- First profitable quarter since 3Q2011 – Net profit at €60m
- Net profit from international operations at €27m
- Net interest income up 2% q-o-q to €383m
- Fee and commission income up 10.0% q-o-q to €68m
- Operating expenses down 1.4% 2 y-o-y
- Core pre-provision income up 14.3% 3 q-o-q at €198m
- Significant deceleration in 90dpd formation, down 82% q-o-q to €42m
- Cost of risk declines to 1.76%
- Deposits flat in Greece and up at a Group level q-o-q. Current Eurosystem funding decreases further to €22.8bn
- Common Equity Tier 1 Ratio at 16.5%
“The agreement with the European partners for the completion of the First Program Review and the start of the discussion for a viable re-profiling of sovereign debt lays the foundation for reduced uncertainty, improved confidence and restored stability in the Greek economy. Free from the burden of the macroeconomic outlook, the Greek banking system can now focus on its primary role, to restore financing of the real economy without delay; to support healthy and internationally competitive enterprises; to help job creation and to contribute to the transition towards a viable, extrovert and investment-based growth model. The ability of banks to contribute to a sustainable virtuous cycle depends on their dealing with the major challenges, such as the efficient management of NPLs, the return of deposits and the gradual access to capital markets, along with renewed credibility both at home and internationally. In order to achieve these goals, it is critical to make moves that strengthen market confidence in the country’s prospects, to lift all capital controls and to reliably implement reforms that promote economic growth and investment and attract significant and much-needed foreign funds and investments. The expected positive decisions of the ECB, the acceptance of Greek bonds as collateral and the potential participation of Greece in the QE Program, can significantly improve the liquidity and profitability of banking institutions and therefore their ability to support economic recovery and the end of the protracted recession. In this context, Eurobank is in a prime position to capitalize on the virtuous cycle opportunities on the basis of its strategic plan, its strong international shareholder base, robust balance sheet and the trust of its clients. Holding transparency and up-to-date corporate governance as a top priority, Eurobank can create value for its shareholders, benefit its customers, help the communities and contribute to the economy.”
Nikolaos Karamouzis, Chairman of BoD
“First quarter results confirm that Eurobank is on track to achieve its main objective for 2016 – a return to profitability. The bank had a profitable quarter for the first time after five years of unprecedented crisis for the Greek banking system. Year-round profitability will reflect the significantly improved image of Eurobank in the eyes of regulators and the general public, facilitating the return of deposits and helping the effort to regain access to capital markets. Pre-provision income improved and was in line with the target set for 2016, while lower loan loss provisions come on the foot of the substantial deceleration in the formation of new NPLs in Q1 2016. The anticipated completion of the First Program Review is expected to pave the way for the gradual return of deposits in Greece, while, in another positive sign, their cost remains in a downward trend, despite the challenges encountered during this period. The management of non-performing loans aiming at value recovery remains in the current juncture our strategic priority and the greatest challenge. In this context, the agreement with a leading international investment fund, KKR, with the participation of EBRD, to manage part of the troubled loan portfolio and restructure viable businesses with capital injection is a trend-setting milestone. The management platform is open to the participation of all Greek banks and opens the way for new strategies for troubled corporate loans, which can greatly contribute both to the improvement of banks’ portfolios (and hence their ability to finance solid firms), and the reconstruction of companies and sectors to become viable and competitive in international markets. The performance of our international activities is particularly promising. They are back on a track of sustainable profitability and we expect this trend to continue, as economies in the region are recovering at a relatively strong pace. Finally, our strategy to further strengthen the balance sheets of our subsidiaries abroad includes the sale, at attractive terms, of portfolios of non-performing loans in Bulgaria and Romania.”
Fokion Karavias, CEO