Piraeus Finl Hldgs Sa

Ladies and gentlemen, thank you for standing by. I am Mina, your Chorus Call Operator. Welcome and thank you for joining the Paredes Financial Holdings Conference Call and Live Webcast to present and discuss the Paredes First Half 2025 Financial Results. All participants will be in a listen-only mode and the conference is being recorded. The presentation will be followed by a question-and-answer session. Should anyone need assistance during the conference call, you may signal an operator by pressing star and zero on your telephone. At this time, I would like to turn the conference over to Paris Financial Holdings CEO, Mr. Christos Megalou. Mr. Megalou, you may now proceed.

Good afternoon, ladies and gentlemen, and good morning to those joining us from the U.S., Today, we will cover our first half 2025 financial results. This is Christos Megalou, Chief Executive Officer, and I'm joined today by our CFO, Theo Gnarvelis, Chrysanthi Berbati, and Xenophon Damalas. Paireus achieved solid performance in the first half of 2025, demonstrating significant progress against our full year targets. Based on our strong first half results, we upgrade today our loans and client assets guidance for the year. On top, we announced that we intend to introduce an interim dividend in Q4. Let's dive now into our first half results. Paireus delivered a solid set of financial results with top line exhibiting resilience on the back of stellar client assets growth, stabilized margins, and best-in-class operating efficiency. Let's move on with slide 4 for the key highlights of our first-half performance. We generated net profit of €559 million, corresponding to earnings per share of €0.43. in line to meet or exceed our guidance for earnings per share of 80 euro cents for 2025. On the back of our performance, Paireus intends to proceed with an interim distribution to our shareholders out of the 2025 profits. amounting to Europe 100 million in the form of share buyback to be executed during the fourth quarter 2025, subject to EGM green light and supervisory approval. In total, we are on track for more than 500 million distribution out of 2025 profit. This is approximately 40 euro cents, which correspond to a 7% yield on our end-June market capitalization of 7.4 billion, now higher by 1 billion. We achieved a return on average tangible book value of 15%. above the 2025 target of approximately 14%, despite the dropping interest rates. We have expanded our loan book by 15% year-on-year to $36 billion. During the first half, our loan book grew by $2.2 billion, already surpassing our end 2025 target. Today, we are raising our full-year guidance for loans to more than $36.5 billion. We delivered 6% net revenue growth in the second quarter, while the decline in net interest income decelerated materially to minus 1.5%, compared to minus 6% in the first quarter. Our revenue diversifying efforts are reflected on our fees over revenue ratio of 24%. This metric is best in class in Greece. Net fee income reached 325 million in the first half, at par with the upgraded 2025 target of $650 million for the year. Our cost-to-core income ratio stood at 34%, among the best in the European banking market, confirming our cost-disciplined approach. Asset quality dynamics remain solid, with NPE ratio at 2.6% and NPE coverage at 68%, while cost of risk shaped at 51 basis points, in line with our target of approximately 50 basis points for 2025. We increased our assets under management to 13.2 billion during first half, up 27% year-on-year, exceeding the 2025 target of above 12 billion. As a result, we upgrade our target to above 13.5 billion for end of 2025. Furthermore, Deposits rose by 5% annually, now standing at 63 billion. Our total capital ratio reached 20.4%, absorbing the 50% distribution accrual, robust loan growth, and DTC amortization. We retain solid buffer of approximately 440 basis points above P2G or approximately 290 basis points if we include ethnically insurance. Slide five presents the details of our first half operating results. We sustainably grow our tangible book value per share, which now stands at 5.9 euros per share. On slides six to eight, we present the dynamics of our performing loan book. Credit expansion has been strong. with performing loans rising but €2.2 billion in the first half, supported by all business lending segments, while household lending improved. Importantly, loan origination dynamics remain positive and reach all sectors of the economy. The strong performance lead us to revive upwards our 2025 net loan growth target to above 3 billion from 2.5 billion previously. On slide eight, we present a detailed sector breakdown of our CAB net credit expansion of 2.3 billion in the first half. As you can see, our corporate platform outreach