the country’s GDP. NPLs remain low, at just 3.5% at the end of 2021 vs. 3.7% seen a year before. FDIs demonstrated exceptional resilience, further improving in 2021 for a total of €3.9 billion, 27% higher y-o-y and 2% up from the pre-pandemic 2019.

Eurobank Direktna managed to achieve most of its strategic goals, maintaining its operating income within the projected range, all the while retaining the image of a strong and stable financial institution within the Serbian banking sector. Eurobank Direktna efficiently took part in all measures towards preserving stability and liquidity, including the continuation of the state guarantee scheme and the moratoria on the outstanding portfolios for certain vulnerable groups.

Despite the continued pandemic-induced crisis, on top of the strong pressures on the lending margins, the Group’s activities in Serbia generated pre-provision income of €21 million and net profits of €4.4 million (excluding the one-off restructuring and transactional costs related to the merger). Statutory capital adequacy remained robust, at 20.23%, vs. the NBS (National Bank of Serbia) minimum threshold of 8%, while NPEs reached 6.8% at year-end 2021.

Corporate social responsibility remains an integral part of the Eurobank Direktna business strategy. More than €4.8 million have been invested in the local community so far through key CSR pillars – education, healthcare, environment, culture and inclusion. Eurobank Direktna continued its support to the healthcare system by donating RSD 1.2 million to the Neonatal Hospital in Kragujevac for the procurement of incubators. The “A School Designed for You” project continued in 2021 by donations to three high schools totalling RSD 3.5 million, with the support of the Ministry of Education and the “Eurobank Direktna Big Heart” Mastercard affinity credit card users.

Information Technology is at the core of Eurobank’s strategic growth in the new post-pandemic era. As a critical enabler to the strategic objectives of the Bank, technology will play a vital role in the “Eurobank 2030” transformation programme. In that context, two major transformation initiatives have been introduced to upgrade the IT architecture towards a flexible model to support growth and efficiency. To this end, the Group has embarked on an ambitious longterm initiative to shift its IT infrastructure to the cloud and to implement a new data and analytics platform. Over and above, cloud computing will play an important role in the Bank’s sustainability and ESG endeavours, by reducing the amount of carbon dioxide emissions.

At the same time, Eurobank continued its digital transformation, investing in strengthening its human capital in Technology, supporting its operations more efficiently and making the most of innovative technologies.

Furthermore, through targeted IT projects, the Bank successfully responded to the many regulatory needs arising from government measures in response to the pandemic, as well as to the Bank’s business decisions to support borrowers, businesses and individuals.

In line with these objectives, the General Division of Information Technology mainly focused on the following areas:

• Further enhancing the omnichannel experience, which encompasses digital channels and the branch network, with the most important being redesigning the Future Branch, introducing an end-to-end digital loan, making contactless mobile payments available (Google, Apple, Garmin devices), integrating the electronic KYC process, and enabling contract signing with an e-signature.
• Continuing automating and digitising the Bank’s processes relating to credit underwriting for SME/small business and individual loans, leveraging new technologies, such as OCR and business rule engines.

• Offering new data and analytics capabilities to enable real-time notifications and new credit models, such as early earnings and pre-advised limits. In addition, working closely with the Business and Risk Analytics teams, gradually introducing an analytics factory that will leverage artificial intelligence/machine learning.
• Introducing new product platforms in the areas of Investment Management along with payments and trade finance. At the same time, focus is given into modernising the core banking applications, such as the Corporate Loan Platform.
• Drastically reducing NPEs through respective securitisations (project Mexico and Wave), achieving a single-digit NPE ratio.
• Aligning with a multitude of regulatory directives. In total, the regulatory needs of the Bank made up 18% of business demand.

In 2021, more than 360 projects were delivered, with the availability of all IT services exceeding 99.994%. From an operating model perspective, more than 30% of the deliverables were completed using agile methodology, further expanding the DevSecOps way of working and consistently scaling the design thinking approach in the product management process. Furthermore, the technical and security infrastructure was enhanced significantly, ensuring uninterrupted services for an increased number of business transactions.

Finally, the technology transformation journey in the international subsidiaries is ongoing. In Cyprus, the replacement of the existing core banking system and digital channels with the Temenos platform is in progress. The platform will act as a blueprint to be later retrofitted in Luxembourg. At the same time, several digital transformation initiatives in Bulgaria are in progress. In Serbia, based on the recent strategic merger agreement with Direktna Banka, the legal merger has been completed, while the preparatory activities for the operational merger programme are ongoing.

