BPIRY - Earnings call transcript Q1 2022 | Piraeus Financial Holdings S.A.

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Operator

Ladies and gentlemen, thank you for standing by. I am Maria, your Chorus Call operator. Welcome, and thank you for joining the Piraeus Financial Holdings Conference Call and Live Webcast to present and discuss Piraeus Group's First Quarter 2022 Financial Results. At this time, I would like to turn the conference over to Piraeus Financial Holding CEO, Mr. Christos Megalou. Mr. proceed. now may you Megalou,

Christos Megalou

Chrys business [Technical Difficulty] This I'm is the XXXX new plan and executed full and ESG. is results. Officer; first of This today since progress IR Business on Christos launch Megalou, our to and speed Financial is evident. first Group being and Theo the quarter Head Chief of with Planning, financial Gnardellis, and I'm call is Berbati, Executive joined call happy quarterly the our plan, that already report Officer, at

our performance, into the my diving developing first me on Before quarter XXXX and views let results macro backdrop. share

in The economy of prospects medium Greek Turning supported to set economic term. economy for has the X. implementation the on transformation resilience remained institutional broad growth by recovery plan. of the foundations the strong the in and back of the XXXX and and the of Greek Slides The the X positive sustainable GDP recovery a

Ukraine Of has course, the Russia war has inflationary pressures. escalated economic and uncertainty increased and

second It that measures a deployed the economic households economy moment, are society. to at the impact effect to important to moderation is support the Greek causing order early effects activity it of fully businesses. the moderate of and in the assess While policy highlight and is are long-term on expected being inflation

are to the the positioned environment are current we of that entails, that aware challenges we are them. well We confident address but

on report the value fronts, inherent Piraeus Turning demonstrating of quarter to Bank delivered happy first all solid results I'm that XXXX, to franchise. the

first of with a return execute on X% the consistently year, year strategic on in commitment. our able XXXX full delivering of line been plan, have to We in tangible equity quarter the our

at operating clean-up XXXX core As restored operating €XX costs. fees, ratio as driven incorporating more of Slide The shown X, the per NPE by two-thirds and than has plan, impairments. fully improvement been CETX XX% the in profitability expenses loaded million, on reached

credit €XXX We continued financing in business. with of expansion a first core reached focusing the coming projects to strong quarter. of quarter, second €X.X Loan on disbursements million strengthening our billion net into the leading pipeline

by the to securitization, effort budget Iolcus XX%, to by group's growth increased the trends risk is underlying back Net months effort. the first the large in of to that the our low quarter precision of in of across commercial XX progress past Slide that NPE both and XX% and X be derisking delivered of cost and NPE by lead improvement accruals, end historical XXXX. KPIs. income our remained quality inflows the allocation both the acquisition the with on rental NPE reduction year. investments. execution increased and X NPE Asset high At the the excluding XXXX costs of X favorable XXXX the in and has expected and Slide relates time, organic completed The display the X%. end and and unabated management the enabled the Solar including the X us X% year. ratio has Sunrise been year-on-year, during assets executed year-on-year. under effort The driven and have Net decreased continues NPE financial interest by inorganic all scheduled were same up NPE XXXX the multi-project fees, income, shows XX% current in operating with of

from of Slide XX, illustrates the also of first whereas evolution, risk-weighted loans securities million, financial performance our asset performing is shipping in contribution example, apart and which of relief, balance previously €XXX which track portfolio profit a Slide a two period, the be to securitizations in Additionally, portfolio. increasing synthetic this present on are sheet work NPE €XX million year. mentioned. the characterized progress synthetic more enhanced forthcoming the in XXXX, by as core concluded for clean-up quarter the resulted On resulting in effort the securitization is operating liquidity, XX we

income the dramatic increased the net charges At €XXX income million post compared the benefit III of than NPE income to contribution interest approximately time, strong cost from halved has net cleanup by been the impacted portfolio, income been has first impairment quarter loss from fixed the the been forgone optimization. same NPEs the mitigated by Although trends, more fee XXXX. continued have and TLTRO XXXX, the

operations, interest in core Turning €XXX strength resilient for on while our to plus net our million and fees leverage business achieving higher-quality quarters. competitive consistent mark producing our four all income, now operating lines We consecutive Slide XX. with

