Piraeus Finl Hldgs Sa

Ladies and gentlemen, thank you for standing by. I am Mina, your course call operator. Welcome and thank you for joining the Perios Financial Holdings Conference Call-in-Live webcast to present and discuss Perios' nine-month 2025 financial results. All participants will be listed in their mode and the conference 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 Perios 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. This is Christos Megalou, Chief Executive Officer, and I'm joined today by our CFO, Theog Nardelis, Chrysanthi Berbati, and Xenophon Damalas, to present and discuss Paireus' third quarter and nine-month 2025 results. Today, I'll take you through the two first sections of the presentation covering the main financial and business achievements for the nine-month period and demonstrating Paireus' standing in the European banking landscape. This will be followed by a Q&A session. As always, detailed analysis of all the key performance drivers of Paereus is incorporated in the latter sections of the presentation. The slides are also accompanied by a comprehensive Excel worksheet with historical financial and business figures. In addition, along with our IR materials, we publish today our new sustainability blueprint. covering the full spectrum of questions from stakeholders. All the materials can be found on our corporate website. And let's begin our presentation with slide four. Paereus is the leading bank in Greece, ranking first across all major business lines. We serve four and a half million clients, with a workforce of 7.4 thousand employees. Our total assets stand at 83 billion, with 37 billion in client loans and 64 billion in client deposits, representing 28% market share in deposits. We operate an omnichannel distribution platform with 3,370 branches, 1,300 ATMs, and 3 million digital clients. Our mobile app is top-ranked, reflecting our commitment to digital excellence and customer satisfaction. Financially, we demonstrate robust strength with return on tangible equity at 15%, cost-to-income ratio at 34%, loan growth of over 3 billion year-to-date, up 9% since December 24, total capital ratio at 20.6%, and liquidity coverage ratio at 217%. We are a leader in sustainable banking with Euros 4.3 billion in sustainable financing, 1.65 billion in green bonds, outstanding, and a strong focus on supporting small businesses and farmers. Our leading market position, sustainable long-term business model, and strong recurring earnings are reflected in our recent upgrade to investment grade rating by Fitch. By Reus is now rated investment grade by three of the four main major credit rating agencies. All these outstanding results have been delivered thanks to our people and our clients. The macro environment is favorable, as you can see on slide five. The gap to pre-crisis GDP, investment and financing, suggest multi-year expansion ahead. Real GDP growth remains above the EU average, strongly supported by investments. Unemployment has declined markedly and continues to trend downwards, further strengthening our operating environment. Let's move now to slide six for the key highlights of our nine-month 2025 performance. We generated normalized net profit of 854 million euros corresponding to return on average tangible book value of 15%. This leads us to upgrade our 2025 target to approximately 15% from 14% previously. Our earnings for the nine months are 62 cents per share. We expect to exceed our guidance of 80 euro cents per share for 2025. On the bank of our strong year-to-date performance, we have commenced an interim distribution to our shareholders out of 2025 profits in the form of a 100 million share buyback that will be completed in November. In total, we are on track to exceed a 500 million distribution out of the 2025 profit or approximately 40 cents per share, which corresponds to a 6% yield based on our closing price on 30th of September. We have expanded our loan book by 3.1 billion during the nine-month period to 36.8 billion in total. Today, we are raising our full-year target for net credit expansion to over 3.5 billion from 3 billion previously. We delivered Euro 648 million net revenues in the third quarter with net interest income stabilizing at the same level as the second quarter and fees increasing by 5% year on year. Our revenue diversifying efforts are reflected in our net fees over net revenues of 25% and fees over assets of 0.8%, 80 basis points. Both metrics are best in class in Greece and close to the or above average in Europe. Net fee income reached 489 million in the nine months, consistent with our upgraded target of 650 million for 2025. Our cost-to-core income ratio stood at 34% among the best in the European banking market, reflecting our strong cost discipline. Our asset quality dynamics remain solid with the NPE ratio of 2.5%, while cost of risk shaped at 49 basis points, in line of our target of approximately 50 basis points for 2025. Our assets under management increased to 14.3 billion during the nine-month period, up 30% year-on-year, exceeding the upgraded 2025 target of above 13.5 billion. Furthermore, Client deposits rose by 5% annually and are now at 64 billion. Our total capital reached 20.6%, absorbing the 50% distribution accrual, strong loan growth, and DTC amortization. we maintain a buffer of 460 basis points above Pillar 2 guidance, or 310 basis points, including the Ethniki insurance acquisition, which is expected to close in the fourth quarter. Slide seven presents the details of our third quarter and nine months operating results. We sustainably grew our tangible book value per share, now at 6.09 euros per share, which is net of the 30 cents per share cash dividend paid in June 2025. On slide 8, we present are strong loan origination dynamics. Performing loans increased by 3.1 billion in the nine months, driven not only by all business lending segments, but also by an increase in household lending. Importantly, Q3 marked a new cycle record of 190 million for mortgage disbursements. The strong performance leads us to revise upward our 2025 net credit expansion target to 3.5 billion from 3 billion previously. On slide nine, we present a detailed sector breakdown of our CIB net credit expansion of 3.2 billion in the nine-month period. As you can see, our corporate platform outreach is very granular, reaching all sectors of the Greek economy. Among other initiatives, we are increasing our presence in syndicated deals and we are offering greenhouse technology financing solutions. We are also very happy to be the bank of choice for SME clients in Greece, as shown by the top performance in disbursements. Slide 10 demonstrates that we have achieved