Attica Bank reported organic profitability for the fifth consecutive quarter in the period January - March. The business growth achieved in 2023 continues with another quarter of positive credit expansion and growth in 2024, according to the update.
Specifically, the bank showed a big improvement across all of the group's organic metrics, with a recurring operating profit (before provisions) of €8.7 million for Q1 2024, compared to a profit of €0.5 million in the same quarter of 2023. This was mostly because interest income increased and costs continued to fall as the business plan was put into action.
The results are fully aligned with the objectives and strategy of the Bank's Management and lay the foundations for Attica Bank's dynamic growth in the banking market and the achievement of the year's targets, the announcement said. Attica Bank continued to improve all key financial indicators, with a focus on operating profitability through diversification of revenue sources, rationalization of operating costs and careful management of credit risk.
The Bank recorded a remarkable 138% year-on-year increase in recurring operating income, which amounted to €25.3 million compared to €18.3 million in the comparative period, boosted mainly by the favourable interest rate environment, as well as by the remarkable credit expansion during and in the first quarter of 2024, confirming the Bank's momentum and repositioning in the market.
The Bank recorded a remarkable 138% year-on-year increase in recurring operating income, which amounted to €25.3 million compared to €18.3 million in the corresponding comparative period, supported mainly by the favourable interest rate environment, as well as by the remarkable credit expansion during the first quarter of 2024, confirming the Bank's dynamism and repositioning in the market.
Net recurring income on a year-on-year basis improved by 36.3%, respectively, as a result of new disbursements as well as an increase in interest income from loans and receivables from customers. The increase was offset by significantly higher funding costs for the Bank's operations compared to the comparative period in 2023, as a result of the adjustment of deposit products to new market rates. Similarly, net fee and commission income amounted to €3.1 million, up 78% year-on-year, driven mainly by higher production, business expansion and a focus on issuing letters of credit. Recurring operating overheads decreased by 7% year-on-year as management remains committed to maintaining and reducing operating costs and making optimal use of the Bank's own resources.
Loans before provisions amounted to €3.63 billion in the period under review, while new disbursements accelerated in Q1 2024 and amounted to €295 million, of which €283 million related to corporate banking and €12 million to retail banking. Net credit expansion was mainly driven by lending to businesses focused by the Bank in the context of the implementation of its Business Plan and amounted to €171 million, a better growth rate than the market as a whole, which recorded a credit expansion of €156 million in the same period.
The share of new disbursements involving SMEs amounted to €97 million, which represents 33% of new lending. The Bank's objective is to continue to focus on the traditional Greek SME, gradually increasing the percentage of income from this client category, while enriching the available products.
Attica Bank maintains sufficient liquidity with the Group's total deposits amounting to €3.1 billion in Q1 2024, with the liquidity coverage ratio (LCR) at 268.6%, the announcement notes. The strong liquidity profile is also reflected in the group's loan (before provisions) to deposit ratio, which stood at 47.6% (excluding securitisation).
As part of its capital strengthening plan, the Bank also sold properties in the first quarter of 2024, with gains amounting to €3.3 million.Including the impact of the de-entitlement of these properties, the capital benefit from the realised sales in 2023 and the first quarter of 2024 is expected to be around 65 basis points. On a capital adequacy level, the CET1 ratio stood at 10.8% on a quarterly basis, due to the accounting adjustments from the transitional provisions of IFRS 9 and the strong credit expansion that also occurred in Q1.
CEO MESSAGE
The CEO of Attica Bank Eleni Vrettou, said, "2023 was the year that the Bank returned to operating profitability, while the trend continues dynamically in 2024 as reflected by the first quarter results. The positive credit expansion in a market that was basically negative in Q1 confirms not only the Bank's momentum, but also its commercial appeal, along with the need for more customer alternatives in the Greek banking system.
Strategically, after achieving increasing profitability, our objective remains the full consolidation, growth and modernization of the Bank with high liquidity and a satisfactory capital base. In this regard, we expect to reach a final shareholder agreement in the near future that will allow us to move forward with our planning for both the possible inclusion of the Bank in the Hercules III plan and the achievement of the merger with Pancretia Bank and subsequent recapitalization.
Our main ambition is for the 5th banking pillar under creation to put the customer back at the centre and better serve them regardless of their size, improving their banking experience not only digitally but also substantially, thanks to immediacy and flexibility. We actively support the growth and modernization of Greek businesses and the transition of the Greek economy to a new, sustainable, digital and outward-looking growth model, making the Greek economy itself.
