Piraeus Bank Sa ((BPIRY)) has held its Q2 earnings call. Read on for the main highlights of the call.
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The recent earnings call for Piraeus Financial Holdings showcased a robust financial performance, marked by significant growth in the loan book and client assets, improved asset quality, and positive shareholder returns through dividends and buybacks. While challenges such as a decline in net interest income and potential regulatory impacts on mortgages were noted, the overall sentiment was positive, indicating a strong position for the company.
Strong Financial Performance
Piraeus Financial Holdings reported a net profit of EUR 559 million for the first half of 2025, with earnings per share reaching EUR 0.43. This performance aligns with or surpasses the guidance for earnings per share of EUR 0.80 for the year, highlighting the company’s strong financial footing.
Loan Book and Client Assets Growth
The loan book expanded by 15% year-on-year to EUR 36 billion, with a notable growth of EUR 2.2 billion in the first half, surpassing the end-2025 target. This growth in client assets led to an upgrade in full-year guidance for loans to more than EUR 36.5 billion, demonstrating the bank’s successful strategy in expanding its financial services.
Interim Dividend Announcement
Piraeus announced its intention to introduce an interim dividend in Q4 2025, with a distribution amounting to EUR 100 million in the form of a share buyback, subject to approvals. This move reflects the company’s commitment to delivering shareholder value and confidence in its financial health.
Improved Asset Quality
Asset quality remained solid, with an NPE ratio at 2.6% and NPE coverage at 68%. The cost of risk was aligned with the target of approximately 50 basis points for 2025, indicating effective risk management and a stable financial environment.
Upgrade in Assets Under Management
Assets under management increased to EUR 13.2 billion during the first half, up 27% year-on-year. This prompted an upgrade of the target to above EUR 13.5 billion for the end of 2025, showcasing the bank’s ability to attract and manage substantial client investments.
Deceleration in Net Interest Income Decline
The decline in net interest income decelerated materially to minus 1.5% in the second quarter compared to minus 6% in the first quarter. Despite this improvement, the overall trend of declining net interest income persisted, posing a challenge for future earnings.
Conservative Guidance on Net Interest Income
Despite strong loan growth and a robust pipeline, the full-year 2025 NII guidance was not upgraded. This conservative outlook is attributed to accelerated rate cuts and cautious expectations on rate trends.
Potential Impact of Regulatory Changes on Mortgages
Potential costs associated with reprofiling mortgages, including Swiss franc mortgages, may affect the NPE ratio and require adjustments in cost of risk. This highlights the regulatory challenges that could impact the bank’s financial metrics.
Forward-Looking Guidance
CEO Christos Megalou provided forward-looking guidance, emphasizing the company’s achievements and future plans. Piraeus plans to execute a share buyback of EUR 100 million in Q4 as part of a larger EUR 500 million distribution from 2025 profits. Loan growth was robust, prompting an upgrade to their full-year loan guidance to over EUR 36.5 billion. Additionally, the acquisition of a 90% stake in Ethniki Insurance is expected to enhance revenues and shareholder value, with the transaction anticipated to close by the end of 2025.
In conclusion, Piraeus Financial Holdings’ earnings call highlighted a strong financial performance with significant growth in key areas. While challenges remain, the overall sentiment was positive, reflecting the company’s solid position and strategic initiatives aimed at enhancing shareholder value.