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 9-month 2026 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 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 U.S. This is Christos Megalou, Chief Executive Officer of Piraeus. I'm joined today by our CFO, Theodore Gnardellis, and the Head of Investor Relations, Xenophon Damalas. Thank you for joining us for our nine-month 2026 results. I would like to start with three messages. First, Paireus has delivered another strong period of profitable growth. Our 2026 targets remain firmly on track. Second, the composition of our earnings continues to broaden. Loan growth remains strong. Net interest income has accelerated. Services revenues are growing rapidly. And we continue to operate with a best-in-class cost-to-income ratio. And third, the strength of our 2026 performance gives us confidence to raise the number of our 2027 aspiration. Let me take you now through the drivers of that performance. Uncertainty remains elevated globally. The ongoing energy and inflation challenges have raised concerns over fiscal deficits and public debts in Europe. However, as you can see on slide 4, the Greek macro environment remains resilient and the Greek economy continues to outperform the Eurozone. Growth remains supported by a sound fiscal framework, continued reform implementation and sustained investment. At the same time, Greece will continue to benefit from substantial European funding flows, declining debt ratios, and ongoing improvement in economic fundamentals. Against this backdrop, our focus remains straightforward. Grow the franchise, diversify earnings, and maintain balance sheet and capital discipline. Turning now to our financial performance and on slide five, We delivered record core operating profit of 930 million euros in the 9-month 2026 period. This performance is driven by strong dynamics in net interest income, diversification of revenues, strong efficiency and asset quality metrics. We generated 68 euro cents earnings per share, placing us firmly on track to achieve our full year target of approximately 90 euro cents earnings per share. We achieved normalized return on average tangible book value of 15.4% in the nine month period. On track to meet the 2026 target of approximately 15%. Net interest income momentum has strengthened materially during the quarter, increasing 7% quarter on quarter, while net interest margin climbed to 2.3%. We continue to deliver leading growth in Europe. Our loan book is up 8% year on year, reaching euros 40 billion. During the nine months, credit expansion reached 2.2 billion euros, maintaining the strong momentum. Revenues from services grew 39% year on year, reaching euros 679 million in the nine months, shaping at 100 basis points over assets among the best in class in Europe and in line with the updated target of above 90 basis points Overall, core revenues grew 15% year-on-year, with sustainable diversification of revenue mix towards fees, which now account for 31% of total revenues. Our assets under management increased to EUR 16.9 billion in the nine months, up 19% year-on-year, with EUR 1.3 billion net inflows above our full-year target. Furthermore, deposits rose by 9% Annually, now at €69 billion, with the total deposit cost remaining low at 39 basis points. Our cost-to-income ratio stands at 33%. Top-tier efficiency and confirms our cost-discipline-disciplined approach. Asset quality dynamics remain solid, with MPE ratio down to 2% from 2.2% in the previous quarter. Organic cost of risk shaped at 57 basis points in the nine-month period in line with the 2026 updated target of approximately 60 basis points. Our capital position is strengthening with standing unfavorable market movements. Our CET1 ratio increased significantly by 10 basis points quarter on quarter to 12.9% driven by strong organic results. And it is well on track to meet the end 2026 target of above 13%. To this end, we will proceed with the distribution of an interim dividend of 10 cents per share out of the 2026 net profit that will be paid to Paireus shareholders in December subject to supervisory approval. Slide 6 presents the details of our third quarter and nine-month operating results. We grew our core operating profit by 10% year-on-year to €301 million in the third quarter, driven by strong top-line dynamics. On slide 7, our net interest income grew strongly, up 7% quarter-on-quarter, Driven by rate tailwinds, while at the same time we preserved spread discipline. Based on our nine-month performance and current market dynamics, there is upside to the full-year NII ambition of EUR 2 billion. On slide 8, we present one of the main pillars of our performance, which is customer loan growth. The €2.2 billion net credit expansion during the nine months is putting us firmly on track to meet our aspiration of more than 3 billion euros net expansion for the full year. Importantly, growth remains broad-based. We continue to support investment across all the sectors of the Greek economy, like energy, hospitality, infrastructure and shipping. At the same time, we are also witnessing and encouraging recovery in household lending. Slide 