Eurobank Posts 15.8% Profit Growth in First Nine Months, Boosted by Net Interest and Fee Income
Eurobank, Greece's largest lender by market value, reported higher profit for the first nine months of the year, owing to higher
Eurobank, Greece’s largest lender by market value, reported higher profit for the first nine months of the year, owing to higher net interest and net fee and commission incomes.
Reported net earnings for the January-September quarter were 1.14 billion euros, up 15.8% from €980 million the previous year.
https://twitter.com/ReutersBiz/status/1854565770140828000
The bank’s net interest income increased 14.3% year on year to €1.83 billion, driven by loans, bonds, and overseas activity, the bank added. Net fee and commission income increased 11.8% year on year to 451 million euros, owing to fees from network activities and asset management, it said.
Eurobank’s non-performing loan exposure ratio (NPE) declined to 2.9% at the end of September.
The bank had another strong set of results in the third quarter, exceeding expectations, according to Chief Executive Officer Fokion Karavias, who also stated that the trend predicts that the return on equity will be around 17.5% for the full year.
Greek lenders have stabilized following three recapitalizations and nationalizations following the country’s financial crisis in late 2009.
In June, the European Central Bank granted Greece’s four major lenders’ request to begin dividend payments after 16 years, indicating the sector’s revival and the country’s economic rebound.
Eurobank Set to Boost Stake in Hellenic Bank
Meanwhile, Greece’s Eurobank is expected to boost its holding in the Hellenic Bank of Cyprus to 68.81% from 55.962% following an agreement with employee groups, while also acquiring 8.58% of Demetra Holdings, a major shareholder in the Cypriot financial institution, which now owns a 21.3% stake.
Eurobank agreed to acquire 12.848% Hellenic Bank’s shares for approximately 243 million euros, or 4.58 euros per share.https://t.co/NwzOw6RDkF#Eurobank
— tovima.com (@tovimacom) November 7, 2024
This integration of the Cypriot credit institution with the Greek company is subject to the permission of all shareholders. Notably, the original proposal to consolidate was greeted with opposition from employee groups and the Demetra fund.
Eurobank has agreed to buy 12.848% of Hellenic Bank’s shares for around 243 million euros, or 4.58 euros per share. This deal resulted in a 79% premium for the sellers.
According to the release, the acquisition is subject to regulatory clearances and will be finalized no earlier than February 8, 2025, if these requirements are met.
The Greek credit institution also announced share purchase agreements with the Cyprus Bank Employees Welfare Fund, the Cyprus Union of Bank Employees Health Fund, and the Cyprus Employees Provident Fund, through which it will acquire an 8.58% stake in Demetra Holdings for approximately 32.4 million euros.
Notably, Demetra Holdings owns 21.3% of Hellenic Bank, making it the second-largest stakeholder.
According to reported numbers for June 30, 2024, Demetra’s holding in Hellenic Bank is worth 77% of its net equity.
JP Morgan maintained its “bullish” outlook on Greek banks, particularly Eurobank, citing stock buybacks and accelerated amortization of Deferred Tax Credits (DTC) as catalysts.
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