Piraeus Financial Holdings S Aktie

Ladies and gentlemen, thank you for standing by. I am Maria, your Chorus Call operator. Thank you for joining the Piraeus Bank conference call and live webcast to present and discuss Piraeus first half 2026 financial results.

The conference is being recorded. The presentation will be followed by a question-and-answer session. [Operator Instructions] At this time, I would like to turn the conference over to Piraeus Bank's CEO, Mr. Christos Megalou. Mr. Megalou, you may now proceed. .

Good afternoon, ladies and gentlemen, and good morning to those joining us from the U.S. This is Christos Megalou, Chief Executive Officer of Piraeus. I'm joined today by our CFO, Theodoros Gnardellis, and our Head of Investor Relations, Xenofon Damalas. Thank you all for joining us for our first half 2026 results. The message today is simple.

Piraeus is delivering sustainable profitable growth. We are generating strong returns, expanding customer activity building a more diversified financial services group and investing in technology and AI-powered productivity while maintaining capital strength, balance sheet resilience and a low risk profile. These achievements are interconnected elements of a strategy that is transforming the quality of our earnings and strengthening the long-term value creation potential of the group. The first half of 2026 provides further evidence that this strategy is working. And based on our strong results, we update today our guidance.

Before discussing our performance, let me briefly frame the environment in which we are operating. As you can see on Slide 4, the Greek economy continues to outperform the euro zone. Growth remains supported by a credible fiscal framework, continued reform implementation and sustained investment mobilization. At the same time, Greece continues to benefit from substantial European funding flows, declining debt ratios and ongoing improvement and economic fundamentals.

Nevertheless, uncertainty remains elevated globally. The ongoing conflict in the Middle East, geopolitical developments and energy market volatility continue to influence the outlook for Europe and the global economy. Against this backdrop, strong balance sheet, diversified revenue streams and disciplined risk management become even more important. This is where Piraeus has positioned itself.

Following the recent upgrade by S&P, Piraeus is now recognized as investment grade by all major international rating agencies. This is an external validation of the transformation we have achieved and of the strength of our financial profile today.

Turning now to our performance on Slide 5. We delivered a record net profit of EUR 617 million in the first half, corresponding to EUR 0.47 earnings per share placing us firmly on track to achieve our full year target of approximately EUR 0.09 earnings per share. We achieved a return on average tangible book value of 16% in the first half compared to 2026 target of approximately 15%. Importantly, this level of profitability is achieved with improving revenue mix and strong efficiency and asset quality metrics.

We continue to deliver leading growth in Europe. Our loan book is up 9% year-on-year, reaching EUR 39 billion. During the first half, credit expansion reached EUR 1.8 billion, maintaining the strong momentum. Revenues from services grew 42% year-on-year, reaching -- in the first half, shaping at 100 basis points of our assets above the target of approximately 90 basis points of the assets for '26. Importantly, 90% of those fees are coming from investment, insurance and financing. We are converging to the best-in-class in Europe in the revenues from services metric. Net interest income rose to EUR 990 million with net interest margin shaping at 2.2%, exceeding the '26 target of approximately 2.1%.

Net interest income in the second quarter rose by 6% quarter-on-quarter to EUR 509 million, with increasing volumes, offsetting the mild spread compression. Overall, core revenues grew 13% year-on-year, with sustainable diversification of revenue mix towards fees, which now account for 32% of total revenues. Our assets under management increased to EUR 16.3 billion in the first half, up 24% year-on-year with EUR 1 billion net inflows already meeting our full year target.

Furthermore, deposits rose by 9% annually and now stand at EUR 68 billion with a total cost at 38 basis points. Our cost-to-income ratio stands at 34%, confirming top-tier efficiency and on track to meet the 2026 target of below 35%. Asset quality dynamics remain solid with NPE ratio at 2.2%, organic cost of risk at 45 basis points and NPE coverage at 67%. Our capital position is strengthening. CET1 ratio increased by 20 basis points quarter-on-quarter at 12.8%, driven by strong organic results.

Slide 6 presents the details of our first half and second quarter operating results. We achieved historic high earnings per share of spot EUR 26 in the second quarter, while we sustainably grow our tangible book value per share now at EUR 6.3 per share up 7% year-on-year.

On Slide 7, we present the first pillar of our performance which is customer loans growth. The EUR 1.8 billion net credit expansion during the first half is placing us firmly on track to exceed our aspiration of more than EUR 3 billion for the full year. Importantly, growth remains broad-based. We continue to support investment across all sectors of the Greek economy like energy, hospitality, infrastructure and shipping. At the same time, we are also witnessing an encouraging recovery in household lending. Mortgage lending continues to improve with mortgage balances increasing by approximately EUR 100 million in the first half, while new mortgage production increased by approximately 65% year-on-year.

Slide 8 demonstrates our pricing discipline. We compete for business. We support economic growth, but we maintain risk-adjusted return at the core of all our underwriting decisions.

Slide 9 outlines the second major theme of the first half, which is a revenue diversification. This is an area where I believe the group has made significant strategic progress and Ethniki Insurance is an important driver of this. Fee growth is increasingly supported also by solid financing activity, asset management and bancassurance. Based on first half performance, we now upgrade the revenue from services target for 2026 to approximately EUR 850 million.

Slide 10 depicts Ethniki Insurance highlights in the first half. The business performed ahead of expectations. Gross written premium reached EUR 424 million, 7% higher year-on-year and with minimal contribution from its Banca channel. The transition of the bancassurance model is now in full implementation mode with 16 prioritized products currently under development for launch in January 2027.

Slide 11 demonstrates the momentum in wealth and asset management. Assets under management reached EUR 16.3 billion increasing by 24% year-on-year. Net inflows amounted to EUR 1 billion during the first half already meeting our full year target.

Turning to net interest income on Slide 12. The key message here is that our NII performance is increasingly supported by volume growth. As the rate environment evolves, our growing balance sheet and customer franchise continue to provide substantial support to income generation. Based on the first half performance, and current market dynamics, we are upgrading our full year NII ambition from EUR 1.9 billion to EUR 2 billion.

Let me now turn to what is perhaps the most important element of our story, growth with discipline. Turning to Slide 13. Our cost-to-income ratio stands at 34%, maintaining one of the strongest efficiency positions in Europe. Importantly, [ continuing ] to invest in technology, AI, customer experience and growth initiatives.

Slide 14 provides a summary of our asset quality indicators. The key message here is that asset quality remains strong. And as we continue to expand the loan book, we are maintaining a prudent approach to risk management. Piraeus enjoys a robust liquidity profile presented on Slide 15. Our strong deposit franchise, combined with superior liquidity coverage ratio supports profitable growth with ample funding capacity.

Turning to capital on Slide 16 and 17. Capital generation remains strong and supports 3 priorities: growth, shareholder returns and investing in the future franchise. The performance in the first half and the dynamics of the second half of the year gives us confidence in the outperformance of the full year [ CET ] target of 13%.

Moving on. Slides 19 and 20 are about our technology and AI journey. Through Newra, our dedicated AI hub established with Accenture, we are accelerating deployment of artificial intelligence across the group. Our objective is to enhance customer experience, employee effectiveness, operating productivity and long-term profitable growth. AI is now being deployed across customer service, analytics, software development, relationship management and internal productivity. At the same time, we continue to develop new growth engines beyond traditional banking.

These initiatives are presented on Slide 21, and they extend our reach into new ecosystems, strengthened customer engagement and create opportunities for future growth. And Snappi, on Slide 23, continues to gain momentum surpassing 210,000 app users and scaling as a capital-light digital growth platform.

On Slide 24, the strong execution delivered in the first half gives us increased confidence in our outlook. As a result, we are upgrading several of our full year ambitions. We now target net interest margin of approximately 2.2%. Revenues from services above 90 basis points of our assets, CET ratio above 13%. These upgrades reflect the momentum we continue to see across the franchise and our confidence in the sustainability of current trends. We also update our cost of risk expectation to approximately 60 basis points for 2026. In order to further fortify our balance sheet and lay foundations for the achievement of even higher targets in the years ahead.

Turning to the second section of our presentation for our positioning within the competitive landscape. Piraeus is in a leading position in Greece in terms of performing loans, deposits, equities brokerage and network, as highlighted on Slide 26. In addition, we ranked at par or above average on all major KPIs in the European banking space.

In slides, 27 to 32, we present the key metrics for Piraeus versus the European bank averages. In Slide 27, we continue to deliver best-in-class loan growth in Europe, outpacing EU peers by a wide margin. Slide 28, our net interest margin is far above the European average, reflecting our pricing power and effective balance sheet management.

Slide 29. Revenues from services of our assets is well above the European average and the best in Greece. Slide 30, our cost-to-income ratio is best-in-class in Europe, demonstrating our ongoing focus on operational efficiency and cost discipline. Slide 31, Piraeus' return on tangible book value is well above the European average, highlighting our ability to generate superior returns for shareholders.

Concluding with Slide 32. Despite our strong fundamentals in absolute and relative terms in relation to our European peers, Piraeus trade below EU banks with similar earnings, yet lower growth dynamics.

And with that, let's now open the floor to your questions.

[Operator Instructions] The first question is from the line of Andreas Souvleros with Eurobank Equities.

Hello. Congratulations for your results, and thank you for the presentation. I have 2 questions from my side. The first question is regarding your updated guidance. It seems that the guidance for NII and fees implies a lower quarterly run rate in the second half especially versus the second quarter. Is this simply a reflection of provided guidance? Or are you anticipating a specific revenue headwind in the second half? And on earnings per share, given the stronger revenue outlook, are there other [indiscernible] headwinds beyond the cost of risk or also the unchanged $0.90 targets for earnings per share is simply a conservative way to see. .

My second question is regarding Ethniki Insurance. I see that in the second quarter contributed around EUR 46 million. So should we consider question that run rate as sustainable? Or this includes seasonality of some nonrecurring items and should normalize in the second half?

Andreas, thank you for your question. Let me first cover the first question on the guidance. The guidance we are giving forward is a reflection of, let's say, our conservatives in view of the geopolitical developments, and we are centering teams around the broader environment rather than company-specific or Greek specific. So we feel comfortable in providing this guidance forward and remain cautious to see how the numbers will be developing in the third quarter before we come up with further forward-looking statements. But overall, the way we have been looking at the guidance was from a stance of trying to be prudent and trying to be conservative in our outlook going forward. And also, we will be upgrading driven by data as we move in the third quarter. .

Now on Ethniki Insurance, we had a very good first 6 months. We estimate that this is on a run rate of what we expect to see towards the end of the year. Obviously, we are very close to the [ case ] and to the management. And we monitor the numbers extremely well, but we can just say that we are pleased with performance so far, both in terms of gross written premium, where we are on track to achieve the numbers that we had as well as the profitability who in the first quarter was also the result of lower costs that are coming in the health book portfolio.

So one follow-up in order to clarify it better for me. So the run rate will be the first half, not the second quarter. Is that correct?

That is correct. The first half, yes.

The next question is from the line of Gabor Kemeny with Autonomous Research. .

A few questions from me, please. Firstly, on NII, which was indeed very impressive. Are there any one-offs on nonrecurring items you would like to highlight to us? And the second one, I believe we just passed recently the deadline for the RRF applications. And we are pretty close to the deadline for signing the credit agreement. So in light of that, are you able to comment on your loan lending pipeline for the coming quarters, please? .

And then just coming back to the guidance for a second, and maybe asking this question with a bit more numbers. I believe that your NII guidance upgrade implies an additional about $100 million of you are also assuming more fees while the provisions may be up to EUR 50 million more. So if you could provide a bit more context on why the EPS outlook of $0.90 has not changed, please? .

Gabor, thank you for the questions. Let me cover the RRF question, your second question, and then Theo Gnardellis will cover the other 2. So now on the RRF, total number of RRF, which has been contracted in our bank in our book is EUR 2 billion. So there is one more billion to be disbursed. EUR 1 billion has been disbursed already. And this, we expect to come over the next 2 quarters, and also this will also take into account in 2027, depending on deployment.

But as you see from the numbers, and this was always happening in every quarter in our numbers. The growth is granular and organic and does not actually depend only on the RRF. It was a good kickstart when it started post COVID. It continues with this EUR 1 billion to be dispersed over the next quarters, the net credit expansion, but it's not the main driver.

Organic growth across sectors and segments is the main driver for growth. And I pass on to CFO for your other 2 questions.

So on NNI, this is the run rate. This is purely organic. There are no one-offs. This is the effect of volume growth, both on the lending side and on the bond side, defense on spreads and of course, risk-free adjustments, you [indiscernible] adjustment that we have experienced in the past quarter. So indeed, this is your organic. Your question on guidance and the calculation is correct.

There are, of course, in the second half, some charges that will come from social responsibility initiatives of about EUR 30 million. But other than that, of course, an upside on the EPS pending to be printed. That is true, and it's calculating about to mid-single digit. But we're not ready to print it out yet as guidance.

There are things -- there are 2 more quarters to evolve here as we have just discussed, we are being a bit prudent and conservative here and keeping the guidance on the profitability and EPS act but we'll come back on the coming quarters.

