Today’s Headlines
· Greek PMI up in October
· Piraeus Financial Holdings 3Q24 Review | Stellar 3Q performance led to another EPS upgrade and higher distribution payout for 2024
· PPC EGM today
· METLEN enters six additional markets (press)
· Intralot won’t renew Ohio Lottery contract from June 2027-Press
· OPAP trades ex-dividend today
· OTE Share Buyback
Market Comment
ATHEX headed north on Friday for a 2nd consecutive session, in line with the European stock markets. In more detail, the General Index rose by 0.56% at 1,390.49 units (FTSE Large Cap: +0.85%, FTSE Mid Cap: +0.14%, Banks Index: +2.08%) and the traded value was shaped at EUR 112.1m, down from Thursday’s EUR 148.2m. On a weekly basis, the General Index rose marginally by 0.02% w-o-w (FTSE Large Cap: +0.24%, FTSE Mid Cap: -1.05%, Banks index: +1.92%).
- We expect a wait and see stance ahead of the US elections in ATHEX today, eyeing the international markets. Ahead this week: OPAP dividend cut-off and PPC EGM today, MSCI announcements on Wednesday, National Bank, Eurobank and Titan Cement 9M24 results on Thursday, Alpha Bank 9M24 results on Friday, Optima bank 9M24 results next Monday.
Macro Headlines
Greek PMI up in October
Greek PMI posted 51.2 in October, up from 50.3 in September, signaling only a slight upturn in the health of the Greek manufacturing sector, above the series average despite being the second-weakest in almost a year.
Company Headlines
Piraeus Financial Holdings || BUY | CP: EUR 3.4380 | TP: EUR 6.00
3Q24 Review | Stellar 3Q performance led to another EPS upgrade and higher distribution payout for 2024
Optima View | Piraeus delivered a robust set of 3Q24 results that beat Optima and consensus estimates. Management will host a CC at 15:00 Athens/13:00 London Time. The stock is trading 0.62x P/TBV24E, at a deep 45% discount to European banks, despite its higher RoaTBV profile (15.4% in 2024e vs. 14.0% of EU banks) and higher dividend yield (>8% vs. 7.2% of EU banks). Piraeus is one of our top picks in the sector and we reiterate our Buy rating.
New guidance | Management upgraded once more 2024 guidance and now expects normalized EPS to exceed EUR 0.90 (normalized net profit of EUR >1.125m), in line with our estimate of EUR 0.91 (EUR 1,132m) against its previous EPS guidance of EUR >0.85 and also expects normalized RoaTBV of >17% from >16% in August 2024.
Higher distribution payout for 2024 | Following the EPS guidance upgrade, mgt also increased the distribution payout target for 2024 to 35% of net profit from 30% previously, aiming to distribute EUR >350m, combining dividend and share buyback. The new payout target implies a gross yield of more than 8.1%.
NII Guidance | Management forecasts NII to reach EUR 2.1bn in 2024, in line with our estimate and to narrow to EUR 1.85-1.90bn in 2025 (EUR +50, +100m against previous guidance) and below our estimate of EUR 2.06bn. In our view, guidance is conservative as it assumes the DFR end rate at 2.0% in 2025e.
DTC Guidance | Mgt guided also on the acceleration of DTC amortization from 2025 onwards. The extra DTC amortization of EUR 145m will increase the total DTC amortization to EUR 328m pa, narrowing the DTC/CET1 ratio to 30% in 2027e (termination in 2034) and shaping the CET1 ratio at 16.0%. DTC amortization has no impact on tangible equity. According to mgt, a net profit run rate of EUR 1.0bn, creates a buffer of EUR 400m that could be used for EUR 3.5bn extra credit expansion, stepping up further distribution payout and to extra CET1 build-up.
3Q24 results | 3Q24 reported net profit came in at EUR 318.4m (-4% q-o-q, +15% y-o-y), 3% above Optima estimate of EUR 310.0m and 4% above consensus estimate of EUR 305.0m. NII was shaped at EUR 529.5m (+0.5% q-o-q, -0.3% y-o-y), slightly higher than Optima and consensus estimates. NIM narrowed by 1bp q-o-q to 2.73%. Fee income came in at EUR 155.9m (-13% q-o-q, +11% y-o-y), broadly in line with Optima and consensus estimates. Total revenues reached EUR 708.7m (-2% q-o-q, +8% y-o-y) and OpEx stood at EUR 207.6m (+2% q-o-q, +6% y-o-y). 9M24 net profit skyrocketed by 53% y-o-y to EUR 881.5m.
