Piraeus Finl Hldgs Sa

Ladies and gentlemen, thank you for standing by. I am Nina, your call-to-call operator. Welcome and thank you for joining the Paris Bank conference call and live webcast to present and discuss Paris' full year 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 have 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 send the conference over to Paris Bank's 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 am joined today by Theo Gnardelis, Chrysanthi Berbati, and Xenophon Damalas to present and discuss Paireus' fourth quarter and full year 2025 results. Today, I will take you through the first two sections of the presentation covering the main financial and business year period and demonstrating our standing in the European banking landscape. This will be followed by a Q&A session. Let's begin with our presentation and slide 4. Paireus is the leading bank in Greece, ranking first across all major business lines. We serve 4.5 million clients, with a workforce of 8.1 thousand employees in Greece. Our total assets stand at 91 billion euros with 37 billion in client loans and 66 billion in client deposits representing 28% market share in deposits. We operate an omni-channel distribution platform with 370 branches, 1,500 ATMs, and serving 3.2 million digital clients. Our mobile app is top-ranked, reflecting our commitment to digital excellence and customer satisfaction. We are a leader in sustainable banking, with euros 5 billion in sustainable financing, Euros 2.2 billion in green bonds outstanding and a strong focus on supporting small businesses and farmers. All these outstanding results have been delivered thanks to our people and our clients. Let's move on to slide 5 for the key highlights of our full year 2025 performance. We generated normalized return on average tangible book value of 16% or 14% on a reported basis. Our earnings per share reached 82 cents. the fast decumulation of base rates. On the back of our strong performance, we increase our payout ratio to 55%. We intend to distribute 40 cents per share cash dividend in Q2 2026 on top of the 100 million share buyback that was completed in the fourth quarter of 2025. In total, we are on track to a total distribution of 592 million euros out of the 2025 profit, which corresponds to a 7% yield. We have expanded our loan book by a Europe leading growth rate of 11% year on year and achieved 4 billion net credit expansion maintaining pricing discipline at the same time. Importantly, net credit expansion reached 300 million euros in the retail segment After 15 years of contraction, our cost-to-core income ratio stands at 33% among the best in the European banking market, confirming our strong cost discipline. Revenues from services reached 700 million in 2025, up 7% year-on-year. Our revenue diversifying efforts are reflected in our services revenues over total revenues of 26% and fees over assets that exceed 80 basis points. Both metrics are best in class in Greece and close to or above average in Europe. We delivered 2.7 billion net revenues in 2025, with net interest income rising in Q4 quarter on quarter, and we consider that we are now Interest income. Asset quality dynamics remain solid with the NPE ratio at 2%, while organic cost of risk shaped at 52 basis points. NPE coverage increased to 73% from 65% a year ago, solidifying our balance sheet. Our assets under management increased to 14.5 billion in 2025, up 27% year-on-year, with 1.5 billion net inflows. Furthermore, client deposits rose by 3.2 billion annually and are now at 66 billion. Practically, our deposits almost fully funded our credit expansion in 2025. Our total capital ratio reached 18.7%, absorbing the Ethniki insurance acquisition, 55% distribution accrual, the strong low growth and DTC amortization. We maintain a buffer of 275 basis points above Pillar 2 guidance with the CET1 ratio standing at 12.7%. Slide 6 presents the details of our fourth quarter and full year operating results. The reported pre-provision income was up 7% quarter on quarter. Below pre-provision income, the quarter has some one-offs. aimed at further strengthening our balance sheet in the areas of non-performing assets and non-core participations to lay out a clean backdrop for the new strategy. We sustainably grow our tangible book value per share, now at 5.9 euros per share. which is net of the 30 cents per share cash dividend paid in June 25, the 8 cents per share of share buyback in November 25, and the impact of the Ethnic Insurance Acquisition. On slide 7, we present our strong loan origination dynamics. Performing loans increased by 11% in 2025, driven not only by old business lending segments, but also by an increase in household lending. Importantly, Q4 marked a new cycle record of $250 million for mortgage disbursements. On slide 8, we present a detailed sector breakdown of our CIB net credit expansion of 3.6 billion in 2025. 