Eurobank Ergasias Services and Holdings (EUROB) Q2 2024 earnings summary

Executive summary

• Achieved investment-grade status from Moody's and DBRS for the first time since 2011, reflecting improved fundamentals and fulfillment of key commitments.

• Adjusted net profit reached €732m in 1H24, up 22.2% year-over-year; reported net profit at €721m, including €99m negative goodwill from Hellenic Bank stake increase and €101m VES cost in Greece.

• Majority holding in Hellenic Bank (55.9%) secured, enabling full consolidation and creating a regional group with a €100bn balance sheet.

• Distributed dividends for the first time since 2007, with €342m paid and 1.4% of share capital in treasury shares cancelled.

• Strong economic momentum in Greece, Bulgaria, and Cyprus, with upgrades in sovereign and sector ratings.

Financial highlights

• Earnings per share reached €0.20; tangible book value per share increased to €2.25, up 18.4% year-over-year; return on tangible book value at 18.5%.

• Net interest income up 8.6% year-over-year to €1,132m; net interest margin at 2.83%; fees up 4.7% to €283m.

• Core pre-provision income up 10.2% year-over-year to €958m; core operating profit up 16% to €814m; net profits at €732m for H1 2024.

• Operating expenses rose 3.1% to €457m at Group level; cost-to-income ratio improved to 31.3%.

• Regional operations contributed €277m, or 38% of total net profits.

Outlook and guidance

• Upward revision of full-year 2024 targets: return on tangible book value now expected at 16.5% (previously 15%).

• Core profit expected to exceed €1.6bn; NII outlook upgraded due to higher deposit volumes, better mix, and higher bond income.

• TBV per share target increased to ~€2.35; NPE ratio target improved to ~3.0%.

• Loan growth on track to meet €2.3bn full-year target, with strong corporate and international performance.

• Macroeconomic environment remains favorable, with Greece outperforming eurozone GDP growth.