X% Slide [ph] including in ECB higher XXXX, front a quarter €XXX our rate this Effectively, been current along year-on-year, NPE around at risk, €X lower approximately low results of tangible by inflationary income the scenario incorporating benefits G&A depo XXXX. rates in administrative stresses million. XXXX which the with We was the would costs on anticipate of Piraeus attain approximately of be year and to as aim the quarter of of XX and X.X% euro impact well run end plus G&A the accelerate an – the effort cost the rate million that simulation end in as trended increased XX%. achieved point XXXX. of decrease comes in of Slide to recorded we first to which inflows XXXX booked the risk, of zero On net interest historical at clearly this positive in the XX, €XX normalization interest for the already cost an underlying first XX% half The back would on a underlying has for of market-based positive costs scenario second we quarter front estimates. forward further. of present XXXX, million trending First

that We transactions we NPE hubs of was ratio formation are approximately XXXX aspiration back net executing. of the our result, by by negative NPE million. a for the X% As €XXX reiterate the end on

has is to absorbing generate the it CETX capital of expansion. that XXXX ratio our derisked also XX, our credit total XX the ratio recovered to operating year-end our loss on Slide The broadly at XX%, expectation and Piraeus ratio of illustrates interest total a from provide part XXXX, position that of capital A profits to cleanup. first sufficient with In XX.X%, buffers. where buffers for necessary XXXX. hand. NPE Turning a at stands area capital Slide capital fully the major the in is by depicted phased-in stable loaded large evolution budget trajectory aspired the is is a safety quarter

in XX showing across fees, guarantee namely dynamics letters as which asset management We business. the from sectors shown fees on priority are of aspire balanced all past whereas loans, resilience. Slide investment XX we a the and but on months, mix with strong commissions, focuses all fees from business more industry Slide strongest shown lines, banking credit growth towards for XX, have present demand yields witnessing higher the are and contribution financing

Our strategy rental income contribution fee boost unfolds. is net as expected real further to estate to income our provide

of Slide I for to note, been for to questions, Piraeus consecutive business, Slide our all X, a we X Slide in opening part the Scope included are year and we by direction the on are performance our discuss the sustainable first Europe's present call. have with further of financial of second in half In part company envisaged XX new strategic on in and Greek XXXX systemic see XX, effort the last we the of to the exploring second move for XX, present can areas all the launch leaders XX, we parallel, before forward XX, to the the and of can Natech, placing which the aim to proud commercial we transaction, targets Moving in X, of wheels times initiatives [ph] with partnership timeline am has set happy brief, to among on floor only strategic banking. enhanced the climate are we you our say we systematic excited our you execution. this. whereas XXXX a motion achieve in that in find to platform. very being On And On fast as focus really Bank

the country let actions, bank are With first path session, with question Greece clear where the tangible And and these our take most serve bank the the floor strategic we the a me happy zero. expect vision open this remark, have. any as follow sustainable net and we to Q&A to in to in may to to you

Operator

from question The Jonas is Scorza go first Please Axia Ventures. ahead. Floriani with

Scorza Floriani Jonas

a afternoon objective I few questions. the briefing Thanks presentation. have Good Yes. guys. for [ph]