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. At the same time, we keep focusing on SME clients in Greece, as shown by the top performance in disbursements. Slide 9 demonstrates that we have achieved Europe's strongest corporate loan growth while maintaining pricing discipline, which is a testament to the commercially rigorous approach of all of our teams. We have been able to compete and win business. while pricing at par with the market average and keeping risk-adjusted returns at the core of our business credit underwriting. Turning to slide 10, the key milestone to 2025 is the first year that mortgage loan growth net of repayments has turned positive with net credit expansion of 110 million euros. This follows net consumer loan growth, which already turned positive in 2024. Consumer investments have been growing since 2021 by 10%, but this growth was previously outweighted by heavy repayments. We now have reached an inflection point that bodes well for future expansion of our loan book and revenue streams. Slide 11 outlines the impressive evolution of our services revenues, which is being supported by loan originations, asset management, and bank assurance. Ethniki Insurance of the new operating model still to come and expected to elevate services revenues with expansion across all segments of the market namely life and health protection and P&C protection. More on this during our capital market day next week. Slide 12 demonstrates the growing trend of assets under management that reached $14.5 billion in December, backed by strong net inflows of $1.5 billion. We have upscaled our investment solutions offering to private banking and retail clients Incorporating robo-advisors while our open architecture strategy combining Paereus asset management expertise with a wide suite of best-of-breed third-party products is paying off. Slide 13 presents detailed information regarding net interest income intrinsics. In a nutshell, our growing CIB loan book drove NII improvement along with the stabilization of base rates. Spread erosion was milder in Q4 versus the previous quarter, while deposit costs stabilized As a result, NII rose by 1% in a quarterly basis, indicating that the trough of the cycle is behind us, given current yield curves. Turning to slide 14, our cost control efforts kept G&A costs under control, while still making extensive IT investments. Overall, we remain cost-conscious, maintaining cost-to-core income ratio below 35%. Slide 15 provides a summary of our asset quality indicators. Our MPE ratio stands at 2%, while the organic cost of risk shaped at 51 basis points in the fourth quarter. Our MPE coverage is strengthened, reaching 73%, while our Stage 1, Stage 2 and Stage 3 coverage ratios are increasing, standing higher than EU average. Paereus enjoys a superior liquidity profile, presented on slide 16. Our liquidity ratios remain strong as evidenced by the high balance of deposits at 66 million and the 216 percent liquidity coverage ratio. Turning to our capital base on slide 17, Our CT1 ratio stood at 12.7% at the end of December post the Ethnic Key Insurance Acquisition, absorbing loan growth, 55% distribution accrual, and accelerated DTC amortization. Slide 18 depicts Ethnic Key Insurance performance in 2025. Profitability was significantly improved to 45 million before tax at a recurring level from 26 million in the previous year. With a leading 14% market share and 1.9 million customers, groceries and premium posted growth in health and P&C. On slide 19, 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, as it currently has 60,000 app users. Turning to the second section of our presentation for our positioning within the competitive landscape, I want to point out that Paireus is in a leading position in Greece in terms of performing loans, deposits, equity brokerage and network as highlighted on slide 21. In addition, Paireus ranks at par or above average on all major KPIs in the European banking space. In slides 22 to 27, we present the key metrics for Paireus versus European bank averages. On slide 22, Paireus delivers best-in-class loan growth in Europe, outpacing EU peers by a wide margin. On slide 23, our net interest margin is far above the European average, reflecting our pricing power and effective balance sheet management. Slide 24, net fee and commission income over assets is well above the European average and the best in Greece. Slide 25, our cost to core income ratio is best in class in Europe, demonstrating our ongoing focus on operational efficiency and cost discipline. On slide 26, Paereus returns on tangible book value is well above the EU average, highlighting our ability to generate superior returns for our shareholders. Concluding with slide 27, Despite our strong fundamentals in absolute and relative terms in relation to our European peers, Paereus trade below EU banks with similar earnings implying significant upside 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. One moment for the first question, please. The first question is from the line of Salim Ahmed with J.B. Morgan. Please go ahead.