Group Procurement Sector

Aiming to meet the needs of the branch network and the centralised units of the Group, the Group Procurement Sector receives relevant requests online. These requests are first evaluated and approved by authorised Bank executives through the competent Management Units.

A technical evaluation is performed by a committee whose members are qualified executives appointed by the Bank, and the result is sent to the Procurement Sector for the process to continue. The financial tenders are then unsealed and a relevant financial evaluation is performed, with simultaneous ranking of the financial and technical tenders. Once the tender has closed, the necessity and cost of the entire award is presented to the Group’s Procurement Committee for final approval.

The contracts include all the relevant terms for projects, goods or services, with a view to limiting any purchase-related risks, while special attention is paid to personal data (GDPR) issues. The new contract management system of the Procurement Sector was also rolled out in 2021. Based on this system, all contracts are recorded in a uniform and structured manner, with all the necessary information and costs.

The Bank currently handles the entire procurement cycle online, including the payments cycle, to ensure efficient management of all procurement requests. Using its supplier evaluation platform, it assesses its suppliers both in terms of quality and quantity, on an annual basis. It measures and weighs all the key financial data from the balance sheets of suppliers, supplementing the evaluation with qualitative information, elicited by means of targeted questionnaires addressed to qualified evaluators. Finally, a weighted objective score is obtained for each supplier, reflecting the progress and quality of the supplier’s relationship with the Bank.

Highlights

In 2021, in line with the Bank Procurement Policy, the Bank launched the Digital Signage for Eurobank Branches project through an RFP process, to promote its digital aspect to its customers, ushering in the new phygital era adopted by Eurobank. Following a special survey and assessment, the tender process for a new eProcurement Platform – cloud solution SaaS was successfully completed. This platform will incorporate all modern ordering technologies, as well as extensive reporting capabilities. In addition, a tender process took place for the Future Branch and the new image of the Bank regarding the branch network. Another highly important action was also the initiation of bundle deals with strategic suppliers, in an effort to increase the Bank’s leverage on large relationships, while achieving higher savings.

In addition to the online evaluation platform, the Bank’s Procurement Policy sets the procurement principles that ensure the method, quality, necessity and relevant cost for each individual purchase, while the supplier evaluation process supplements the impartiality of the evaluation by setting rules and criteria.

Part of 2021 highlights were also the completion of the complex Total Facility Management services tender (consolidating hard and soft services together) and the completion of the new International Procurement Guideline, which enhances and defines the relationship between the Group and foreign subsidiaries under common principles.

During 2021, through the Procurement Sector, the Bank handled 978 requests for IT supplies to the amount of €111 million, as well as 4,465 requests for other goods and services to the amount of €60.1 million. In addition, 384 contracts with suppliers were successfully completed, 87 of which were contract renewals and 297 new contracts.

Following the European legislation, the Bank also includes a resolution-proof clause in all contracts with suppliers. During 2021 the Bank incorporated 120 resolution-proof clauses in its strategic contracts and IT contracts in general, ensuring continuous support for applications and services on the part of its associates.

Another challenge that was addressed was the completion of 20 critical outsourcing contracts concerning IT products/services and non-IT goods and services, all reported to the Bank of Greece, according to the relevant procedures.

The Group Procurement Sector complied once again with the Bank’s Code of Conduct, in accordance with its principles and practices. The Code aims to protect its staff, its customers and mostly the Bank from any misleading practices.

Additionally, as indicated by the national legislation concerning labour issues, the Group Procurement Sector incorporates terms related to provided personnel in most of its contracts. The Bank was awarded the first prize for the “Supplier Evaluation for the Bank and Eurobank Group” initiative at the Bravo Sustainability Dialogue and Awards 2021, which proves its commitment to a sustainable approach towards its evaluation of suppliers.

Supplier Cooperation

Eurobank pays particular attention to the relationships it forges with its suppliers and business partners. In 2021 the Group continued to apply its centralised procurement model, which covers both domestic and foreign subsidiaries, while it carried out tenders to assign major projects, substantially saving on costs.

In November 2021 the Bank performed evaluations for IT suppliers, consulting services, technical services, construction services, as well as suppliers of other goods and services, adding, for the sake of quality and risk management, special indicators that measure: 

i. the suppliers’ level of dependency on the Bank compared to their total turnover,

ii. the Bank’s level of dependency on the suppliers in relation to their total turnover with the Company.

