Eurobank reports higher profits in 2020, announces new securitization

Eurobank on Wednesday reported a significant increase in net profit to 544 million euros in 2020 from 257 million in 2019, with core pre-provision profit rising 4.2 pct to 865 million euros, exceeding targets of 840 million.

The bank, in an announcement said it will become the first bank in Greece to achieve a single-digit ratio of non-performing exposures (NPEs) in 2021 and will be the first to inaugurate the “ Hercules II” program. More specifically, the bank said its NPE ratio fell by 25.2 ppts to 14.0 pct, year-on-year, the lowest in the Greek banking system, while NPE stock fell by 7.3 billion euros to 5.7 billion euros in 2020. Provisions over NPEs were up by 660 basis points in 2020 to 61.9 pct, business loan disbursements in Greece totaled 6.4 billion euros and performing loans recorded an orgranic increase at 2.1 billion euros in 2020. Deposits grew by 2.4 billion euros in 2020.

“ Despite the adverse developments of the Covid-19 pandemic, Eurobank is moving forward with a plan to complete the cleanup of the balance sheet and become the first bank in Greece to bring the NPE ratio to single digit, within 2021. Having delivered timely on our 2019 plan, we are now able to further accelerate the disposal of legacy NPE stock with a new securitization to the tune of 3.3 billion euros. As a result, the NPE ratio will decline below 9% by year-end, even including the impact of the pandemic, and further down to circa 6% in 2022, converging to European peers. Sustained revenues and a lower cost of risk, support a solid profitability this year, increasing to double-digit return of equity, next year, in line with our pre-pandemic estimates. In 2020, a year of unique challenges, the bank operations remained resilient. Growth will be on top of the global agenda post-pandemic and Eurobank’s mission is to be a growth enabler. However, it is equally important to prioritize sustainability. We are speeding up the introduction of ESG criteria in all our activities and processes. Overall, Eurobank, as a leader in the domestic market, will take advantage of the upward cycle to deliver value to its employees, clients and shareholders,” Fokion Karavias, CEO of the bank, said in a statement.

Having successfully completed the Cairo securitization in 2020, Eurobank said it was moving ahead with a new business plan for the period 2021-2022, which includes further clean-up of the loan portfolio and strengthening of profitability. A new NPE securitization of circa 3.3 billion euros size is scheduled for 2021 under the code name “ Mexico”.