Piraeus Bank Says Pre-Tax Profits at 73 Million Euros in H1

Branch of Piraeus Bank in Athens. (Photo by Eurokinissi/Giannis Panagopoulos)

ATHENS – Piraeus Bank Group on Friday said pre-tax profits totaled 73 million euros in the first half of 2019 with all basic results showing an improvement during this period.

In an announcement, the bank said that Recurring Pre Provision Income stood at 417 million euros in the first six months of the year, +6 pct year-on-year, Net Interest Income was 719 million euros, +2 pct year-on-year, Net Fee Income at 146 million euros, +5 pct year on year, Operating Costs was 476 million, -7 pct year on year on a recurring basis and Cost of Risk at 332 million or 174 bps, within the Bank’s guidance.

Pre-tax Profit totaled 73 million euros up from 33 million in the same period last year. Reported Net Profit at 38 million vs losses in the same period last year; in the second quarter of 2019 the bank reported Net Profit of 19 million euros, the 4th consecutive profitable quarter.

Loan disbursments totaled 1.8 billion euros in the first half in H1 2019, broadly in line with the 2019 target of 4.0 billion.

Performing loan book in Greece expanded by 2 pct year-to-date to 24.4 billion euros and deposits stood at 44.9 billion euros, +7 pct year on year.

NPE reduction of 1.2 billion euros in the first half in 2019, on the back or organic initiatives, with improving trend of defaults and re-defaults and steady pace at restructuring and collection effort, for the 15th consecutive quarter of NPE reduction. NPE reduction of 3.3 billion euros year on year. Piraeus Bank reported the sale of NPE portfolios of 0.7 billion euros gross book value to be concluded soon; overall pipeline of sale projects at the level of 4.5 billion (H2 2019 and 2020). The bank said it was on track to meet 2019 annual NPE reduction target of 3.5 billion.

“The first half of 2019 encompassed significant developments for Piraeus Bank. The Bank proceeded with two landmark transactions: the issue of a Tier 2 instrument, the first one by a Greek bank in a decade, and the strategic partnership with Intrum regarding the servicing of NPEs and REOs. At the end of June 2019, the pro-forma Capital ratio of the Bank was at 15.7 pct on a phased-in approach, while on a fully loaded basis the ratio stood at 13.0 pct. We remain focused on generating capital with organic means, while we continue optimizing the Bank’s balance sheet.

“Piraeus Bank built on the progress made in 2018, continuing its effort to leverage its position in the market, as displayed by our performance against a number of KPIs. Deposits grew by 2.8 billion euros compared to June 2018, with close to 90 pct of inflows stemming from the private sector. The Bank reached a level of c.100 pct in Liquidity Coverage Ratio at the end of H1 2019. At the same time, our Loan to Deposit ratio improved to 85 pct compared to 94 pct a year ago.

“Regarding new loans, in H1 2019 we disbursed 1.8 billion euros, and we are on track to attain our target for 4.0 billion euros new loans in 2019, up from 3.1 billion euros last year. We experience good demand from growing sectors of the economy and as the economy continues on its restoration path, credit expansion will accelerate along with overall demand for banking products and services.

“On profitability metrics, net interest income in H1 2019 was 2 pct higher yoy, while net fees grew by 5 pct, respectively. Operating costs were lower by 7 pct yoy on a recurring basis. Provisions reduced in Q2 2019 on the back of improved NPE dynamics. H1 2019 pre-tax profit was at 73 million euros up from 33 million euros a year ago on a like-for-like basis, while reported net profit amounted to 38 million euros compared to losses in the same period last year.

“Our asset quality effort is on track to meet the annual target of 3.5 billion euros NPE reduction, with NPE balances down by 1.2 billion euros in the H1.2019 relying exclusively on organic effort. We are preparing for NPE sales of c. 4.5 billion euros in H2.2019 and into 2020, when we plan to proceed with our first securitization of more than 2.0 billion euros. The rebound in economic activity and real estate prices, the more favorable tax regime, the lifting of the capital controls, are all expected to stimulate investment and employment. These positive prospects are going to be reflected on our budget for 2020, for which we have started preparing. We feel confident for our performance going forward, identifying areas in which we can outperform targets set,” Christos Megalou, Chief Executive Officer said in a statement.