The next question is from the line of Benjamin Caven-Roberts with Goldman Sachs International. .

Two for me. First on distribution. Shall we expect the next capital return announcement is with full year results early next year? Or would interim distribution later in the year be considered? And if so, when? And then secondly, just on cost of risk, could you please run through the moving parts behind the increase to the cost of risk guidance for 2026. I remember in your CMD, you targeted about 40 basis points by 2028. Does this change to the 2026 outlook alter how you think about progressing to the 2028 run rate as well? .

Ben, so indeed, we are well on track, and we are accruing in the capital for the distribution out of profits of 2026. The accrual rate in the first half has exceeded EUR 250 million. So well on track for the distribution promise of EUR 26 million or EUR 650 million. That -- we are working right now. It's most likely there will be an interim distribution in the upcoming quarters before the full payment that will happen pretty much at the same time as this year is happening now.

On cost of risk, the slight move from 50 to 60 basis points is a reflection of also what we experienced in Q2 with [indiscernible] with macro adjustments, that is there. So I would say we're rather holding on to the 50 basis points guidance that we had before, adjusted for what we experienced in Q2. I would not move on any part of the guidance for the upcoming years to make any changes now. As we always do, with the full year results with the new budgets and business plans, we will come and tell you what we think the future holds. But from this move, I would not impair any moves for the future.

The next question is from the line of Noemi Peruch with Morgan Stanley.

You showed strong deposit growth in Q2, well ahead of targets. And I was wondering if you could give us a sense of how much of this is business as usual and how much of this is temporary from corporate actions in Greece. And then you upgraded your guidance for revenues from services for 2026 not far from 2028 targets. So I was wondering if you feel comfortable in upgrading also the 2028 number? And if not, what are your major concerns apart from the trend in the bancassurance space that we know .

Thank you, Neomi, for the questions. Now on the deposits, there were some -- there was some equity capital markets activity, corporate activity that obviously then resulted in liquidity in in the market. And we were a good recipient of this activity on nondeposit side. One broad metric is about 50% was because of this corporate activity, and the other 50% of the growth was organic. So that's broad-based metric for you to have in mind.

On the broader guidance for the next few years, as we said, we want to be in a position to provide guidance closer to the end of the year for the year ahead. So we will not upgrade any of the future guidance numbers other than what we put forward for '26 , and by the end of the year or with full year results, of course, we will be coming up with guidance for the years to come.

The next question is from the line of Mehmet Sevim with JPMorgan.

I have just 2 remaining questions, please. One, could you please comment on the slight uptick in the cost of risk this quarter as well as the NPE ratio. You've upgraded your cost of risk. You do highlight that this is because of a better revenue performance. But could maybe just give a little bit of details on that, I would really appreciate it.

And then the second question was on the Ethniki Insurance and the solvency ratio. It seems like it's decreased a little bit to 162% I saw a footnote of an AT1, was that the reason behind it? Or is it just business as usual? And I was wondering if you were to replenish that, would the 10 basis point pro forma capital upstream to the group grow, so would we get a better contribution if you actually upstream the dividend above the 150% solvency ratio. Thanks. .

Really, this uptick on cost of risk is, as we said, about for Q2 about EUR 20 million that we took a full charge for the Casella modifications from plus macro scenario adjustments that we've done, and as a result, we -- the cost of risk increased for the first half to 45 basis points. That delta, I would say, is what we extrapolated to the full year original guidance of EUR 50 million for it being EUR 60 million now that we're making some extra money is the time to also, I would say, keep some money aside to defend the profitability of the future. And we'll see how we deploy that, increase performing coverage or some other way, but that's basically the driver, nothing more there.

On Ethniki solvency, indeed, the reduction was about 17 percentage points that happened from the repayment of AT1, over 50 million AT1 instruments that Ethniki had. The plan is for this to be issued in the market in Q3, and that will reinstate this percentage points and more. Just to tell you that in the quarter alone of Q2, the Ethniki profitability added almost 10 percentage points in the solvency [indiscernible] on the back of repayment of AT1. The organic profitability is increasing the solvency every quarter with this -- with the current run rate the solvency will probably reach almost 100% by the end of the year.

The 10 basis points that we're talking about are given the 162. So if stream. The capital -- the extra capital above solvency of Ethniki, which is the target solvency ratio for the company, that would add 10 basis points to CET1. So when we look at the CET1 of the group, we look with the side vision to the solvency ratio of Ethniki because that extra cut is something that at any point in time, we could [indiscernible].

That's very helpful. If I may just ask a follow-up. So it seems like there is some good upside if you were to upstream that at some point in the future. Would there be a time line? Or is there a regulatory process? Or is there at all any willingness for the timing to do that? .

Depending on the performance of the insurance company, this is most likely an annual exercise. We will look at the company closer at year-end, and we will make some upstreaming for sure, I would say, the size of it is what matters. The guidance for capital year-end, we're saying if you see above 13%, and we have an element of above 0.2%, how much above that 0.2% depends on the size of that distribution. So indeed, it is Ethniki already in its first year of consolidation, will add significant CET1 to the overall group. .

The next question is from the line of [indiscernible] Securities. .

Congratulations on the results. I have 2. First one is on corporate asset quality. Business and the inflows stepped up to EUR 89 million this quarter versus EUR 47 million in the previous one and '25 a year ago. Could you give us some color on what drove this? Does it refer to single names? Or is it broad-based?

And my second question is on loan growth. Corporate net credit expansion came in at EUR 347 million, with large corporate contributing EUR 65 million versus EUR 975 million in the first quarter, which takes the first half to around EUR 1 billion against EUR 1.7 million last year. Is that primarily a timing effect on disbursements? Or is something shifting in the competitive environment? .

[indiscernible], thank you for the question. I'll take the second one on loan growth. It's a seasonality and timing differences rather than anything else. We remain focused in achieving the EUR 3 billion net credit -- the above EUR 3 billion net credit expansion that we came forward. The run rate already is on the higher side. But we remain with our above EUR 3 billion projection between the next 2 quarters. We are very happy with the SME growth. and we are very happy with the net credit growth on the mortgage portfolio, which also is something that we strategically wanted to achieve, and we have been working on and now we look like we are achieving. So the seasonality and timing rather than anything else. And Theo, on the corporate asset quality?

The NPA inflow on the corporate side of Q2, indeed, gap is a single name case. I will consider it business as usual. It's some that happens. We will be managing this case as the entire book over the coming quarters to contain and potentially return some of the incurred provisions already. So I would say nothing exceptional, nothing macro driven, a single case classification.

The next question is from the line of Alex Demetriou with Jefferies. .

2 questions from me, please. If we could go back to capital. So going forward, is there a way that we should think about it, anything above the 150% solvency ratio, Ethniki will be redistributed or kind of repatriated up to the group? And just like a rough estimate. So should we think about it basically 20% of the solvency ratio equals about 10 bps on the CET1?

And then just my second question on the NIM, could you kind of kind of break down the trajectory we should expect for the rest of the year? If we think about the loan yields we haven't really seen the repricing yet which kind of loan yields flat Q-on-Q. Going forward, we should see some of that repricing coming through as well as the deposits, maybe a little bit of a tick up there. But we should expect quite a strong expansion into the second half. So I'm just wondering if there's anything here because you're already at the full year target of 2.2%. So I'm just trying to understand the second half in trajectory from here.

So Alex, it's -- it's a solid assumption to be making the calculation of above 150% upstream. But just to say that this is not automatic. I mean, on any given year, we can sold to 170% or 165%. Generally, we like to think of group capital in that way. but we will be approximating, I would say, that exercise printing it in 1 quarter of the year, depending also on regulatory approvals, as I think was also pointed out.

So I would say overall, yes, but let's not make it a mathematical, I would say, obligation. In terms of what corresponds to what. It's a little bit less. So it's, I would say, about 12 to 15 points of solvency right now at about 10 basis points overall on CET1. So that's why this 12 percentile points of solvency, as we said, calculates to 10 bps of CET1.

On your question on NIM and overall yields, the repricing is happening. We have seen the the increase overall in the portfolio yields. I mean we have some spread erosion that is countered by Euribor increase. A lot will depend on what happens with the Euribor in the future, I have to say, with whether we have the PFR bump in September and whether you right will follow.

But I would say right now, given the macro situation, it is a volume that is driving the growth of NII. While spread erosion, I would say, is semi or almost countered by risk-free rates. In this quarter, for example, we had EUR 15 million in the loan book being driven by volumes, while spread reduced and risk-free kind of counted by Delta. So overall, we had about 20, 15 of that came from volumes.

[Operator Instructions] The next question is from the line of Simon Nellis with Citibank. .

Just a few quick ones for me. actually. Firstly, on staff costs, they went up a bit. I think it's driven by variable cost. Is it fair to assume that as long as revenues continue to be quite robust that staff costs will remain elevated.

Second, I was hoping you could unpack the EUR 27 million negative other impairment and associates loss, just what the drivers were, I think, GBP 6 million is one-off and what the nature of that one-off is? And what's the outlook for the second half? I think you said $30 million of further one-offs, which I guess would go in that line item, but interested in knowing what the underlying number would be as well. And then last, just on the Katseli issue, can you tell us how much you actually booked in risk costs in the second quarter and if you expect further charges going forward. .

Indeed, the staff cost uptick in Q2 was because of variable compensation actual payment when share-based compensation gets paid. Then if we start it is in that quarter that we book in the P&L. There is no way to actually accrue about years, always Q2, whenever variable conversation happens, there is this uptick. So it is not to be annualized what you saw in Q2. .

The overall guidance for costs we have given for something under EUR 1 billion for '26. Nothing else is changing right now. for the year -- for the coming years. As we've said, I think, twice already in this call, we will come back with the full year results in Q4 to tell you of any updated trajectory. The one-off that as we pointed out in the associates and other impairment line is a social responsibility charge of EUR 6 million and similar ones are coming in half 2. And you will see those also indeed in those lines. There's also a EUR 15 million loss of the legacy asset sale that we did.

And again, as we continue to clean up the balance sheet of any remaining legacy assets, this is where we would be seeing such charges. On the Katseli law, we -- in the cost of risk line, we wrote around EUR 10 million. There is also some charges that have been incorporated in the trading line depending on the accounting treatment for rehabilitation of the interest accruing profile after the court decision, there's nothing more to be charged on this book. The adjustment has been made. So we cannot completely done with it.

The next question is from the line [indiscernible]

Yes. Just 1 clarification. assurance fees are still growing nicely. Can you just tell us when we will see the drop in this line due to the previous insurance JVs? Thank you. .

Alberto, Indeed, the front is still selling third-party products. So we have full upfront booking of the fees. The way you should look at this growth is that the actual GWP is growing and the productivity of the network is growing. The accounting adjustment and the drop will happen in '27. There will be an equal adjustment, as we have discussed also on the cost line. but it is -- it will coincide with the introduction of Ethniki as a product factory into our network that is scheduled for January '27. .

We have a follow-up question from Noemi Peruch with Morgan Stanley.

I have a follow-up question on a which is offering a pretty on deposit rate. So I was wondering how shall we read it in the context of the group strategy and the deposit competition in Greece?

Yes. If you look -- Noemi, thank you for the question. This is kind of in line with the competitive environment that is developing the digital banks front. There are other, let's say, levels of deposit, let's say, returns and Snappi being a digital attacker is actually playing at all in this game here. It's a competitive rate that we think will be attracting some of the people that are actually today are are kind of focusing of other digital players. It's -- the strategy is evolving and it will be developed as we move on. So for the time being, we think is the right return for attracting new customers into the franchise. .

Ms. [indiscernible], are you done with your questions?

Yes.

Ladies and gentlemen, there are no further questions at this time. I will now turn the conference over to Mr. Megalou for any closing comments. Thank you. .

Ladies and gentlemen, thank you all for participating in our Piraeus 2026 Results Conference Call. We look forward to discussing with you physically or virtually during our investor outreach program will commence as of early September. In the meantime, enjoy some time off in the summer. Thank you all very much.

Ladies and gentlemen, the conference has now concluded, and you may disconnect your telephone. Thank you for calling, and have a good afternoon.

Ladies and gentlemen, thank you for standing by. I am Maria, your Chorus Call operator. Welcome, and thank you for joining the Piraeus Bank conference call and live webcast to present and discuss Piraeus First Quarter 2026 Financial Results. [Operator Instructions] The conference is being recorded. [Operator Instructions].

At this time, I would like to turn the conference over to Piraeus Bank CEO, Mr. Christos Megalou. Mr. Megalou, you may now proceed.

Good afternoon, ladies and gentlemen, and good morning to those joining us from the U.S. This is Christos Megalou, Chief Executive Officer, and I'm joined today by our CFO, Theodoros Gnardellis; and our Head of IR, Xenofon Damalas, to present and discuss Piraeus' first quarter 2026 results. Piraeus delivered a strong start to 2026 with high-quality earnings, strong volume and fee income growth, continued balance sheet strength and performance fully in line with our full year results -- targets.