Balance sheet | Performing loans came in at EUR 32.0bn (EUR +1.9bn y-t-d vs. FY target of EUR 1.6bn) and deposits at EUR 60.5bn (EUR +783 q-o-q). Time deposits reached EUR 13.5bn (EUR -47m q-o-q) and accounted for 22.3% of the deposit base. Investment securities also increased by EUR 610.7m q-o-q to EUR 16.05bn.
Asset quality | LLPs reached EUR 51.7m (+20% q-o-q) and organic CoR was shaped at 54bps. NPEs narrowed by EUR 2m q-o-q to EUR 1.26bn, the NPE ratio squeezed further to 3.2% and the NPE cash coverage widened to 61.4%.
Capital | Tangible equity stood at ca7.1bn (EUR +310m q-o-q) and pro-forma FL CET1 widened further to 14.7% (+50bps).
CC Highlights
§ They will announce a new Business Plan for 2025e-2027e in mid-February.
§ They stepping up the process in order the AGM to take place in early 2Q25 and to distribute the dividend and initiate the share buyback sooner than expected. Share buyback will be substantial but no more details were given.
§ Reconfirmed distribution payout at 50% for 2025 from 35% in 2024.
§ New performing loans target increased by EUR 1.0bn to EUR 33.0bn for 2024. The top priority is to increase credit expansion and are also looking the reperforming loans market.
§ They expect net growth in retail credit in 2025 driven by higher net credit expansion in small business and consumer loans and zero NCR in housing loans.
§ Cost of risk will gradually normalize to European levels (40bps) from 60bps in 2024.
§ A new NPE securitization of EUR 250m will be held in 4Q24 and will reduce NPE ratio below 3.0% versus 3.0% of Spanish banks and 2.5% of Italian banks. New synthetic securitization in place.
§ They look for acquisitions of platforms in the Eurozone that be will add on fee income and in areas such as asset management, transaction banking, leasing and factoring.
§ Snappi to commence operations in 2Q25 and targets revenues of EUR >200m and 2.5m customers for the next 4-5 years and with presence in 3 to 4 European countries.
|
(EUR m) |
3Q24 |
2Q24 |
QoQ |
3Q23 |
YoY |
vs Optima |
vs Consensus |
|
Net Interest Income |
529.5 |
527.6 |
0% |
531.4 |
0% |
0% |
1% |
|
Fee income |
155.9 |
179.2 |
-13% |
140.0 |
11% |
-2% |
1% |
|
Core income |
685.4 |
706.8 |
-3% |
671.3 |
2% |
0% |
1% |
|
Non-core Revenues |
23.3 |
19.2 |
– |
-18.1 |
-228% |
– |
133% |
|
Total revenues |
708.7 |
726.0 |
-2% |
653.2 |
8% |
0% |
3% |
|
Operating Expenses |
(207.6) |
(203.3) |
2% |
(196.1) |
6% |
2% |
2% |
|
Pre Provision Profit |
501.1 |
522.8 |
-4% |
457.1 |
10% |
0% |
3% |
|
LLPs (inc, associates income) |
(56.0) |
(43.3) |
30% |
(75.7) |
-26% |
7% |
-12% |
|
Reported Net Profit |
318.4 |
331.2 |
-4% |
277.4 |
15% |
3% |
4% |
source: Company, Optima Bank estimates, Median Consensus estimates-Company
|
(EUR m) |
9Μ24 |
9Μ23 |
ΥοΥ |
|
Net Interest Income |
1,575 |
1466.0 |
7% |
|
Fee income |
480 |
403.0 |
19% |
|
Core income |
2,055 |
1,869 |
10% |
|
Non-core Revenues |
(29) |
23 |
– |
|
Total revenues |
2,027 |
1,892 |
7% |
|
Operating Expenses |
(613) |
(603) |
2% |
|
Pre Provision Profit |
1,413 |
1,289 |
10% |
|
LLPs (inc, associates income) |
(153) |
(454) |
-66% |
|
Reported Net Profit |
882 |
577 |
53% |
source: Piraeus Financial Holdings
|
Upgraded guidance |
Nov-24 |
Jun-24 |
% |
Optima 2024e |
|
Normalized EPS 2024 (EUR) |
>0.90 |
0.85 |
>6% |
0.91 |
|
Normalized net profit (EUR m) |
>1,125 |
1,060 |
>6% |
1,132 |
|
RoaTBV normalized (%) |
>17% |
15.0% |
>2% |
16.8% |
|
NIM (%) |
2.7% |
– |
– |
2.7% |
|
NPE ratio (%) |
<3.0% |
– |
– |
3.3% |
|
NPE coverage (%) |
60-65% |
– |
– |
60.4% |
source: Piraeus Financial Holdings
PPC EGM today
PPC will hold an EGM today, to approve the spin-off of the “Testing, Inspection & Certification” Business Sector of PPC S.A. and contribution thereof to a new company, a wholly owned subsidiary of PPC, to be established for this purpose and the cancellation of own shares.
