A very strong set of third quarter results were announced by the four systemic banksas stated by National Stock Exchangewith improved trends in organic earnings before provisions.
The positive trend in the latter is mainly reflected by, a) the benefit of the ECB interest rate hike, which offsets the reduction in net interest income on the basis of the termination of the favorable 50 basis point easing regime from the TLTRO “lines”, b) the expansion of loan portfolios with new disbursements of 5.8 billion euros in total c) stable operating expenses on a quarterly basis, despite inflationary pressures, supported by banks’ efforts to contain operating costs.
These trends were also supported by an increase in commission and fee income due to higher trading volume. Furthermore, asset quality continued to improve with him average NPE ratio down 57 basis points quarter-on-quarter due to organic actions as well as sales of NPEs. End, Greek banks have maintained a fairly solid and solid capital position as well as their abundant liquidity, which they can continue to invest in higher yielding assets.
Alpha Bank reported organic profit before provisions of €365m, up 18.4% quarter-on-quarter, driven by higher interest rates and increased contribution from securities, offsetting higher deposit costs and costs from issuing securities. Profit from continuing operations came in at €208m compared to €191m in the second quarter, also benefiting from higher commissions and lower operating costs. NPEs fell by €1bn quarter-on-quarter to €2.9bn in the third quarter as consistently lower organic inflows were more than offset by higher curings and repayments. The NPE ratio fell to 7.2%, down 40 basis points compared to the second quarter, while coverage levels reached 40.8%, up 1.2% quarter-on-quarter. Alpha Bank’s capital position strengthened in the third quarter, with the FL CET1 ratio increasing to 13.9% from 13.6% in the second quarter and the total capital ratio reaching 18.2%, up from 18% in second semester.
Eurobank announced organic profit before provisions of €462 million, up 0.7% quarter-on-quarter, driven by loans, bonds, derivatives and international operations. Net income from continuing operations came in at €318m, down 7.4% quarter-on-quarter, before one-offs, as increased net interest income and higher fees were offset by lower trading and other income , as well as from the increase in operating expenses. Total loans increased by €66 million quarter-on-quarter to €42.2 billion in the third quarter, while NPEs fell by €145 million quarter-on-quarter to €2.1 billion in the third quarter. The NPE ratio fell to 4.9% from 5.2% in the second quarter and 5.6% in the third quarter of 2022. Eurobank’s capital position strengthened in the third quarter, with the total capital ratio (CAD) at 19.5 % and the FL CET1 ratio at 16.8% in the nine months, representing an increase of 230 basis points and 260 basis points year-on-year respectively.
National Bank recorded organic profit before provisions of €481 million (up 7.5% quarter-on-quarter), supported by the bank’s repricing in light of key interest rates and benefited from loan interest income, despite the compression of spreads in loan portfolios, the increase in term deposit costs by 31 basis points quarter-on-quarter to 156 basis points in the third quarter, as well as higher costs in wholesale funding. Profit after tax from continuing operations amounted to 353 million euros (+19.9% quarter-on-quarter). The stock of NPEs fell by €570m quarter-on-quarter to €1.2bn, with almost zero organic formation of NPEs in the base and last trade NPEs leg. The ratio fell to 3.7% (vs. 5.4% in the second quarter) and coverage levels increased to 93.1% (vs. 82.1% in the second quarter). FL CET1 rose 0.6% quarter-on-quarter to 17.9%, supported by strong organic profitability.
Piraeus Bank’s organic profit before provisions reached 457 million euros (+10.9% on a quarterly basis), supported mainly by the favorable interest rate environment and the management of deposit costs. Fee income was lower in the third quarter as seasonally softer new loan activity weighed on performance while operating expenses were also lower as the bank continued to seek to optimize resources as part of its transformation programme. Net profit from continuing operations was €277 million (+131.8% quarter-on-quarter), also impacted by lower forecasts and the non-recording of intangible impairment charges during this quarter. NPEs remained at €2 billion in the third quarter, down 39% year-on-year, supported by both the execution of the resolution plan and organic decline. Consequently, the NPE ratio remained at the level of 5.5%, i.e. significantly lower than at the end of September 2022 (at 8.8%). Piraeus Bank’s FL CET1 ratio reached 12.9%, mainly due to organic capital generation. The overall FL CAD ratio stood at 17.6%, well above capital requirements.