Before turning to our performance, let me briefly frame the macro environment. As you can see in Slide 4, the Greek economy remains resilient with growth expected to continue above the European average, a strong primary surplus and a rapidly declining debt-to-GDP ratio. However, the global backdrop has become materially more uncertain. The ongoing conflict in the Middle East is now a key macro variable, particularly through energy markets. For Europe, in particular, the impact is more pronounced given higher energy dependence. Against this backdrop, the relevance of strong balance sheets, recurring revenue streams and disciplined risk management becomes even more critical.

Let me now turn to our performance, and let's go to Slide 5. We delivered EUR 281 million net profit in Q1, corresponding to EUR 0.21 earnings per share, putting us firmly on track to achieve our full year target of approximately EUR 0.90 earnings per share. We achieved return on average tangible book value of 14.6%, fully in line with the 2026 target of 15%. Importantly, this level of profitability is achieved with improving revenue mix and strong efficiency and asset quality metrics. We continue to deliver lending growth in Europe. Our loan book is up 11% year-on-year, reaching EUR 39 billion.

During the first quarter, net credit expansion reached EUR 1.3 billion, continuing the strong momentum of 2025. Fee income grew 32% year-on-year, reaching EUR 210 million and accounting for 32% of total revenues, while fees over assets saved at 94 basis points, both metrics are best-in-class in Greece. Overall, core revenues grew 8% year-on-year with strong volume and fee growth, offsetting lower rates and spreads. Our assets under management increased to EUR 14.7 billion in the first quarter, up 17% year-on-year with EUR 500 million net inflows. Furthermore, deposits rose by 6% annually and are now at EUR 65 billion.

Our cost-to-income ratio starts at 37%, confirming top-tier efficiency. Asset quality dynamics remain solid with NPE ratio at 2.1%, cost of risk at 32 basis points and NPE coverage at 70%. Our capital position remains strong. Total capital ratio reached 18.5%, absorbing the EUR 1.3 billion loan growth and increased 57% distribution accrual for 2026 and accelerated DTC amortization while retaining a buffer of 260 basis points above Pillar 2 guidance. On the back of our solid financial performance, the Annual General Meeting of Shareholders in April has approved a cash dividend amounting to EUR 0.40 per share out of the 2025 profits on top of the EUR 100 million share buyback that was completed in the fourth quarter of 2025. The total distribution will reach EUR 594 million out of 2025 profit, which corresponds to a yield of 7%.

Slide 6 presents the details of our first quarter operating results. We sustainably grow our tangible book value per share now at EUR 6.11 per share, which combined with dividends paid has grown shareholder value by 6.5% year-on-year. On Slide 7, we present our strong loan origination dynamics. In Q1, we achieved EUR 1.3 billion net credit expansion, supported by all business lending segments. Importantly, mortgages continue to recover with EUR 185 million disbursements in Q1, up 95% year-on-year.

Slide 8 demonstrates our pricing discipline, which is a testament to the commercially rigorous approach of all our teams. We have been able to compete and win business while pricing at par with the market average and keeping risk-adjusted return at the core of our business credit underwriting. Slide 9 outlines the impressive evolution of our services revenues, supported by stellar combined insurance and asset management results, which has yet to fully build up. Ethniki Insurance contributed EUR 20 million in the first quarter, on track with the annual target.

Slide 10 demonstrates the growing trend of assets under management that reached EUR 14.7 billion, backed by strong net inflows of EUR 500 million. Slide 11 presents detailed information regarding net interest income intrinsics. In a nutshell, our growing loan and securities book drove NII increase in the first quarter with Euribor tailwinds still to come. Turning to Slide 12. It is evident that our cost control allow us to comfortably meet targets. Overall, we remain very cost conscious using CapEx investments to ensure structural efficiency gains.

Slide 13 provides a summary of our asset quality indicators. The key message is that our balance sheet is now structurally derisked. We enjoy a robust liquidity profile presented on Slide 14. Our strong deposit franchise combined with superior LCR supports profitable growth with ample funding capacity. Turning to capital on Slides 15 and 16. Our capital position is resilient and efficient and in line with internal targets, while at the same time, we are delivering attractive shareholder returns. As said, for 2026, we have elevated our distribution accrual ratio to 57% from 55% in 2025. Slide 15 depicts Ethniki insurance highlights in the first quarter. Notably, gross written premium reached EUR 217 million, in line with full year aspirations and with minimal contribution for its Banca channel.

Bancassurance's integration with Piraeus is now at full implementation mode with a goal to increase gross written premium production in 2027 by 30%. On Slide 18, we present an update on snappi, our neobank, which has currently just surpassed 100,000 customers. Snappi launched commercially in October 2025 and is already gaining significant traction with its fully digital app-based branchless low CapEx model as it currently has more than 170,000 app users. On Slide 19, there is a summary of our KPIs, demonstrating that we are fully in line with our 2026 financial targets.

Turning to the second section of our presentation for our positioning within the European competitive landscape. Piraeus is in a leading position in Greece in terms of performing loans, deposits, equities brokerage and network as highlighted on Slide 21. In addition, Piraeus ranks at par or above average on all major KPIs in the European banking space. In Slides 22 to 27, we present some of the key metrics for Piraeus versus European bank averages. In Slide 22, Piraeus delivers best-in-class loan growth in Europe, outpacing EU peers by a wide margin. Slide 23, our net interest margin is far above the European average, reflecting our pricing power and effective balance sheet management.

Slide 24, net fee and commission income over assets is well above the European average and the best in Greece. Slide 25, our cost-to-income ratio is best-in-class in Europe, demonstrating our ongoing focus on operational efficiency and cost discipline. Slide 26, Piraeus return on tangible book value is well above the EU average, highlighting our ability to generate superior returns for our shareholders. And concluding with Slide 27. Despite our strong fundamentals in absolute and relative terms in relation to our European peers, Piraeus trades below EU banks with similar earnings, implying significant upside for our shareholders.

And with that, let's now open the floor to your questions.

[Operator Instructions]

The first question is from the line of Benjamin Caven-Roberts with Goldman Sachs.

Two from me, please. Just first on the macro environment. I see in the slides, you mentioned that under the current high energy price scenario, Greek GDP could decline to 1.5% or 1.6%, but still higher than the EU average. So if you do end up seeing oil prices staying higher for longer and further negative growth revisions, how sensitive do you see your lending pipeline being to that in 2026 and 2027? And where do you see upside and downside risks there?

And then on the second point, just on the trading and other income for Q1, a fairly sharp move lower. How much do you expect that to reverse? And then more broadly, are you happy with how those income profiles are set up given how they perform in certain times of volatility?

Thank you, Ben. Thanks for the question. Let me cover the first one. Now we came in with a very strong first quarter on net credit growth. Taking into account what's happening and the effect that this may have on a number of metrics, including GDP growth. We stand firmly with our guidance. We think that -- and we have seen that through the pipeline that we have and what we expect to happen within the second and the quarters to come. We think that we will -- growth will not going to be negatively affected. We believe that we will be in a position to be above or at the EUR 3 billion guidance that we are giving for net credit growth. And if there are any effects in certain areas of the business, we believe that we will be in a position to follow with other areas.

We are particularly looking at hospitality as an area that could possibly be affected. Up until right now, we have not seen any significant delays in bookings or even cancellations. There is a scenario where there may be also a hospitality in Greece may be a beneficiary of the crisis given possible negative consequences for Turkey and Egypt. However, we -- currently, on the basis of all the granular work that we are doing with clients, we remain firmly confirming our guidance for the year. Other areas, there has been shipping that sometimes is kind of being discussed as a possible area of concern. I can tell you talking to a large number of our shipping clients that we don't see any weakness there.

To the contrary, one could argue that shipping sometimes in this crisis is a beneficiary of crisis rather than being negatively affected. And just to give you a data from about 700 ships that our portfolio is financing and are navigating around the globe. We have almost 10 ships that are tied up in the area, the affected area. The rest are kind of really navigating producing revenues for our clients. So on the book and on the -- how this could possibly -- crisis could possibly affect the economy. We remain steady at our guidance. And of course, we'll wait and see how this whole thing will evolve.

On the trading side, I'll ask Theo to give us the outlook for trading post the first quarter.

So Ben, first of all, on the other income line, that minus EUR 14 million that we see on Page 6. I mean, this is very much business as usual. It's something that happens in Q1. It was minus EUR 10 million in Q1 '25. This is a line that is burdened by multiple things, servicing fees, the DTC fees are there. And it's a line that you have this mild negative effect in the odd quarters of Q1 and Q3, but gets supported by investment properties revaluation. That's why it kind of evens itself out and is also positive in Q3 and Q4. These are the 2 times a year where we look at the investment property book again. So no news on that line. On the trading line, indeed, that minus EUR 18 million was the effect of market volatility.

Primarily, I would say, from the bond book, the trading part of the bond book. It is an effect of spread widening to a large extent. That number has been almost fully reversed, and it's actually a positive number quarter-to-date in Q2. We took a photograph exactly as the book is. It's very easy to play around that line and do some OCI recycling or sell some stuff out of your amortized cost book. We didn't do that. We didn't impair the unrealized losses or the OCI capital. This is what the print was. The print quarter-to-date is positive. Until a few days ago, I would tell you that it is 100% reversed. I know it's almost 100% reversed. But right now, it is a positive number quarter-to-date.

The next question is from the line of Gabor Kemeny with Autonomous Research.

On the recent increase in macro volatility, how do you think about the likelihood of this having an impact on your provisions and specifically on the creation of Stage 2 and Stage 1 provisions in the next couple of quarters? If you could give us some flavor there, please? And the other question will be on capital. Your 12.6% CET1 ratio is maybe towards the lower end in the sector. Can you walk us through how you think about the capital build from here to the 13% target for the year in light of the increased distributions? And finally, another quarter of outstanding loan growth and NII obviously impacted by seasonality, but yes, grew more slowly. How do you see the trajectory of that loan growth translating into NII growth going forward?

All right, Gabor, thanks. Right now, the IFRS models when it comes to performing exposure coverage are not producing any substantial sensitivities that will affect the performing exposure coverage going forward. Even with the 1.5% estimate, it will be a very mild effect if we were to eventually bake that in. Right now, the estimate holds at 1.9%. That is what we've got in the IFRS models. and it is in line with what also Bank of Greece announced very recently. So overall, I would not expect any substantial IFRS Stage 1 and Stage 2 model volatility. We are much more focused when it comes to cost of risk on actual Stage 3 inflows, making sure that we manage defaults and avoid substantial inflows that will create additional coverage requirements on the third stage.

On 12.6% capital, obviously, it was a massive growth quarter for the bank. We almost took half the year's budget in 1 quarter. The coming quarters will be strong, but there will not be a repetition of Q1 x3. Even with that growth, we managed to almost absorb the entire growth and the increased distribution in our capital levels that were printed pretty much at the level of Q4 last year. Going forward, there are tailwinds on the capital. We've got SRT transactions kicking in. As we said, the run rate of growth is not expected to continue. And there are some other capital-generating initiatives in play. Overall, the guidance for capital holds. And if anything, given the strong P&L intrinsics that we're looking at that are rather certain, I think we can safely confirm the 13% area capital for year-end.

For NII, it's difficult to judge quarter-to-quarter. I mean, even the 2 days, fewer accrual days that you've got in Q1 versus Q4, that is a EUR 10 million hit on the NII. So if Q1 had exactly the same number of accruing days as Q4, it would be EUR 10 million higher. It is a situation on the NII that we like very much. The front-loading of the credit growth, the fact that it is a quarter that still had rather static accruing Euribor and we've got tailwinds there. We accrue with a risk-free of almost 2% and the spot rate now is almost 2.15%. So we've got a tailwind on the risk-free and the spread erosion was somehow contained, front-loaded also the bonds generally NII has a tailwind when it comes to our budget and guidance expectations.

A small follow-up, if I may. How do you see your capacity to boost your capital ratios by SRTs, if you can give us a sense on that?

Well, that's already in the plan. We've got a number of transactions in play. Obviously, the cost over CET1 relief is very good and very attractive and remains so. We're taking advantage of that. We were at 70 basis points capital relief as of Q4. We're going to travel towards our average of 100 basis points of capital relief. So you can understand that's a 30 basis point enhancement over the course of the year. But as I said, we're also very focused on achieving and potentially exceeding our P&L expectations for the year. So organic capital generation, together with SRTs plus whatever growth expectation one might have, I think we'll get capital closer to the 13% area.

The next question is from the line of Stephan Potgieter with UBS.

You've answered most of my questions. So just maybe one on one-off costs. Just to check on that. So I don't think you've had any one-off costs in this quarter. Do you expect any integration or Ethniki cost integration costs to come through in that line in the remaining quarters?

Very slim numbers, I would say, Stephan, over the course of the year. I mean, this quarter had approximately a EUR 6 million, I would say, headwind that we classified as one-off. This is pretty much the vicinity of the numbers that we should be seeing in the coming quarters. May that be on some, as you say, Ethniki transformation costs, some VES costs. But I would say reported pretty much will be matching normalized returns for the coming quarters.

The next question is from Alex Demetriou with Jefferies.

If we could just talk about some of the NII dynamics kind of going forward. If you think about the loan yield this quarter, we actually saw a tick up in more or less in line with kind of the rates going up as well. But on the deposit side, you still have some kind of repricing benefits to come through. If we can kind of just talk about the NIM trajectory or how we can kind of see it evolving over the coming quarters, that would be really helpful.

