Eurobank Reports Strong First Half Profits
In the first half of 2024, Eurobank’s total net profits reached 721 million euros. This includes a 99 million euro profit from acquiring additional shares in Hellenic Bank of Cyprus, as well as a 101 million euro cost from voluntary employee departures in Greece. Earnings per share and return on equity were at 0.20 euros and 18.5% respectively.
Commenting on the financial results announcement, Eurobank’s CEO Fokionas Karavias stated: “Eurobank has achieved the following results: […]”
Eurobank announces dividend distribution to shareholders
For the first time since 2007, Eurobank has distributed dividends to its shareholders. After more than a decade, Eurobank regained its investment grade status from two rating agencies, Moody’s and DBRS. In Cyprus, we became the majority shareholder of the Hellenic Bank with a 55.9% stake, paving the way for its full accounting consolidation, which will create a Banking Group with €100 billion in assets. We have a systemic presence and a leading role in all three of our main markets, Greece, Cyprus, and Bulgaria.
The Positive Economic Environment in Greece
The economic environment remains positive in all the countries where we operate. Greece continues to outperform the eurozone average in terms of GDP growth. The labor market is strong, investments are accelerating, supported by the Recovery and Resilience Fund, as well as other European funds. We are on track to meet or exceed the targets we have set for the year. Loan demand, deposits, and assets under management are increasing at a faster pace than expected.
Strong Performance in the First Half of 2024
The company recorded strong results in the first half of the year. Earnings per share reached 20 cents, with the net asset value per share increasing to 2.25 euros, and return on equity reaching 18.5%. All indicators point to a positive economic environment, leading us to upwardly revise our target for return on equity to around 16.5% for 2024.
Analysis of First Half 2024 Results
Organic pre-tax earnings increased by 10.2% on an annual basis to 958 million euros, exceeding expectations. Overall, the company continues to show strong performance and growth, setting a solid foundation for the future.
Positive Financial Results for the First Half of 2024
The forecasts for revenues have increased by 13% compared to the first half of 2023, reaching 1.003 billion euros. This positive trend is a result of improved market conditions and strategic investments.
On the other hand, the forecasts for doubtful debts have decreased by 12.6% compared to the same period in 2023, amounting to 144 million euros. This reduction reflects the company’s effective risk management strategies.
As a consequence of the above, the organic operating profits before taxes have increased by 15.5% on an annual basis for the first half of 2024, reaching 814 million euros. This growth is a testament to the company’s strong performance and efficient cost management.
The adjusted net profits have also seen a significant increase of 22.2% on an annual basis, totaling 732 million euros for the first half of 2024. The overall net profits have reached 721 million euros, demonstrating the company’s financial stability and sustainable growth.
Positive Financial Results for Greek Bank
The Greek Bank reported a profit of 99 million euros from acquiring additional shares in the Cyprus Bank (negative goodwill) and a cost of 101 million euros from voluntary employee departures in Greece. Earnings per share and return on equity stood at 0.20 euros and 18.5% respectively.
Profitable International Operations
The bank’s activities abroad were profitable, with adjusted net profits increasing by 35.5% on an annual basis to 277 million euros, contributing 37.8% to the Group’s overall profitability.
The index of non-performing exposures (NPEs) decreased, showing an improvement in the bank’s asset quality and financial stability.
Positive Trends in the Financial Sector
On an annual basis, there was a decrease of 2.1 percentage points in non-performing exposures (NPEs), reaching 3.1% in 2023. The formation of new NPEs was positive, increasing by 125 million euros in the first half of 2024. The coverage of NPEs by cumulative provisions strengthened by 20 percentage points on an annual basis, reaching 93.2%.
Maintaining Strong Capital Adequacy
Capital adequacy remained at strong levels, with the Common Equity Tier 1 (CET1) and Total Capital Adequacy Ratio (CAD) standing at 16.2% and 19.3% pro-forma, respectively. This takes into account the impact of the merger of the Greek Bank and the distribution of dividends totaling 342 million euros.
Positive Trends in the Financial Sector
Recent reports show that the financial sector is experiencing positive growth, with a total of 81.3 billion euros in net assets. Loans have increased organically by 1.2 billion euros in the first half of 2024. The total loan balances (before provisions) have reached 43.4 billion euros, including high and medium-grade bonds totaling 4.3 billion euros. Business loans amounted to 25.8 billion euros, housing loans to 9.8 billion euros, and consumer loans to 3.6 billion euros.
Customer deposits have also seen a rise of 1.2 billion euros in the first half of 2024, totaling 58.6 billion euros. The loan-to-deposit ratio stands at 72%, with a coverage ratio of ____%.
Financial Trends in Greece
According to recent data, the total assets under management in Greece increased by 181.7% at the end of the first semester of 2024. Funding from the eurozone decreased by 4.3 billion euros on an annual basis, reaching 3.1 billion euros by the end of June 2024.
Client assets under management in Greece saw a significant rise of 32.2% on an annual basis, totaling 6.4 billion euros at the end of the first semester of 2024. Additionally, the assets of private banking clients within the Group increased by 15% on an annual basis during the same period, reaching 12.2 billion euros.