Financial Data and Key Metrics Changes - Piraeus Financial Holdings reported a normalized net profit of €333 million in Q2 2024, contributing to a total of €612 million for the first half of the year, marking the best quarterly and semiannual performance ever [4][5] - Earnings per share reached €0.26 in Q2, up 42% year-on-year, and €0.47 for the first half, compared to a full-year guidance of €0.85 [9] - Return on average tangible book value was 19% in Q2, with a first-half figure of 18%, exceeding the full-year target of 15% [10] - Operating expenses were reduced by 3% year-on-year, with a cost-to-core income ratio of 29%, among the best in Europe [11] - The CET1 ratio increased by 50 basis points to 14.2%, with the total capital ratio at 19%, both already meeting 2024 targets [12] Business Line Data and Key Metrics Changes - The performing loan book expanded by €1.2 billion in the first half, with strong growth in business lending and a breakeven quarter in the retail book [12][19] - Net interest income showed resilience with a net interest margin of 2.7% and stable loan pass-through at 80% [15] - Net fee income reached a record high of 93 basis points of assets in Q2, driven by loan expansion and asset management [16][17] Market Data and Key Metrics Changes - Piraeus has become the first Greek bank to meet the final MREL requirement 1.5 years ahead of target, and it successfully acquired a pan-European license for Neo Banks [6] - The bank's assets under management increased to €10.4 billion, surpassing the end of 2024 target, reflecting a 27% year-on-year growth [22] Company Strategy and Development Direction - The company is focused on expanding and diversifying revenue sources, with a strong emphasis on operational efficiency despite inflationary pressures [17] - Piraeus is undergoing a transformation strategy for 2024-2026, prioritizing customer experience and aiming to solidify its position in the new banking landscape in Europe [24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in surpassing the current level of net credit growth, driven by activity in various sectors including manufacturing and transportation [42] - The company anticipates continued positive trends in mortgage lending, supported by government initiatives [69] Other Important Information - Piraeus paid a cash dividend of €72 million to shareholders in Q2, marking the first dividend payment in 16 years [5] - The bank's turnaround has been recognized with multiple awards, including "The Global Best Bank Transformation" by Euromoney [7] Q&A Session Summary Question: Future fee levels in card segment - Management indicated that while Q2 was strong for card fees, it is not a one-off, and a run rate between Q1 and Q2 is expected [29][30] Question: Mortgage demand outlook - Management noted a reversal in the negative trend for mortgages, with a breakeven in new production over repayments, aided by the My Home program [31][32] Question: Loan margins and guidance for 2025-2026 - Management highlighted resilient loan yields and indicated potential upside to NII guidance for 2025-2026, depending on market conditions [40][41] Question: Loan growth compared to sector trends - Management stated that Piraeus's loan growth is in line with sector performance, with June showing strong results for both [48] Question: CET1 ratio and Basel IV impact - Management confirmed that the CET1 ratio will remain above 14% and discussed the expected impact of Basel IV starting in 2025 [49] Question: Snappi's customer base and revenue generation - Management clarified that Snappi targets a new customer base, minimizing cannibalization risk, and will be consolidated in the group's P&L [50][51] Question: Cost of risk and RWAs - Management discussed the current cost of risk and the substantial increase in RWAs, emphasizing the strength of profitability despite growth [60][61]
Piraeus Financial Holdings(BPIRY) - 2024 Q2 - Earnings Call Transcript