Alex, it is rather difficult to model out today in this call, all of the stuff that gets baked into the NII trajectory. For example, one thing you didn't mention was the deposit evolution, the actual volume, what the site accounts will do, what is the expectation. As I said, we were expecting a run rate, let's say, of EUR 750 million expansion on the loans per quarter at the spreads that they came in. So we met spread expectation, but volume was much higher. Bond growth was expected to be less than EUR 500 million for the quarter. It was actually EUR 2 billion. So overall, on the volume side, we have tailwind. On the risk-free side, 2% was the expected accrual.

We're looking now at 2.15% for the coming quarters. So there's a tailwind there. And overall spread was expected to erode this quarter. It didn't, although that's a bit of a one-off situation for Q1, but it definitely confirms that we're looking at a very mild spread erosion overall in the book. So I think these -- all of these intrinsics versus our implied guidance and our budget assumptions for NII is creating a tailwind. Let's not quantify it now. We're not going to change guidance today. But definitely, it is a line that is looking that it will print north of our original expectations. The challenge today is to manage the other lines, especially see what the trading line will eventually print. We talked about it before. Cost of risk, it is also in play. Again, it has been discussed so that we meet at least what was the guidance that we talked about on the CMD on the 5th of March.

That's very clear. Are you able just to provide the current kind of loan yield that you're getting on the bond portfolio at the moment and what you were able to put the big volume that we saw in Q1?

So your question was about the bond yield, yes?

Yes, yes.

That's around 3.2%.

[Operator Instructions]

Ladies and gentlemen, there are no further questions at this time. I will now turn the conference over to Mr. Megalou for any closing comments. Thank you.

Thank you all for participating in our first quarter 2026 results conference call. We look forward to discussing with you all physically or virtually during our investor outreach program, which will start from next week. Thank you very much.

Ladies and gentlemen, the conference has now concluded, and you may disconnect your telephone. Thank you for calling, and have a good afternoon.

Good afternoon, everyone, and welcome to the Piraeus Capital Markets Day. A very warm welcome to those of you here with us in the room, our webcast audience, and thank you also to our host and partners. Good also to see Piraeus has brought London, some of the Greek Sunshine as well.

Now today is about delivery and the next chapter and showing how scale, balance sheet strength and digital execution underpin profitable growth. Most of you, of course, will be familiar with the Piraeus story, the largest bank in Greece. And today, it's all about how the bank has set itself up for success for the next chapter of growth.

Today, we will be looking at where that growth is set to come from. Now as you can see by looking at the agenda behind me, we've got a really exciting opening lined up for you. We're going to be hearing from some key members of the executive team. Christos Megalou, will provide a CEO Strategic Overview. We'll also be assessing The Next Chapter for the Greek economy with a fireside chat with Chief Economist, Dr. Ilias Lekkos. Plus will be showcasing Ethniki Insurance recently acquired to become part of the Piraeus portfolio. We'll be looking at the strategic rationale for the acquisition.

And then in part 2, we'll hear from Piraeus CFO, Theo Gnardellis, on the business plan and the financials followed by an extended Q&A with both Theo and Christos.

Now today, we're going to focus on the facts, delivery and where incremental value comes from across capital earnings and operating efficiency. Q&A will then come later. Please hold your questions. Please turn your phones to silent, roving mics are in the room, online viewers are able to submit your questions via the portal.

Now in a moment, we'll hear from the CEO of Piraeus, Christos Megalou. But first, let's start with a short film on Piraeus transformation journey since 2017. And as you'll see in a few moments, all the voices in this film are the team at Piraeus Bank.

[Presentation]

Good afternoon, everybody, and thank you very much for being here with us in this very exciting venue to present to you our 2026, 2030 business plan. I just to acknowledge first, the volatile times that we are living in. As we know, the last 5 days have been quite turbulent, and we monitor with vigilance developments, we look at what could possibly happen in the future. A lot depends on how long this crisis will last. But I'm not here to talk about the developments in the Middle East and in Iran, but I'm here to talk about Piraeus 2026, 2030 business plan.

And going straight into what Piraeus plan is promising. We want to be strong and profitable. We will improve our efficiencies, and we will optimize our capital. These are the 3 overarching strategic priorities for myself and the management team. And the key enablers, the franchise, the risk management, the platform of delivering of products, AI and technology and people and culture. And the target, you have it in front of you, what we are promising and what we are guiding the market, 18% return on tangible book value, a cost/income ratio that's going to be best-in-class in Europe from 33%, we are right now down to 30%, earnings per share growth of 10% year-on-year for the next 5 years. Dividends per share significantly improved 17% year-on-year, an improvement on shareholder returns, total shareholder returns year-on-year of 13% and a net promoter score above 20. This is what this plan is all about.

Our core strengths, 4.5 million customers, 50% of the active population in Greece are the customers of Piraeus Bank, #1 in deposits, the biggest franchise branch network in the market delivering these results that we are talking about. We are very proud of our recognition in the market, but we are mostly proud for our MSCI AAA on sustainability. We are the only Greek corporate that is a AAA from MSCI in the sustainability agenda.

5 businesses that are delivering these results. 2025 was EUR 2.7 billion from businesses from individuals, from wealth and asset management, insurance and the financial markets. That's what is the Piraeus machine producing in 2025. And where are we operating? We are operating in Greece in a country where there is significant improvement in everything that talks macro. The sovereign spreads are improving, the economy grows, credit is in demand, fiscal is improving, and we have quite a lot of upside on segments. So loans to GDP, 84%, average Europe 110, assets under management to GDP and meager 12%. We see Europe at about 100, an insurance premium from the 2% that we are currently are 5% to 7% in Europe. So there is a lot of growth in this market.

At the same time, we have converged. Who would imagine that Greece would be trading at par with Italy and France, but this is what is happening on the longer-term yields. Greek debt is sustainable. Greece is growing faster than the European average and will continue to grow faster up until the period we are talking about at the business plan and unemployment is at historic low, improving disposable income, improving demand for credit and affordability. The surpluses continue to be at the core of the government's agenda. And this sustained fiscal discipline is what keeps the economy going and what will be creating the growth of the future. And that's how the primary surpluses are coming in.

Debt to GDP ratio, there is no other country in Europe that is reducing the debt to GDP ratio with the rates that Greece is managing to reduce historically, but also projected to go to the next few years. And that's a very positive backdrop for the effort we are doing as a bank.

And let's reflect one moment on what we have achieved so far. In 2016 to 2025, look at the numbers, they speak for themselves. This is a great, a great achievement of this management team, whatever we have promised over the years we have delivered. And what could have possibly be a better launch pad than what we have achieved in 2025. The numbers are there for you to see, significant improvement across all board and 2 milestone transactions. One, the acquisition of Ethniki Insurance, the enabler of growth for the next 5 years and the launch of Snappi, the neo bank who already has 60,000 customers on board.

What this plan is all about? The Piraeus 2030 plan is about profitability and growth, is about efficiencies, and is about optimizing our capital allocation and making sure our shareholders are rewarded throughout this period for their patient of being our shareholders. And how are we going to achieve this by playing to our strengths. We're going to be growing essentially the Greek economy being the #1 player in the market, growing our loans, deposits, our assets under management, and the gross written premium that Ethniki Insurance is producing and will be producing in the future. This is not about basically cost cutting, efficiency that we will be doing over the years will come because we have the ambition to take our cost/income ratio down to 30%, improving revenues and managing costs in the best possible way, achieving stellar results on the insurance business, taking the expense ratio down to 8% and delivering efficiencies from technology and artificial intelligence that we estimate here at EUR 70 million with about 80% being already in the plan that you have in front of you.

Capital is an area where there's a lot of debate in Greece. And one of the things that I can tell you, we are thinking very seriously about our capital position. We are thinking very seriously about the buffers that we need to have in order to operate in a market like Greece, Eurozone country with growth rates above average. We believe that the new guidance we are giving you now the 12.5% CET1 ratio and the capital buffer of 200 and above is the right level of capital for our low-risk operation because the balance sheet of Piraeus is a low-risk balance sheet by all means. And we have distribution to the shareholders as key in our strategy, EUR 5 billion between now and 2030. And that's what we are promising, and this is what we will be delivering.

How are we going to achieve that? The strategic enablers, the franchise, the risk management, very prudent risk management, the services platform, multi-omnichannel delivering on products, the use of technology and artificial intelligence and most importantly, our people, our culture and our delivery mechanism, which is enabled through our people.

The franchise power and our services platform are second to none. The branches, the market share that we have in most of the country, the leading position in -- across the client age groups, the delivery that we do through the platforms, the diversification of protection and insurance and property that will come out of our new investment in Ethniki Insurance. These are going to be the enablers to achieve the results that we are promising here with this plan.

And two words of Snappi. Snappi is a low cost, locally regulated, very important. But with the European banking license offering that is catering for the emerging Greek sophisticated younger generation that we see them evolving, and we see that they are attracted by our Snappi offering. We have for 3 months of operation, 60,000 clients, average age from 18 to 35, and this is where the focus is going to be for Snappi with a view of achieving within the next year, 300,000 clients on their app and usage. Quality, credit underwriting, prudent credit underwriting and making sure this is reflected across the book is our mantra and now our pillar for the next few years. We are very proud of what we have achieved in the later vintages of credit underwriting that we have been doing the last few years. We maintain this quality, and we will continue to underwrite with prudence, our mortgages book as we are, has a loan-to-value ratio at 50%, very conservative, if you look at it as compared to Europe and 73% of our exposures are collateralized. That's against an average of 50% in Europe. So a very solid, very conservative book, which we intend to continue developing this way.

With the use of AI and innovation, we are planning to improve both the top line and all are OpEx. We are investing in all those areas that we see. We are building factories with Accenture and Anthropic is our new, let's say, franchise that we will be announcing very soon. And we are very focused and confident in delivering efficiencies on the one hand and top line on the other.

And finally, our people. We are improving our discretionary pay, and we will be doing even more so to our people. We are hiring new people. We didn't have the opportunity to do it before, but we are now in a position to do it. And we are focusing in improving the skill set, improving the delivery of our employees.

And let's look at what we can achieve with the various segments that we are working on. On the corporate and investment banking, we are the #1 bank in CIB in the Greek market. We are promising significant loan growth, high single-digit number over a year over the next 5 years. A Net Promoter Score that will be above 30 and about 50% of capital consumption will come from our exposure in CIB.

Retail. Innovation, technology and delivery are going to be driving our retail offering. New products are coming. New platforms are coming. The mortgages book is developing. We were very pleased that in 2025, mortgages were up net credit expansion, EUR 100 million. We are planning EUR 300 million for '26 and a lot more for 2030. And this will be another fuel in our delivery of NII and bottom line, but the retail will play increasingly a much bigger role in our offering going forward.

Wealth and asset management. We are driving AUM growth on products, on platforms. We are driving AUM growth significantly as we did the last few years and the numbers that we are presenting in this plan could definitely go better because for the next 5 years, we haven't assumed any significant market appreciation. So watch out. Things could be even better than the numbers that you see here on the chart.

Insurance, that's a key pillar of our future growth. Insurance means working together with our bancassurance channel, the most efficient channel in the Greek market, motivating the agent network, 1,000 agents plus being all over Greece of Ethniki Insurance, working together with Ethniki Insurance and the management team there and Dimitri Mazarakis and his team in delivering what we believe it could be a real growth driver for the future going forward. And the numbers you see here on the chart speak for themselves.

And finally, that's the story. 18% return on tangible book value by 18%, 30%. A cost/income ratio that is best-in-class in Europe, 30% by 2030, improving our customer offering with a Net Promoter Score above 20. That is what I am promising you today. Earnings per share year-on-year growth of 10%, and that's without using any buybacks. We are talking about cash dividend and without reducing the number of shares, 10% EPS growth, a dividend per share that will grow at 17% and a total shareholder return, which will be 13% taking into account return on tangible book value and dividends per share. This is what this plan is all about. This is what we will be hearing in the next hour or so.

I'm very happy that all of you, you are here with me today, and you are here with the management team. And I'm looking forward at the end of the presentation to take all the questions that you can get.

Thank you very much.

Thank you, Christos. A really interesting overview. And as Christos said, we'll come back for questions with Christos and Theo later in the session. Now in a few moments, I'll be talking to the Piraeus Chief Economist, Dr. Ilias Lekkos, an overview on the Greek economy. But now to show the central role that Piraeus plays across the Greek business sector, we're going to take a brief look into the Piraeus corporate banking franchise.

Now for context, Piraeus has the largest loan book in Greece with energy, agriculture and digital infrastructure, a particular focus. Here's a flavor for you.

[Presentation]

So we want to set the Piraeus story now in the context of the macro environment, both in Greece and also globally. Who would have thought that an economy seen a few years ago as Europe's headache is now truly finding its feet. So to frame the macro situation in context and to discuss The Next Chapter for Greece, I'd like to invite up to the stage Dr. Ilias Lekkos, Chief Economist of Piraeus.

Ilias good to see you.

