National Bank of Greece SA (NBGPRA.PFD) Q2 2024 Earnings Call Highlights: Record Loan ...

GuruFocus News
4 min read

In This Article:

  • Core Profit After Tax (PAT): EUR646 million for H1 2024, up 27% year on year.

  • Core Return on Tangible Equity (RoTE): 17.4% for H1 2024.

  • Net Interest Income (NII): EUR1.2 billion for H1 2024, up 15% year on year.

  • Loan Disbursements: EUR2.8 billion in Q2 2024, a multiyear record quarterly high.

  • Fee Growth: Up 15% year on year for H1 2024.

  • Cost of Risk: 55 basis points for H1 2024, down from 68 basis points a year ago.

  • CET1 Ratio: 18.3% as of H1 2024, up 100 basis points year to date.

  • Net Cash Position: Above EUR9 billion as of June 2024.

  • Core Deposits: Increased by EUR1.3 billion quarter on quarter in Q2 2024.

  • EPS: EUR1.4 per share for H1 2024.

  • Loan-to-Deposit Ratio: 60% as of H1 2024.

  • Liquidity Coverage Ratio: 240% as of H1 2024.

  • NPE Ratio: 3.3% as of Q2 2024.

  • Total Capital Ratio: 20.9% as of H1 2024.

Release Date: August 01, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • National Bank of Greece SA (NYSE:NBGPRA.PFD) reported a strong first-half group core profit after tax of EUR646 million, up 27% year on year.

  • The bank's CET1 ratio increased by 100 basis points year to date, reaching 18.3%, which is significantly above the internal target of 14%.

  • Loan disbursements reached a multiyear record quarterly high of EUR2.8 billion in the second quarter, indicating strong credit expansion.

  • Net interest income (NII) showed resilience, with a 15% year-on-year increase, supported by strong credit growth and a favorable deposit mix.

  • Moody's upgraded the senior rating of National Bank of Greece SA by two notches, now standing one notch above investment grade, reflecting the bank's strong financial performance.

Negative Points

  • The normalization of net interest income (NII) continued at a pace similar to the first quarter, with a 3% quarter-on-quarter decline.

  • The bank faces challenges from hedging costs and the full cost of MREL issuances, which impacted NII negatively.

  • Despite strong loan growth, the corporate loan book's expansion is described as 'choppy,' indicating potential volatility in future loan disbursements.

  • The bank's cost of risk, although declining, remains a concern at 55 basis points, with little new gross formation.

  • There is uncertainty regarding the approval of potential buybacks by the regulator, which could impact capital allocation strategies.

Q & A Highlights

Q: How do you see the pipeline for performing loans in the second half of the year, and are there any updates on capital allocation, including potential buybacks? A: Pavlos Mylonas, CEO, explained that the corporate loan book is the key driver of loan expansion, which can be choppy. The guidance has been upgraded significantly, and more details will be provided at the end of the year. Regarding capital allocation, there are no major changes, and buybacks would need regulatory approval. The bank is accruing for a 40% payout for 2025, and discussions with regulators about buybacks will continue.

Recommended Stories