is very granular, reaching all sectors of the Greek economy. We are very happy that we are the bank of choice for SME clients in Greece, as shown by our NPS score in this space. Before going into more detail on the group's performance, I would like to comment briefly on selected Paireus retail initiatives, which we have summarized on slide nine. In the second quarter of 2025, Paireus introduced several products and services that target to enhance the mortgage lending experience, address the housing and investing needs of younger population, and support Greece's agricultural sector. Slide 10. outlines the evolution of our net fee income, which has been supported by asset management, bank assurance, loan origination, and rental income. Slide 11 demonstrates the growing trend of assets under management that reached 13.2 billion in June, surpassing the 2025 target. As a result, we now upgrade the full-year target to more than $13.5 billion. Slides 12 to 14 present detailed information regarding net interest income intrinsics, which makes us confident about the 2026 trends. In a nutshell, our growing loan and bond books mitigated the material drop in base rates. Moreover, time deposits and downward repricing is driving funding costs lower. Overall, the NII intrinsics in the first half lead us to reconfirm our 2025 guidance of 1.9 billion NII, with 2026 guidance of 1.9 billion presenting upside. Turning on slide 15, our cost management is trending as per the budget. Overall, we remain very conscious and on track with our annual target. Slide 16 provides a summary of our asset quality indicators. Our MPE ratio stands at 2.6%, with MPE coverage at the level of 67.5%. The organic cost of risk, shaped at 50 basis points in the second quarter in line with our annual target. Paereus enjoys superior liquidity profile presented on slide 17. Our liquidity ratios remain solid as evidenced by the high balance of deposits at 63 billion and the 2006 liquidity coverage ratio. Moreover, we are the Greek bond with the highest green bond issuance, totaling 1.65 billion. Turning to our capital base, on slide 18, our CET1 ratio stood at 14.4% at the end of June, absorbing best-in-class loan growth 50% distribution accrual, and accelerated DTC amortization. On slide 19, our embryo position now stands at 30.4%, with approximately 300 basis points buffered to the requirements. On slide 20, we depict the key financial KPIs that will be impacted from Paireus' acquisition of Ethniki Insurance. To remind for those that are new to the Paireus developments, that in March 2025, we entered into a Share Purchase Agreement to acquire 90% stake in Ethniki Insurance from CVC. The consideration for the transaction is Euro 600 million in cash on a 100% basis. The Ethniki insurance acquisition will further diversify our revenue sources and enhance value for our shareholders. While it is estimated to be earnings per share and return and tangible equity accretive, by more than 5% and 1%, respectively, without any synergies included yet. Post the transaction, Pireo CET1 ratio is expected to land at the level of 13% and subsequently move higher. The transaction is subject to approvals of the competent regulatory authorities, and we are working diligently to conclude all required steps by the end of 2025. On slide 21, we present an update on SNAP's progress. The platform is already in use, while its commercial launch is expected in the third quarter of 2025. On slide 22, there is a summary of our KPIs. demonstrated that we are in line or outperforming in some areas our 2025 financial targets. Our strong results position Pareus well among the broader group of regional peers. To give you some context, on slide 25 to 33, we present the key metrics for Pireus versus domestic and regional peers. We benchmark ourselves in terms of return on average tangible book value, credit expansion, net interest margins, net fee margin, fees over revenues, cost to core income ratio, NP ratio, cost of risk and capital ratio. In all KPIs, we are either at par or best in class while we are growing at an accelerated pace. we expect to generate significant value for our shareholders. And with that, let's now open the floor to your questions.

Ladies and gentlemen, at this time, we will begin the question and answer session. Anyone who wishes to ask a question may press star followed by one on their telephone. If you wish to remove yourself from the question queue, then you may press star and two. For those participating in the question and answer session, please use your hands when asking your question for better quality. Anyone who has a question may press star one at this time. One moment for the first question, please. The first question is from the line of Ismailo Eleni with Axia Ventures. Please go ahead.