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NPE reduction target gets more difficult for Piraeus Bank
Analysts, commenting on Piraeus Bank’s results, focus on the slowdown of the bank’s NPEs reduction, which makes it unlikely for the bank to reach its 2019 targets.
Trends in Piraeus Bank sizes in the third quarter confirm a strong operating shift, JP Morgan said, noting that the results were better than projected, mainly due to higher trading income. However, the US bank notes that the slowdown in the organic decline in NPEs this quarter is a problem, mainly due to the transfer of corporate loans of € 675 million to NPEs. Thus, as they warn, the target for NPEs of € 22.9 billion at the end of 2019, from € 24.9 billion in the third quarter, is difficult to be achieved.
Bank of America notes that the decline in the NPEs stock was limited due to the new large reclassification of some loans to NPEs, and the deceleration of outflows of organic NPEs. However, they stress that fixed income remained robust despite a decline in net interest income, thanks to the very good commissioning performance, while transaction income also supported the bank’s figures, and operating expenses remained under control.
Euroxx Securities notes that Piraeus’s performance was better than its estimates of both recurring pre-projected profits and net profits, given the higher level of non-organic profits and lower capital expenditures and uncertainties.
Lastly, Axia Research notes that it is seeing positive results from Piraeus in terms of bank performance and the fact that it was able to record a clean quarter, but at the same time cautious about reclassifying some loans to NPEs (although steps are being taken to negative impacts), which puts additional pressure on the required effort to achieve the NPEs 2020 targets. However, it gives credit to the bank’s management for the capital actions that led to the increase in capital ratios century it emphasizes a positive surprise for the market.
Original Source: Kathimerini
Translation/Adaptation: Kiki Athanasiadis