Piraeus Financial Holdings SA (BPIRF) Q4 2024 Earnings Call Highlights: Strong Earnings Growth …

• Reported Earnings Per Share: EUR0.81.

• Reported Earnings: EUR1.1 billion, up 38% year on year.

• Cash Dividend Per Share: EUR0.30.

• Net Revenue Growth: 7% year on year.

• Return on Average Tangible Book: 17.5% for the year, 18.1% in Q4.

• Assets Under Management: Increased by 23% to EUR11.4 billion.

• Cost to Core Income Ratio: 30%.

• NPE Ratio: 2.6%.

• Cost of Risk: 21 basis points, excluding servicing fees.

• CET1 Ratio: 14.7%, increased by 135 basis points year on year.

• Total Capital Ratio: 19.9%.

• Liquidity Coverage Ratio: 219%.

• Net Interest Margin: 2.7%.

• Net Fee Income Over Assets: 82 basis points.

• Performing Loan Book Expansion: EUR3.6 billion, 12% year on year.

• Deposit Balance: EUR63 billion.

Release Date: February 24, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

• Piraeus Financial Holdings SA (BPIRF) reported earnings of EUR1.1 billion for 2024, a 38% increase year on year, surpassing their initial budget of EUR900 million.

• The company achieved a normalized return on average tangible book of 17.5% in 2024, aligning with best-in-class standards in the region.

• Net revenue grew by 7% year on year, with fees growing at four times the annual rate of net interest income.

• The NPE (Non-Performing Exposure) ratio decreased to 2.6%, with a stable cost of risk at 21 basis points, indicating solid asset quality.

• A cash dividend of EUR0.30 per share is proposed, up from EUR0.06 per share last year, reflecting a 6% yield based on the current market cap.

• The company absorbed EUR200 million in one-off costs for transformation and cleanup, impacting overall financial performance.

• Recurring staff costs grew by 3.5%, and total recurring expenses increased by 3.8%, raising concerns about cost management amid inflation.

• The potential acquisition of Ethniki Insurance could pose risks to capital distribution plans, although the company aims to maintain a 50% payout.

• The foreclosed assets portfolio remains significant, with EUR1.5 billion still on the books, requiring ongoing management and potential provisioning.

• The digital bank Snappi is expected to incur cumulative losses of EUR50 million over the next two years before reaching breakeven in 2027.

Q: How does Piraeus plan to manage capital growth in 2025, considering the increase in tangible book value and Basel IV impacts? A: Theodore Gnardellis, CFO, explained that the capital growth is influenced by Basel IV impacts and the increase in distribution from 35% to 50%. The tangible book value increase is a mix of growth and Basel IV implications. The cost base is expected to grow in line with inflation, and the 50% payout is a step towards maintaining capital accretion despite growth aspirations.