Piraeus Financial Holdings raises 2025 loan growth guidance

Investing.com -- Piraeus Financial Holdings on Friday reported a solid third quarter with net profit of €261 million, slightly ahead of expectations and achieving a return on tangible book value of 13.8%.

The Greek bank upgraded its loan growth guidance for fiscal year 2025 to more than €3.5 billion, up from its previous target of €3 billion. The company has already achieved €3.1 billion in loan growth through the first nine months of 2025.

Net interest income was in line with expectations, marginally down from the previous quarter. Higher income from the bond portfolio and lower deposit costs helped offset the impact of lower interest rates. Lending spreads decreased by 3 basis points sequentially, which aligned with the bank’s budget and expectations.

Piraeus expects fourth-quarter net interest income to increase by 1% sequentially, assuming European Central Bank rates at 2%, with potential upside to its current €1.9 billion guidance.

Performing loans grew by 2% or €0.9 billion during the quarter, reaching €36.8 billion. Fee income was 3% lower than expected, though investment fees showed strong performance in both bancassurance and asset management. This was partly offset by lower loan fees due to seasonal factors.

The bank maintained its 2025 fee income target of €650 million, having achieved €489 million in the first nine months. Assets under management reached €14.3 billion, exceeding the upgraded target of more than €13.5 billion.

Operating expenses were slightly better than anticipated, with a cost-to-core-income ratio of 33% in the third quarter. The bank is targeting a full-year cost-to-core-income ratio below 35%.

The non-performing exposure (NPE) ratio improved by 10 basis points to 2.5%, while NPE coverage increased to 74% from 68% in the second quarter. The NPE balance remained flat at €1.1 billion.

Capital position strengthened with the Common Equity Tier 1 (CET1) ratio rising by 20 basis points sequentially to 14.4%. Organic profits contributed 80 basis points, partially offset by risk-weighted assets (20 basis points) and distribution accruals (40 basis points).

Piraeus upgraded its 2025 normalized return on tangible book value guidance to approximately 15% from about 14%, with the first nine months of 2025 achieving 14.6%. The bank expects to exceed its guidance of €0.8 reported earnings per share for 2025.

The Ethniki transaction is expected to be completed by the end of 2025, which will reduce Piraeus’ total capital buffer from 460 basis points to 310 basis points.

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