Piraeus Bank's Chief Executive Officer, Christos Megalou has commented on the results, “Piraeus has delivered impressive financial results in the 9-month 2022 period, driven by high-quality earnings and outperformance of targets across the board."
"In the first 9 months of 2022, Piraeus generated €0.28 normalized earnings per share. We expect to outperform our previous €0.35 full year 2022 guidance. Piraeus is achieving steady business loan growth, high risk-adjusted profitability, continued cost discipline and accelerated capital build-up. We are clearly unlocking the strength of our unparalleled franchise.
The Group’s performing portfolio has expanded by €0.8bn in Q3 and by €2.3bn in the 9-month 2022 period, already surpassing the revised annual target of €2.0bn. We have successfully absorbed the first €200mn tranche of the RRF funds, and have received approval for disbursement of the second tranche. The NPE book continues to decrease and we are now clearly heading to a ratio below 8% at year-end 2022 from 9% in Q3.
Accelerated organic capital generation has driven our fully-loaded CET1 ratio to 10.7%, up by c.120bps in the quarter and by more than 300bps in the last 12 months. We now forecast the CET1 ratio to exceed 11% at 2022 year end, an upgrade from our previous estimates of 10-11%. In clear contrast to European peers, Greece remains on a path of economic expansion into 2023 and beyond, reflecting the completely different place that Greece finds itself in the economic cycle, and the country’s improved resilience and competitiveness.
With confidence based on
Greece’s robust economic prospects and our visible operating outperformance, we are upgrading our full year 2022 guidance to c.9% return over tangible book value from c.8% previously.
We continue to raise our aspirations and remain relentlessly focused on
creating value for our shareholders, clients and employees.”
The key take aways,
- €2.3bn performing loan book growth in 9M.22, already beating revised FY.22 target of €2.0bn. Strong expansion in Q3.22 at +€0.8bn, successfully absorbing the first €200mn tranche of RRF funds, and getting approval for the disbursement of the second tranche
- Strong growth in net interest income in Q3.22, up 8% qoq at €331mn, driven by loan and bond portfolio dynamics, without accrual benefit from ECB’s TLTRO program
- New quarter record-high net fee income generation in Q3.22 at €128mn, +4% qoq and +12% yoy, with strong contribution from transactional business, new loan origination fees and bancassurance. NFI in 9M.22 has increased 18% compared to 9M.21
- Recurring operating expenses continued their downward trend in 9M.22, -4% yoy, at €623mn. The Bank’s new cost governance structure already bears fruits, with G&A costs -6% yoy in 9M.22. The Group’s cost-to-core income ratio steadily improves quarter after quarter, standing at 47% in Q3.22
- €0.7bn negative organic NPE formation in 9M.22, with new historical low gross NPE inflow in Q3.22, at €99mn. Clean balance sheet and stable asset quality dynamics are key factors behind the underlying cost of risk remaining stable in Q3.22 at 50bps for the fourth consecutive quarter
- NPE ratio below 9%, from 17% a year ago; NPE coverage up 10 percentage points yoy to 49%
- Sep.22 CET1 fully loaded at 10.7%, +120 bps qoq, with the year-end target now set at above 11% from approximately 11% previously
- 9M.22 normalized EPS of €0.28, vs. €0.17 in 9M.21, to reach level of above €0.37 for the FY.22. 9M.22 RoaTBV of 9% on a normalized basis leads to the upgrade of FY.22 guidance to c.9%, from c.8% previously
- Normalized operating profit at €386mn in 9M.22 vs €225mn a year ago
