All-time record profitability of 333 million euros and earnings per share of 0.26 euros, with a 42% year-on-year increase, Piraeus Bank announced for the second quarter.
According to the statement, the main developments for the second quarter and first half of 2024 are as follows:
- The highest adjusted profit ever was €333 million in the second quarter, with €0.26 earnings per share, up 42% year-on-year.
- Adjusted earnings per share of €0.47 in the half-year, compared to a target of around €0.85 in 2024.
- Return on tangible equity (RoaTBV) of 18% in the half-year, against a target of around 15% in 2024. Tangible equity per share was €5.42 on 24 June, up 15% year-on-year
- Net interest income stood at €528 million in the second quarter, up 2% quarter-on-quarter and 8% year-on-year, supported by credit expansion, growth in the bond portfolio and a stable deposit mix. Net interest income was €1.045 billion in the first half, up 12% year-on-year, with the net interest income ratio at 2.7%, in line with the annual target. The cost of term deposits stood at 2.1% in Q2, with the cost of new term deposits at 2.8%.
- Net commission income was €179 million in the second quarter, driven mainly by commissions from financing, card transactions, funds transfers and client fund management. Net commission income amounted to €325 million in the six months.
- Recurring operating expenses reached €199 million in the second quarter, stable compared to the previous year and in line with the annual target. Recurring operating expenses stood at €392 million in the first half, down 3% compared to the same period last year, as a result of operational efficiency measures that offset inflation and investment costs. Piraeus operates with the lowest cost efficiency ratio in the sector, at 28% in the second quarter.
- Organic cost of risk remained low at 46 basis points in the second quarter and 48 basis points in the first half. Excluding NPE servicing fees and synthetic securitization costs, cost of risk was 21 basis points in the second quarter and 19 basis points in the first half.
- Stable asset quality with NPE ratio at 3.3%, compared to 5.5% in the corresponding period last year, and NPE coverage at 59%, strengthened by 2 percentage points annually
- The NPL portfolio increased by €1.2 billion in the half-year, against a target of +€1.6 billion for 2024. Of the €3.2 billion disbursements in the second quarter, around €1.5 billion went to small and medium-sized enterprises and individuals, and around €1.7 billion to large corporates and shipping. The perimeter of Piraeus’ loans linked to the Recovery and Resilience Fund is €1.8 billion.
- The pro forma CET1 ratio stood at 14.2% and the total capital ratio at 19%, both ratios including a forecast distribution of 30% to shareholders. The capital indicators for the 2nd quarter are already approaching the target level for 2024.
- The corresponding pro forma MREL was set at 28.3% in June 2024, making Piraeus the first Greek bank to meet the final binding MREL requirement, one and a half years ahead of target
- Strong liquidity profile, with a liquidity coverage ratio of 215% and a transformation ratio of 63%
Cr. Megalou: Historically high financial results in the six months
In a statement on the occasion of the announcement of Piraeus Bank’s results, Christos Megalou said:
“2024 has started strongly for Piraeus, with the first half of the year confirming significant progress towards meeting or exceeding annual targets. During the first half of the year, Piraeus delivered an all-time high for half-year financial results, producing earnings per share of €0.47, up 41% year-on-year, and a return on equity of 18%, compared to 14% in the corresponding period last year. Piraeus achieved sustainable profitability and capital strengthening through diversified revenue sources and cost discipline, while maintaining prudent credit risk management.
Revenues strengthened significantly, with net interest income at 2.75% and net commission income at 0.85% of assets in the first half, with both revenue streams benefiting from strong growth in client balances. The Group’s outstanding loan book stood at €31.3 billion, up €1.3 billion on the second quarter, and is on track to exceed the annual target of €31.7 billion in outstanding loans. Of the €3.2 billion in loan disbursements in the second quarter, €1.5 billion were for small and medium-sized enterprises and individuals. Client funds under management increased to €10.4 billion in June, exceeding the 2024 target of €10.2 billion.
An approach focused on operational efficiency kept the cost-to-core ratio at 29%, one of the lowest in the European banking market, while risk costs remained low at 19 basis points, or 48 basis points including NPE servicing fees and synthetic securitisation costs, resulting from the successful management of new NPE inflows. The NPE ratio further improved to 3.3% and NPE provisioning coverage remained close to 60%.
The CET1 ratio strengthened to 14.2%, an increase of 0.9 percentage points since the beginning of the year, having already reached the annual target. Furthermore, following the successful issuance of the new green bond with a high repayment priority of EUR 650 million in July 2024, the corresponding pro forma MREL ratio stood at 28.3%, making Piraeus the first Greek bank to meet the final binding target of 27.9% for the MREL ratio, one and a half years ahead of the closing date.
2024 looks set to be a landmark year for Piraeus. After returning to full privatisation in the first quarter, the Group paid out a €79 million dividend to shareholders for the first time in 16 years, while the Group’s main subsidiary, Piraeus Bank, recently regained its investment grade rating after 14 years.
The achievement of a pan-European banking license by Greek neobank snappi is an important step in the Bank’s path to emerging as a hub of the new banking landscape in Europe. This achievement reflects our unwavering commitment to innovation and our ability to respond to the evolving needs of our customers.
We welcome our new brand with enthusiasm and continue to build an organization that represents our customers. Our new corporate identity reflects the dynamism and flexibility that characterize Piraeus’ new era and is a symbol of our resilience and ability to evolve in a constantly changing environment.
We continue to raise our aspirations and remain committed to creating value for the benefit of our shareholders, while providing continued support to our customers and the Greek economy and society at large. We are proud to have received three awards at the Euromoney international awards, including the “World’s Best Banking Transformation” award in recognition of the Bank’s successful journey, transformation and return to profitability.”