Piraeus Finl Hldgs Sa

Ladies and gentlemen, thank you for standing by. I'm Poppy, your course call operator. Welcome and thank you for joining the Pireos Financial Holdings conference call and live webcast to present and discuss Pireos 9 Months 2023 Financial Results. At this time, I would like to turn the conference over to Pireos Financial Holdings CEO, Mr. Christos Megalou. Mr. Megalou, you may now proceed.

Good afternoon, ladies and gentlemen. And welcome to today's conference call on our nine-month 2023 financial results. This is Christos Megalou, Chief Executive Officer of Paereus Group, and I am joined today by our CFO, Theo Gnardelis, Chrysanthi Berbati, and Xenophon Damalas. Paireus Bank's strong operating performance in the nine-month 2023 period confirms that we are well on track to meet or surpass our targets. In the third quarter 2023, we have delivered yet another quarter of solid results, maintaining our focus on net revenue growth and operational excellence. Before diving into the details of the bank's performance, I would like to comment on the macroeconomic environment. In 2023, the Greek economy maintains its growth momentum with first half real GDP increasing by 2.4% annually, higher than the Eurozone average of 0.9%. The recent announcement that the Greek sovereign has regained its investment-grade status marks another milestone for the country and the banking sector in the journey of convergence with the European Union. Let's start our presentation with slide five, which displays our impressive performance in the third quarter and nine month 2023 period. Third quarter profit increased strongly, continuing the positive trends of previous quarters, supported by top line overperformance, improved efficiency and normalization of low loss provisions in line with our expectations. Slide six points out the highlights of our third quarter performance. We generated normalized earnings of 10 to one cents per share, running ahead of full year 2023 guidance provided in July. We produced return on average tangible book of 17.6%. We delivered 9% net interest income growth versus the previous quarter on the back of continued net interest money expansion and deposit costs containment. We recorded historically low operating expenses, down 8% year-on-year, despite the inflationary environment, with best-in-class cost-to-income ratio of 29%, from 32% in Q2. Our asset quality dynamics remain resilient with the NPE ratio standing at 5.5% and NPE coverage at 57% up 50 basis points versus the previous quarter. We achieved a 240 million net credit expansion in the quarter and 830 million in the nine months 2023 period, building on the strengths of our franchise. Our CET1 ratio stands at a solid 12.9%, 54 basis points high year quarter on quarter, while we have already met our 1st of January 2024 MREL target of 21.8%. The remaining relatively manageable NPE portfolio of 2 billion, as shown on slide 14, is on a clear path to runoff through a combination of organic strategies. On slides 15 and 16, we present the movement of our performing loans. Q3 was a solid quarter with net credit expansion of 240 million that drove net credit expansion for the nine-month period to 830 million. The expansion has been supported by Paireus' strong take-up of the RRF We have already dispersed close to 270 million euros to approximately 50 credit Greek businesses, two-thirds of which are SMEs. This corresponds to more than 40% market share. Aereus has a superior liquidity profile presented on slides 17 and 18. Our deposit base is granular, stable, and of high quality. Our liquidity ratios are all solid, as evidenced by the 242% liquidity coverage ratio and the 62% loan-to-deposit ratio, both in the top percentile of the European space. Turning to our capital base on slides 19 and 20, the Q3 capital position is already at par with our full year 2023 target led by elevated capital generation of 130 basis points in nine months 2023 while accruing four 10% dividend payout. This drove the CET1 ratio to 12.9% and total capital ratio to 17.6% in September 2023. Moreover, on slide 21, Our new wealth and asset management strategy continues to produce strong results, with assets under management reaching euros 8.5 billion at the end of September, recording a 4% increase in Q3. Finally, As slide 22 shows, it is clear we are well on track to meet or exceed our 2023 financial targets. Our established track record of financial transformation makes us confident in our ability to deliver in the longer term. we offer an attractive and sustainable opportunity for our investors, both in terms of returns and profitable growth. In slide 24, we summarize the competitive advantages of Piraeus Bank across all areas. The commercial positioning and the financial strength of the bank, indicate why its valuation remains attractive compared with its local and European peers. From slide 25 to slide 32, we present the drivers behind this performance. and where we stand against our domestic and European peers. We benchmark ourselves in terms of net interest margin, net fee margin, cost to core income ratio, NPE ratio and capital ratio. In all KPIs, we are now either at par or best in class while we are growing our already sound capital buffers at an accelerated pace. We expect to generate significant value for our shareholders. And with that, let's open the floor to take any questions you may have.

The first question comes from the line of Putkov Michael with Goldman Sachs. Please go ahead.