METLEN enters six additional markets (press)
According to Euro2day.gr, METLEN acquired the necessary licenses to operate energy trading services in six additional countries in SE Europe, namely Romania, Serbia, Montenegro, Croatia, Bosnia and Slovenia.
Intralot won’t renew Ohio Lottery contract from June 2027-Press
According to press reports (mononews), the Ohio Lottery has selected a new central gaming vendor and Scientific Games will take over from 30 June 2027. According to our estimates, the contract is expected to generate revenues of EUR 37.8m on average over 2024e-2026e and EBITDA of EUR 19.6m, (13.9% of group EBITDA) in the same period. At first glance, the news is negative but Intralot has the time to counterbalance the loss with new contracts around the globe.
OPAP trades ex-dividend today
OPAP will trade today ex-interim DPS of EUR 0.6028 (DY: 3.8%).
OTE Share Buyback
The company announced that during 29/10/2024 – 1/11/2024, it purchased 279,164 own shares at an average price of EUR 15.6089 per share and now holds 4,515,302 own shares or 1.094% of the total shares outstanding.
Calendar of Events
Macros
08/11/24 | CPI OCT (ELSTAT) & Industrial Production SEP (ELSTAT)
14/11/24 | Import Price Index in Industry SEP (ELSTAT)
15/11/24 | Evolution of Turnover of Enterprises 3Q24 & SEP (ELSTAT)
20/11/24 | Current Account Balance SEP (BoG) & Turnover Index in Industry SEP (ELSTAT)
22/11/24 | Fitch – Greek sovereign credit review
Market
06/11/24 | MSCI Index Review announcement (Effective date: November 26, 2024)
3Q/9M24 Results Release
05/11/24 | Premia Properties
07/11/24 | National Bank of Greece (Aft-mkt), Eurobank Holdings (Aft-mkt), Titan Cement, Alpha Trust Andromeda
08/11/24 | Alpha Services and Holdings (08:00 GR Time)
11/11/24 | Optima bank (Bef-mkt)
12/11/24 | Bank of Cyprus (Bef-mkt)
13/11/24 | PPC (Aft-mkt), LAMDA Development (Aft-mkt)
14/11/24 | HELLENiQ ENERGY (Aft-mkt), OTE (Bef-mkt), Aegean Airlines (Aft-mkt), Austriacard Holdings, Lavipharm
20/11/24 | OPAP (Aft-mkt), ElvalHalcor (Aft-mkt), QUEST Holdings (Aft-mkt)
21/11/24 | Ideal Holdings (Bef-mkt)
25/11/24 | Hellenic Exchanges
26/11/24 | Fourlis (Aft-mkt)
12/12/24 | Attica Bank
EGM / AGM
04/11/24 | PPC (EGM)
06/11/24 | TERNA Energy (EGM)
08/11/24 | Biokarpet (EGM)
15/11/24 | BriQ Properties (EGM), Intercontinental International REIC (EGM)
19/11/24 | Intrakat (EGM)
Ex-Dividend
04/11/24 | OPAP (interim dividend EUR 0.602852798)
11/11/24 | Papoutsanis (interim dividend EUR 0.03)
02/12/24 | CNL Capital (interim dividend EUR 0.25)
23/12/24 | Motor Oil (interim dividend EUR 0.30)
Share Capital Increase – Attica Bank
21/10/24-04/11/24 | Exercise period of rights
13/11/24 | Commencement of trading of new shares SCI
Warrants – Attica Bank
21/10/24-04/11/24 | Offer Period
08/11/24-28/11/24 | Exercise Period
04/12/24 | Commencement of trading of the warrant exercise shares
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