The merger creates the best capitalized bank in Greece, with total capital ratio at 19 pct, ready to serve its clients, return to growth and support economic activity in Greece and Southeastern Europe.
Eurobank plans to substantially accelerate NPE reduction to a ratio of approximately 15 pct by the end of 2019 and single digit by 2021 with an NPE deconsolidation of approximately 7 billion euros in a single transaction with all shareholders keeping potential upside from the NPEs (“Acceleration Plan”).
The merger is capital and earnings accretive; fully loaded CET1 increases to 13.8 pct and pre-provision income to 0.28 euros per share. The combined group is targeting strong sustainable earnings per share and over 10 pct return on tangible equity in 2020.
Applying the best-in-class real estate management skills of the Grivalia team led by George Chryssikos will unlock the value of the existing and future real estate assets of the combined group. Chryssikos will be proposed for nonexecutive Vice Chairman of the Board of Directors of Eurobank and will join the Strategic Planning Committee.
9month period financial results
Net profit of €41.2 million for the nine month period of 2018 for Grivalia Properties REIC Grivalia Properties REIC net profit reached €41.2m for the nine month period of 2018 vs. €35.5m for the respective period recording an increase of 16%. Operating profit excluding fair value adjustments reached €41.0m vs. €35.6m for the respective period. Group’s main operational metrics for the nine month period of 2018 vs. the respective period are as follows:
1. Rental income amounted to €53.8m vs. €48.1m (increased by 12%) driven by the incorporation of revenues deriving from 2017 investments, as well as the new investment of 2018.
2.Net gain from fair value adjustments on investment property for the nine month period of 2018 amounted to €8.3m compared to €6.1m for the previous period. From the new properties acquired during the period, a profit of €0.6m was recognized, while for the existing portfolio as at December 31st, 2017profit of €7.7m was recognized.
3.Finance income remained unchanged to €0.7m.
4.Finance costs amounted to €4.4m vs. €3.1m (increased by 42%). The increase is due to full nine month impact of debt acquired in 2017. Within 2018, the Company agreed two stand by credit facilities of €75m each in the form of a secured bond loan.
5.Property taxes amounted to €5.0m vs. €4.3m (increased by 16%) mainly due to the incorporation of new investment property acquired in 2017, to the calculation of aggregate tax on property (ENFIA).
6.Taxes amounted to €6.2m vs. €5.7m (increased by 9%) mainly due to the incorporation of new investment property acquired in the second half of 2017 and in the current period, to the calculation of tax on assets.