our loan growth outperformance while maintaining pricing discipline. which is testament to the commercially rigorous approach of all our teams. We have been able to compete and win business while pricing at par with the market average and keeping risk-adjusted return at the core of our business credit underwriting. Turning to slide 11, the key milestone to note is that mortgage loan growth net of repayments has turned positive by 45 million in the third quarter and overall marginally positive in the nine months. This follows net consumer loan growth, which already turned positive in 2024. Mortgages and consumer disbursements have been growing since 2021 mortgages by 20% annually and consumer by 10%, but this growth was previously outweighed by heavy repayments. We now have reached an inflection point that bodes well for future expansion of our loan book and revenue streams. CLI 12 outlines the impressive evolution of our net fee income, which is being supported by asset management, bank assurance, and loan originations. Our diversified model brings outstanding results, and these do not yet include the anticipated incorporation of ethnic insurance in our group. which will elevate net fee income with expansion across all segments of the market, namely life and health protection and P&C protection. The group will take advantage of the synergies between our nationwide network of strong relationship management from mass retail to corporate, on the one hand, and the insurance factories expertise and franchise on the other. Line 13 demonstrates the growing trends of assets under management that reached 43 billion in September, backed by strong net inflows of 1.3 billion. We have upscaled our investment solutions offering to private banking and retail clients, incorporating robo-advisors, while our open architecture strategy combining Pireus asset management expertise with a wide suite of best-of-breed third-party products is paying off. Slide 14 presents detailed information regarding net interest income intrinsics. In a nutshell, our growing loan book partly offset the material drop in base rates of circa 35 basis points in Q3. Time deposit downward repricing is driving Funding costs lower. As a result, NII decline decelerated considerably, standing at just minus half a percent in the third quarter. Growth in NII is expected from Q4 onwards. Turning to slide 15, our cost control efforts kept operating expenses in the third quarter stable versus the previous quarter, despite the snappy launch and the insurance transaction-related costs. Overall, we remain very cost-conscious and on track to meet our annual target. Slide 16 provides a summary of our asset quality indicators. Our NPE ratio stands at an all-time low of 2.5%, while the organic cost of risk shaped at 49 basis points in the third quarter, in line with our annual target. We note the ongoing reduction of NPE servicing fees down five basis points year on year. On stage one, stage two, and stage three coverage ratio, we are increasing them and we are now higher than the EU average. Paireus enjoys a superior liquidity profile presented on slide 17. our liquidity ratios remain solid, as evidenced by the high balance of deposits at 64 billion and the 217 liquidity coverage ratio. Moreover, we are the Greek bank with the highest green bond issuance, totaling 1.65 billion. Turning now to our capital base on slide 18, our CET1 ratio stood at 14.6% at the end of September, absorbing best-in-class loan growth, 50% distribution accrual, and accelerated DTC amortization. Paereus has a 460 basis points CET1 buffer at the end of Q3. Slide 19 outlines the significance of digital banking and technology for FIREOS. Digital transformation continues to drive efficiency with 99% of transactions now digital and 3 million digital active users. GenAI virtual assistant and automation initiatives have delivered significant productivity gains. On slide 20, we present an update on Snappy, our neobank, with its own portable pan-European banking license. Snappy launched commercially in September and is already gaining significant traction with its fully digital, app-based, branchless, low-capex model. Snappy has 30,000 app users after less than a month of operations. We will update you on Snappy's progress and plans for expansion with our Q4 results. On slide 21, we present our 2025 revised targets. Based on our nine-month performance, we are upgrading our guidance on net credit expansion to more than 3.5 billion for the year and our return to tangible book value guidance to 15% from 14% previously. We remain confident in our future trajectory because of our proven ability to deliver sustainable, profitable growth and create value for our shareholders. Let's turn now to the second section of our presentation for our positioning within the competitive landscape. Paireus is in a leading position in Greece in terms of performing loans, deposits, equities brokerage and network, as highlighted on slide 23. In addition, Paireus ranks at par or above average on all major KPIs in the European banking space. Slides 24 to 30, we present the key metrics for Paireus versus European bank averages. On slide 24, Paireus delivers best-in-class loan growth in Europe, outpacing EU peers by a wide margin. On slide 25, our net interest margin is far above the European average, reflecting our pricing power and effective balance sheet management. On slide 26, net fee and commission income over assets is well above the European average and the best in Greece. On slide 27, our cost to core income ratio is best in class in Europe, demonstrating our ongoing focus on operational efficiency and cost discipline. On slide 28, Paereus return on tangible book value is well above the EU average. highlighting our ability to generate superior returns for our shareholders. On slide 29, Paireus' implied cost of equity remains high given the relatively tight sovereign risk premium, suggesting further re-rating potential. And finally, concluding with slide 30, despite our strong fundamentals in absolute and relative terms in relation to our European peers, Paereus trades below EU banks with similar earnings, implying significant upside for our shareholder. 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. Those participating via the webcast, please review related information in the Q&A live session tab should you wish to ask a question. For those participating in the question and answer session, please use your handset before asking your quality. Anyone who has a question, may press start on one at this time. One moment for the first question, please. The first question is from the line of Bouligouris Alex with Eurox. Please go ahead.