The results of the National Bank for the first quarter of the year record an improvement. In particular, the organic profit after tax up 45%as a result of which the prorated profits after taxes increased by 38% on an annual basis and by 14% on a quarterly basis, amounting to €358 million.

As the National Team states in its announcement the net interest income held at over €600m, -2.8% qoq, against the historically high Q4 2023, reflecting the impact of hedging costs and increased funding costs that were partially absorbed by the positive impact of the increase in of average outstanding loans, which drove net interest income from non-performing loans higher on a quarterly basis. Net interest margin came in at 326 bp, well above the estimate of over 290 bp. for 2024.

Fee income momentum was maintained (+15% YoY) following a seasonally strong Q4 2023, recording double-digit growth rates across all Retail Fee sub-categories, particularly Investment Product Fees and Lending, where growth exceeded +30% on an annual basis. The number of transactions increased by +13% year-on-year, as a result of which transactions in digital channels increased by +26% year-on-year

Cost containment continued, with recurring operating expenses rising 3% year-on-year in Q1 2024, reflecting December industry wage increases and normalized variable pay, as well as inflationary, but easing. The cost-to-organic revenue ratio was below 30% against a target of <35% for 2024

The cost of credit risk stood at 55 bps, significantly below the target of <65 bps. set by the Bank for 2024, reflecting the high MEA coverage rates across all portfolios (Stages 1, 2, 3)

Return on equity was 17.6% at organic earnings after tax and 19.7% at attributable earnings after tax, not adjusting for excess CET1 capital above regulatory limits.

Beginning of June the announcements about the dividend

Speaking to the analysts, in the context of the teleconference on the occasion of the announcement of the results, the CEO of NGE, Pavlos Mylonas, said that the official response from the SSM is expected in early June.

The first Greek bank to regain investment grade

As highlighted, NGE is the first Greek bank to regain investment grade (from MDBRS) after the 2010 crisis, as a result – as reported – of the strengthened balance sheet, high organic profitability, stable creation of capital reserves, as well as the strong financial position and liquidity of the Bank.

The remaining sizes

  • Increase in serviced loans by +€1.1 billion annually to €30.2 billion at Group level. Retail Banking disbursements accelerated in Q1 2024 to €0.4bn, led by small business and consumer loans, offsetting repayments across the Retail Banking portfolio. Indeed, performing Retail Banking loans were flat on a quarterly basis for the first time in many years
  • Approved but undisbursed business loans on top of April disbursements stand at €2.9bn, while disbursements are already seeing a strong recovery in April to €0.85bn against the seasonally weak Q1 2024, setting the stage for the achievement of the credit expansion target for 2024
  • Increasing exposure to Fixed Rate Assets provides protection against impending ECB interest rate normalization
  • Domestic deposits were affected by the usual seasonality, as well as by the optimization of the net financing costs of businesses and the shift of part of the deposits to investment products. Compared to Q1 2023, domestic deposits increased by €0.6bn, reflecting deposit inflows from Retail customers
  • NGE is the first Bank to repay the Program of Long Term Refinancing Transactions (TLTRO III) in Q1 2024. The Bank’s net cash was further strengthened to €9.1 billion in Q1 2024, mainly as a result of issuances in in the context of the increase in the Minimum Requirement for own funds and Eligible Liabilities (‘MREL’)
  • The NPE ratio stood at 3.7% at Group level, with NPEs after provisions amounting to €0.2bn in Q1 2024. NPEs stood at €1.3bn in Q1 2024. The MEA coverage ratio from accumulated provisions reached 86%, with the corresponding coverage ratios of Stages 2 and 3 being 8% and 52% respectively. Negligible net MEA flows in Q1 2024 are within our expectations for this year
  • The CET11 ratio stood at 18.6%, with the Total Capital Adequacy Ratio at 21.3%
  • The Transformation Program is a significant competitive advantage, creating a strong momentum for change

“Strong financial results across the board”

Commenting on the results, its CEO of National Bank, Pavlos Mylonas, said: “Economic activity in Greece accelerated in the first months of 2024, showing increased momentum and resilience against geopolitical risks, with key economic indicators on an upward trajectory. It is indicative that labor market conditions are improving further, inflation is subsiding, fixed capital investment is showing signs of acceleration, while demand for bank loans is increasing.

Capitalizing on Greece’s growth momentum, National Bank started the year with strong financial results across all its business areas, benefiting from its strong balance sheet and key transformation. Demonstrating remarkable resilience in our organic revenue, earnings after tax attributable to shareholders reached €360m in Q1 2024, up +38% YoY and +14% QoQ, driven by return on tangible equity to approach 20% for the current quarter (about 18% on an organic after-tax basis).

Our capital buffers strengthened further, with CET1 at 18.6% and Total Capital Adequacy Ratio at 21.3%, up by +80bp. and +110 m.b. on a quarterly basis – including provision for dividend distribution – reflecting continued strong organic capital generation. The Bank’s liquidity profile resulting from its large and stable demand and savings deposit base remains strong, with net cash further increasing to €9.1bn in Q1 2024, following the repayment of the Long Term Refinancing Transactions Program ( TLTRO). Loan portfolio quality remains high, with negligible NPE flows in Q1 2024.

Our impressive financial performance, with a focus on maintaining organic profitability at high levels, combined with our strong capital position and high liquidity, allowed us to become the first Greek bank to regain investment grade, after the financial crisis that took place in Greece in 2010.

With an eye on the future, we remain true to our commitment to support the growth of the economy and the development initiatives of our clients, while delivering added value to our shareholders. With a strategic focus on our technological and digital transformation and with the unwavering support of our people, we continue to work towards improving the experience and outlook of our customers as the Bank of First Choice.”