9M.2021 financial takeaways
NPE ratio down to 16% vs 46% six months ago, single-digit NPE ratio in clear sight
New loan origination of €4.6bn, in line with €5.7bn target for the full year. New loans to individuals and small businesses of c.€800mn and c.€3,800mn to businesses
Strong growth in client assets (deposits and mutual funds) of €3.4bn
Deposits portfolio stood at €52.2bn, up 5.2% since end December 2020
Elevated net fee income at €279mn, +21% yoy, with solid trends evident in almost all product lines; Q3.21 best quarter ever for Piraeus (€102mn)
Pre provision income at €837mn, +14% yoy on a recurring basis
Operating expenses on a recurring basis at €672mn, -2% yoy
Recurring cost-to-income at 45%, compared to 48% a year ago
Organic cost-of-risk displays sizeable improvement to 57bps in Q3.21, on the back of accelerated derisking
Recurring pre-tax profit of €489mn, compared to €285mn a year ago
Accounting for the NPE clean-up, reported result stood at -€3.1bn, in line with capital plan projections
Total capital ratio at 16%, comfortably above current and forward expected capital requirements (proforma ratio for the Sunrise 2 and Thalis transactions)
Sunrise plan progress update
In less than eight months, 90% of Sunrise plan has been executed, in complete discipline with initial plan
c.90% of the NPE reduction plan locked-in (€16.4bn of €18.9bn) in alignment with initial estimates for its capital impact
Further de-risking well prepared, to lead to a NPE ratio lower than 3% in the medium term
More than €3bn of capital enhancement actions timely executed to support the transformation of Piraeus
Approximately €0.4bn capital to be booked until the completion of the NPE cleanup plan, from non-dilutive capital enhancement actions under way
Piraeus transformation produces tangible results in record time and paves the way for the accomplishment of RoTE above 5% in the forthcoming period
Digital is the key accelerator of the whole transformation program; new collaboration with Accenture and Microsoft to leverage our cloud-first approach
“The Greek macro provides reasons for solid optimism, as the implementation of reforms, the speeding-up of foreign direct investments and the inauguration of projects under the Recovery and Resilience Facility, have reinforced the growth prospects of the Greek economy. On top, the acceleration of NPE reduction has further strengthened market confidence.
During 9M.21, we continued to focus on supporting our customers, and have already granted €4.6bn of new financing, in line with our target of €5.7bn for the whole year. During the same period, customer deposits and mutual funds have increased by €3.4bn.
Our NPE reduction plan is well on track with more than 90% of actions already executed. NPE reduction in the first nine months of the year amounted to €16bn, bringing our NPE ratio down to 16% from 46% six months ago.
In September 2021, our capital ratio stood at c.16% on the back of more than €3bn of capital enhancement actions that were timely executed throughout the year. The remaining non-dilutive €0.4bn capital enhancement actions are under way, expected to be completed by early 2022.
Capturing greater opportunities and efficiencies form a central part of our strategy. We are launching new initiatives, with the aim to capture business upside, by leveraging on increasing healthy credit demand and the RRF structural funds, enhancing our asset management, bancassurance and custody business, as well as exploiting digital ecosystem commercial opportunities.
The Piraeus transformation is producing tangible results in record time, revealing the inherent value of our commercial franchise. Performance has been strong on all fronts with solid revenue generation, continued cost discipline and massive improvement in organic loan impairments.
Against this backdrop, we bring closer the delivery of a return on tangible equity above 5%, along with single-digit NPE ratio in the forthcoming period.”
Christos Megalou, Chief Executive Officer