Financial Data and Key Metrics Changes - In Q1 2024, the company generated normalized earnings of 0.80 [6] - The return on average tangible book value was 16.5%, exceeding the full-year target of 14% [6] - Recurring net revenue grew by 10% year-on-year, with operating expenses reduced by 5% year-on-year, achieving a cost-to-core income ratio of 29% [7][13] - The cost of risk dropped to a historic low of 17 basis points, with an NPE ratio maintained at 3.5% and NPE coverage at 60% [8][14] - The CET1 ratio reached 13.7% and total capital ratio was 18.5% [9][17] Business Line Data and Key Metrics Changes - Net fee income increased by 19% year-on-year, reaching €145 million in Q1, with a market-leading level of 76 basis points [12] - The performing loan portfolio grew by 6% annually, with strong disbursements utilizing RRF and My Home program totaling approximately €500 million [15] Market Data and Key Metrics Changes - The deposit base is described as granular, stable, and of high quality, contributing to low deposit betas [16] - The liquidity coverage ratio was 241% and the loan-to-deposit ratio was 62%, both at the top range of the European spectrum [16] Company Strategy and Development Direction - The company is focused on cost containment and operating excellence, aiming to exceed full-year targets [5] - A strong capital buildup of approximately 80 basis points in Q1 supports the planned shareholder distribution of 25% [17][20] - The company is pursuing further operating efficiency despite inflationary pressures, maintaining a best-in-class cost-to-core income ratio [13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving guidance for net credit expansion and stable loan yields [26][27] - The company updated macro expectations in line with fiscal sector consensus, indicating a minor impact on cost of risk assumptions [53] - Management noted that the first quarter is typically weak due to seasonal repayments, with expectations for stronger performance in the second quarter [33] Other Important Information - The company announced it would pay a cash dividend of approximately €80 million for 2023 results, marking the first dividend payment in 16 years [20] - Piraeus was recognized for its efforts in reducing carbon emissions, being included in the Financial Times list of Europe's Climate Leaders for the fourth consecutive year [21] Q&A Session Summary Question: Interest income from fixed-income securities portfolio - Management confirmed that the balance grew mainly towards the end of the quarter and expects a step-up in interest income in the next quarter [22][23] Question: Loan growth and pricing spreads - Management confirmed guidance for net credit expansion and stable loan yields, with new production slightly lower than the current stock [26][27] Question: CET1 capital deductions and future impacts - Management indicated that there will be additional capital deductions over the next three years, approximately €200 million to €230 million [28][29] Question: Loan growth and seasonal repayments - Management explained that seasonal repayments are typical for the first quarter, with expectations for stronger growth in the second quarter [33] Question: NII and hedging positions - Management confirmed that NII was flat excluding hedges, with no pressures from deposits [39][41] Question: Strategy on repossessed assets - Management outlined a strategy to accelerate the sale of repossessed assets, which are currently not dragging on P&L [58][59]
Piraeus Financial Holdings(BPIRY) - 2024 Q1 - Earnings Call Transcript