First of all, I mean, you've clearly had a front row seat over the last few years to witness this remarkable transformation. Just give everyone a reminder of how much has changed in recent years. And I know you have some graphs to illustrate some data points in terms of trends in investment and consumption to start with.

Yes. I mean, thank you very much, Richard. Everybody here follows the Greek economy. So saying that the recent macroeconomic events in Greece have been volatile is the understatement of the year. I mean over the past 10, 15 years, we had to deal with the global financial crisis, the Greek sovereign crisis COVID, then the Russian invasion Ukraine and then the hiking cycle by ECB. So things have been sort of very interesting to say.

But the important thing is that during that period, lessons have been learned. So nowadays, it is a fact that, as Mr. Megalou said, Greece right now has the best fiscal position in Europe. We are running substantial primary fiscal surplus Again, we have one of the most attractive sovereign debt profile. And at the same time, Greece has been able to grow by twice the euro area average over the past 2, 3 years. So overall, we are entering this new phase at a very strong position.

But to answer your question about the future, the next chapter as we are discussing here, I think that people have not really appreciated that the Greek economy is still at the early stages of its business cycle. So for instance, if you look at the chart here on the screen, with the yellow line, you can see the Greek business idle. Now if you are lucky enough to be macroeconomists, you know that this is the output gap. For everybody else, it's the business cycle, okay? And with the blue line, you can see the year-on-year growth in investments, gross fixed capital formation.

You can see that there is a very tight link between the business cycle and investments, both in the good years, but also in the bad years. What's really important, though, to notice is that, in the last few years, 2023, '24, '25, there is a gap between the 2. Investments have not grown fast enough and meet the return of growth in the Greek economy. And that is very important because in reality, what this graph shows you is that there is a speed limit to how fast the Greek economy can grow.

We really need to invest more to improve the growth potential of the Greek economy. And this speed limit is not only on the corporate sector. If you go and look at the next chart here, you can see that there is a speed limit in the household sector as well. Now for me, the yellow line here is a very interesting and very exciting variable. Probably I'm the only one who has this feeling. But in reality, the yellow line here shows you the households confidence, households employment expectations.

Now the reason that I like this variable is because it's a variable that -- it's not something that I estimate. It's not something that the government estimates. It's what the Greek households themselves feel about their employment opportunities. And you can see that when households feel confident, they consume more. They spend more. It's only natural. Again, you can see that in the past few years, there's a substantial gap about confidence expectations and consumption. Again, Greek households are still very conservative in their way of thinking.

So looking forward, I think that the next chapter in the Greek economy will be sort of driven by both investments but also consumption.

Let's look then at capital productivity and corporate profitability. I mean growth is good for the local economy and Greek households. What's the business case for a foreign investor to look at Greek assets?

Yes, that's a very interesting question because growth is good if you are in Greece. But if you are a fund manager, if you are an investor looking to invest in Greece, you need to wonder why should I. And it's very interesting to see how productive is the current existing capital in Greece. Here, we can see, in a sense, the ratio of how much we produce given the existing invested capital in the Greek economy. And you can see that during the boom years of the past invest in capital was very productive in Greece. There was a huge drop during the crisis years. But if you look at the past couple of years, again, there has been a substantial recovery in the productivity of the Greek economy.

And productivity means one thing, profitability. Here, you can see the EBITDA. It's not based on IFRS standards. It's based on Eurostat accounting standards. But in reality, the Y axis is in billions of euros. You can see the EBITDA of the entire Greek corporate sector. And you can see again that there has been a substantial pickup in the productivity of the Greek corporate sector over the past couple of years.

Just looking at this the lens, through the lens of foreign investors, just looking at FDI in Greece, what's the interest been until now? And where is the opportunity? Which sectors are looking most promising?

Again, I think that there has been a very popular myth is that Greece does not attract FDI. But that's not true. I mean, there are sectors like tourism, hotels or infrastructure projects but these are projects or sectors that usually analysts associate with Greece. But I don't know how many people know that, for instance, the Greek private health care sector has been able to attract substantial investments from foreign funds. Or the private educational sector has been able to attract quite a lot of interest from abroad.

So there is a very nice mix of traditional sectors, but also new sectors that are emerging. Exactly.

Now many people know that the RRF, the recovery in resilience fund is being -- or has been a big part of the Greek recovery story, but the fund expires at the end of 2026. Is there going to be a cliff effect next year as funding is withdrawn? What's your view on that?

Again, this is one of the questions that I get a lot from people who look to invest or have invested in Greece. And it is true that the RRF has been a game changer for the Greek economy without any doubt, okay? But because legally, the fund expires at the end of 2026. A lot of people think that there is going to be a cliff effect and there's going to be no funding in the Greek economy after the end of this year.

But this is not true. I mean if you look at this chart, this is a very sort of busy chart, but it shows you the evolution of the RRF. And I want you to focus on the blue bars. Because the blue bars shows you the disbursement of the funds to Greek corporates to finance their investment products, their investment projects. Okay. And you can see that the disbursements extend far and above 2026. So you will have disbursements in 2027 and 2028.

And in fact, the data in this chart refer to December 2025. So every project that will be finalized in -- during the course of this year, will add to the size of the blue bars going forward. So the important thing to notice is that there is no cliff effect. There is a very slow tapering of the RRF funds over the course of the next 2 or 3 years.

So is there really enough support, do you think, for the Greek economy after the expiration of the RRF?

Again, I don't think that people have fully appreciated the extent of the buffers that the Greek government has been able to build during recent years. And when I say -- I talk about buffers, I think the Greek government has been very effective and very efficient in fighting tax evasion. And when we talk about fighting tax evasion, in reality, we mean that tax revenues grow far and above the pace of growth of the Greek economy. And that has allowed the Greek government to build substantial buffers that they can spend over the next few years.

Just to show you some data. Here, there are 2 parts: the blue part of the bars and the yellow part. Now the blue part is something that everybody is very familiar in Greece. It's the public investment program. So it's the vehicle through which the Greek government finances large infrastructure spending, okay? So everybody knows that. What is not very clear and very obvious to people is the yellow bars. The yellow bars show you the buffers that the Greek government has been able to build through excess tax revenues.

Just to give you an idea, I mean, we're talking about -- if you look at 2029, the sum of the unallocated buffer, the yellow part and the public investment program, sum up to EUR 20 billion. We said that the RRF has been a game changer. Now the RRF, the size of the RRF was EUR 36 billion. This EUR 36 billion would be dispersed to the Greek economy from 2021 all the way to 2029. Now in 2029, you will have EUR 20 billion alone coming from the Greek government. So that tells you that there's a substantial tax dividend that will be the difference -- exactly.

Given all of the above and what you save just taken us through, what's the outlook for credit?

Yes. Now this chart and the next one is the chart that my colleagues and my team didn't want me to say to you because somehow, they believe that they're going to be too difficult for you to understand, okay? So I'm going to take you through the graphs. And if you have a problem, I will apologize later on. Okay. But in reality, what you see here with the yellow line, you see business investment. Quarter after quarter at any point in time, okay? So that's the yellow line.

Now the blue line is corporate lending, new corporate lending again quarter after quarter. So the ratio between the yellow line and the blue line tells you, in reality, the percentage of new business investment that's financed out of corporate lending. It's as simple as that. And you can see that in the good years between 2000 and 2008, that was very close to 100%. It was 95%, 90%, sometimes 100%. Now you can see that after the recovery of the Greek economy from 2018, 2019 onwards, investment has improved, but business funding, not so much. So right now, the percentage of investment -- business investment that's financed out of bank lending is about 65%.

So looking forward, PAUSE the next chapter in the Greek banking sector will come from the expansion of both lines. So I've spent the past 10, 15 minutes saying to everybody that we need more investment in the Greek economy, but also the percentage of that investment that will be financed out of banking loans will increase as well.

And talking about the last bit, talking about an untapped opportunity. Here, you can see exactly the same chart but for mortgages. So the yellow line is a residential investment and the blue line is new mortgage lending, okay? And you can see that in reality, construction activity in Greece and mortgage lending they have been dead for -- during the time of the Greek crisis. But again, you can see that residential investment has picked up from very low levels, but has improved while mortgage lending is only now beginning to basically to gain some traction.

In 2025, essentially, the last 2 months of 2025, November and December were the first period, we saw the mortgage book growing again after 2009. So this is the next opportunity going forward for the Greek banking sector and the Greek economy.

So just in terms of the opportunity in the last sort of minutes or so, I mean, would it be fair to say that the way you look at the economic outlook, bringing all these things together could be characterized by cautious optimism? Is that the way you see things in terms of the next few years.

That's a very nice way to put it. I mean, the Greek economy is trying to grow and to recapture its previous status. We're trying to do so in a global environment that we all see every day -- it's very volatile. It's very unpredictable. But at least now we have the tools and we have the buffers to continue growing in this very challenging environment.

And to some extent, it would be fair to say that you've been used to volatility as well. So navigating volatility over the year.

Richard, we've seen everything.

You've seen everything.

So nothing can put us, of course.

Ilias Lekkos, thank you very much, indeed. I really appreciate.

Thank you.

So now we're going to switch things up a little as we turn our attention to a new jewel in the crown of Piraeus Bank, a brief introduction to Ethniki Insurance, which I'm going to tell you a little bit more about in detail in a moment, but we got a short film for you to sum up Ethniki's heritage, its market-leading position and its sector coverage. As I alluded to in a moment, we're going to hear from the CEO of Ethniki, Dimitris Mazarakis; and Piraeus' CFO Theodoros Gnardellis to discuss a bit more about the strategy behind Ethniki. But let's just hear a bit more about the background now in the short film.

[Presentation]

You've led companies in Greece, you've led companies in the Middle East, welcome back from the Middle East now. You let the Insurance Association in Greece of insurance. You've been around the block, let's educate these guys on the Greek insurance market. What is it about?

Before we are talking about the market. First of all, I would like to welcome you and the whole management team of Piraeus for this warm welcome. It is a privilege for me to be part of this winning team, I would say, especially at that point of time, leading a legacy organization to the next chapter. And let's go directly to your questions regarding the market.

Yes, I've been more than 30 years in the market. I know inside out the Greek insurance and I have seen a lot of ups and down in the Greek insurance market following the ups and downs of the Greek economy. Despite the solid recovery post COVID period, the insurance penetration in Greece remains at the level approximately of 2.5%. Well behind the European average and most of countries in the Southern Europe. This indicates a protection gap on the one hand, while on the other hand, indicates, I would say, an opportunity, a growth opportunity.

Now if we consider this and taking to also consideration the fact that, as Ilias said before, that Greece has a positive story. A positive macroeconomic outlook, one. Second, there is the regulatory momentum in Greece and significant tax incentives, especially towards property, natural catastrophe insurance for both commercial and residential properties. And last, the continuous improvement of insurance awareness of the Greek population, we could expect a medium to high single-digit growth of the overall market. And at this point, I think Ethniki Insurance within the Piraeus ecosystem is very well positioned. It's very well positioned not only to follow the market growth but outperform the growth of the market.

Okay. So I mean, the cynic would say that we've been at this 2.5% penetration for a long time. But you're expecting growth above nominal GDP, so kind of a slight convergence at European average? And then what about Ethniki in more detail? Are you gaining share? What do you think you stand for going forward?

Yes, we are expecting the growth of the market higher than the GDP growth because as I said, we combine all these factors, and I strongly believe that we are in an inflection point. Now as far as Ethniki what I said before that we are very well positioned. This is based on the following, let's say, factor or truth. First of all, Ethniki Insurance, as people would say, Ethniki Insurance is one of the few multi-distribution channel career. We have a leading agency, a leading non-tight agency. And of course, we have bancassurance that is going to -- we're going to up our game, especially the next -- over the next charter with Piraeus bank.

We are a company that we have a leading presence in each and every line of business. We are doing life, investment, health, personal accident, but also we're doing property and casualty, motor, mobility, property and all other financial liabilities risk. So multi-distribution, multiline of business, scale. Today, just for today because tomorrow we're going to be the leader. But today, we are the second largest in premium insurer in Greece. Then the brand equity. I don't think that there is any other brand in Greek insurance market that could compare with Ethniki Insurance.

And last is the customer advocacy. Another area that we excel and the relationship NPS is at least 12 points above the NPS of the market, the average NPS of the market. So combining all this along with a great management team that we have built in Ethniki, make me confident that the next chapter, not only we're going to win the future, but we are going to dominate the future.

Good. I like that. So let's talk then about Piraeus. I mean we're going to talk a little bit about how Ethniki is plugging into Piraeus financially from a customer franchise perspective. So we know what Ethniki will do for Piraeus. But what can Piraeus as an owner as a channel do you think do for Ethniki?

I would say 3 things. First, stability. For many, many years, especially after the financial crisis, Ethniki Insurance was for sale. So it is critical to have that shareholder stability as long as an insurance company is a long-term player, investment, financial institution that shareholder stability is critical for us, for our people, for our sales force to know what should expect in the future.

