Piraeus Bank announced a record nine-month normalized net profit of 932 million euros, corresponding to 0.72 euros per share, leading to an updated target of 0.90 euros for 2024.
Net profit rose 15% to 320 million euros 0.25 euros in the third quarter, the bank said.
Q3 & 9M 2024 highlights
• Record 9M normalized net profit of 932 million, corresponding to 0.72 EPS, leading to updated target of >0.90 for 2024. Q3 net profit reached 320 million, or 0.25 EPS, +15% yoy
• 18% RoaTBV in 9M, leading to updated target of >17% for 2024; tangible book value per share increased to 5.69 euros in Sep.24, up 15% yoy
• Q3 net interest income increased qoq to 530 million euros from 528 in Q2, despite Jun.24 rate cut, benefiting from strong growth of client balances
• 9M net interest income reached 1,575 million, +7% yoy, with net interest margin standing at 2.7%
• Best-in-class net fee income at 0.8% over assets in 9M, amounting to 480 million, mainly driven by financing fees, cards issuance, funds transfers and asset management. Net fee income amounted to 156 million in Q3, +11% yoy
• Client assets under management increased by 29% yoy, to 11 billion in Sep.24, driven by the #1 position in mutual fund net sales in 9M, as well as institutional mandates and private banking inflows
• Best-in-class operating efficiency, with 30% cost-core-income ratio in Q3 and recurring operating expenses reaching 206 million, up 6% yoy, incorporating increased talent retention remuneration and IT investments. 9M recurring expenses amounted to 598 million, flat yoy, maintaining cost discipline
• Organic cost of risk remained stable at low levels for the third consecutive quarter, standing at 54bps in Q3 and 49bps in 9M. Excluding NPE servicing fees and synthetic securitization costs, underlying cost of risk landed at 33bps in Q3 and 23bps in 9M
• Solid asset quality, with NPE ratio at 3.2%, vs. 5.5% a year ago, and prudent NPE coverage at 61%, up 4 percentage points yoy. 2024 target updated to <3.0% NPE ratio, on the back of best-in-class organic management and a small NPE sale under preparation
• +1.9 billion euros performing loan book growth achieved in 9M, reaching 32 billion, leading to updated target of 33 billion for end-2024, which corresponds to 10% growth; out of 2.8 billion disbursements in Q3, c. 1.3 billion were to small, medium enterprises and individuals and c. 1.3 billion to corporates; 1.5 billion Piraeus loan pipeline related with RRF, on top of 0.5 billion disbursed
• 14.7% CET1 ratio already meets 2024 target; 2024 distribution accrual increases to 35%, while we have updated our distribution policy to provide for a 50% payout ratio for next year. Total capital ratio stood at 19.9%, exceeding by c.410bps the 2024 P2G supervisory guidance; MREL ratio reached 29.1% in Sep.24. Piraeus has already met the terminal MREL requirement, more than a year ahead of target
• Superior liquidity profile, with liquidity coverage ratio at 244%, and loan-to-deposit ratio at 63%.
Piraeus Bank CEO, Christos Megalou, stated: “Piraeus nine-month 2024 performance is a clear statement that we continue to exceed our targets across the board. In the nine-month 2024 period, we delivered our best results to date, generating 0.72 earnings per share, up 31% yoy, and 18% RoaTBV, from 15% in the nine-month 2023. Piraeus has achieved sustainable profitability and capital accumulation, through diversified revenue sources and cost discipline, while maintaining prudent credit risk management.
Our top line increased considerably on the back of growing business. Net interest margin stood at 2.7% for the nine-month period, while net fee margin reached 0.8%, best-in-class in Greece.
Net interest income was higher in Q3, as strong loan growth offset the June 24 rate cut, while our net fee income grew by 3x the rate of net interest income in the nine-month period, reflecting our revenue diversifying efforts.
Our performing loan portfolio increased 9% yoy and by 2bn in the nine-month period, to 32bn, already exceeding the full year target of 31.5bn. Out of the 2.8bn loan disbursements in Q3, 1.3bn were to SME/SB and individuals. Client assets under management increased to 11bn as of Sep.24, driven by strong net mutual fund sales, where Piraeus holds the leading position in Greece for the nine-month period.
Our focus on operating efficiency kept our cost-to-core income ratio at 29% in the nine-month period.
This remains among the best in the European banking market. Our cost of risk has stabilized at low levels, 23bps, or 49bps including NPE servicer fees and synthetic securitization costs, an outcome of the successful management of NPE inflows. Our NPE ratio improved further to 3.2% and NPE coverage exceeded 60%.”