Furthermore, in the context of enriching and updating its relationship with suppliers, the Procurement Sector receives feedback on each supplier from the Business Units involved, with respect to the services provided, aiming for a more comprehensive approach to supplier relations.

The Bank’s suppliers and respective relations with each of them are reviewed at regular intervals through formal procedures, while the Procurement Committee ensures that the relevant procedures are followed both in terms of procurement necessity and in terms of operating cost containment. For reasons of transparency and with a view to safeguarding the interests of the Group, the Bank follows the Due Diligence Procedure for New Bank Suppliers. Based on this procedure, each new supplier must submit their published balance sheets and all necessary financial information going back three years, as well as disclose to the Bank the legal form, the real beneficiaries and the legal representatives of the company. Furthermore, new certifications are requested, which also integrate ESG criteria, with the aim of attracting suppliers who are aligned with both environmental and social factors.

The Bank runs an e-invoicing program, in cooperation with specific suppliers, where they issue invoices online, though a platform directly linked to the Bank’s central ERP system, saving time and cutting down on paper.

In the same context, e-auctions are held through the Ariba marketplace system for specific types of products and services, maximising both the financial benefit and the efficiency, while also improving the environmental footprint, by cutting down on the paper, used for the submission of financial and technical tenders.

In general, the benefits of the supplier evaluation process are:

• Saving on costs.
• Ensuring the quality of the products and services offered.
• Forging partnerships based on mutual benefit.
• Ensuring efficiency in procurement times.
• Ensuring transparency and meritocracy in the supplier selection process.
• Promoting green procurement and ESG evaluation criteria.
• Adopting a comprehensive approach to supplier relationships, taking into account the corporate relationship apart from the procurement turnover.

The Bank mainly works with suppliers who operate and are registered or have an office in
Greece (mainly in Athens or Thessaloniki). The rate of expenses in local suppliers (registered and
operating in Greece) compared to the Bank’s total expenses amounts to 71%, while the relevant
rate in foreign suppliers (registered and operating abroad) amounts to 29% (compared to 77%
and 23% respectively for 2020).

An integral part of Eurobank’s approach to sustainability is to foster strong relationships of trust, cooperation and mutual benefit, with all stakeholders affected by its activities, directly or indirectly. In this context, Eurobank promotes two-way communication and develops ongoing dialogue with stakeholders, to be able to actively meet the expectations, concerns and issues raised by all its stakeholders: Board of Directors, Executive Management, Investors, Shareholders and Investment Community, Employees, Customers and Clients, Business Community, Government and Regulators, Civil Society, Suppliers and Partners.

The GRI Reporting Principles for defining report content, namely the principles of Stakeholder Inclusiveness, Sustainability Context, Materiality, and Completeness, have been taken into consideration in the materiality analysis exercise of Eurobank, in which the Bank’s activities, impacts, and the substantive expectations and interests of its stakeholders have been considered.

Eurobank’s materiality analysis is the key process used to define the Annual Report 2021 – Business & Sustainability contents. The analysis was conducted to determine the material ESG topics that influence the decisions and assessments of its stakeholders, as well as reflect the wider environmental, social and economic impacts of Eurobank’s activities.

Eurobank conducts stakeholder mapping on an annual basis, taking into consideration both internal and external stakeholder groups, as well as potential changes of the Bank, its products, its services, as well as its business relationships.

In 2021 there were changes in the process of the materiality analysis conducted compared to the previous reporting period, as both the operational and financing activities of the Bank were taken into consideration, on top of a robust sustainability and responsible banking framework, resulting in an updated and further enhanced list of identified ESG topics.

The materiality analysis consisted of three phases:

Phase 1: Identification of ESG topics

The first phase of the materiality analysis aims to identify the ESG topics that reflect the needs and expectations of Eurobank’s stakeholders, as well as the wider impacts created by Eurobank, as a result of either its financing activity or its operation. To this end, the internal and external environment of Eurobank’s business model was assessed, taking into consideration, among others, the:

• ESG-related EU and national regulatory context.