So stability is the one. Second is the scale. I think Mr. Megalou mentioned before, that we are in a position to combine a leading face-to-face distribution channel, agency tight agency and not tight agency along with the most productive bancassurance platform in Greece. So the result is going to be what you can see in the screen here. We're going to dive down, actually, the revenue over the next 5-year period. And the bancassurance is going to lead that transformation. Today, bancassurance is 17%, and we are going to PAUSE of the total revenue, and it's going to reach almost to 50% by 2030.

So bancassurance is going to be the engine of growth and create that scale. And the third is synergies. Synergies across all the functions of both organizations from technology and procurement to asset management and people. I heard before to talk about the investment in technology and AI and how we're going to optimize, let's say, and improve the efficiency. With Piraeus, we are talking about how we're going to take advantage of specific AI investments that are relevant for both for Piraeus Bank, but also for Ethniki as well as the game.

Taking all this into consideration, I think that we are creating that engine for growth. And this -- and our aspiration for 2030 reflects that we can see, the gross written premium dove down, as I said, we can see the return on equity, significant increase. At the same time, we shrink our expense from 13% to 18%, as Mr. Megalou mentioned before, and this is not a cost-cutting game. It is a scale game because when you grow, you are creating economies of scale. And at the same time, we are investing in technology in order to become more efficient, to become more efficient, and improve the customer experience.

So all of them at the end of the day, is going to triple our profit before tax from from -- at the solo level, I'm not going to talk right now at the corporate level because you cover all of them. But yes, again, if you allow me, stability, scale, and synergies are the secret recipe and what Piraeus bring to Ethniki.

Good. Hopefully, it won't be so secret after the end of the day. Your priorities, 5 years. It's a 5-year plan. Tell me the 5 things you want to focus on.

Yes. The first priority is the accelerated growth. We will continue to professionalize our tight agency. We will accelerate the bancassurance sales, optimize the non-tight agency and experiment in digital. This is the first strategic priority. The second is the 360 coverage of our customers, either we're talking about retail customers or corporate customers and how we're going to improve the customer experience.

The third one is operational efficiency. As I mentioned before, we're running a holistic program for continuous improvement or business process reengineering, and we are trying to embed into the organization, the mindset of eliminate, simplify and automate. So taking all of this, we strongly believe that we are going to go to 8% in the region of 8% expense rate.

Then are the synergies is the fourth priority. And I -- the more I work with Piraeus, the more I see the synergies and the opportunities, either in the revenue side or in the cost efficiency side. So synergies is the 4 priority. And last but not least, is the capital efficiency and how we are going to strengthen our balance sheet and our P&L through our real estate strategy, through reinsurance strategy and, of course, by concluded our shelf strategy that will allow us to differentiate our value proposition, protect the legacy but also differentiate the value proposition in the market.

And last but not least, we have the same enabler as the mother company Piraeus data and technology and talent and culture.

Great. But you're not of the hook yet. So forget these guys, forget these cameras, what are you holding back? What have you not given me?

Okay. I will ask you to go out, and I'm going to talk -- it's a tricky question.

Hold you accountable.

As I said, the more I work with the team here, the more I realize that there are untapped opportunity, even though we have a very, let's say, aggressive stressing plan, there are opportunities in both retail and corporate business. And especially in bancassurance. Again, the Piraeus bancassurance is the most productive and efficient bancassurance platform in Greece.

However, we are skewed towards unit-linked or asset management type of products. There is room to leverage our Greece customer base with protection type of products with life, with personal accident, with health, but also with motor, with property. So we're going to cover 360, as I said before, the needs of individual. And at the same time, we have heard about the focus areas in the corporate. There is a significant untapped opportunity in corporate that will give that certainty to investors to continue that journey.

So yes, there are some opportunities that we have to work further the next 5 to 6 months with Vasilis with CEO. And I'm going to be in position to share with you my secret later this year. And for sure, I'm going to commit for the next plan cycle. But for the time being, I think we have a very aggressive plan and the focus is to deliver that plan. And we're confident that we can do that and deliver our promises and build the credibility quarter-by-quarter, year-by-year.

And I need to put you all the time. Thanks for doing this.

Thank you.

Appreciate it. Thank you.

Okay. So that brings part 1 to a close. We're now going to give you all a breather with a 15-minute break. Coffee and Tea is at the back. And then after the break, we're going to turn our attention to digital solutions across the bank, the CFO's business plan and financials and that much promised extended Q&A with both Theo and Christos. So we'll see you all shortly.

[Break]

Ladies and gentlemen, ladies and gentlemen, if I could ask you to return to your seats to please bring your teas and coffees. Back to your seats with you as we start the next session.

So ladies and gentlemen, in Part 2, as you can see from the agenda here, we're going to focus on execution, how technology, data and product innovation, elevate, experience and returns. Also coming up, we're going to be looking at the business case for Piraeus, with Piraeus CFO, Theodoros Gnardellis. So of course, you saw earlier on, followed by an extended Q&A but he will also be joined by Christos Megalou.

Can I also ask you when -- if you have questions to -- please wait for the mic to come to you before you ask the question so everyone in the room and also on the webcast can hear your question.

First though, before we get to that Q&A, we're going to look at how Piraeus is innovating in digital solutions from retail mortgage platforms like Odyssey to investor tools such as brainy and FarmClick in the agricultural sector. So here's a snapshot for you.

[Presentation]

.

Okay. We got 20 minutes for this. So why own Piraeus?

Piraeus is the fastest-growing Greek banking profit pool exists. If somebody wants to invest in Greek banking growth, Piraeus is the fastest growing by far. We saw it on track record, and this is what this plan is committing to. Efficiency 30% cost-to-income. You heard from our CEO, lowest in Europe, not because costs go down. But because we are investing in technology to contain the cost increase so that the efficiency increases. So revenues outpaced cost increases while doing massive technological investments.

And number three, it's a differentiator. Optimize customer allocation. We're big distributors. We're committing to distribution of EUR 5 billion over the next 5 years. We're going to make a lot of money on this franchise, and we're going to give it back to shareholders. We're going to deploy it so that shareholder value continues to increase and people can start feeling it. We've proved that this year with the distribution step up to 55%, taking the capital to our target capital level of 12.5%, close to 12.7%.

Profitability increase. 10% CAGR on EPS, taking us from EUR 0.82 to over EUR 1.3. Where is that coming from? Clearly, the growth of credit funded by a low-cost deposit is generating and sustaining the strong NII effect that this balance sheet has. EUR 0.55 comes from NII. EUR 0.15 comes from insurance and asset management that we can discuss whether that is all that there's there or there's more. But this is where this plan snapshot has been taken. It has been taken at 15% insurance and asset management fees.

OpEx, EUR 0.10, OpEx will increase, right? It will increase by EUR 0.10 a share. But as you see the overall picture paints together with the tax normalization rate of 29%, based that 1.3 years. This is where the money is going to come from.

Let's talk about loans first. The Greek credit asset class. This is what we're about. EUR 15 billion of corporate loans will be added to the balance sheet over the next 5 years. Most of it from infrastructure large corporate, substantial part from SME and shipping. But more importantly, on NII, it's happening profitably. The spread erosion is contained to 35 basis points between now and 2030. We're landing at 1.8% spread. This is happening normally. It happens linearly. It goes down linearly. We've seen it go down linearly. The erosion has been happening at 5, 6, 3 basis points per quarter, it's a great defense on pricing that's going on by the corporate franchise and the control functions there, and it's a result of the RAROC focused culture of Piraeus, where funding cost needs to be paid for. Proper ECL assumptions are there in terms of expected credit losses. Everybody needs to pay for capital. That calculates naturally to the fair spread of the exposures, and we do not cannibalize prices.

Retail, we love retail. We love what's going on. We've been waiting for it. The biggest question we've been getting from you guys is real estate markets are thriving. GDP is growing. Why are mortgages not there? What's going on? I think it took time, right? Interest rates normalizing, rental yields going up, mortgages are increasing in this plan. We had EUR 100 million of net credit expansion in 2025. We're taking that up to EUR 500 million in 2030. What's making us all the more optimistic for that? The growth that happened in 2025 that led to this expansion did not come from state-sponsored programs. The state sponsor programs were giving 200 million dispersals in '24 and '25, all the delta came from arms length price mortgages.

And it came from all the macro stuff that Ilias talked about before, that gap of equity-only transactions going on, the fact that people were waiting for lower interest rates. You can get a fixed rate mortgage 20 year now in Greece for a very attractive price with what the franchise is doing on retail. And it's just better to buy than rent. And we think this is what's going on, and it will continue to happen. Healthy addition also from small business, total growth, EUR 2.5 billion out of the EUR 18 billion, EUR 19 billion credit growth we're going to be seeing.

Lots of stuff going on in retail right now, pushing innovation, as [ Vasilis ] just talked about with Harris and George in the video.

One thing we're particularly proud of, and we're going to launch this what called Project Odyssey. Now Odyssey is what customers used to go through in Greece to take a mortgage. We need to rethink the branding when we actually launched this because the outcome is going to be, I don't know, if I can, maybe, it's an AI-powered digital platform. It will operate as a stand-alone branded digital broker, where people can go in, upload documents and get very quick update on what's going on, feel more comfortable that they're not trapped in some funnel, 9-month funnel of banking and state bureaucracy until they get that light end in the tunnel.

Client assets. Piraeus is the #1 depositor in Greece. We grew deposits by EUR 3.3 billion in 2025. We grew AUM by EUR 3-plus billion -- in AUM in 2025, half of it from net sales. This is not a big customer asset plan, right? We're assuming a 3% CAGR in deposits and we're assuming a 7% CAGR on assets under management. Client assets are growing on this plan at half the pace they grew in 2025. Why? Just to prove that even if this was to happen, if the deposits doesn't -- don't pick up at the level that we expect, the plan can fund itself, and I will explain what that is in a bit.

So how is the plan funding itself? PAUSE We're going to be adding EUR 19 billion of loans over the next 5 years. The corporate loans and the retail loans. Not a lot of bonds, we're way up there. We've got EUR 17 million of bonds. We're going to add a couple. When we find opportunities that's going to be there. Cash and that's kind of the net delta. But how are we funding this? EUR 12 billion come from deposits. As per track record, it could be more, we'll discuss. It's an NII upside, but right now, the assumption, the planned snapshot is for EUR 12 billion. But the plan gets funded from reduction of non-yielding assets, that EUR 6 billion negative is DTA, HAP senior notes, real estate does not making us any money on repossessed. We're monetizing all of that over the coming period. And that's why NIM goes up from 2.2% to 2.6%, why would NIM go up otherwise.

We got spread erosion, maybe coupled by the one rate increase we're expecting, we're expecting in 2027 midyear. So theoretically, it shouldn't. But it does, it does because of this. Because you've got EUR 6 billion of no revenue-generating assets that go away, they become cash and that positive effect goes up. That's the only reason why Piraeus has been having a NIM handicap versus some of its peers, not because their asset -- our asset classes are lower yielding, but because we were carrying this big bulk of nonyielding assets, that was bringing the average down. That goes away. And what used to be 20% of nonyielding asset, the balance sheet becomes 10%. And the LDR goes from 67% to 75%, a much healthier balance sheet, much faster revenue-generating balance sheet than what we had in the past. Nobody cares about Ethniki here, but let's talk about it for a little bit.

Ethniki revenue in 2027 will add to our fee line EUR 120 million. That number becomes EUR 210 million in 2030, very rapidly increasing. Why is that? It's because the GWP, as Dimitris told me before, grows to 1.6%, primarily because of that bank apart. The GWP contribution from the banking channel that Ethniki now was in partnership with generated EUR 100 million. The Piraeus franchise in 2030 will generate EUR 700 million. And that's simply business as usual, Piraeus, traditional bancassurance power, selling united products, primarily 90%, 95% of the production is that. Once you do that, then you start accumulating what we call contractual service margin, which means future profitability of these contracts are getting plugged into the balance sheet. And they start increasing the reserves of Ethniki and then it amortizes over time in the P&L. And that's why the EUR 120 million jumps to EUR 210 million and will continue to be jumping in the coming years. We do not just look career limiting move to the fund.

We do not just look at P&L, right? We're not selling oranges. We're selling long-term insurance contracts. So monitoring that stock of future profit, monitoring CSM is what Dimitris and I and the teams are always looking at when we look at productivity of products. So overall, a very healthy plug on the P&L on the fee line. It's the primary reason of fee growth for the Piraeus franchise going forward, and then we can discuss the other assumptions. Very healthy balance sheet solvency goes up, as we said, above 150%. It was actually a higher number. We kind of saved it down because it will look much higher.

One thing to remember, solvency ratio level threshold, 100%. That's kind of the regulatory floor, healthy levels, 140% to 150%. Solvency ratio goes way up because we're assuming very minimal dividends from the daughter to the parent. If we were to increase that, those dividend levels, solvency would go down, but CET1 will go up. So the CET1 trajectory that we've got now assumes practically 0 dividends out of Ethniki. We're keeping the money there to fund other growth opportunities to create a stronger company, but it is a CET1 upside option if we choose to pull it.

Expense rate, same story as Piraeus, I would say, right? It's scale, tech investment, keeping efficiency higher and combined ratio very healthily going down below 95% and strong productivity.

