NBG reported a quite good set of Q3 ’14 numbers, exceeding our estimates by 6.0% at a core level with the key theme being Finansbank’s strong performance both in terms of volumes and profitability.
english.capital.gr/news.asp?id=2151294
Liquidity remained healthy with loans to deposits ratio at c93%. NBG reported a fully loaded CET1 ratio of 11.8% (excluding prefs and capital actions). NBG reported net profit of Eur30 mn in Q3 ’14 and Eur1.18 bn in the 9m period thanks to the DTA of Eur1.0 bn that had been booked in H1 ’14. The pre-provisions core income (PPI) reached Eur450 mn, +9.8% qoq (6.0% above our estimates) due to a combination of 5.0% qoq rise in core revenues and contained costs (+1.2% qoq). NII increased by 4.9% qoq largely driven by Finansbank (+12% qoq), whereas Greek NII was also up (+1.0% qoq).
The NII rise was driven by the reduction in time deposit costs and stabilization of loan spreads, trends expected to remain in the following quarters. The cost of risk increased to 2.1% vs 1.9% in Q2 ’14, reflecting the rise in the new NPLs formation to Eur346 mn from Eur304 mn in Q2 ’14 driven by SEE. Greek new NPLs declined by Eur16 mn qoq. The spread of the core PPI margin vs the cost of risk remained stable qoq, at a positive 0.4%. The NPLs ratio and the coverage remained virtually stable qoq at 23.4% and 56.5%, respectively. Volumes were driven by Finansbank.
The latter posted a c14% rise in loans (in TL terms) and an 11.0% yoy increase in deposits (in TL terms). In Greece, volumes moved in line with the market: -0.7% qoq in loans and +0.3% qoq in deposits. Liquidity remained healthy with loans to deposits ratio at previous quarter’s level of 93% at a group level.
Tangible equity stood at Eur7.5 bn (Eur2.13 per share). NBG reported a CET1 ratio of 15.8% and a fully loaded of 11.8%. In terms of operating performance per region, Turkey/Finansbank reported net profit of Eur109 mn in Q3 ’14 and Eur257 mn in 9m ’14; Greece reported net losses of Eur87 mn in Q3 ’14 (on one-off charges) and profit of Eur888 mn in 9m ’14 (due to DTA); and SEE reported net profit of Eur14 mn in Q3 ’14 and Eur43 mn in 9m ’14.