We expect ATHEX to move higher today, aided by the positive trends in the European stock markets.
Market Comment
ATHEX headed north on Friday, underperforming the European stock markets. In more detail, the General Index rose by 0.62% at 1,607.79 units (FTSE Large Cap: +0.80%, FTSE Mid Cap: -0.06%, Banks Index: +2.07%) and the traded value was shaped at EUR 385.9m, up from Thursday’s EUR 156.1m.
On a weekly basis, the General Index dropped by 0.64% w-o-w, (FTSE Large Cap: -0.63%, FTSE Mid Cap: -2.11%, Banks index: +0.59%). Week Ahead: ElvalHalcor FY24 results today, Cenergy FY24 results tomorrow, Optima bank FY24 Results and ECB meeting on Thursday (amc), FY24 Greek GDP data and DBRS sovereign debt review on Friday. We expect ATHEX to move higher today, aided by the positive trends in the European stock markets.
Today’s Headlines
· Greek HICP slightly down in February (Eurostat)
· PPI in industry slightly up in January (ELSTAT)
· Retail sales down in December (ELSTAT)
· Greek ESI drops in February
· Electricity Suppliers announce unchanged tariffs for March
· Alpha Services and Holdings | 4Q24 results beat estimates, BP targets feasible and above estimates, Top pick, Reiterate BUY
· National Bank of Greece | 4Q24 results missed estimates on higher one-offs, BP targets feasible
· Piraeus to distribute capital return and not dividend-Press
· Paulson & Co holds 13.62% of Piraeus Financial Holdings
Macro Headlines
Greek HICP slightly down in February (Eurostat)
According to a flash estimate from Eurostat, Greek annual inflation is expected to shape at 3.0% in February (and unchanged m-o-m), slightly down compared to 3.1% in January and above the respective EU area figure (down to 2.4% in February from 2.5% in January).
PPI in industry slightly up in January (ELSTAT)
According to ELSTAT, Producer Price Index in Industry (PPI) increased by 0.3% y-o-y in January 2025, driven by an increase in Durable consumer goods (+4.5% y-o-y), while also higher producer prices were gauged in Capital goods (+3.9% y-o-y;). In the February 2024- January 2025 period, Producer Price Index in Industry (PPI) decreased by 1.6% in comparison with the corresponding index for the period from February 2023 to January 2024.
Retail sales down in December (ELSTAT)
According to the Hellenic Statistical Authority, retail sales (excluding automotive fuel) decreased by 4.1% y-o-y in December 2024 (while also decreased by 4.8% y-o-y in volume terms), while including automotive fuel, retail sales decreased by 5.4% y-o-y. Per main store category, the turnover of the Food sector decreased by 7.3% y-o-y, with sales volume lowered by (6.7% y-o-y), while Non-food sector (except automotive fuel) sales decreased by 1.4% y-o-y with sales volume also down by 3.3% y-o-y. Finally, the turnover of the Automotive fuel sector decreased by 9.6% y-o-y, with sales volume down by 7.4% y-o-y.
Greek ESI drops in February
Greece’s Economic Sentiment Indicator (ESI) dropped to 106.9 in February 2025 from 108.6 in January, remaining well above the EU average ESI (rose to 97.1 in February from 96.0 in January).
Sector Headlines
Electricity Suppliers announce unchanged tariffs for March
The electricity suppliers announced flattish tariffs for March, despite the higher wholesale price (wholesale electricity price in February shaped at EUR 154.09/MWh from EUR 135.13/MWh in January). PPC and METLEN’s Protergia have already announced unchanged tariffs for January at EUR 155/MWh and EUR 159/MWh respectively. In other related news, according to Energypress.gr, the evolution of the retail tariffs in the next two months, April and May, will determine whether there will be a repetition of an extra tax to the electricity generators.
Company Headlines
ALPHA SERVICES AND HOLDINGS | BUY | CP: EUR 1.9475 | TP: EUR 2.55
4Q24 results beat estimates, BP targets feasible and above estimates, Top pick, Reiterate BUY
Optima View: Alpha delivered a strong set of 4Q24 results that beat both Optima and consensus estimate. On top of that, the BP targets over 2025e-2027e are well above both Optima and consensus estimates and we believe that are achievable under the current macro environment. Therefore, we’ll adjust upwards our estimates and Target Price accordingly. Alpha is one of our top picks in the sector.