First is lending. on of them

to your that just level these quite see a expectations, slightly expectations probably the of XXXX. we which for how in seen already high eased of you repayment are think from good QX, dynamics now mentioned comparing is wondering disbursements I'm in I've I versus presentation March. previous level

loan in the ratio meaning forma reach quarters, but is €X.X the I aim for X% I billion it your by growth you to asset to your significantly coming you're that meet the comments book. get going introduction less same XXXX. think slightly during the your Then the if question see were to the So you disbursements end appreciate on right? guidance my in year, you pro quality. repayment, can to second that less of NPE also

bank high-level I and also in you're So systemic environment change have customer on of changes already the the out asset is pose in the still the the the changes seeing noted of persists, that was light any this agreed level? inflation pointing risks could if or inflation wondering dynamics high macro just that bank. that in high the quality also at

management target in increase to are willing on see of then your So inflow, reported you that the maintenance is defend it. XXXX, seen can general quite that also you high mean And outflow mild is of inflation on you side you in does the case again number? impact that that relates summary, the efforts your question for final necessary to I've my expenses. QX the the so

kind from of to terms in Thank this is you. end the budgeted of well the expenses? expect as of operating level see year we'd So

Christos Megalou

Thank Jonas. you. Thank you,

fair have had Theo data the on the in – presentation. first question track rightly And and take three. said, our few Let that April of €X.X two as year. is credit for been say the On better. target on doing XX billion. first of But Page it have that me and we expansion confirming And quarter the CFO, Gnardellis, will of March, numbers more even our are take much we repayments are though the question, to indeed, first months you we

return the the capital was and primary they of few this sectors, good have being other disbursements on risk that with So with takes very our the for we started disbursements. year. markets will that given see for new we we gives dynamics we that a to the which trend see quarter the months focus a mix next are and on our The year. we manufacturing, of pleased Overall, macro very be also – expect, capital the – bulk adjusted subsiding and reiterate of guidance very the us good will our

are under believe disbursements yield. we effort think and the We on yield the happy are we doing following that And and we maintaining and the disbursements February. with are control January

to quality me asset Let Theo question. turn the

Theo Gnardellis

the Indeed, with are it in and for then our Jonas. denominator achieved of NPE achievement coming securitizations Hi assumes NPE some coming for proceeding and the – increase, achievement primary two – remains generally a ratio NPE remaining obviously, back year achieved that It over on the expansion from over the the normally. quarters. of to on is that target play neutral are the primarily be quarters. single-digit the And this formation an

to Yet headwinds minus a So not had the versus seen as have it zero €XXX-plus payment now borrowers. in the we very on dire we that vigilant Obviously, kind is the net outflows monitoring are day-to-day, going the that trying know on situation of in It's QX. we coming. a there. out a that's behaviors of inflows pressures million pinpoint

third achievable. cost zero have to right for the single-digit looking of of sensitivities that to believe We But payment cost €XXX of some additional and have it's the inflationary behavior the the million €X something target. is on reasons of the seeing move that speak the course, admin million we them It could ratio Under base, cost and effect the run bit. for million scenarios the the on inflationary a €XXX The that includes already. issue. line. which formation at an reiteration to your has year that's the versus QX needle To scenarios, we the measured by the be effects been between quarters now, million we're saw overall €XX we line of the upcoming on loans. for about NPE the And disposable in question formation ground, income against could NPEs, serve stress little

our our that baking G&A our made over a have base €XXX effort be counter We the aspiration going something estimates moves savings million. into over extra nominal for year for to the the and we're and cost – to defend of

Scorza Floriani Jonas

you. Thank

Operator

The Osman Please Memisoglu next question with is the Ambrosia of from go line ahead. Capital.

Memisoglu Osman

Hello. the opportunity. Thanks for

Just kind of the on loan following growth. up

conservative And now? potentially could with it capital, with presentation, you've to for could asset taken in two-thirds say with far slow if if back so €XXX XX% I QX for uncertainties, you you It get the is you. mentioned of how you that then a looking linking to your give appreciate And And we this things that, for necessarily the do on cleanup? You won't would XXX quality, fall latest bps uncertainties, of the but year? in in again, you the particularly on looks mentioned keen given, below right repayments, disbursements. already the say hit you the that. started like you front as risk million. but upside Thank trend to looking understand quarter, I see QX? the be the there's potential But cost color coming

