Eurobank Q4/FY 2014 results – First Glimpse

11.03.2015 18:26

Manos Chatzidakis

5:50 μ.μ. (Πριν από 33 λεπτά)

Eurobank announced a solid set of operating results broadly in line with our estimates while higher provisions and non recurring items deviate net income from estimate of 462 losses.

In specifics:

¡  Net interest income increased by 4.1% q-o-q and reached €394m, from €379m in the third quarter. The expansion of interest income was mainly due to the de-escalation of the cost of deposits in Greece, as the spread of time deposits decreased by 17 basis points in the fourth quarter 2014. Net interest income rose by 4.7% in Greece and 2.4% in international operations. Net interest margin also expanded from 2.04% to 2.11% in the fourth quarter 2014, also helped by the 2 basis points increase in lending spreads.

¡  Net fee and commission income recorded a remarkable increase of 11.4% to €79m in the fourth quarter 2014, mainly due to higher income from insurance, lending, rental and branch network businesses. Fee expansion came both from Greece (+15.0%) and international business (+4.8%). As a result of this expansion, the ratio of fees over total assets increased to 42 basis points in the fourth quarter 2014, from 38 basis points in the previous quarter.

¡  Core income (net interest income and net fee and commission income) was up by 5.2% q-o-q to €473m, €341m in Greece (up 6.2% q-o-q) and €132m in international operations (up 2.9% q-o-q).

¡  Operating expenses amounted to €262m in the fourth quarter 2014, compared to €258m in the third quarter, an increase of 1.8% on the back of higher administrative expenses. On an annual comparable basis, costs were cut by 10.1% over 2013, 11.1% in Greece and 7.2% abroad.

¡  Accumulated provisions reached €9.7bn at the end of the year, accounting for 18.8% of total loans and 56.3% of loans past due over 90 days. The stock of provisions at the end of 2014 is almost aligned with ECB/EBA Comprehensive Assessment projections for the same period.

¡  90dpd formation was maintained at third quarter’s low levels of €239m. Loans past due over 90 days stood at €17.3bn, accounting for 33.4% of the loan portfolio at the end of 2014.

¡  Deleveraging reversed in the fourth quarter 2014, as Gross customer loans before write-offs increased by €164m. Loans to businesses amounted to €26.7bn, versus €26.5bn in September and loans to households receded to €25.1bn, from €25.3bn.

¡  Deposits were down by €1.8bn to €40.9bn at the end of 2014. Εurosystem funding rose to €12.5bn, from €9.1bn in September, while the loans to deposits ratio reached 103.1%, compared to 99.8%.

¡  The phased-in Common Equity Tier I capital (CET1- Basel III) reached €5.9bn and accounted for 15.2% of risk weighted assets.

¡  The net result came at -€524m in the fourth quarter 2014 and includes €218m of goodwill impairment and other non-recurring items.

 

The following table summarises results vs our estimates:

 

Eurobank Overview
(In Million Euro) 4Q13 3Q14 4Q14 Α QoQ YoY 4Q14 Ε vs Estimate
NII 393 379 394 4,1% 0,3% 397 0,8%
Fee income 57 51 79 54,9% 38,6% 80 1,3%
Trading -17 20 -9 -145,0% -47,1% -9 0,0%
Total income 491 476 464 -2,4% -5,5% 468 0,9%
Operating costs -313 -258 -262 1,7% -16,3% -260 0,8%
Pre-provision-profits 178 218 201 -7,8% 12,9% 208 3,5%
Provisions -1.115 -588 -742 26,1% -33,5% -620 16,4%
Other results 4 -41 141 -443,1% 3425,0% -50 -135,5%
Net profit reported -925 -180 -524 191,1% -43,4% -462 11,8%

 

Conference call details (18:00 GR Time):

¡  Greek Dial-in tel:                              + 30 211 180 2000

¡  Alternate Greek Dial-in tel:          + 30 210 94 60 800

¡  UK/European Dial-in tel:               + 44 (0) 800 368 1063

¡  US dial-in tel:                                     + 1 866 288 9315

 

 

Best Regards,

 

Manos Chatzidakis

Head of research

Beta Securities S.A.

29 Alexandras Ave.

GR – 11473

Athens, Greece





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