2024 P & L: Reported net profit came in at EUR 654.0m (+6% y-o-y) on the back of a) almost flat NII at EUR ca1.65bn (-1% y-o-y), b) higher fee income at EUR 420.0m (+12% y-o-y), c) soaring non-recurring revenues at EUR 152.0m (+86% y-o-y) and d) lower LLPs at EUR 236.0m (-24% y-o-y). Furthermore, OpEx reached EUR 866.0m (+6% y-o-y), whilst the results were burdened by NPA losses of EUR 136.0m (+46% y-o-y). Normalized net profit (excluding one-offs) increased by 9% y-o-y to EUR 861.0m. Normalized EPS adj. AT1 reached EUR 0.35, above November guidance of EUR 0.34.
Remuneration: Payout at EUR 281m or 43% of profits, above our estimate and guidance of 35%. Share buyback at EUR 211m or 75% of remuneration and the remaining EUR 70.3m in cash dividend, corresponding to EUR ca 0.03/share, implying a gross dividend yield of 1.5%.
Balance Sheet: Performing loans rose by EUR 2.4bn q-o-q to EUR 33.3bn, deposits rose by EUR 1.3bn to EUR 51.0bn and assets stood at EUR 72.1bn. Investment securities reached EUR 17.7bn or 24.5% of assets. Tangible equity accelerate to EUR 7.0bn vs. EUR 6.4bn in 2023.
Asset quality: Cost of risk widened to 67bps in 4Q from 58bps in 3Q24 and also shaped at 63bps in 2024. Negative NPE formation EUR -20m) in the quarter. Group NPE ratio narrowed to 3.8% from 4.6% in 3Q24 and the NPE coverage widened further to 53.0% vs. 48.0% in 3Q24.
Capital: FL CET1 ratio widened to 16.3% post dividend accrual from 15.5% in 3Q24 and 14.3% in 2023. RWAs stood at EUR 30.3bn. Excess capital amounted to EUR 1.0bn (EUR 0.42/share) over FLCET1 target of 13%.
|
(EUR m) |
4Q24A |
3Q24 |
QoQ |
YoY |
vs Optima |
vs Cons |
|
|
Net Interest Income |
405.7 |
410.0 |
-1% |
-8% |
1% |
0% |
|
|
Fee income |
114.4 |
108.8 |
5% |
15% |
9% |
6% |
|
|
Core income |
520.1 |
518.8 |
0% |
-4% |
2% |
1% |
|
|
Non-core Revenues |
57.4 |
27.2 |
111% |
93% |
132% |
80% |
|
|
Total revenues |
577.5 |
546.0 |
6% |
1% |
8% |
6% |
|
|
Operating Expenses |
(238.9) |
(210.7) |
13% |
27% |
10% |
8% |
|
|
Pre Provision Profit |
338.6 |
335.3 |
1% |
-11% |
7% |
4% |
|
|
LLPs |
(63.2) |
(53.1) |
19% |
-32% |
-11% |
-3% |
|
|
NPA loss |
(19.2) |
(18.4) |
4% |
-82% |
-62% |
-45% |
|
|
Reported net profit |
164.9 |
166.7 |
-1% |
37% |
48% |
23% |
source: Optima Research, Company, Company-Median consensus estimates
|
(EUR m) |
2024A |
2023 |
YoY |
|
Net Interest Income |
1,646.6 |
1,658.8 |
-1% |
|
Fee income |
420.0 |
374.2 |
12% |
|
Core income |
2,066.6 |
2,033.0 |
2% |
|
Non-core Revenues |
152.0 |
81.9 |
86% |
|
Total revenues |
2,218.6 |
2,114.9 |
5% |
|
Operating Expenses |
(866.2) |
(815.4) |
6% |
|
Pre Provision Profit |
1,352.5 |
1,299.6 |
4% |
|
LLPs |
(235.8) |
(309.3) |
-24% |
|
NPA loss |
(144.6) |
(125.3) |
15% |
|
Reported Net Profit |
654.1 |
618.3 |
6% |
source: Company
BUSINESS PLAN TARGETS 2025e-2027e
The targets set are above our estimates over 2025e-2027e across all revenue lines and lower LLPs.