Theo Gnardellis

on clear. just so number – Osman, to the on question Hi repeat it's first your

talking are credit the billion and million We growth. €X.X new disbursements refer €XXX net to about

we our that trend towards for quarter credit especially is and by about growth stick end for know is fourth So €X.X as billion a that. we Usually, quarter year, quite of per the the the total of line in seasonal. the the guidance,

first our there. €X.X we million So expansion year. higher are going net the the quarter, for with net chances billion speak, we of But as the expansion reiterate credit €XXX credit in

your for question. CEO second to Turning

Christos Megalou

Yes.

you underlying Sunrise X We as So cost in well of and took clean-up risk Solar, said. quarter extra of an two risk as kind million. on as for both the of the cost the includes €XXX of elements, securitizations

expectation So the cleanup. totaling provisions, on underlying including million. an charge impairment for the charge deals for That we quarter includes book two for cost million of the this million. in an €XXX of of QX risk versus around €XXX actual did of The is €XX

the right provisions expecting for to provisions reach the year, that this was be €XXX conditions in of the as are some on extra quarter particular servicing prevailing we cases. The We year, per the full charge – including as we took total for to million fees as the given €XXX it are now well and we €XXX million expecting million the guidance have said. prevailing

in fully we as to So the seen further to these we're the the that trajectory, underlying conditions. end as hands remains expectations year loaded this, the for of under for for we our which A the XX% goal well in we expectation value executing remains risk even kind lot on restructuring what the But we of in question, able from book reached From plan, be we course. splits, the as have second what base, CETX aspiration. the what defend original the securitizations year have costs the to seeing are we've of had the end cost FTE in things that your of also QX. given will in total means, reduce the

base. cost to level both on XXXX CETX capital of organic profit the deploy will organic in activities, fully the loaded And onwards. NPEs and on the grow continue on as generated clean-up We then through

Memisoglu Osman

Thank you.

Operator

question ahead. line Autonomous David Daniel Please the is The next Research. with of from go

David Daniel

the the capital, call just and on I of couple results. for a on one on Thanks have Hi. MREL. one congratulations

the in if was relates MREL generation just you've other. what throughout at similar confirm on in what anything walk just MREL I'm at of your TLTRO, some out just the got on considerably has up the you're provisions. then rest slides, I a just just CETX to you've you the the know your of X.X% it's your capital about interesting of be capital ratio the TLTRO And to bridge, wondering tell you organic you'd in QX. ratio, in issuance what than was? of other ahead the understanding, to to. year have the think higher got up expect remaining through And Could have kind and what's on us bps just in just Could you much I'm moved hear looking a how you just could fully as to quarter-on-quarter I'm else just to looking gone that my what's I Could from that affected then saying it's I regard from moved of interested looking me quarters bit on contributed XX from the gone theme, And bridge, then call that Just capital? X.X% reported? hear? you loaded what year? and quite TLTRO in finally, movements in in might comments any would Thanks. I quarter. And

Christos Megalou

basically, so what managed include OCI on the organic the CETX not and the happened phase-in. the happened the the capital loaded to The the fully David, Hi. loaded indicator. question, in does everything that QX to obviously from full year, on IFRS your capital increased, we book loaded deploy integrator in, to movements including fully basically how

regulatory If at this a you what capital from evolution, look Page regulatory XX. seeing it from you're phase-in is capital a on

capital settled reserve more and basically, €XXX less the out million both. million on So phasing drop €XXX million of IFRS €XXX OCI about organic or of of

recognition question, it's There's indicator fully bps, up out communication really. on towards some the offline of things from count NPE minor securitizations IFRS and that's the the and not take caught the – clean-up. various – To if excess going those was XX other capital still And the forma does other of happy back the regulatory for pro that then kind some a synthetic the overall, So X the RWA, phase-in static before. adjustments, the but to to taking on Tier what picture, to loaded needed. explain your

a had MREL? you question Sorry, on

David Daniel

Yes.

which quite capital that over in increased, that the seems movements a I the think, the in else is bps, to seems quarter Is in happens above MREL jump anything So capital? XXX the have MREL there moves. I and big given, guess,

