Piraeus Bank Group on Friday reported pre-tax profit of 146 million euros in the January-September period, with net profit of 87 million euros in the nine-month period from a loss of 304 million last year.
Christos Megalou, the bank’s CEO, commenting on the results said: “For another quarter, we have achieved tangible improvement across a number of priorities. Thanks to our decisive actions we have delivered five consecutive quarters of profit. Pre-tax profit on a recurring basis stood at 146 mn in nine months 2019, compared to 98 mn in nine months 2018. Reported net profit amounted to €87mn compared to losses in the same period last year. This was enabled by solid recurring core revenue generation, while the focus on cost efficiency continues to deliver."
He went on to say that both net interest and recurring net fee income were higher by 2% and 6%, respectively, against the same period last year.
Operating expenses were down 6% on a recurring basis. "As the operating environment strengthens, we are confident that our financial performance will progress further. Balance sheet developments are a testimony of the restoration of our business," Megalou added.
The bank’s performing loan book increased by 0.4 bn euros year-to-date as at September 2019 on a like-for-like basis, with business lending driving the trend. Loan disbursements reached 3 billion euros in the nine months 2019.
Piraeus' CEO said, "The Group’s net loan-to-deposit ratio further improved to 84% compared to 91% a year earlier, signifying that the Bank is in a position to respond to credit demand, which we expect to accelerate as we go further, enabling us at the same time to defend our net interest margin."
On asset quality, the improving trends of defaults and re-defaults continue, while curings, restructurings and collections remain robust. From the peak of September 2015, Piraeus Bank has reduced NPE balances by 12 billion euros". Building on the positive track record that we have achieved so far, we are working to execute our NPE Plan, facilitated by the recent strategic partnership with Intrum, which will enhance this effort. We are currently in the preparatory phase of 3 bn euros NPE securitisations, also in anticipation of the launch of the Hellenic Asset Protection Scheme ("Hercules")," he said.
He added that "the successful implementation of HAPS, coupled with favorable conditions in the markets for the issuance of non-dilutive capital instruments, will facilitate the acceleration of the existing NPE reduction plan. In this context, we intend to provide further details in early 2020."
Following the two landmark transactions of 2019 - the issue of a Tier 2 instrument, and the strategic partnership with Intrum regarding the servicing of NPE and REO - and the continuous capital generation through organic and inorganic means, the bank, he noted, has increased its regulatory capital significantly above the capital requirement level.
At the end of September 2019, the pro-forma total regulatory capital ratio of the Bank was at 16.0% on a phased-in approach, versus a SREP requirement of 14.0%. "We are stepping up our actions and we are working hard to make our bank better and stronger. For the nine months 2019, Piraeus Bank produced a 2.0% Return on Tangible Equity, with favourable prospects as we continue to progress with the execution of our 'Agenda 2023' roadmap," Megalou said.