Net profit: Reported net profit is targeted to reach EUR ca850.0m in 205e, above our estimate of EUR 768.0m and 20% above consensus and to surpass EUR 1.0bn in 2027, above our estimate of EUR 872.0m and 25% above consensus.
RoTE: Reported RoTE is expected to accelerate to 11.0% in 2025e and to 12.0% in 2027e from 9.7% in 2024.
Remuneration: Payout is targeted to be at least 50% of earnings over 2025e-2027e. The future split between cash and buyback will depend on market conditions. Overall, it targets to distribute EUR 1.3bn over 2025e-2027e.
Excess capital: Management targets the excess capital to reach EUR 1.4bn (EUR 0.59/share) over 2025e-2027e that will be used for extraordinary dividends and bolt-on acquisitions.
NII: Management targets NII to exceed EUR 1.65bn in 2025e, to surpass EUR 1.7bn in 2026e and EUR >1.8bn in 2027e, above our estimate of EUR 1.65bn in 25e and EUR 1.69bn in 2027e. Performing loans are expected to exceed EUR 35.5bn in 25e, EUR >38.0bn in 26e and EUR >41.0bn in 27e.
Fee income: Fee income is projected to reach EUR 450.0m in 2025, above our estimate of EUR 436.0m and thereafter to post a CAGR of >9.0% over 2026e-2027e.
Non-recurring revenues: Trading income is expected to land at EUR 80.0m in 2025 and to exceed EUR 80.0m in 2027e, whilst other income (rental, service fee to Romania, advisory activity) to accelerate to 65.0m in 2025e and to exceed EUR 80.0m in 2027e. The targets set are above our estimates.
Asset quality: CoR is expected to de-escalate further to 50bps over 2025e-2027e, below our estimate of 60bps for 2025e. Group NPE ratio is targeted to stand at 3.5% in 2025e from 3.8% in 2024 and to narrow below 3.0% in 2027e.
Capital: FLCET1 ratio is expected to exceed 16.3% in 2025e and >17.0% in 2027e from 16.3% in 2024.
CC HIGHLIGHTS
§ They target an excess capital of EUR 1.4bn over 25e-27e (EUR 0.59/share) to use for extraordinary dividends and bolt-on acquisitions against our estimate of EUR 1.1bn.
§ Extraordinary dividends are not in the agenda with SSM right now.
§ They aim to increase progressively the ordinary dividend.
§ Plenty of M & A opportunities in the current environment.
§ Focus on delivering profitability, capital and distribution targets
§ EPS CAGR of 6% without buybacks
§ One-offs at EUR 50m in 2025.
§ BP does not include the acquisition of Astro bank in Cyprus.
NATIONAL BANK OF GREECE | BUY | CP: EUR 8.924 | TP: 10.92
4Q24 results missed estimates on higher one-offs, BP targets feasible
Optima View: We believe that the BP targets set are achievable and are above our estimates. We reiterate our Buy rating. Following the results and the new BP targets, we’ll adjust our estimates and TP accordingly.
4Q24 results: National Bank of Greece reported 4Q/FY24, that missed Optima and consensus estimates on higher than expected one-off costs. Net profit came in at EUR 174.0m (-45% q-o-q) in 4Q24, 11% below Optima estimate of EUR 195.4m and 7% below consensus estimate of EUR 188.0m.
Reported net profit for the year reached EUR ca1.16bn (+5% y-o-y). Shareholders remuneration payout at 50% of 2024 earnings, in line with our estimate, o/w 35% in cash dividend and the remaining 15% in share buyback.
The results were burdened by other & one-off costs of EUR 186.0m, well above Optima estimate of EUR 120.0m and consensus estimate of EUR 118.8m.
Net interest income was shaped at EUR 575.0m (-2% q-o-q) in 4Q24, broadly in line with Optima estimate of EUR 570.0m and consensus estimate of EUR 566.5m.
