Eurobank announced an almost sevenfold increase in profitability, a ratio of bad loans below 6%, increased lending, deposits and income from international activities and real estate for the first half of 2022.
In particular, adjusted pre-tax profits amounted to 933 million euros and adjusted net profits to 760 million in the first half of 2022. Total net profits amounted to 941 million, compared to 190 million in the first half of 2021 and include profits from the spin-off transaction of the branch of acceptance of payment transactions and settlement of transactions (“Triangle” project).
As a result of the strong profitability of the first half of 2022, the Business Plan for the whole of 2022 is revised upwards as follows:
Overseas operations were profitable with adjusted net profit at 102m in the first six months of this year, up from 73m in the previous year. the corresponding period last year. Organic profits before provisions increased by 11.5% and reached 142m. and organic operating profits increased by 41.7% to €127m. in the first half of 2022. About 45% of the net profits came from the activities in Bulgaria and 44% from those in Cyprus.
Fokion Karavias: We exceeded all our goals
The managing director of Eurobank, Mr. F. Karavias, commenting on the results of the first semester, stated that “we are in a period where there is a feeling of concern for the global and European economy. Geopolitical risks and fears about the sufficiency of energy reserves have increased, while supply chain turmoil continues.Rises in interest rates could limit growth prospects, pushing key economies into recession, with a potential impact on asset quality for the European banking system.
In this environment, the outlook for the Greek economy remains better. The growth rate is estimated at 4% or higher for 2022, mainly as a result of a record tourism season, lower unemployment and strong investment flows.
Eurobank’s results for the 1st half of 2022 confirm our business model and the potential of the bank after its balance sheet consolidation. In particular, we exceeded all our targets in every area of activity. As a result, core operating profit increased by 72% and book value per share increased by 18 cents in the half to €1.60, driven by organic profitability, higher finance gains and proceeds from the sale of the card business. International operations continue their positive performance, showing an increase of almost 40% in net profits compared to last year. This strong performance allows us to revise our targets upwards for 2022, including a return on equity that will exceed our initial target of 10%.
As the Greek economy is on a growth trajectory after the pandemic, we are focusing all our efforts on financing it and supporting our customers, households and especially businesses. In the first half of 2022, we disbursed more than €5 billion in new loans, with new deals for major infrastructure projects and private investments, while continuing to dominate almost every area of retail banking.
Although next year may prove more challenging, we have built a strong franchise capable of meeting external challenges and creating value for our shareholders and customers.”
Detailed results
Elaborating on H1 results, Eurobank’s H1 2022 operating results were particularly strong with adjusted net profit increasing to €760m, from €195m. the corresponding period of 2021. Earnings per share amounted to €0.25, up from €0.05 in the first half of 2021 and the return on tangible equity5 to 27.5%, up from 7.7% last year.
More detail:
– Net interest income increased by 4.5% compared to the 1st half of 2021 and amounted to €700m, from €670m. the corresponding period last year.
– Net fee and commission income increased by 22.4% to €256m, mainly due to income from lending, Network operations, and card services. Fee and commission income represented 65 basis points of total assets, compared to 61 basis points in H1 2021.
– As a result of the above, organic revenues increased by 8.8% to €956m. in the first half of 2022. Other income increased to €572m, from €45m. the corresponding period last year, mainly due to financial gains from hedging products. Consequently, total revenue increased by 65.4% to €1,528m. in the first half of 2022.
– Operating expenses increased by 3.9% to €450m. due to operations abroad, while in Greece they remained unchanged. The cost-to-organic revenue ratio improved to 47.1% in H1 2022, from 49.3% a year ago, while the cost-to-income ratio decreased significantly to 29.5%, due to high financial gains.
– Organic profits before provisions increased by 13.5% to €506m. and total profits before provisions more than doubled to €1,078m.
– Provisions for bad debts amounted to €126m. and corresponded to 64 basis points on average loans in the first half of 2022.
– As a result of the above, organic operating profits increased by 71.7% to €380m. in the first half of 2022, from €221m. in the first half of 2021.
– Adjusted profits before taxes amounted to €933m. and adjusted net profits to €760m. in the first half of 2022. The total net profits amounted to €941m, against €190m. the 1st half of 2021 and include the profits from the spin-off transaction of the payment transaction acceptance and transaction settlement branch (“Triangle” project).
– The operations abroad were profitable with adjusted net profits amounting to €102m. in the first six months of this year, from €73m. the corresponding period last year. Organic profits before provisions increased by 11.5% and reached €142m. and organic operating profits increased by 41.7% to €127m. in the first half of 2022. About 45% of the net profits came from the activities in Bulgaria and 44% from those in Cyprus.
– The NPEs ratio decreased to 5.9%6 at the end of June 2022, with total NPEs falling to €2.5bn. or €0.7 billion after predictions. The formation of NPEs was negative by €6m. in the first half of 2022. The coverage of NPEs from the cumulative provisions increased from 63.3% in the first half of 2021 to 71.5%.
– CET1 and total capital adequacy (CAD) ratios stood at 14.7%7 and 17.0%7 at the end of H1 2022 and were up by 150 and 140 basis points respectively compared to H1 2021. The ratios these are significantly higher than the corresponding 2022 minimum supervisory thresholds (TSCR) of 6.2% and 11.0%. The CET1 ratio with the full implementation of Basel III strengthened to 14.0%7, from 12.1% a year ago.
– Tangible equity per share amounted to €1.60 and was increased by €0.18 in the first half of 2022.
– At the end of the first half of 2022, the weighted assets amounted to €41.7 billion. and total assets at €80.2 billion.
– New loan disbursements in Greece amounted to €5.2 billion. in the first six months of this year. Current loans at Group level increased organically by €1.6 billion. in the first half of 2022. The total loan balances (before provisions) amounted to €42.3 billion. at the end of June, including the high-grade bonds amounting to €5.0bn. Business loans amounted to €23.8 billion, housing loans to €10.2 billion. and consumer goods at €3.4 billion.
– Customer deposits increased by €0.8 billion. in the first half of 2022 to €54.0bn. The loan-to-deposit ratio stood at 75.0% and the liquidity coverage ratio at 174.3% in the first half of 2022.
See the full results announcement in the right column “Related Files”
Source: Capital
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