Christos Megalou

Yes.

is has the we They not scenario MREL yet indicator come will enhancing on MREL part. the later. in have The trajectory charges. So overall sales that incorporated

happen. to now activity next expecting be the are years a – obligation. target we the supportive Reminder year, the was We of later not trajectory the that this. to gradually over binding But will for seeing meet conditions January obviously, are met the market Hopefully, Xst in for coming indicator are XXXX and the in we the end increasing.

the about NII The what has included NII. you how in was of the a €XX much On million question revenue had TLTRO, unit. QX TLTRO – was

€XX held, to then or QX. less Of more element non-tiering for the €XX and expects for The payment with QX, course, it we €XX of if within and the another against of the counter you XX million XX QX the million the on cash QX bps we are kind away million. of for bps going year of part, the drop extra the receiving the is marginal as rest that extra

David Daniel

much. very you Thank

Operator

with from the The Please of next Butkov Sachs. is Goldman ahead. question line go Mikhail

Butkov Mikhail

day. you for Good very Yes. the Thank much presentation.

in – or in Thank an for impact client with will analysis of increase costs, have you impact risk customer assessment service how how to they new average the your maybe question or the or rates quality cost the XX also points cost service on scenario outlined some in is you carried My you the asset basis you. presentation NII. have portfolio? any So for do rate response can some on debt

Theo Gnardellis

NII that mean, what seeing is I be positive why XX the we the ago. especially sheet we are an fact to balance on an to primarily that to make, in obviously, that's as points we rate, a cross trajectory interest the the on the NII hike depo. that and side as want month world both straightforward obviously said, as is the the clear is on will there the more of impair scenario. of Mikhail. this is to do more we kind there some and have right have That including depo on of rate we expectation the is cost The different was the given impact now the We it, risk. Hi, sensitivity side assumption in rate that is time estimate as liability well depo of the affected going got the This liability half be that yield. approximately going time we it

at extra have pick. a – which we're €XXX some could XX back the NPE we pressures, depending as looking two that cost an such you in really on the right the seeing goes, at in for another the actually the on to or I not you disposable what serve, together, to from the in hike, both environment So million, risk NPE things something points of quarters, scenario also €XXX ground. mentioned coming the formation that to before. course, there. to There's cost far come sensitivity but plan things scenario, under rate we now back could it risk [ph] of One goes is where of between past, have As what basis does cost be income? seen do inflationary Overall, of million the such

Butkov Mikhail

very right. much. All Thank you

Operator

of from with is Tsourtis Petros go next The Optima Bank. question the ahead. Please line

Tsourtis Petros

results. for Congratulations Hello. the

follow-up Just asset on quality. a question

€XXX [ph] You to €XXX million and mentioned conducted scenarios sensitivities earlier that to some million point you have NPEs. additional some

on year? So question what for worst-case the is full scenario is your

Christos Megalou

with cross a in a sold drop disposable combined depo to sector. one I same of goods the about hike – points the of and obviously mean individuals I of the the think can basis to million At we rate cost have XX year. Petros mentioned, rate XX% But in it the €XXX manufacturing around in income where scenario increase the about. respective – the time, has asking in such be case an sensitivity worst worst-case do that scenario environment,

that the performing calculates if model played NPEs. in portfolio this of for current of €XXX that million the stress all we So

other could can But is you. second this and are course, Of to about. multiple order disclose now, third order factors that and think right model there one what we

Tsourtis Petros

Thank you very much.

Christos Megalou

you. Thank

Operator

and Thank questions for turn Mr. you. to Megalou gentlemen, no I time. conference will are closing the any Ladies there this at further now over comments.

Christos Megalou

results you conference to look the Thank our weeks. with financial our virtually We course, IR participating any XXXX And further call. for forward discussing physically disposal corporate presentation all or your in is all. of to in you first questions forthcoming program quarter or our answer during team at outreach clarifications. Thank you

Piraeus Financial (BPIRY) 14 May 222022 Q1 Earnings call transcript