Net profit of €1.145 billion in the first nine months

Net profit of €1.145 billion in the first nine months | TheGreekDeal.com

Eurobank

Eurobank recorded a positive performance in the first nine months of 2024 with an adjusted net profit of €1.145 billion, of which €498 million came from international operations.

Newsroom

07/11/24 • 17:36

TIME TO READ

4 min

Fokion Karavias, CEO Eurobank

Eurobank recorded a positive performance in the first nine months of 2024 with an adjusted net profit of €1.145 billion, of which €498 million came from international operations. Net interest income increased by 14.3% to €1.830 billion, together with the performance of Hellenic Bank in Cyprus.

KEY FIGURES

Net interest income increased by 14.3% year-on-year (or 4.8% excluding Hellenic Bank) to €1,830m, mainly due to income from loans, bonds and foreign operations. The net interest margin strengthened to 2.81% from 2.70% in the first nine months of 2023.
Net fee and commission income strengthened by 11.8% (or 6.1% excluding Hellenic Bank) compared to the first nine months of 2023 to €451 million, mainly due to income from Network and Asset Management operations, representing 70 basis points of total assets.
As a result of the above, organic revenues increased on an annual basis by 13.8% (or 5.1% excluding Hellenic Bank) to €2,280 million. Total revenues increased by 15.6% (or 6.3% excluding Hellenic Bank) over the nine months to €2,352 million in the first nine months of 2023.
Operating expenses decreased in Greece by 0.2% year-on-year, while group operating expenses increased by 12.1% (or 2.9% excluding Hellenic Bank) to €754 million, due to the foreign operations. On a comparable basis (excluding BNP Bulgaria), group expenses increased by 1.0%. Both the cost-to-organic revenue ratio and the cost-to-total revenue ratio improved further to 33.1% and 32.1%, respectively, in the nine months to 2024.
Organic profit before provisions increased year-on-year by 14.6% (or 6.2% excluding Hellenic Bank) to €1,526 million, while total profit before provisions improved by 17.3% (or 8.0% excluding Hellenic Bank) over the first nine months of 2023 to €1,598 million.
Provisions for doubtful debts decreased compared to the first nine months of 2023 by 10.1% (or 19.6% excluding Hellenic Bank) to €229 million, corresponding to 68 basis points on average loans.
As a result of the above, organic operating profit before tax increased on an annual basis by 20.5% (or 12.3% excluding Hellenic Bank) in the first nine months of 2024 to €1,297 million.
Adjusted net profit increased by 24.9% (or 9.2% excluding Hellenic Bank) year-on-year to €1,145 million in the first nine months of 2024. Total net profit was €1,135 million and includes a €99 million gain from the acquisition of an additional stake in Hellenic Bank in the second quarter. Earnings per share and return on tangible equity were €0.31 and 19.2%, respectively, in the first nine months of 2024.
International operations were profitable, with adjusted net profit increasing year-on-year by 45.8% (or 3.0% excluding Hellenic Bank) to €498 million in the nine months to 2024 and contributing 43.5% to the group's overall profitability. In particular, adjusted net profit in Bulgaria increased by 3.8% in the same period to €154 million and in Eurobank Cyprus by 11.4% to €158 million. Hellenic Bank contributed €177 million to the group's adjusted net profit for the nine months to 2024.
Organic profit before provisions abroad increased by 46.5% (or 16.8% excluding Hellenic Bank) to €553 million, and organic operating profit before tax increased by 45.8% (or 19.5% excluding Hellenic Bank) to €488 million for the nine months of 2024.
The NPEs ratio fell below 3% to 2.9%6 at the end of September. The coverage of NPEs by cumulative provisions stood at 89.9%7 in the same period.
Capital adequacy remained at strong levels, with the total capital adequacy ratio (CAD) and the CET1 common equity ratio at 20.9%8 and 17.8%8, respectively, in the nine months to 2024.
Τangible equity per share stood at €2.27 and was up 5.1% compared to Q2 2024.
There were €99.6 billion in total assets, of which Hellenic Bank held €17.5 billion.
Loans outstanding increased organically by €2.1bn in 9M 2024. Total loan balances (before provisions) amounted to €50.4bn, of which €33.3bn in Greece, €8.7bn in Cyprus (€5.9bn Hellenic Bank) and €7.4bn in Bulgaria. At Group level, business loans amounted to €29.2bn, mortgage loans to €12.3bn and consumer loans to €4.5bn.
Customer deposits increased organically by €2.3bn in the first nine months of 2024 (excluding Hellenic Bank). Total deposit balances amounted to €74.6bn, of which €41.0bn in Greece, €22.5bn in Cyprus (€14.9bn Hellenic Bank) and €8.4bn in Bulgaria. The loan-to-deposit ratio stood at 65.8% and the liquidity coverage ratio at 187.1% in 9M2024. Eurosystem funding stood at €3.1bn at end-September 2024.
Customer funds under management in Greece increased by 34.7% year-on-year to €6.6bn at the end of 9M2024. In addition, the assets and liabilities of private banking clients at Group levelincreased by 19.6% year-on-year in the same period and amounted to €12.8bn.

CEO STATEMENT

Fokion Karavias, CEO of the Bank, commented: "The Q3 results are a milestone for Eurobank. For the first time, we are fully consolidating Hellenic Bank of Cyprus, following the acquisition of a majority stake. As a result, the size of our balance sheet is approaching EUR 100 billion, with EUR 50 billion in loans and EUR 75 billion in deposits and a balanced distribution across three key markets: Greece with 60% of assets, Cyprus with 27%, and Bulgaria with 11%. We are confident that the management of Hellenic Bank under Mr. Michalis Louis, former CEO of Eurobank Cyprus, will highlight synergies, taking advantage of the opportunities offered by the growth of the Cypriot economy.

In Greece, the macroeconomic environment also remains positive, with GDP growth expected to be strong at around 2.4% for 2024 and 2025. Eurobank has adapted its strategy to support investment-led growth by being the first bank to apply for the 7th tranche of the Recovery and Resilience Fund loans. The loan portfolio has grown organically by more than EUR 2 billion, and we look forward to an acceleration in demand for business loans.

In the third quarter, the bank's results were particularly positive, exceeding expectations. The trend suggests that the return on equity will be around 17.5% for the full year. Eurobank is pursuing sustainable growth, reaping the benefits of recent strategic choices, and achieving strong financial results through which it rewards shareholders while contributing to the economy and wider society."