• ESG-related sectoral and Eurobank-specific priorities as identified through:
  
   
  • UNEP FI Principles for Responsible Banking. This includes related strategic priorities, management systems as well as the results of the impact analysis of Eurobank conducted in the framework of the UNEP FI Principles for Responsible Banking.
  • GRI Sustainability Reporting Standards.
  • International and sectoral ESG disclosure standards, frameworks and initiatives, such as the TCFD, the Sustainability Accounting Standards Board (SASB), the GRI Financial Services sector supplement and the Athens Stock Exchange ESG Reporting Guide.
  • ESG indices and ratings, such as the MSCI, Sustainalytics, S&P Global, FTSE4Good, ISS ESG and Vigeo Eiris.
  • ESG best practices and ESG topics addressed by peer banks in Greece and abroad.
  • Press clippings and media coverage of Eurobank’s activities.
• ESG cross sector megatrends and global accords, such as the UN SDGs and the Paris Agreement and the EU Green Deal.

Phase 2: Prioritisation of ESG topics

As part of the second phase of the materiality analysis, Eurobank prioritised the identified ESG topics by conducting an e-survey addressed to internal and external stakeholders. The stakeholder groups that participated in the e-survey included:

Internal Stakeholders	External Stakeholders
Board of Directors Executive Management Employees	Investors, shareholders and investment community  Customers and clients Government and regulators Business community Civil society Suppliers and partners

The ESG topics were assessed to the extent that they:

• Influence the assessments and decisions of the stakeholder groups.
• Reflect Eurobank’s wider economic, environmental and social impacts.

Phase 3: Validation of material ESG topics

During the third phase of the materiality analysis, Eurobank’s ESG Management Committee validated the results of the materiality analysis. Accordingly, ten (10) ESG topics were defined as material for Eurobank and were mapped on the respective map.

Impact Analysis

As its first key step towards the implementation of the UNEP FI PRB, the Bank in 2021 utilized UNEP FI’s Portfolio impact analysis tool, a resource to identify its most significant impact areas at the portfolio level, which will in turn allow to develop a business strategy and set targets that will increase its positive and decrease its negative impacts, in the impact areas that are most significant, based on the nature, content and location of its portfolio.

The impact areas resulting from the tool are those encompassed by the Impact Radar (UNEP FI, Positive Impact Initiative). The Impact Radar aims to offer a credible and comprehensive set of impact categories that capture the sustainable development needs that underpin the SDGs (macro) while offering a basis against which indicators can be used to frame and measure financial contributions to sustainable development (micro). They also enable the identification of negative and positive impacts across the three pillars of sustainable development, allowing a holistic impact analysis.

The scope of the Bank’s portfolio impact analysis included its three key business activities, Consumer, Business and Corporate Banking for its operations in Greece.

The results of the impact analysis per business activity included the following:

• Consumer banking’s key positive impact areas included employment, economic convergence, housing and mobility. Its key negative impacts related to resource efficiency/security and climate.
• Business banking’s key positive impacts included culture and heritage, mobility, employment, housing, food and economic convergence while its negative waste, climate and resource efficiency/security.
• Corporate banking’s key positive impacts were economic convergence, energy and employment while its negative were resource efficiency/security, waste and climate.

Overall, throughout the bank’s key activities, its positive impacts converge to economic convergence, employment, housing and mobility while its negative to climate, waste and resource efficiency/security...

▲improvement
*ESG Ratings scores as recorded by 31.12.2021.

In order to enhance its ESG approach, Eurobank participates in national and international associations, organizations and initiatives.

Find out more at ESG Partnerships and Initiatives.

Banking Services Best Bank in Greece Global Finance Magazine	Private Banking Best Private Bank in Greece Global Finance Magazine Best Private Bank in Greece World Finance Magazine Best Private Bank in Cyprus Global Finance Magazine Best Private Bank in Cyprus Euromoney Magazine
Transaction Banking Market Leader Cash Management in Greece Euromoney Magazine Best Treasury and Cash Management Provider in Greece Global Finance Magazine
Digital Services Best Consumer Digital Bank in Western Europe Global Finance Magazine Best Consumer Digital Bank in Greece Global Finance Magazine Best Consumer Online Product Offerings in Western Europe Most Innovative Digital Bank in Greece Global Finance Magazine
	Global Markets and Treasury Best FX Provider in Greece Global Finance Magazine
	Custody Services Outstanding Performer in Southern Europe Global Custodian Magazine Best Sub Custodian Bank in Greece Global Finance Magazine

Find out more at Eurobank Group Awards.