Loan and other impairments amounted to EUR 63.0m (+22% q-o-q), 6% above Optima and 17% above consensus estimate.
|
(EUR m) |
4Q24A |
3Q24 |
QoQ |
YoY |
vs Optima |
vs Cons |
|
Net Interest Income |
575.0 |
589.3 |
-2% |
-8% |
1% |
1% |
|
Fee income |
115.0 |
107.6 |
7% |
5% |
4% |
4% |
|
Core income |
690.0 |
696.9 |
-1% |
-6% |
1% |
2% |
|
Non-core Revenues |
22.0 |
17.7 |
24% |
-27% |
-5% |
47% |
|
Total revenues |
711.0 |
714.6 |
-1% |
-7% |
1% |
3% |
|
Operating Expenses |
(246.0) |
(217.3) |
13% |
5% |
0% |
4% |
|
Pre-Provision Profit |
466.0 |
497.3 |
-6% |
-12% |
2% |
2% |
|
Loan and other impairments |
(63.0) |
(51.6) |
22% |
-5% |
6% |
17% |
|
Reported Net Profit |
174.0 |
314.7 |
-45% |
-45% |
-11% |
-7% |
source: Optima bank estimates, Company Median consensus estimate
|
(EUR m) |
2024A |
2023A |
YoY |
|
Net Interest Income |
2,356.0 |
2,263.0 |
4% |
|
Fee income |
427.0 |
382.3 |
12% |
|
Core income |
2,784.0 |
2,645.3 |
5% |
|
Non-core Revenues |
104.0 |
93.4 |
11% |
|
Total revenues |
2,887.0 |
2,738.7 |
5% |
|
Operating Expenses |
(884.0) |
(835.2) |
6% |
|
Pre-Provision Profit |
2,003.0 |
1,903.5 |
5% |
|
Loan and other impairments |
(222.0) |
(240.9) |
-8% |
|
Reported Net Profit |
1,158.0 |
1,106.0 |
5% |
source: Optima bank estimates, Company
Balance Sheet
Performing loans jumped by EUR 3.1bn y-o-y to EUR 33.6bn, deposits increased by 500m y-o-y to EUR 57.6bn and securities by EUR 3.2bn to EUR 20.4bn, accounted for 27% of assets. Tangible equity rose to EUR 7.8bn. Loans to deposits stood at 63%.
Asset quality dynamics
Cost of risk at 49bps in 4Q and at 53bps in 2024. NPE ratio squeezed to EUR 2.6% from 3.3% in 3Q24 and cash coverage accelerate to 98.2% from 86.0% in 3Q.
Capital dynamics
FL CET1 stood at 18.3% and excess capital at EUR 1.6bn, as the internal CET1 target has been set at 14.0%. RWAs stood at EUR 37.5bn from EUR 37.9bn in 3Q24.
BP targets 25e-27e above our estimates
NBG targets NII to exceed EUR 2.1bn in 2025, in line with our estimate and CoR to narrow to be <50bps in line with our estimate of 48bp. Core profit after tax (before one-offs) is projected at EUR 1.19bn, above our estimate of EUR ca 1.07bn. Furthermore, NBG targets NII to surpass EUR 2.3bn in 27e, above our estimates, CoR to squeeze further below 40bps and Core profit after tax (before one-offs) to accelerate to EUR 1.37bn, above our estimate of EUR 1.19bn. Last but not least, Core RoTE is expected to surpass 13% in 25e and 14% in 27e. Payout will increase to 60% from 50% in 2024, supported by share buyback.
Higher NII is attributed to higher performing loans growth (CAGR25e-27e at 8%) and NIM is projected to exceed 280bps in both 25e and 27e against 319bps in 2024. Fees CAGR of >8% and OpEx CAGR of 5% over 25e-27e. Finally, NPE ratio is expected to be lower than 2.5% in 25e and at 2.0% in 27e and CET1 ratio to exceed 18.0% post payouts in the period from 18.3% in 2024.
CONFERENCE CALL HIGHLIGHTS
§ They aim to increase shareholders value through both organic and inorganic growth. In this spectrum, they are looking for inorganic (M & A) opportunities BIG in size with tech benefits
§ Management stated that NBG has the power and the discipline to wait for the right opportunity.
