Piraeus Finl Hldgs Sa

Ladies and gentlemen, thank you for standing by. I am Maria, your chorus call operator. Welcome and thank you for joining the Piraeus Bank conference call and live webcast to present and discuss Piraeus first quarter 2026 financial results. At this time, I would like to turn the conference over to Piraeus Bank CEO, Mr. Christos Megalou. Mr. Megalou, you may now proceed.

Good afternoon, ladies and gentlemen, and good morning to those joining us from the US. This is Christos Megalou, Chief Executive Officer, and I'm joined today by our CFO, Theo Gnardelis, and our head of IEA, Xenophon Damalas, to present and discuss Paireus first quarter 2026 results. Paereus delivered a strong start to 2026 with high quality earnings, strong volume and fee income growth, continued balance sheet strength and performance fully in line with our full year results targets. Turning to our performance, let me briefly frame the macro environment. As you can see in slide 4, the Greek economy remains resilient with growth expected to continue above the European average, a strong primary surplus, and a rapidly declining debt-to-GDP ratio. However, the global backdrop has become materially more uncertain. The ongoing conflict in the Middle East is now a key macro variable, particularly through energy markets. For Europe in particular, the impact is more pronounced given higher energy dependence. Against this backdrop, the relevance of strong balance sheets, recurring revenue streams, and disciplined risk management becomes even more critical. Let me now turn to our performance. And let's go to slide five. We delivered. 281 million net profit in Q1, corresponding to 21 euro cents earnings per share, putting us firmly on track to achieve our full-year target of approximately 90 euro cent earnings per share. We achieved return on average tangible book value of 14.6%, fully in line with the 2026 target of 15%. Importantly, this level of profitability is achieved with improving revenue mix and strong efficiency and asset quality metrics. We continue to deliver lending growth in Europe. Our loan book is up 11% year on year, reaching 39 billion euros. During the first quarter, Net credit expansion reached €1.3 billion, continuing the strong momentum of 2025. Fee income grew 32% year on year, reaching €210 million and accounting for 32% of total revenues, while Fees over assets, shaped at 94 basis points, both metrics are best in class in Greece. Overall, core revenues grew 8% year on year, with strong volume and fee growth, offsetting lower rates and spreads. Our assets under management increased to 14.7 billion euros in the first quarter, up 17% year-on-year, with 500 million net inflows. Furthermore, deposits rose by 6% annually and are now at 65 billion euros. Our cost-to-income ratio starts at 37%, confirming top-tier efficiency. Asset quality dynamics remain solid, with NPE ratio at 2.1%, cost of risk at 32 basis points, and NPE coverage at 70%. Our capital position remains strong. Total capital ratio reached 18.5%, absorbing the €1.3 billion loan growth, an increased 57% distribution accrual for 2026, and accelerated DTC amortization. while retaining a buffer of 260 basis points above Pillar 2 guidance. On the back of our solid financial performance, the Annual General Meeting of Shareholders in April has approved a cash dividend amounting to 40 cents per share out of the 2025 profits, on top of the 100 million share buyback that was completed in the fourth quarter of 2025. The total distribution will reach 594 million euros out of 2025 profit, which corresponds to a yield of 7%. Slide 6 presents the details of our first quarter operating results. We sustainably grow our tangible book value per share, now at 6.11 euros per share, which combined with dividends paid has grown shareholder value by 6.5% year on year. On slide seven, we present our strong loan origination dynamics. In Q1, we achieved 1.3 billion euros net credit expansion supported by all business lending segments. Importantly, mortgages continue to recover with 185 million disbursements in Q1, up 95% year-on-year. Slide 8 demonstrates our pricing discipline, which is a 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. Slide 9 outlines the impressive evolution of our services revenues, supported by stellar combined insurance and asset management results, which has yet to fully build up. Ethniki Insurance contributed 20 million euros in the first quarter, on track with the annual target. Slide 10 demonstrates the growing trend of assets under management that reached 14.7 billion euros, backed by strong net inflows of 500 million. Slide 11 presents detailed information regarding net interest income intrinsics. In a nutshell, our growing loan and securities book drove NII increase in the first quarter, with Euribor tailwinds still to come. Turning to slide 12, it is evident that our cost control allows us to comfortably meet targets. Overall, we remain very cost-conscious, using CAPEX investments to ensure structural efficiency gains. Slide 13 provides a summary of our asset quality indicators. The key message is that our balance sheet is now structurally de-risked. We enjoy a robust liquidity profile presented on slide 14. Our strong deposit franchise, combined with superior LCR, supports profitable growth with ample funding capacity. Turning to capital on slides 15 and 16, our capital position is resilient and efficient. and in line with internal targets, while at the same time we are delivering attractive shareholder returns. As said, for 2026 we have elevated our distribution accrual ratio to 57% from 55% in 2025. Slide 15 depicts Ethniki Insurance highlights in the first quarter. Notably, gross written premia reached 217 million in line with full year aspirations and with minimal contribution for its Banka channel. Bank Assurance integration with Paereus is now at full implementation mode with a goal to increase gross return premium production in 2027 by 30%. On slide 18, we present an update on Snappy, our neobank which has currently just surpassed 100,000 customers. Snappy launched commercially in October 2025 and is already gaining significant traction with its fully digital app-based branchless low capex model as it currently has more than 170,000 app users. On slide 19, There is a summary of our KPIs demonstrating that we are fully in line with our 2026 financial targets. Turning to the second section of our presentation for our positioning within the European competitive landscape. Paereus is in a leading position in Greece in terms of performing loans, deposits, equities brokerage and network, as highlighted on slide 21. In addition, Paereus ranks at par or above average on all major KPIs in the European banking space. In slides 22 to 27, we present some of the key metrics for Pireus versus European bank averages. In slide 22, Pireus delivers best-in-class loan growth in Europe, outpacing EU peers by a wide margin. 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 income ratio, is best in class in Europe, demonstrating our ongoing focus on operational efficiency and cost discipline. Slide 26, Paireus return on tangible book value, is well above the EU average, highlighting our ability to generate superior returns for our shareholders. And concluding with slide 27, despite our strong fundamentals in absolute and relative terms in relation to our European peers, Paireus trades below EU banks with similar earnings implying significant upside for our shareholders. And with that, let's now open the floor to your questions.

The first question is from the line of Benjamin Kaven Roberts with Goldman Sachs. Please go ahead.