2021 operating performance exceeded initial expectations in terms of profitability, asset quality and capital strength. Core pre-provision income amounted to €900 million and the adjusted profit after tax reached €424 million in 2021, with the return on tangible book value¹ standing at 8.2%. The NPE ratio declined from 14.0% in 2020 to 6.8% in 2021, setting Eurobank the first Greek bank with a single-digit NPE ratio. In addition, the capital ratios strengthened more than anticipated, as a result of higher profitability and stronger impact from the Mexico securitisation, Wave and Triangle transactions. Thus, the total capital adequacy ratio rose to 16.8%² and CET1, on a fully-loaded Basel III basis, increased to 13.6%² in 2021.

• Net interest income fell by 2.1% in 2021 to €1,321 million, mainly as a result of NPE loans deconsolidation. The net interest margin receded to 1.84% in 2021, from 2.03% in 2020.

• Net fee and commission income expanded by 18.7% y-o-y to €456 million, mainly due to fees from network activities, lending business and wealth management. Fee and commission income accounted for 64 basis points of total assets in 2021, compared to 58 basis points in 2020.
• The increase in fee and commission income more than offset net interest income reduction, thus core income grew by 2.5% to €1,776 million in 2021. Other income fell to €128 million in 2021, from €439 million in 2020, mainly due to lower bond gains. As a result, total operating income decreased by 12.3% y-o-y to €1,904 million in 2021.
• Operating expenses were up by 0.8% y-o-y to €876 million, with the cost to income ratio remaining steadily below the 50% threshold at 46.0%.
• Core pre-provision income was up by 4.1% y-o-y to €900 million.

¹Adjusted net profit.
²Pro-forma for strategic partnership for merchant acquiring business (Triangle). Including period profits, subject to AGM approval.

• Pre-provision income declined by 21.1% in 2021 to €1,028 million, due to lower other income.
• Loan loss provisions reached €418 million in 2021 and corresponded to 111 basis points of the average net loans, as the NPE formation was substantially lower than anticipated.
• As a result of the above, core operating profit increased by 64.9% over 2020 to €482 million.
• Adjusted profit before tax amounted to €585 million and adjusted net profit totalled €424 million in 2021.
• SEE operations were profitable, as the adjusted net profit reached €148 million in 2021. Core pre-provision income increased by 7.5% y-o-y and amounted to €259 million, with core operating profit rising by 28.0% y-o-y to €186 million.
• The NPE ratio fell by 7.2 percentage points y-o-y to 6.8% at the end of 2021, setting Eurobank the first bank in Greece with a single-digit ratio. The stock of NPEs decreased by €2.9 billion in 2021 to €2.8 billion. Provisions over NPEs increased by 7.4 percentage points y-o-y to 69.2%.

CET1 rose by 60bps y-o-y to 14.5%³ and Total CAD was up by 50bps y-o-y to 16.8%³ in 2021. These ratios are substantially higher than the respective 2022 total SREP capital requirements of 6.2% and 11.0%. The fully-loaded Basel III CET1 ratio strengthened by 160bps y-o-y to 13.6%³, driven by higher profitability and stronger impact from Mexico securitisation, Triangle and Wave transactions. The binding agreement with Worldline B.V. for the sale of 80% of Eurobank’s merchant acquiring business (project Triangle) contributes 80 basis points to capital and the synthetic securitisation of €1.7 billion performing loans (project Wave) adds 40 basis points. The substantial reduction of NPEs in 2021 combined with the strengthening of regulatory capital led the Texas ratio to improve from 63% in 2020 to 36% in 2021.

• Risk weighted assets amounted to €39.9 billion in 2021.
• New loan disbursements in Greece reached €7.8 billion in 2021. Group performing loans grew organically by €1.5 billion y-o-y. Total gross loans amounted to €40.8 billion at the end of 2021, including senior notes of €5.1 billion. Corporate loans stood at €22.4 billion, mortgages at €10.1 billion and consumer loans at €3.2 billion.
• Customer deposits rose by €5.9 billion in 2021. Savings and sight deposits amounted to €40.6 billion, while time and other deposits stood at €12.6 billion. The loans to deposits ratio further improved to 73.2%, from 79.1% in 2020. The liquidity coverage ratio also improved to 152.4% in 2021, from 123.7% in 2020.

³Pro-forma for strategic partnership for merchant acquiring business (Triangle). Including period profits, subject to AGM approval.