§ Payout will increase to 60% over 2025e-2027e from 50% in 2024, above our estimate of 50%. The split between cash dividends and share buyback will be 2/3 dividends and 1/3 share buyback, depending on stock price performance. They have set a cap at 1.0x P/TBV
§ NII sensitivity: EUR 35m for every 25bps
§ VSS cost at EUR 90m in 2024, EUR 30m cost from the placement last October and EUR 25m for school donations.
§ They target recurring trading income of EUR 60m per annum
§ AGM is scheduled for end of May and they’ll start immediately the share buyback.
Piraeus to distribute capital return and not dividend-Press
Reportedly (euro2day), Piraeus Financial Holdings will distribute the proposed EUR 373.0m or EUR ca0.30/share (35% payout of 2024 net earnings, Yield: 6,6%) in capital return and not in dividend. If this is the case, then the news is positive and unexpected. Piraeus is one of our top picks in the sector with TP of EUR 6.20/share.
Paulson & Co holds 13.62% of Piraeus Financial Holdings
Piraeus Financial Holdings announced that Paulson & Co held on 25 February, 170,317,912 common shares, corresponding to 13.62% of total voting rights.
Calendar of Events
Macros
04/03/25 | Unemployment Rate JAN (ELSTAT) & S&P Global Greece Manufacturing PMI FEB
07/03/25 | 4Q:24 GDP (provisional data) (ELSTAT)
07/03/25 | DBRS – Greece Sovereign Rating review
14/03/25 | Moody’s – Greek sovereign credit review
4Q/FY24 Results Release
04/03/25 | ElvalHalcor (Aft-mkt), Bank of Greece (Aft-mkt)
05/03/25 | Cenergy Holdings
06/03/25 | Optima bank (Bef-mkt), Viohalco
10/03/25 | Attica Bank (Aft-mkt)
12/03/25 | Sarantis (Aft-mkt), Autohellas (Bef-mkt)
19/03/25 | OPAP (Aft-mkt)
26/03/25 | PPC (Aft-mkt), LAMDA Development (Aft-mkt)
27/03/25 | Titan Cement International
31/03/25 | Hellenic Exchanges (Aft-mkt), AUSTRIACARD Holdings (Aft-mkt)
02/04/25 | Trade Estates
09/04/25 | Phoenix Vega Mezz Plc
10/04/25 | Orilina Properties
25/04/25 | Biokarpet
28/04/25 | Alumil
30/04/25 | Motodynamics
EGM / AGM
06/03/25 | EVROPI Holdings (EGM)
19/03/25 | Jumbo (EGM)
08/04/25 | Bank of Greece (AGM)
14/04/25 | Piraeus Financial Holdings (AGM), Athens Airport (AGM)
28/04/25 | Sarantis (AGM)
29/04/25 | Optima bank (AGM), OPAP (AGM)
30/04/25 | Eurobank (AGM)
08/05/25 | Titan Cement (AGM)
16/05/25 | Bank of Cyprus (AGM)
27/05/25 | Cenergy Holdings (AGM), Viohalco (AGM)
30/05/25 | National Bank of Greece (AGM)
03/06/25 | METLEN (AGM)
05/06/25 | OTE (AGM), IDEAL Holdings (AGM)
06/06/25 | Premia Properties (AGM)
12/06/25 | Motodynamics (AGM)
18/06/25 | Biokarpet (AGM)
19/06/25 | HELLENiQ ENERGY (AGM)
20/06/25 | Phoenix Vega Mezz Plc (AGM)
24/06/25 | AUSTRIACARD Holdings (AGM)
25/06/25 | PPC (AGM)
25/07/25 | Alpha Services & Holdings (AGM)
Ex-Dividend
24/03/25 | Jumbo (extraordinary cash distribution EUR 0.4724)
23/04/25 | Athens Airport (EUR 0.78)
02/05/25 | Sarantis
07/05/25 | OPAP
12/06/25 | Premia Properties
01/07/25 | AUSTRIACARD Holdings
02/07/25 | HELLENiQ ENERGY (EUR 0.55)
03/07/25 | OTE (EUR 0.7216)
21/07/25 | PPC
Ex-Capital Return
07/03/25 | IDEAL Holdings (EUR 0.10/share)
24/03/25 | ELLAKTOR (EUR 0.85/share)
|
Research Department |
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