Eurobank Ergasias Services and SA: Press release Third quarter 2021 financial results


Financial results

9M2021 – First Greek Bank to Achieve Single Digit NPE Ratio

  • Net profit1at € 298m in 9M2021 and € 103m in 3Q2021
    • Net profit1SEE operations at € 111m in 9M2021 and € 37m in 3Q2021
  • Heartprofit before provision up 4.1% year-on-year to € 675m
  • Cost of risk at 1.1%2in 9M2021
  • Core operating income of € 357m in 9M2021, up 60.8%Hello
  • Profit before tax1at € 412m in 9M2021
  • A single digitNPE ratio at 7.3%2
  • Stock of NPEs at € 2.9bn, down € 3.2bnHello
  • NPE provisions at 72.8%, up 10.3 pptsHello
  • Agreement with doValue for securitization in Mexico
  • Total CAD 15.7%3and CET1 13.3%3
  • New loan disbursements in Greece € 5.3bn in 9M2021
  • Customer deposits up by € 3.8bn in 9M2021
  1. Adjusted net profit.
  2. Pro-formafor recognition of senior notes from Mexico.
  3. Pro-formafor securitization in Mexico.

25 November 2021

Financial results

“Eurobank’s financial results for the third quarter of 2021 represent an important milestone for the Bank and for the Greek banking system. Our NPE ratio stands at 7.3%, the first time a Greek bank has reported a ratio of a number over the past 10 years, sending a strong signal to return to financial normalcy.

Having overcome the problems inherited from the past, we are now focusing all our efforts on strengthening and expanding our activities, while supporting the main objectives of Greece’s economic policy: shifting to a model of sustainable growth and inclusive and return to a premium credit rating. Macroeconomic developments support this target setting. The Greek economy is expected to grow by more than 7% this year and maintain a high rate in 2022. However, it is both important and feasible to keep the growth rate well above our euro area peers at a average of almost 4% for the next five years, making the most of available European funds and the possibility of attracting significant foreign and local private capital for investment.

During the third quarter, Eurobank continued to perform well on all fronts, exceeding our expectations. Profit before core provisions increased and core operating profit increased 61% on lower bad debt provisions. Net income amounted to nearly € 300 million over the nine months of the year, supported by the development of our international activities. Loan disbursements of 5.3 billion euros in Greece for the first nine months of 2021 highlight our shift into growth mode and are expected to continue and accelerate. In 2021, we recorded a total collection of nearly 4 billion euros in private sector deposits. Households and businesses have substantial cash reserves that can fuel consumption and future investments.

Eurobank is the first Greek bank to come out of the NPL problem. We are therefore in the best position and determined to make the most of the strong growth of the Greek economy and improve economic conditions in our core markets, helping our clients take advantage of the bull cycle and helping the communities we serve to achieve sustainable and inclusive prosperity. . ”

Fokion Karavias, CEO

25 November 2021

Financial results

Review of 9M2021 Financial Results

Adjusted net incomeamounted to € 298 million over the nine months of 2021 (9M2021), with net income after restructuring and other costsuniqueelementsreaching 216 million euros. The net result includes a loss of 72 million euros on the securitization in Mexico. More in detail:

