“Eurobank continued a solid performance in the second quarter, highlighted by sustained profitability, increased pre-provision income and positive results in the area of non-performing exposures (NPE) in line with our full-year target, Fokion Karavias, Eurobank’s CEO said on Thursday.
In an announcement, Karavias said that net profit reached 113 million euros in the first half of the year. The core Pre-Provision Income increased by 6.3% from the previous quarter, driven primarily by stronger fees and commissions and 1.3% y-o-y. Our international franchises continued to significantly contribute to the Group’s overall performance, their profitability increasing by nearly 20% year-on-year. At the same time, the cost containment plan led to lower operational costs at the rate of 2% (3.4% in Greece). New NPE formation remained negative and the NPE ratio following a decrease by 70bps in the first quarter had a further 110bps reduction in the second quarter, leading to a lower NPE ratio of 40.7%. Liquidity conditions improved further as we witness a return of deposits in Greece and the use of ELA funding has been drastically reduced from 6.1 billion euros at the end of 2017, to 1.8 billion euros currently.
Our business priorities remain unchanged: first, the gradual reduction of the NPE stock, which should lead to a NPE ratio in the mid-teens level by the end of 2021. Furthermore, we are targeting the gradual increase of our loan book mainly in corporates and SMEs as the expected growth rates should lead to higher healthy demand, and the provision of best-inclass service to both our household and business clients through continued investment in technology.
The conclusion of the third support program is both a milestone and a challenge for the Greek economy. Having shouldered the painful fiscal adjustment, Greece is now moving towards regaining credibility and capital market access in a foggy international environment. Achieving the necessary growth rates requires massive investment for many years. A clear signal that all stakeholders are committed to timely implementing the agreed roadmap without backtracking and to accepting ownership of the reform agenda can be instrumental in turning the existing interest in Greek asset into concrete investment projects, in which Eurobank is able and willing to contribute.”
Eurobank said net profit totaled 55 million euros in the second quarter and 113 million in the first half of 2018.
Core pre-provision income up 6.3% q-o-q and 1.3% y-o-y
Operating expenses down 3.4% y-o-y in Greece and 2.0% for the Group
International operations net profit1 up 19.4% q-o-q (40 million euros) and 13.3% y-o-y (73 million)
NPE formation negative by 199 million euros in the second quarter
NPE stock down 0.6 billion euros in the second quarter and 1.1 billion euros in the first half
Provisions over NPEs at 55.9%
NPE ratio down 110bps q-o-q and 440bps y-o-y to 40.7%
Deposits in Greece up by 0.9 billion euros in the second quarter and 2.2 billion in the first half
Current ELA funding down by 6.1 billion euros y-t-d to 1.8 billion
CET1 at 14.8% and CAD at 17.4%