9 demonstrates our pricing discipline. We compete for business, we support economic growth, but we maintain risk-adjusted return at the core of all underwriting decisions. At the same time, As we see on slide 10, the orderly repricing of our time deposits balance keeps funding costs low. Our 69 billion euros book of deposits is our core strength, with total deposit beta remaining stable at 15%. Slide 11 outlines one of the major themes of the nine months, which is revenue diversification. Ethnic insurance is an important driver for this, leading the acceleration in revenues from services with its nine-month contribution standing ahead of the annual target. Fee growth is increasingly supported also by solid financing activity, asset management and bank assurance. Slide 12 depicts the ethnic insurance highlights in the nine months. The business performs ahead of expectations. Gross written premiums reached EUR 666 million, 4% higher year on year, driven by solid trends in health. The next phase of group integration is now under preparation and is expected to support accelerated growth from 2027 onwards. Slide 13 demonstrates the momentum in wealth and asset management. Assets under management reached euros 16.9 billion, increasing by 17% year on year. Net inflows amounted to 1.3 billion euros during the nine months, Exceeding already our full-year target. Turning to slide 14, our cost-income ratio stands at 33% in the nine months and at 32% in the third quarter, on track to meet the 2026 target of below 35%. We maintain one of the strongest efficiency positions in Europe while continuing at the same time to invest in growth initiatives. Slide 15 provides a summary of our asset quality indicators. NPE ratio declined to 2% and underlying cost of risk increased to 60 basis points as we transferred some loans to health for sale status. The key message is that asset quality remains strong and as we continue to expand the loan book, we are maintaining a prudent approach to risk management. Paereus, enjoys a robust liquidity profile presented on slide 16. Our strong deposit franchise, combined with superior liquidity coverage ratio, supports profitable growth, offering strategic optionality. Turning to capital, on slides 17 and 18. Capital generation remains strong and supports growth and shareholder returns. The performance in the nine months and the dynamics of the fourth quarter of the year give us confidence in achieving the full year CET1 ratio target of above 13%. Moving on slides 19 and 20, we present the highlights of our digital bank. Snappy's momentum is accelerating as it reached 260,000 app users and euros 130 million of deposits in its first year since launch. This performance compares favorably to what other leading neobanks have achieved at the same point of their development and gives us confidence for our 2027 aspiration. At a rate of euros 1 million inflows per day, deposits are expected to reach 500 million euros in 2027. While we aspire to double the customer base to over 400,000 next year. On slide 21, the strong execution delivered in the nine months gives us increased confidence in our 2026 outlook. All our targets for the year are well on track while there is upside on net interest margin and revenues from services over assets ratio. Based on this performance, we are revising several of our 2027 ambitions compared to the Capital Markets Day aspiration on the 5th of March, 2026. As you can see on slide 22, we now target for 27. EPS growth of approximately 10%. Return on tangible book value above 15%. Net interest margin of more than 2.4%, revenues from services over assets at 90 basis points, and CET1 ratio above 13.5%. These upgrades reflect the momentum we continue to see across the franchise, and our confidence in the sustainability of current trends. Turning 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 24. In addition, Paereus ranks at par all above average on all major KPIs in the European banking space. In slides 27 to 29, we present The key metrics for Paireus versus European bank averages. In slide 25, Paireus continues to deliver best-in-class loan growth in Europe, outpacing EU peers. Slide 26, our net interest margin is far above the European average, reflecting our pricing power and effective balance sheet management. Slide 27, revenues from services over assets, is well above the European average and the best in Greece. Slide 28, our cost to income ratio is best in class in Europe, demonstrating our ongoing focus on operational efficiency and cost discipline. Slide 29, our average, our return on tangible book value is well above The European Average, highlighting our ability to generate superior returns for shareholders. And 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, yet lower growth dynamics. And with that, let's now open the floor to your questions.

Thank you. 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 handset when asking your question for better quality. Anyone who has a question may press star and one at this time. One moment for the first question, please. The first question is from the line of Noemi Peruk with Morgan Stanley. Please go ahead.