NII, we talked about those EUR 0.55. That's basically on the EPS growth. That's basically EUR 1.9 going to EUR 2.6. Most of it coming from the growth, growth at a healthy 4.5%, defending that spread and keeping the erosion that we have on the load spread on the left. So that combined, we can get that net 700 NII plug. It's very important. It's a big part of the assumption of the plan, right? 850, massively outpaces the 150 erosion that the spread gives us. And then, of course, a healthy addition by bonds countering the very low-cost deposits. So EUR 12 billion of deposits is basically counted by EUR 2 billion of bonds.

Revenue from services. That's the new name for fees. Banking, flat. Flat banking fees throughout 5 years' time, it's an assumption. It's a revenue pool. It includes transactions. We know about the fintech erosion, there's pricing, there's also some regulation going on. It's an assumption. Other people are talking about mid-single-digit growth or low single-digit growth. The assumption is that we can achieve our key aspiration through insurance and asset management. Asset management is plugging in 50. Insurance and bancassurance is plugging a EUR 125 million that is coming from the EUR 210 million of obviously that we mentioned before.

Is that all? As I tried to push my friend Dimitris before, it's definitely not all. But this is where we are right now, right? This is what we have modeled right now, simply taking into account the plug of Piraeus into Ethniki as well as what that brings to the franchise in terms of productivity.

In terms of P&L, it brings -- I think we've calculated -- if we were to take it out and replace it with the previous status quo, calculates about EUR 35 million to EUR 40 million synergies out of this EUR 125 million. But definitely, the production opportunities there. Most of this production, as we said, is life-saving products. You can package it up with AUM, if you want and talk about it in conjunction with wealth management. In effect, out of the EUR 700 million that we've got on bancassurance targets for 2030, 10% is protection, right? And we're talking about the biggest corporate franchise in the country and the biggest retail franchise in the country.

We're not selling car insurance. We're not selling B2B. How big could that be? And estimate first says that we could probably identify opportunities of about EUR 70 million additional premium over the coming years with very attractive loss ratios. So that would plug into that number as well. I think the story is that we will keep working and tap the opportunities, quantifying them bottom up, but we do not guide top down from stuff from benchmarks. We guide for things that we're feeling, that we're selling, that we're doing. But the more you pull on this thread, the more stuff you find out.

OpEx. OpEx, as we said, goes up. Does it go up a lot? No, it goes up about 10% over the 5-year period. Why does it only go up by this because we've got about EUR 60 million of AI efficiencies plugged into the plan. And I think with Harris said, there's more to come on this. But the first use case we got in front of us said that we can economize between staff costs and G&A, about EUR 60 million AI. The rest and most of the adjustment comes from depreciation by doing the technology investment, but also from salary adjustments and variable compensation that absolutely needs to happen in Piraeus to step up that cost per FTE to approximately close to about EUR 70,000 from the current EUR 54,000 in alignment with other benchmarks. And it's money well spent for all this productivity that's coming in and translates to a cost-to-income ratio, as we said of 30%.

Asset quality, we never stop. Balance sheet looks great. We never stop, right? NPE ratio continues going down 1.5%. The repossessed portfolio of real estate, which has taken some hype in the past. We're the #1 seller of repossessed properties right now in Greece. We sold more than EUR 200 million of properties closing contracts in 2025 at a profit. And we continue going down to that pace, and we're going to be dropped below EUR 0.5 billion over the coming years. But at that pace, we're not going to be doing massive inorganics, taking big losses for shareholders. We've set up the organic machine and it's working well. And DTC, another big star of the show a couple of years back is basically going away much faster than we thought.

We reached single-digit DTC over CET1 level, including prudential deductions that we did. And we're doing over very strong profitability and very strong distributions and basically, we're here away after 2030 from getting rid of this thing once and for all saying that letter to the ministry and say, we're out of this law and be done with this.

Capital. 12.7 is a starting point. Our CEO talked about the adjustment of the CET1 target 12.5 after the projected derisking of the balance sheet and the improvement of capital buffers that we've seen. But what's very important here, why did we do this? People come to us and say, why did you step up distribution to 55%? Why did you dip into your 13% articulated target? Because we know this. We know the profitability that's coming. We know how much capital is getting generated. We know that we have a better balance sheet. And now is the time to give it -- to start giving back to the shareholders, set the baseline at that 55% and gradually step it up to 60% and 65%, give our distribution on a 60% average payout that basically comes out of 22% 12 points of CET1 generation through P&L, 7 of which is what we need for all of that growth we talked about.

So what do we do? We make money. We use what we need to grow and the rest we deploy. This plan is talking about cash deployment. And this is what the primary distribution at some of we've got in this plan is. It could be something else. But the baseline assumption is that we're going to be distributing in cash, what was mentioned by our CEO about EUR 5 billion of dividends over the next 5 years' time, to reach the same levels, I would say, 13.5. I would not pay a lot of attention to the 13.5% or had some questions as to why 13.5, why are you not talking to the 12.5 you talked about? This is the bottom our plan, right? We calculate the profit, we calculate the distribution. We set out the payout ratio. The most important thing is that in gross or model, these 3 blocks even themselves out. This is what we want to do. I've got 20 seconds, but I think I'm done. So I think we can switch it to Q&A.

So Mr. [indiscernible], if you want to come back. And [indiscernible], Deputy CFO; and [indiscernible], Head of IR, you guys have a mic incase we've got a question from the crowd.

So here we are. Looking forward to your questions. Yes. Ben? Microphone..

This is Ben Caven-Robertsfrom Goldman Sachs. Just 2 questions for me, please. First, could you elaborate a bit on the fee opportunity outside of Ethniki. So obviously, there's banking fees is one component of it, but also the wealth and asset management fees and the opportunity you see there. And then secondly, just on Ethniki, how are you thinking about the role of AI within that business? And whether there's any potential competitive impact from some of what we've been hearing about more in the industry around greater price comparisons and AI tools that might help consumers look at different insurance products using AI.

Let me cover the first question and Theo you cover the second one. Now on fees, it was very clearly indicated also in the graph, we have almost flattish, the banking fees, one could argue, that obviously, there could be a little bit higher over time. We have been able to achieve growth in our banking book. And usually, this we associate with fees as well.

But we wanted to be prudent and conservative, and we wanted to show that this plan is not based on, let's say, exaggerated arguments about the future. On the other area of growth, we have been able, over the last 3 years to grow significantly our wealth and asset management business. And in this plan, we have a high single-digit growth and not as much as what we have been growing the book and the fees over the last -- over the last 3 years. And again, there, we wanted to be conservative. We think we can do better but we don't want, again, to base the whole story of the growth of Piraeus in numbers that people will start criticizing.

So solid numbers, results that they are coming through, the estimates that we have on the growth of wealth and asset management fees, don't take into account any price appreciation of the market going forward for the next 5 years. We see the dips and the ups and downs of the market. So you could safely assume that -- we could be talking a higher number. Now if I start giving out numbers and guidance, [indiscernible], we started telling you're promising thing to the market. But what I can tell you for sure is that this is a conservative plan and wealth and asset management even their banking fees in a way are 2 areas for growth.

And everything that we can achieve through the first plan of Ethniki Insurance and the second plan is going to be coming on top. Theo?

Yes. I mean the AI opportunity is blown up. People keep talking about it. The fact is that the use cases are still materializing. Investments are happening. Definitely, on all 3 areas, Ethniki can benefit. And there's a strong AI budget in conjunction with the overall group for AI in the future. I think the use cases in Piraeus are crystallizing a bit faster on Ethniki both in terms of commercial and kind of live pricing that's going on as well as claims management, definitely lots of application there. Crystalizing the digital strategy and the direct sales on digital channels, how that's going to come out is important for the next plan.

I think we see the opportunity. I don't think we've grasped it yet, definitely not to materialize to numbers. So I wouldn't bake any of that in this current plan yet. I think in the coming phases, we're going to see more of that.

Yes, Alex.

This is Alex Boulougouris from Euroxx our Securities.

A bit closer to the mic.

This Is Alex from Euro Securities. Very detailed and thorough. A quick clarification on the insurance segment. and the bancassurance agreements that Ethniki Insurance had with NBG and you had with, I believe, NBG with NN and Ergo. Could you clarify this has been unwind now and how does -- if you could clarify this a bit better.

Absolutely. Theo?

So there's 2 segments of this story. There were exclusive bancassurance agreements, as you said. When it comes to Ethniki with the previous bancassurance partner, that has been resolved, and the parties have mutually agreed to release themselves of exclusivity as of 2027. Hence, the assumption of being introduced into the network of Piraeus. When it comes to the Piraeus prior and current active relationships even in 2026, we're still big sellers of bancassurance products with these relationships.

The assumption is that, that stock will run down in the future, and that's why you see kind of a gradual drop of these third-party fees that we mentioned. So I would say that legally, Ethniki and the previous partner have been -- have agreed to release themselves. And that was the major component of the strategy, bringing Ethniki into the network. That's why this is happening as of 2027. We're using 2026 as a migration year, prepping products, shifting the culture of the network so that we do not experience any blip, either of the customer experience or nor on the sales productivity of the network. It's a great addition for us, especially outside the urban areas, where the Ethniki brand very, very strong. And actually, I think it will facilitate sales there from a brand perspective of Ethniki.

But from a commercial perspective, we need to make sure that everything is working. IT systems, you click the button, you get the contract, everything needs to work in play. That's why we took that year to prepare and not suffer in turbulence in the commercial productivity.

Andreas Souvleros from Eurobank Equities. Your medium-term target for deposits seems relatively conservative. Does this -- could this be interpreted as intensifying competition ahead of digital banks and this -- and I have another question. Does your business plan imply any gain in your market share in loans or in asset under management and deposits.

Okay.

Quick answer to the first one is, no. It's not because of competition. It is simply the assumption to be very fair is. This is what we need to fund the plan. This is what we need to fund the growth plan. But if you look at it, you're right, on average, there's a EUR 2 billion growth. Last year, we did EUR 3.3 billion, EUR 2 billion growth per annum. Last year, we did EUR 3.3 million. If you want to correlate that with the delta is what I always like to look at, the delta of deposits over the delta of loans.

So what percentage of the loans growth is being funded by deposits. It's a much higher ratio and it has been a much higher ratio than what is plan assumes. Now that means that in terms of customer assets, there's an upside, if you want to put it on deposits. That's an NII upside, clearly. If you want to put it on -- if you want to say, no, I'm going to hold back on deposit because I want to push asset management much more than it's a fee upside that was mentioned before. It's clearly there. We cannot say that it's smart. Market share effect is that with these numbers, market share would go down in deposits, but it hasn't gone down for the past whatever number of years of Vasily, which makes us confident that this is what I need to fund the plan kind of number rather than what will commercially actually happen.

Alex, a bit closer to the -- we can't hear you.

Alex Demetriou from Jefferies. Two questions. Firstly, on the wealth management strategy. Is it really just further penetration of your customer base that you have now? Is it growing the private bank? Or kind of a little bit more color there would be really helpful. And just secondly, if we think about one of the other things that's kind of hampered mortgage growth more recently, it's also been around the kind of supply housing in Greece. How do you kind of see that evolving over the next couple of years? Is it further investment or these properties coming back online? Any hopeful there.

Alex, on the Wealth and Asset Management business. Basically, what we have there is the private banking business we have the mutual fund business, which is essentially the retail product that we distribute through our banking network, the very efficient sales network that we have. And we have what we call the third-party business, which is basically the private bank that introduces clients outside Greece, I mean, with our partners in Switzerland and in Europe.

All of it together is a port that grew up significantly the last few years with assets under management of around EUR 14 billion and fee port, which is from meager EUR 30 million, EUR 40 million to about EUR 110 million EUR 120 million in '25, and will continue to grow. The strategy varies multi. So we have digital products that we are already launching, one very efficient product that I personally use is brainy, which is the robo-adviser that we are distributing through our Piraeus Securities business for our securities clients but it's basically an electronic platform, a robo-adviser that allocate you on the basis of your of your perceived risk profile and your willingness to risk or not.

Then we have the platform of the private banking itself, which is using the UBS platform of advisers or electronic advisory, which we're using to optimize our investment proposition to our clients and the biggest mutual fund business in the Greek market, which is the engine of growth for the fees of the business, which is basically the mutual fund, which we distribute through the retail network of Piraeus.

Now as to how this whole thing is structured is single product owned by Piraeus in the mutual fund business, open architecture in private banking, high net worth individuals and family offices. So we do both plus the technology improvements on the technology front. So the growth in that business will come also from disposable income ability to invest client money and so on and so forth. We have been very efficient in actually turning retail banking clients 66 billion of deposits, the largest deposit number in the Greek market into asset management clients improving the discretionary basis of our client base. And that has been also a game changer as well. Theo?

Question about mortgages, right? And how is -- yes. I mean it's difficult to correlate what we see here as increased mortgage demand to macro elements. If that was the case, we would have modeled this change long back. And probably we have answers to the questions as to why it did not happen sooner? Why is it not happening bigger? The fact is that intrinsically, the market, yes, housing supply will increase because of renovation that's going on to all properties, closed properties. You know all of these stats. I think more importantly, right now, we've got kind of this benign mix of rental yields going up, disposable income going up and people have monetary certainty. They know they can get fixed rate mortgages for a long period of time. They don't need to expose themselves into payment volatility in the future anymore given where the curves are.

