2021 Key Takeaways
• In twelve months, more than 95% of Sunrise plan has been executed, in absolute discipline with initial expectation
• NPE ratio down to c.12.5% vs c.45% a year ago, on track to c.8% level by end-2022
• Overperformance in annual organic NPE flow by €0.5bn (€1.2bn vs €1.7bn Covid-driven expectation)
• Total capital ratio at 15.9%
• New loan origination of €6.5bn, exceeding €5.7bn target; €1.0bn net credit expansion (disbursements minus repayments) in 2021
• Strong increase in client assets: deposits reached €55.4bn, up €5.8bn yoy, and mutual fund assets at record high of €3.4bn, up €0.9bn yoy
• Robust net fee income generation at €394mn, +25% yoy, with solid trends evident in almost all product lines; Q4.21 figure reached historical high level of €116mn
• Further cost containment with recurring operating expenses at €902mn, -4% yoy
• Pre provision income at €1,052mn on a recurring basis, +10% yoy
• Recurring cost-to-income at 46%, compared to 50% a year ago
• Organic cost-of-risk presented sizeable improvement to 53bps in Q4.21, on the back of accelerated derisking
• Recurring pre-tax profit of €665mn, more than double compared to a year ago
• Accounting for the NPE clean-up, reported result stood at -€3.0bn, in line with capital plan projections
“For Piraeus Group, 2021 was a year of complete turnaround, through the execution of its strategic business plan, which drove its NPE ratio to c.12.5% at the end of 2021 from 45% a year ago, and aspires for single-digit NPE ratio within 2022, while maintaining solid capital position and enabling sustainable profitability for the short and medium term.
Our 2021 journey is proof of the commercial strength of our franchise. We continued supporting our clients and disbursed €6.5bn of new loans, ahead of our target of €5.7bn, while at the same time we advised our corporate customers in the raising of approximately €3.0bn in debt and equity capital markets. Our customer assets, namely deposits and mutual funds, increased by €6.8bn, a record high.
Piraeus Group’s 2021 financial performance demonstrated tangible improvement in all areas. Our recurring pre-tax profit reached €665mn, driven by resilient net interest income, despite the drastic NPE clean-up, record net fee income, continued cost discipline and significant improvement in organic loan impairments.
In 2021, the Greek economy posted strong GDP recovery of 8% and set the foundations for sustainable mid-single digit growth as of 2022 and for a number of years forward. The inauguration of projects under the Recovery and Resilience Facility and the implementation of related structural reforms, are expected to safeguard the growth prospects of the economy, even amid the uncertain environment that is evolving post the severe conflict between Russia and Ukraine.
The situation in Ukraine creates risks, affecting - among others - energy and agri prices, resulting in heightened inflationary pressures both in intensity and duration above initial estimates. Second-order effects may exert a negative impact on consumption and business activity. As the situation is still evolving, it is premature to assess the long-term impact to the Greek economy and society. However, as the prerequisites for sustainable growth for the Greek economy have been set, the consequences of the crisis could be mitigated based on relief measures at European level, similar to the ones taken to address the pandemic.
For Piraeus, the solid execution of our business plan to date, and the pragmatic assumptions that it is based on, allow us to be optimistic for the successful accomplishment of our targets, enabling us to support the Greek economy and provide attractive returns to our shareholders. In parallel, we continue contributing towards a cohesive and inclusive society, an objective more important now than ever before”.
Christos Megalou, Chief Executive Officer