  • Net interest incomefell 2.0% in 9M2021 to € 1.0bn, mainly due to the deconsolidation of loans from Cairo.The net interest margindeclined to 1.90% in 9M2021, compared to 2.05% for the respective period of 2020.
  • Net income from fees and commissionsgrew by 18.4% year-on-year over 9M2021 to € 326 million, mainly due to commissions from network activities, rental income and credit activity. Fees and commissions increased 6.1% quarter on quarter to 117 million euros and represented 65 basis points of total assets in 3Q2021.
  • The increase in fee and commission income more than offset the reduction in net interest income,basic incomeup 2.3% to € 1,326m in 9M2021. Other incomeamounted to € 66m in 9M2021, compared to € 251m in 9M2020. Therefore, Total of exploitation productsamounted to € 1,391 million over the January-September 2021 period, down 10.0% over one year.
  • Operating Expenseswere stable year-on-year in Greece and increased by 0.5% year-on-year for the Group to € 650 million in 9M2021. The cost / income ratioremained well below the 50% threshold at 46.8%.
  • Heartpre-supplyIncomewas up 4.1% year-on-year and 0.8% quarter-on-quarter.
  • Pre-supplyIncomedeclined 17.6% in 9M2021 and 3.9% in 3Q2021 due to lower other income.
  • Provisions for loan lossesreached € 318m in 9M2021 and corresponds to 1134basis points of average net lending.
  • Core operating incomeamounted to 357 million euros over the period January-September, an increase of 60.8% compared to the respective period of 2020.
  • SEE operationswere profitable, because the adjusted net incomereached € 111m in 9M2021 and € 37m in 3Q2021. Heartpre-supplyIncomeincreased by 5.9% year-on-year and amounted to € 192 million, with basic operating profitup 16.8% year-on-year to € 137 million.
  • Following theagreement with doValuefor the sale of part of the mezzanine and junior securitization notes Mexico, the NPE ratiofell to the single-digit level of 7.3%4in 3Q2021, the lowest among Greek banks. The NPE stockdecreased by € 3.2bn year-on-year to € 2.9bn at the end of September. The NPE trainingwas negative by € 26m in 3Q2021. NPE provisionsincreased to 72.8%. Mexican NPEs will close and deconsolidate in 4Q2021.
  • CET1 and CAD totalreached 13.3%5and 15.7%5at the end of September, against total SREP capital requirements of 6.2% and 11.0% respectively. Fully loaded Basel III CET1 increased 20 basis points qoq to 12.3%5.
  • Risk-weighted assetsamounted to 40.6 billion euros5in 9M2021.
  1. Pro-formafor recognition of senior notes from Mexico.
  2. Pro-formafor securitization in Mexico.

25 November 2021

Financial results

  • New loan disbursements in Greecereached € 5.3bn in 9M2021 και € 1.9bn in 3Q2021. Total gross loansamounted to € 39.8bn at the end of September, including € 5.1bn in senior bonds6. Business loans amounted to € 21.6 billion, real estate loans to € 10.0 billion and consumer loans to € 3.1 billion.
  • Customer depositsincreased by € 3.8bn in 9M2021 and by € 1.4bn in 3Q2021. Savings and sight deposits amounted to € 37.5 billion, while term deposits and others amounted to € 13.6 billion. The loan / deposit ratiofurther improved to 73.8%6, compared to 75.4% in 2Q2021. The liquidity coverage ratioalso improved to 168.2% in 3Q2021, compared to 166.4% in 2Q2021.

6Pro-forma for Mexico Recognition of € 1.6 billion in senior bonds.

25 November 2021

Financial results

Adjusted net profit

(€ m)

348

298

9M2020 9M2021

Capital adequacy ratios5

(%)

15.7

13.3

CET1 CAD

Loans / Deposits

(%)

80.1

73.86

9M2020 9M2021

Basic operating profit

(€ m)

357

222

9M2020 9M2021

NPE ratio

(%)

14.9

7.36

9M2020 9M2021

Provisions / NPE

(%)

72.8

62.5

9M2020 9M2021

25 November 2021

Disclaimer

Eurobank Ergasias Services and Holdings SA published this content on 25 November 2021 and is solely responsible for the information it contains. Distributed by Public, unedited and unmodified, on November 25, 2021 10:19:03 PM UTC.

Public now 2021

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Analyst recommendations on EUROBANK ERGASIAS SERVICES AND HOLDINGS SA
Sales 2021 1,865 million
2,090 million
2,090 million
Net income 2021 358 million
402 million
402 million
Net debt 2021

PER 2021 ratio 7.46x
Yield 2021
Capitalization 3,449 million
3,867 million
3,865 million
Capi. / Sales 2021 1.85x
Capi. / Sales 2022 1.89x
Number of employees 11,465
Free float 65.1%

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