Financial Data and Key Metrics Changes - Piraeus Financial Holdings reported a normalized net profit of €320 million for Q3 2024, contributing to a total of €932 million for the first nine months of 2024, marking the best performance in the company's history [4] - The normalized earnings per share (EPS) increased by 16% year-on-year to €0.25 for the quarter and €0.72 for the nine-month period, leading to an updated target of over €0.90 for 2024 [5] - The return on tangible book value was 18% for both Q3 and the nine-month period, prompting an upgrade of the 2024 target to higher than 17% [6] - The net revenue grew by 9% year-on-year for the nine-month period, with fees growing at three times the annual rate compared to net interest income (NII) [6] - The cost of risk remained low at 23 basis points for the nine-month period, with a non-performing exposure (NPE) ratio decreasing to 3.2% [8] Business Line Data and Key Metrics Changes - The assets under management increased to €11 billion, driven by strong net mutual fund sales, positioning the company as a leader in this segment [7] - The performing loan book expanded by €2 billion in the nine-month period, with a target of €33 billion by December 2024, reflecting a 10% year-on-year growth [8][22] - Net fee income over assets reached 83 basis points, indicating strong performance in the wealth and asset management strategy [13] Market Data and Key Metrics Changes - The liquidity coverage ratio stood at 244%, and the loan-to-deposit ratio was 63%, both indicating a solid liquidity profile [18] - The CET1 ratio increased by 150 basis points year-to-date to 14.7%, with a total capital ratio of 20% [9] Company Strategy and Development Direction - The company aims to accelerate DTC amortization, targeting zero DTC by 2034, which is expected to enhance dividend payouts and overall balance sheet health [20][66] - Piraeus is focusing on expanding its retail credit offerings, leveraging state schemes and a diversified sectoral model to drive growth in mortgages and small business loans [17][78] - The company is also exploring potential acquisitions in asset management and transaction banking to strengthen its fee income [90] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving a payout ratio of 35% for 2024 profits and a 50% payout ratio for 2025, supported by strong financial performance [9][22] - The management highlighted the importance of maintaining a balance between capital distribution and growth, emphasizing the need for sustainable profitability [68][90] - The outlook for the mortgage market remains cautious, with expectations of flat growth in 2025, but potential for improvement driven by state programs [78] Other Important Information - The company has received a European banking license for its neobank, snappi, which is set to launch in Q2 2025, with projected revenues exceeding €200 million [21] - The company is committed to maintaining a disciplined approach to cost management, with a cost-to-core income ratio of 29% [7] Q&A Session Summary Question: NII resilience and guidance for 2025 - Management noted that the term deposit share is expected to remain static, with higher loan volumes contributing to NII growth for 2025 [29][30] Question: DTC amortization and dividend payouts - There are no further regulatory approvals required for DTC amortization, which is expected to facilitate higher dividend payouts [36] Question: Loan growth and market conditions - The company anticipates strong loan growth driven by SME markets and government programs, with a target of €33 billion in performing loans by year-end [43][78] Question: Cost of risk and asset quality - Management expressed confidence in achieving a cost of risk in line with European averages, with a focus on maintaining low NPE formation [59][60] Question: Capital allocation and acquisitions - The company is exploring bolt-on acquisitions in asset management and transaction banking to enhance growth and fee income [90]
Piraeus Financial Holdings(BPIRY) - 2024 Q3 - Earnings Call Transcript