In This Article:
Release Date: May 08, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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National Bank of Greece SA (NYSE:NBGPRA.PFD) reported strong profitability in Q1 2025, with profits exceeding EUR 380 million and a return on tangible equity over 19%.
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The bank's earnings per share, normalized for trading results, stood at EUR 1.44, surpassing the full-year guidance of EUR 1.3.
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Credit expansion was healthy, with a net increase of EUR 0.3 billion in Q1, and a strong pipeline of approved corporate credits over EUR 2 billion.
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The bank's capital position strengthened, with a CET1 ratio increasing by 40 basis points to 18.7%, and a total capital ratio of 21.5%.
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The bank's cost-to-income ratio remains low at 30%, evidencing strong top-line resilience and efficient cost management.
Negative Points
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Net interest income was down 4% quarter-on-quarter, reflecting a significant drop in average arrival rates by approximately 100 basis points.
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Operating expenses increased by 5% year-on-year, driven by higher wages, variable remuneration, and investments in human capital.
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Despite strong originations, the performing loan stock remained flat in Q1 due to factors like FX impact and amortization of securitization bonds.
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The bank faces potential risks in the shipping sector, with concerns about lower trade volumes impacting shipping loans.
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There is uncertainty regarding the impact of lower interest rates on net interest income, with sensitivity to EUR rates remaining a concern.
Q & A Highlights
Q: Could you provide guidance on how your loan growth pipeline will unfold in the coming periods, and any changes in your full-year guidance? Also, what should we anticipate in terms of spreads and loan pricing? A: We have a strong pipeline, and most of it should be dispersed in 2025, supporting our 2.5 billion net expansion guidance. Loan growth is primarily driven by corporate and large corporates, with some optimism in the mortgage market due to a new government program. Regarding spreads, most of the loan spread contraction has occurred, especially in corporates, with less pressure as rates decline. No major changes are expected.
Q: Your performing loan stock remained flat in Q1 despite strong originations. Were there any redemptions, and how do you expect them to develop? Also, what is your confidence level on NIM staying above 2.8% given the lower rate trajectory? A: The flat loan stock is due to FX impacts from our shipping portfolio in USD and amortization of securitization bonds. We are confident about maintaining NIM above 2.8% by year-end, with sensitivity to EUR rates remaining at 35 million for every 25 basis points change. The repricing of time deposits will provide additional benefits over the next nine months.