Eurobank Ergasias Svcs

Ladies and gentlemen, thank you for standing by. I'm Konstantinos, your course call operator. Welcome and thank you for joining the Eurobank conference call to present and discuss the third quarter 2026 financial results. All participants will be listed in 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 Mr. Fokion Karavias, CEO. Mr. Karavias, you may now proceed.

Thank you. Ladies and gentlemen, good afternoon, and welcome to the Eurobank nine-month results presentation. Together with me is our CFO, Harris Kokologiannis, and the investor relations team. We are starting with some key recent developments. followed by the results analysis and the Q&A session. As Europe faces an energy and inflation crisis with far-reaching political and social consequences, markets have brought concerns over fiscal deficits and rising public debt back into focus. Greece and Cyprus stand out in this environment with strong primary balances and rapidly declining debt levels. Their primary surpluses stand at 3.3 and 4% of GDP respectively. Greece's debt-to-GDP ratio is falling faster than any other in the EU, while Cyprus is down to 50%. Bulgaria also maintains a low public debt at 33% of GDP. According to the draft budget, Greece's economic growth is expected to accelerate to 2.3% in 2027, from 2% this year, supported by robust investments, which are projected to rise by close to 8%. Inflation should this alongside further improvements in the labor market. In Cyprus, the economy is expected to grow by around 3% in 2026 and 2027, as all sectors of the economy perform well. In Bulgaria, economic growth should exceed 2.5% in both 2026 and 2027, while for the new government, reducing the fiscal deficit is a priority. Overall, the resilience of our core economies Underpin by strong investment and sound fiscal fundamentals, continues to support banking activity and sustain credit growth across the region. Now, before we go into the financial results, let me highlight the closing of the EuroLife acquisition, another milestone transaction which announced earlier today. EuroLife provides an additional growth engine particularly in insurance and asset management, adding circa 100 million euros fees on an annual basis. Let's move now to our financial results. Eurobank accelerated its financial performance in the third quarter. As such, the net profit for the nine-month period approached 1.2 billion euros and returned on tangible book value 17%. On the back of strong organic growth. Now, in more detail, NII was up by 9% year-on-year and 5% quarter-on-quarter, while commissions were up by 13% year-on-year. Co-operating profit reached 1.48 billion euros, increasing by 14% from the previous year period. Let's now look at the organic growth figures, starting from loans. The loan growth rate remains above 10% year-on-year, with quarterly and nine-month net deltas of 1.1 and 3.8 billion euros respectively, on track to meet or even exceed the revised full-year target of 4.5 billion euros. Deposits were up by 1.8 and 4.7 billion euros on a quarterly and annual basis respectively. Wealth management maintained its strong momentum with managed funds growing by 900 million euros in the quarter and 22% year on year. Moving now into our regional operations which had another strong quarter. For the 9th month period, they netted 555 million euros or 46% of total. As Cyprus, net profit reached 356 million euros and Bulgaria's 182. Asset quality remains resilient and the cost of risk ratio stable at 53 basis points. The set-one ratio increased to 15.5% and the total capital ratio to 20.4%. In conclusion, the strong 9-month performance demonstrates our consistent ability to deliver organic growth and give us confidence in meeting or exceeding our full-year targets. Reflecting the strength of our performance and capital position, we will distribute an interim dividend of 214 million euros on November 26th. This is equivalent to 5.99 cents per share, an increase of 27% versus last year's respective payment. At this point, I would like to ask our CFO, Harris Kokologiannis, to present our third quarter results before opening the Q&A session.

Thank you, Fokion. Before we start, let me note that following the announcement of EuroLife acquisition completion, its numbers will be fully consolidated as of the fourth quarter, boosting our fee and commission income. Let's now provide more insight into the third quarter results. On page 20 and on lending volumes, loan growth remained strong in the third quarter, reaching 1.1 billion euro, comprising 0.7 billion from Greece, 300 million from Bulgaria, and 100 million from Cyprus. In the nine months, loan increase reached 3.8 billion, with a year-on-year growth rate at 10.5%. Based on the year-to-date performance and our pipeline, we expect to comfortably reach, or even exceed, the revised full-year target of €4.5 billion. Group deposits, shown on page 21, following a record second quarter, rose this period by €1.8 billion. including 0.8 billion from Greek retail. As regards managed funds on page 24, during the quarter, managed funds rose by 400 million euro to 11.4 billion. Year on year, they are higher by 2.1 billion or by 22%. Private banking customers' assets and liabilities reached 15.9 billion euro Higher by 17% year-on-year. Moving to profitability on page 28, quarter-on-quarter, net interest income increased by 5%, reflecting higher loan and bond volumes, better deposit spread, and higher URIBOR, which offset lower lending spreads and higher MRL costs. On a year-on-year basis, NII is higher by 8.7%. The net interest margin for the period increased further to 253 basis points. Turning to fees on page 29, despite seasonality, we had one more strong quarter, with fees up 2.7% quarter-on-quarter to 216 million euro. Lending fees Although lower this quarter, are higher year on year by 19%. Our focus on wealth and insurance pays off, as reflected by the 75% annual growth. Finally, transactions, credit cards and capital market related fees supported well third quarter's mark. Group fees are higher year-on-year by 17%. Moving to cost on page 30, quarter-on-quarter, OPEX remained flat, confirming the trajectory communicated in our previous scores. Year-on-year increase decelerated to 6.9%, and the cost-to-core income ratio for the quarter improved to 35.6%. On page 32, we summarized operating performance for the nine months of the year. Core PPI reached €1.7 billion, higher by 11% year-on-year. Loan loss provisions for the period amounted to €224 million, or 53 basis points in line with our plan. Consequently, core operating profit reached 1.48 billion euro, higher by 14% year on year. Moving on to asset quality on page 34, NPI ratio decreased to 2.4% on the back of lower formation, while coverage remained stable to 82%. On capital and on page 38, CET1 ratio increased to 15.5%, as organic profitability contribution, offset loan growth, payout accruals, DTC acceleration, and fair value through OCI mark-to-market. Performa with Eurolife, our CTR ratio amounts to 14.3%. The total cut ratio on page 39 stands at 20.4% and Performa with Eurolife at 19.2%. Overall, despite the challenging external environment and risks, our nine-month results reaffirm the achievement or even outperformance of revised targets communicated to the market in July. The closing of EuroLife Acquisition provides an additional growth driver, particularly in insurance and asset management. This completes my presentation and we may now open the floor for your questions.