¹ Adjusted net profit.
³ Pro-forma for strategic partnership for merchant acquiring business (Triangle). Including period profits, subject to AGM approval.

Direct economic value generated and distributed 2021 (in €million) Eurobank SA
Direct economic value generated	€ 1,806
Revenues	€ 2,128
Impairment losses relating to loans and advances to customers	€ 323
Economic value distributed
Operating expenses  of which:	€ 235
Sponsorships	€ 3
Wages and employees benefits (Staff costs)  of which:	€ 253
Wages, salaries and performance remuneration	€ 212
Medical, Retirement and other benefits	€ 40
Voluntary Exit schemes and other related costs	€ 10
Other restructuring costs	€ 7
Interest Expense and banking fee and commission expense	€ 609
Other impairment losses and provisions	-€ 7
Payments to Hellenic public excluding payroll tax	€ 119
Payments to government	€ 14
Social security contributions	€ 45
Contributions to resolution and deposit guarantee funds	€ 60
Economic Value distributed	€ 1,226
Economic Value retained	€ 579
Income Tax	€ 110
Payroll and other solidarity taxes	€ 41
Economic Value retained including employee and income taxes	€ 428

Eurobank offers a wide range of financial services to the Group’s retail and corporate clients. Eurobank has a strategic focus in Greece in fee-generating activities, such as asset management, private banking, equity brokerage, treasury sales, investment banking, leasing, factoring, real estate, trade finance and bancassurance. Eurobank is also among the leading providers of banking services and credit to SMEs, small businesses and professionals, large corporates and households, concentrating its efforts on financing the growth cycle of the Greek economy and the other countries of presence, including an instrumental participation in Recovery and Resilience Facility (RRF) funds.

The Group has an international significant presence in four countries outside Greece (see further information in the section “International Activities” of Eurobank Holdings Annual Financial Report). Eurobank’s diversified business model through business line, geography and customer, helps enhance its resilience to changes in the external environment. Its strategy aims at optimizing the financial performance, maintaining a strong capital base as well as contributing to the economy and society in a holistic manner. In conducting its business activities, the Group considers the particular and diverse needs of its stakeholders and focuses on creating value for them.

In this context, the Group

a) makes appropriate use of available funds for supporting its customers and financing the economies in which operates, mainly in Greece and in Southeastern Europe,

b) relies on the skills and expertise of its human resources for the implementation of its business strategy including the improvements of products and services to customers; for this purpose, it enhances staff engagement by strengthening the knowledge and experience of its employees through training and development programmes and providing a safe and productive work environment and

c) invests in IT infrastructures and digital transformation for achieving in operating efficiency and improving customer experience.

Having built a flexible, sustainability-oriented operational model, the Group adapted it immediately to address Covid-19 pandemic by strengthening of existing digital channels infrastructure to support its customers, business and households.

Eurobank’s vision is to be the leading bank in creating prosperity for our customers, employees, shareholders and society by offering pioneering solutions in communities we serve.

The Annual General Meeting of the shareholders that convened on 23.7.2021 assigned the statutory audit of the Eurobank Holdings annual financial statements (consolidated and non-consolidated) for the fiscal year 2021 to KPMG Certified Auditors SA which appointed its member Mr. Charalampos G. Sirounis, certified auditor (SOEL Reg. No 19071), as the statutory auditor, while appointing its partner, Mr. Nikolaos E. Vouniseas, certified auditor (SOEL Reg. No 18701), as his substitute in case of impediment of the statutory auditor. In order to safeguard the independence of external auditors, the Eurobank Holdings Group has been consistently implementing a policy on external auditors’ independence, as well as a policy with regards to the tendering process for the assignment of the statutory audit of its financial statements to external auditors.

As part of the policy on external auditors’ independence, the rules concerning the service provided by external auditors are founded on three key principles, the violation of which could affect the auditors’ independence: (1) an auditor may not audit his or her own work; (2) an auditor may not perform any management role and (3) an auditor may not provide any services prohibited by the law or the Eurobank Holdings Group policy.

Regarding the tendering policy that Eurobank Holdings Group follows to assign the statutory audit of its financial statements to external auditors, the main objective is to define the framework by which Eurobank Holdings Group receives offers from candidate auditing firms on a periodic basis, in order to ensure that (a) the auditors’ independence is not compromised and (b) the most appropriate auditors are selected to carry out the Group’s statutory audit through a transparent and objective selection process.