By Vassos Angelito
Managing Director of the National Bank, Pavlos Milionas, sees “positive momentum for the current year,” estimating that “there are no significant reasons to worry about 2023.” For the current year, the bank expects a growth rate of 1.6% and an increase to 2.6% in 2024 and 2.7% in 2025, respectively. .
He emphasized, especially for the bank, the significant strengthening of its capital position, which allows it to explore new opportunities for investors. “We are looking for opportunities in overseas portfolios but also possible synergies with partners from the technology sector,” Mr. Mylonas said during the 2022 annual results briefing to analysts today.
In terms of rewarding shareholders, the bank’s management is considering measures such as dividend distribution or share buyback and expects a payout ratio of 20% to 30%.
Regarding share buybacks, Mr. Mylonas indicated that they are included as a possibility in the divestment strategy published by the Financial Stability Fund (HFS). “It’s one we’re looking at but we’ll have to discuss it with the shareholder. We’ll have to wait,” he said.
Regarding the size of the share buyback by the HFSF, the CEO explained that this would depend on the bank’s funds. Regarding the approval of the supervisory authorities for such a proposal, he replied that this depended on when the proposal was submitted. “If we do it now, when we claim a small dividend, the answer is likely to be negative. If we make the proposal in the next period, it may be positive – we will move in small steps,” he emphasized.
In individual key areas of activity of NBB, management explained to analysts the following:
profitability: Net interest and fee income (NII) increased 13% to 1.369 billion euros last year, while net fee and commission income increased 21% to 347 million euros from 287 million euros in 2021.
Red loans: At the lowest levels in the industry, NGE reduced non-performing loans in 2022, achieving an NPE ratio of 5.1% and a coverage ratio of 88%. In 2025, the bank estimates, that percentage will drop further, to 3%.
Grant: New payments increased by 40% in 2022, to 6.7 billion euros, while the increase in serviced loans amounted to 2.5 billion euros, almost half of which (1.2 billion euros) was disbursed in the last quarter of the year.
Capital adequacy: CET1 will reach 15.7% in 2022 – the highest levels of the domestic industry.
Digital channels: The number of users of electronic banking (electronic banking services) increased by 11%, and electronic transactions increased to 26.3 million last year.
interest rates: The business plan includes a conservative forecast to keep the Euribor level at 2.5%. For every 100 basis points increase in interest rates (more than 3%), interest and fee income (NII) increases by 120 basis points.
credit extension: The three-year target for lending growth is 7% annually, compared to 10% recorded in 2022. Mr Mylonas emphasized the low spread of credit in the Greek economy – only 55% as a percentage of GDP – which creates significantly expanding credit margins for the bank. In any case, he said, the pace of credit expansion is expected to increase over the years and escalate towards the end of the triennium as a larger increase in lending to the retail sector and small and medium enterprises is expected.
Finally, Mr. Mylonas revealed that Ethniki executives will be in London tomorrow to take part in the Morgan Stanley Roadshow, while a new promotion is scheduled for the end of the month with the participation of the CEO.
* National Bank of Greece: Press Release – NBG Group results for the fiscal year 2022
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