Eurobank Ergasias Svcs

Ladies and gentlemen, thank you for standing by. I am Geli, your chorus call operator. Welcome and thank you for joining the Eurobank conference call to present and discuss the first quarter 2026 financial results. At this time, I would like to turn the conference over to Mr. Fokion Karavias, CEO. Mr. Karavias, you may now proceed.

Thank you. Ladies and gentlemen, good afternoon and welcome to the Eurobank first quarter 2026 results presentation. Together with me is our CFO, Haris Vakologiannis, and the investor relations team. We are starting with some key recent developments, then presenting our results, and we will answer your questions. The global economy continues to be affected by developments in the Gulf region and their effects on confidence, energy markets, and economic prospects. The extent of these effects will depend on both the duration of the conflict and the persistence of elevated energy prices. Nevertheless, forecasting within this context remains notably complex. But there is a broad expectation of higher inflation and growth taking a hit across Europe with GDP estimates for Greece and our broader region revised downwards by around half percentage point. However, all our core markets should continue outperforming Eurozone peers in growth rates. Tourism and shipping are sectors with notable contribution to the GDP of Greece and Cyprus. At present, tourism indicators do not suggest any material downturn, while the shipping sector appears to take advantage from increased freight rates. Against this backdrop, fiscal discipline remains critical. Budget execution in 2025 was strong in both Greece and Cyprus, providing room for targeted temporary relief measures to help cushion households and businesses from the energy-driven shock. Today, we have not seen any adverse impact on credit expansion. Loan demand remains strong in Greece and Cyprus, and momentum is encouraging in Bulgaria, supported by the positive sentiment following Euro adoption in January. In this operating environment, We remain focused on discipline execution of our strategic priorities across the group, with particular emphasis on organic growth and the integration of our recent acquisitions. More specifically, in Cyprus, we're progressing with the operational merger, which is expected to be completed in early 2027. In parallel, a voluntary exit scheme involving 200 FTEs was successfully implemented. In Greece, we announced earlier today the SPA signing for the Eurolife transaction. Thus, we now expect the transaction to close in the third quarter after the required regulatory and supervisory approvals. Now, let's move on to our financial results for the first quarter of 2026, as highlighted on slides 5 to 10. Eurobank's financial performance was in line with our business plan during the first quarter, with especially strong loan volumes, net interest income and commissions. Overall, net profit reached €351 million and return on tangible book value 15.1%. The tangible book value per share reached €2.55. In more detail, starting from the loan growth, which remained strong for another quarter, resulting in a net quarterly increase of 1.1 billion euros and almost 10% year-over-year expansion. Trade demand was robust in every country. In Greece, corporate loans saw significant growth due to increased investments, while mortgages are gradually making a larger impact. In Bulgaria, credit demand continues unabated and Cyprus experienced its highest loan growth in five quarters. Balance and expansion supported our top line numbers. In particular, net interest income was up by 2.6 and 4% quarter on quarter and year on year respectively. In addition to NII, commission rose 20% year-on-year, driven by lending fees, insurance, and wealth management. Managed funds, especially, continue their strong momentum, with assets under management growing by 26% year-on-year. The strong top-line performance has driven corporate provision income up by 6.6% year-on-year. The cost of risk ratio was 55 basis points, in line with our full year estimate. So, based on the above, core operating profit reached €460 million, or up 8% year on year. Regional operations performed in line with our plan, netting €165 million, almost half of our total profits. highlighting the group's franchise strength. Finally, our asset quality remains resilient and our capital position strong with set one and total cut at 15.4 and 20.4% respectively. So overall, the first quarter demonstrated robust top line performance and reaffirmed our ability to sustain organic growth. As such, without underestimating the volatile geopolitical environment and its adverse impact on growth rates, we are on track to deliver our 2026 plan. At this point, I would like to ask our CFO, Haris Vakologiannis, to present our first board results before the Q&A session.

Thank you, Fakir. Let's now provide more insight into the first quarter results. Overall, the year commenced on a strong note demonstrated by organic growth in loans and assets under management, NII and fees. More specifically, on page 19 and on lending volumes, first quarter continued the solid momentum of last year with organic growth reaching 1.1 billion euro 500 million coming from greece 400 from bulgaria and 200 from cyprus first quarter results strengthen our confidence in reaching the full year 2026 growth target of 3.8 billion euro as regards managed funds on page 23 at the end of the period managed funds reached 10.2 billion euro, with 500 million quarterly net inflows, offset by 200 negative mark-to-market, reflecting market volatility in March.