Piraeus Financial Holdings (TPEIR) H2 2023 earnings summary

Executive summary

• Record FY23 normalized net profit €1.047bn, normalized EPS €0.80 and RoaTBV 16.6%; reported net profit €788mn and reported EPS €0.59.

• Net revenue rose 37% YoY, NII increased 48%, net fees rose 14%, recurring OpEx declined 4%, and performing loans grew 5%.

• FY23 actuals exceeded key targets: normalized EPS €0.80 vs >€0.65 forecast, RoaTBV 16.6% vs ~14%, and NPE ratio 3.5% vs <5%.

Financial highlights

• FY23 NII €2.003bn, net fee income €547mn, normalized operating profit €1.047bn and reported net profit €788mn.

• Q4.23 NII €537mn vs €431mn Q4.22; net fee income €144mn vs €126mn, while normalized operating profit rose to €326mn from €199mn.

• Q4.23 reported net profit was €211mn, including €52mn inorganic NPE impairment and €64mn one-off operating costs; normalized profit was €326mn.

• Deposits increased 2% YoY to €59.6bn; AuM rose 34% to €9.3bn, from €6.9bn in Dec.22.

Outlook and guidance

• FY24 guidance: reported net profit ~€0.9bn, performing loan growth ~5%, NPE ratio <3.5%, CET1 >14% and distribution accrual ~25%.

• FY25-26 reported net profit guided at ~€1.0bn annually; performing loan growth ~6%, NPE ratio ~3.0%/~2.5%, and CET1 ~14.5%/~15.0%.

• NII guided at ~€1.9bn in 2024 and ~€1.8bn in 2025-26; NFI rises from ~€0.6bn in 2024 to ~€0.7bn in 2026.

• 2024-26 assumptions include average 3M Euribor of ~3.8%, ~3.1% and ~2.4%; annual net credit expansion of ~€5-6bn, ~€6-7bn and ~€7-8bn, respectively.

• Snappi, the planned digital bank, was expected to launch with a full banking license in mid-2024; 2026 ambition is ~1mn customers and ~150 embedded-finance merchant partners.