Eurobank (Results 4Q/FY 2014): Eurobank is set to release its 4Q/FY 20114 results today post market close. We expect losses of €464m in 4Q14 vs. €411m loss in Q3 on the back of rising provisions. A cc will follow at 18:00 Athens time. More specifically:
BETA SECURITIES – Manos Chatzidakis
Benefiting from the improving macro conditions in its main geography, Eurobank is seen reporting better operating results in 4Q, with increased NII on the back of lower funding costs, well contained opex but higher NPL formation to incorporate the remaining provisions from the AQR test.
At the same time we expect higher coverage ratio following management guidance in Q3. We have therefore pencilled in higher impairments on a quarterly basis (+5% QoQ), as we understand that the bank will further raise its coverage aiming also to eliminate the AQR gap.
As for the other lines, we see NII 1% up QoQ as deleveraging is seen eroding the magnitude of liabilities re-pricing and improving commissions (40% QoQ). Trading losses (-€9m) is expected to settle PPI at €208m. We also expect higher impairments (€50m) after NPL provisioning. As a result we expect Eurobank to report €464m losses in 4Q14 (in the absence of other DTA), leading cumulative 12M14 losses to €1.157m.
The following table summarises our Q4 estimates:
|(In Million Euro)||4Q13||3Q14||4Q14||Q-o-Q||Y-o-Y|
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