The following is a summary of the Eurobank Ergasias Services and Holdings S.A. (EGFEY) Q4 2023 Earnings Call Transcript:
Financial Performance:
Eurobank reported a record core profit in 2023, with a 70% increase in core operating profit totaling €1.5 billion.
Tangible book value per share grew by 21% to €2.07 while return on tangible book value reached 18%.
Regulatory capital stands at 17% for CET1 and CAD exceeding 20%.
A continued improvement in asset quality observed with a decline in the NPS ratio to 3.5%, and coverage increased to 86%.
Eurobank forecasts a TBV per share around €2.2 and return on tangible book value to 15% for 2024 along with a core profit higher than €1.5 billion.
Business Progress:
Eurobank followed through with strategic actions like the acquisition of BNP Personal Finance in Bulgaria and increasing its equity stake in Hellenic Bank to a majority level in 2023.
Their 2024-26 business plan involves capitalizing on Greece's growth cycle, diversifying income sources through acquisitions of Hellenic Bank and BNP, and investing in areas such as systems, people, and new markets in wealth management.
The bank plans to maintain a payout ratio starting at 25% in 2024, increasing gradually to 50%.
Increase in group loans and deposits is expected at the rate of 6.5% and 7%, and €2 billion and €6.8 billion respectively.
Growth in fee income is expected to double in 2024, reaching around €630 million, despite projected decrease in net interest margin.
They plan to keep operating expenses flat in Greece for 2024 and anticipate the NPE ratio to be lower than 3.5% at the end of 2024, and around 3% in the following years.
Anticipated growth from entities like Hellenic Bank and from new sectors such as golf management, while maintaining a cost-to-core income ratio at 36% in 2024 and below 40% throughout the business plan period.
More details: EUROBANK ERGASIAS SERVICES&HLDGS UNSP ADS EA REP 0.5 ORD SHS IR
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