Piraeus Financial Holdings SA (BPIRF) Q4 2024 Earnings Call Key Takeaways: Robust Earnings Growth

By
Joe Killer
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  • Earnings Per Share Reported: EUR0.81.

  • Earnings Reported: EUR1.1 billion, reflecting a 38% year-over-year increase.

  • Dividend Per Share: EUR0.30.

  • Growth in Net Revenue: 7% year-over-year.

  • Return on Average Tangible Book: 17.5% for the year, 18.1% in Q4.

  • Assets Under Management: Rose by 23% to EUR11.4 billion.

  • Core Income Cost Ratio: 30%.

  • NPE Ratio: 2.6%.

  • Risk Costs: 21 basis points, excluding servicing fees.

  • CET1 Ratio: 14.7%, an increase of 135 basis points year over year.

  • Total Capital Ratio: 19.9%.

  • Liquidity Coverage Ratio: 219%.

  • Net Interest Margin: 2.7%.

  • Net Fee Income Percentage: 82 basis points.

  • Expansion of Performing Loan Book: EUR3.6 billion, a 12% increase compared to last year.

  • Deposits Total: EUR63 billion.

Release Date: February 24, 2025

For the full earnings call transcript, please see the complete earnings call transcript.

  • Piraeus Financial Holdings SA (BPIRF) announced earnings of EUR1.1 billion for 2024, marking a 38% increase from the previous year and exceeding their original budget of EUR900 million.

  • The company achieved a normalized return on average tangible book of 17.5% in 2024, meeting the top-tier standards in the region.

  • Net revenue increased by 7% year-over-year, with fee growth outpacing net interest income at four times the annual rate.

  • The NPE (Non-Performing Exposure) ratio was reduced to 2.6%, while the cost of risk remained stable at 21 basis points, reflecting strong asset quality.

  • A cash dividend of EUR0.30 per share is proposed, a significant increase from last year’s EUR0.06, representing a 6% yield based on the current market capitalization.

  • The company absorbed EUR200 million in one-off expenses related to transformations and cleanups, which affected overall financial outcomes.

  • Recurring staff expenses grew by 3.5%, and total recurring costs rose by 3.8%, raising concerns about cost control in an inflationary environment.

  • The acquisition of Ethniki Insurance may impact capital distribution strategies, yet the firm seeks to uphold a 50% payout ratio.

  • The portfolio of foreclosed assets remains considerable, with EUR1.5 billion still on the balance sheet, necessitating ongoing management and potential provisioning.

  • The digital bank Snappi is projected to experience cumulative losses of EUR50 million over the next two years before breaking even in 2027.

Q: What are Piraeus’s plans for capital growth in 2025, considering tangible book value increases and Basel IV influences? A: Theodore Gnardellis, CFO, noted that capital growth is affected by Basel IV and the transition from a 35% to a 50% distribution rate. The rise in tangible book value derives from growth and Basel IV factors, with the cost base expected to increase in line with inflation while maintaining a 50% payout to support capital accumulation alongside growth objectives.