The operating performance of Eurobank in 2022 was robust and exceeded the initial guidance7 in terms of profitability, asset quality and capital strength. Core pre-provision income increased to €1.2bn in 2022, from €900m in 2021, EPS rose to €0.18 8 , from €0.119 in 2021 and the return on tangible book valuegrew to 11.4%8 in 2022, from 8.2%9 in 2021.
In more detail:
- Net interest income rose by 17.4% y-o-y in 2022 to €1.6bn, against €1.3bn in 2021, driven by bond income, lending and international business.
- Net fee and commission income expanded by 19.1% y-o-y to €543m, mainly due to fees from lending activities, Network operations and cards business. Fee and commission income accounted for 68 basis points of total assets in 2022.
- As a result of the above, core income grew by 17.8% y-o-y to €2.1bn in 2022. Other income reached €717m, from €128m in 2021, mainly due to trading gains from hedging instruments. Thus, total operating income increased by 47.6% y-o-y to €2.8bn in 2022.
- Operating expenses increased by 4.7% y-o-y to €917m, mainly due to SEE operations, with Greece being up by 0.3% y-o-y. The cost to core income ratio improved to 43.8% in 2022, from 49.3% a year ago, while the cost to income ratio substantially declined to 32.6%, due to high trading gains.
- Core pre-provision income was up by 30.6% y-o-y to €1.2bn and exceeded expectations due to higher interest and fees & commissions income. Pre-provision income reached €1.9bn, from €1.0bn in 2021.
- Loan loss provisions declined from €418m in 2021 to €291m in 2022 and corresponded to 72 basis points of the average net loans.
- As a result of the above, core operating profit before tax increased by 83.5% y-o-y to €885m.
- Adjusted profit before tax amounted to €1.5bn and adjusted net profit totaled €1.2bn in 2022. Reported net profit stood at €1.3bn, compared to €328m in 2021 and included €231m gains from the completion of the spinoff of the merchant acquiring business (project “Triangle”).
- SEE operations were profitable, as the adjusted net profit reached €224m in 2022, from €148m in 2021. Core pre-provision income increased by 25.5% y-o-y and amounted to €325m, with core operating profit before tax risingby 57.2% y-o-y to €293min 2022. 47% of the adjusted net profit came from the operations in Cyprus (adjusted profit €105m) and 43%from those in Bulgaria (adjusted profit €96m).
- The quality of the loan portfolio improved further during 2022, despite the challenging global environment. The NPE ratio fell to 5.2%in 2022, from 6.8% in 2021 and was lower than expected by 60 basis points due to low NPE formation (€46m in 2022). The stock of NPEs decreased by €0.5bn against 2021 to €2.3bn or €0.6bn after provisions. Provisions over NPEs improved substantially from 69.2% in 2021 to 74.6% in 2022.
- Eurobank capital position strengthened notably in 2022, exceeding initial guidance10 . CET1 rose by 230bps y-o-y to 16.0%11andtotal CAD increased by 290 bps y-o-y to 19.0%. 11The fully-loaded Basel III CET1 (FLB3 CET1) ratio grew by 250bps y-o-y to 15.2%.
- Tangible book value per share increased by 19.7% over 2021 to €1.70.
- At the end of 2022, Risk weighted assets amounted to €41.9bn and total assets stood at €81.5bn
- Performing loans grew organically by €3.3bn in 2022, against initial guidance12 of €2.3bn. 66% of the expansion came from Greece and 34% from SEE business. Total gross loans amounted to €43.5bn at the end of December, including senior& mezzanine notes of €4.9bn. Corporate loans stood at €25.0bn, mortgages at €10.2bn and consumer loans at €3.4bn.
- Customer deposits grew by €4.1bn in 2022 to €57.2bn. The loans to deposits ratio was 73.1% and the liquidity
coverage ratio 172.9% in 2022.