That's flattening of the risk-free curve together with a healthy spread addition is creating that piece and quiet to people, and they feel more comfortable. What we need to take out of the equation is the Odyssey. We need to take out the Odyssey of the equation, and I think we're going to be able to get to that EUR 500 million of of expansion.

We were really positively disposed by the EUR 100 million net credit expansion that we saw last year PAUSE in mortgages, even without deploying this new platform and some of the other stuff because of the market intrinsics that we just talked about, and we expect to see more. So is going to be an engine for growth in mortgages for the next few years.

Simon? Gabriel.

Is this working?

It is working.

Gabor Kemeny from Autonomous. Just knowing that the investors in the room can invest in 4 large Greek banks. potentially. Can you just distill again into a few sentences of what you think differentiates Piraeus relative to the peers. And the reason I'm asking is some of the factors we heard about like high single-digit loan growth. DTA on the balance sheet, in our securitization, which can be invested into higher-yielding assets. This is something which I believe all 4 can offer. So just once again, the key differentiating factors at Piraeus.

Theo.

So we cannot hide the growth opportunity that this franchise brings. We are, as I said, the #1 Greek lender, we are -- whoever wants to back in to invest in regrowth and not regional growth or whoever wants to invest on greed credit, this is what we're about. We were the #1 lender expansion expanding. We continue being with this guidance and funded by a very strong low-cost deposit book. And that's a clear differentiator.

The other thing I would say is that in terms of capital allocation, management and distribution, we're bringing the level down to where we think it's right for shareholders. We're not holding back any buffers, right? That's why we came out with big distribution numbers here. So if you look at yields, if you look at just pure EPS growth, which, by the way, is without buybacks, right? We're pure cash payers in this plan and EPS grows 10%, no buybacks, right? So big profitability growth coming from big Greek credit growth with whatever assumptions you want to talk about the market in terms of ECL about the quality of the market center. So we're not talking about other areas. And all of the money that's made out of this franchise comes back to shareholder gets deployed for shareholder value.

And Gabor, just to say here. I mean, what really -- if you look at PAUSE what we have achieved from 2016, '17 to where we are now, the journey of the last few years. And you acknowledge where we were then and when we are now -- the big differentiation of pyros vis-a-vis the market is that whatever we have promised in very, very challenging situations and markets, we have delivered that's what we are achieving with we have achieved in the past, and that's what we are claiming that we will do in the future.

Very fair point. Just one more question from me. The volatility in the past few days. Yes, I believe that your bonds have been volatile, like every other Greek banks bonds, but maybe a bit more than that. So I guess if there is a message from credit mark is that maybe you should be running with a little more capital. What would be your response to that?

Look, volatility is there and it has always been in the banking markets. We look at the big picture, and we are confident that in an economy like Greece with a rate that is growing the level of capital that we create over time, which is based on very conservative assumptions. And is not buying the sky. We is not our, let's say, prerogative in order to feel comfortable with ourselves to keep equity away from our shareholders. And that was the philosophy and our philosophy always. So we are creating capital out of this plan with bake volatility into our assumptions. Risk management is the work that the banks do and touch wood, we do it very efficiently.

And we want to reward our shareholders taking our target CET1 from 13% to 12.5% was a reflection of the P2G reduction where PAUSE the regulators came and said this bank is less risky than it was before. So P2G 24, 25 basis points down. And we said we have to give this to our shareholders. We increased our payout ratio from 50% to 55%. That's the philosophy that we are running this bank for not PAUSE to feel comfortable accumulating capital and sitting on idle capital but use it for the benefit of the shareholders.

Simon.

Simon

I was hoping that you could maybe elaborate a bit more on the integration of Ethniki into Piraeus, what needs to be done in terms of technology, staffing. And also, I know this is -- you're trying to look forward, but Ethniki was loss making, what, 2 years ago. Can you just kind of tell us what's been done maybe this is for Dimitris on how to -- how it's improved the profitability so far? And what further actions need to be taken to achieve your plans? Because I think a lot of the growth is coming from Ethniki.

All right. So there's a very big project, as you can understand, going on right now and has been going on in Paris. Around the integration of Ethniki has multiple aspects. So the most important ones are, one, I would said, product. It's a product design that comes from ethnic from the franchise of the bancassurance, giving out the specs as to what customers are expecting out of the branches and then Ethniki prepping themselves with products running the actuarial exercise ruling the pricing exercise, preparing their products for launch. Second one is PAUSE where the systems and the procurement systems are coming in the front end with the branches that need to be linked to the back end with Ethniki they need to be there.

And the third one is governance, risk management controls and overall compliance, right? So we're setting up risk appetite framework adjustments, policies, how to make sure that solvency is correlated with CET1, what does good look like? What does bad look like setting up the KPIs. This is very important. Because as risk starts being generated more and more, we need to make sure that the balance sheet is always secure. We need to go to the level 2 KPI, the Level 3 KPI because in insurance, if something goes wrong and you find out too late, then there's not much you can do. So that's clearly their own profitability, that loss-making that you saw in the past was from what I discussed on reserves in the previous session on reserves that Ethniki we had to take to protect its health book. That's gone right now. It's very well reserved and the profitability goes up by a reduction of claims and containment of expenses as they grow their top line. This year, 2025, it was a EUR 48 million profit. I think in 2026, we're going to 70-ish, 66,

Okay. But what's more important is the profit generation that comes out of '27. That is the year that perils gets plugged in and the bancassurance GWP kind of steps up. So that loss-making picture that you had, think about it as one-off reserves provisions that had to be taken to protect the book. The book now is well protected. So we're starting with a baseline of EUR 50 million profit right now, not minus x we're stepping it up very healthily over the coming years, the turbo boost happens in '27 when the power of the Piraeus network comes into the franchise. PAUSE.

But the bancassurance angle PAUSE Simon is really powerful. This is the most efficient, most effective bancassurance franchise in the market. We've proven it before. The #1 player is there because of us. Ethniki will be the #1 player from 2017 onwards. So there is a lot that we can gain also on the top line with this association.

Alberto.

We're going to get to Alberto in a bit.

It's just 2 follow-up questions on insurance. So Cecile Monford, Credit Agricole. The first one is you say Ethniki is going to be plugged in, in '27. What is the equipment rate you expect in 2030 and in the long term? And the second one is on the solvency ratio. I understand that 250% is the normal evolution of the solvency ratio. Is it your target? Meaning if it was -- if you had to upstream dividend, would you issue debt in order to maintain this ratio?

On the first one, the question was what.

Is the equipment rate. What's the percentage of Piraeus customers you hope to equip with Ethniki products?

Oh, the penetration...

The penetration.

So the fact is that when it comes to penetration, we've got about a 20% penetration right now on the active customer base with bancassurance products. This assumes it becomes 25%. So not a radical change. As I said, Banca 1.0, as we call it, is Piraeus as is plugged into Ethniki and creating a much bigger company. We said that I think is the #2 company, but as our CEO said, it's only the #2 and not the #1 because we made the #1 what it is, right? So that's definitely -- it's not a penetration, not a massive penetration. That's what Banca 2.0 can help us with.

Look at other customers, other opportunities, everybody needs to be protected. Everybody needs to accumulate for the future. I think those state bailout thinking will gradually go away. The government is pushing for that, giving the incentives. So there's a big protection opportunity out there, both on the individual and on the business side. And the other one was...

Solvency Solvency ratio.

Solvency ratio. As I said, definitely not the target. The target is around 150%. I would say 50, 60 points above kind of the threshold is what we want to be about. I guess the natural question out of that would be, okay, fine. So why are you not dividending out stepping up your CET1? Probably we will. So that 13.5% potentially higher. If we were to sold back 250, it's at least a percentile point, probably a percentile 5 on the CET1 that gets plugged in. So that 13.5% could become even higher. And then the next will come what about distributions. But we're not going to be solving for 250. This is just to show that the profitability of Ethniki is such that it is creating a very strong balance sheet. It can protect itself against turbulence if it ever was to happen. It will not -- the CET1 of the group would not suffer if there was volatility and if there was turbulence on the insurance side of the group.

Not a question for me, but from my partner, Alberto Nigro. So he asks, considering the cautious stance on fees on insurance solvency ratio and on the Danish compromise, capital will grow much faster than what you are projecting. How can you deploy this capital? What is the preference between organic and inorganic growth versus a faster higher payout ratio? And he says, sorry for not being there.

Yes. Well, look, we are the management team that is no shy when it comes to doing strategic transactions. When it came to our attention that we had the opportunity to buy a very big player in the insurance market. We took this opportunity and we did Ethniki Insurance. That's in our DNA. So if there is an opportunity in the future and we have accumulated capital, obviously, we are going to be in a position to take it, if we so choose. That's number one.

Number two, again, we don't want to accumulate capital for the sake of accumulating and sitting on it and feeling comfortable. We want to be distributing to our shareholders. So #1 priority is going to be shareholder distribution, as we said. As we will grow capital, if opportunities come our way, and we feel comfortable and there is a strategic rationale and there is accretive to the offering of Piraeus, we might as well take it. Areas -- one area could possibly be asset management. We feel we can do more there if we find a target that's acceptable to us and on a return profile that we want.

Investment banking is another area. With the Euronext acquisition, we see an opportunity in actually becoming a regional player in brokerage and investment banking. And that's another area where we could possibly deploy some excess capital. But what we can promise is that whatever excess capital we generate, we will be using with distribution returns being the #1 priority for us.

Anything else?

Any other questions? Okay.

Well, we are really on time. It says we have still 1 minute 34 -- is it over, the red. This is what it means.

So first of all, I'd like to thank you all for being so patient. I was betting with the team that it's going to be impossible to keep for 2 hours so many people in the room and that the people will start leaving as we do the presentation. But obviously, it didn't happen. I thank you for that.

I think we are very happy to have you here and giving you an opportunity to look at our -- the way we look at the future as Piraeus. I think we are -- and we were in a position to demonstrate to you that we have the ambition, we have the tools and we have the capacity to deliver on what we are promising. And what we are promising, it's no exaggeration is one of the most profitable growth stories in the banking sector in Europe.

And with that, I'd like to thank you all for being patient, and thank you very much for being with us.

Ladies and gentlemen, thank you for standing by. I am Mina, your Chorus Call operator. Welcome, and thank you for joining the Piraeus Bank conference call and live webcast to present and discuss Piraeus' Full Year 2025 Financial Results. [Operator Instructions] And the conference is being recorded. [Operator Instructions]

At this time, I would like to turn the conference over to Piraeus Bank's CEO, Mr. Christos Megalou. Mr. Megalou, you may now proceed.

Good afternoon, ladies and gentlemen, and good morning to those joining us from the U.S. This is Christos Megalou, Chief Executive Officer, and I am joined today by Theo Gnardellis, Chryssanthi Berbati and Xenofon Damalas to present and discuss Piraeus' fourth quarter and full year 2025 results.

Today, I will take you through the first 2 sections of the presentation, covering the main financial and business achievements for the full year period and demonstrating our standing in the European banking landscape. This will be followed by a Q&A session.

Let's begin with our presentation on Slide 4. Piraeus is a leading bank in Greece, ranking first across all major business lines. We serve 4.5 million clients with a workforce of 8,100 employees in Greece. Our total assets stand at EUR 91 billion with EUR 37 billion in client loans and EUR 66 billion in client deposits, representing 28% market share in deposits. We operate an omnichannel distribution platform with 370 branches, 1,500 ATMs and serving 3.2 million digital clients.

Our mobile app is top ranked, reflecting our commitment to digital excellence and customer satisfaction. We are a leader in sustainable banking with EUR 5 billion in sustainable financing, EUR 2.2 billion in green bonds outstanding and a strong focus on supporting small businesses and farmers. All these outstanding results have been delivered thanks to our people and our clients.

Let's move on to Slide 5 for the key highlights of our full year 2025 performance. We generated normalized return on average tangible book value of 16% or 14% on a reported basis. Our earnings per share reached EUR 0.82 post the AT1 1 coupon, fully absorbing the fast decumulation of base rates.

On the back of our strong performance, we increased our payout ratio to 55%. We intend to distribute EUR 0.40 per share cash dividend in Q2 2026 on top of the EUR 100 million share buyback that was completed in the fourth quarter of 2025. In total, we are on track to a total distribution of EUR 592 million out of the 2025 profit, which corresponds to a 7% yield.

We have expanded our loan book by a Europe leading growth rate of 11% year-on-year and achieved EUR 4 billion net credit expansion, maintaining pricing discipline at the same time. Importantly, net credit expansion reached EUR 300 million in the retail segment after 15 years of contraction. Our cost-to-core income ratio stands at 33%, among the best in the European banking market, confirming our strong cost discipline. Revenues from services reached EUR 700 million in 2025, up 7% year-on-year.

Our revenue diversifying efforts are reflected in our services revenues over total revenues of 26% and fees over assets that exceed 80 basis points. Both metrics are best-in-class in Greece and close to or above average in Europe. We delivered EUR 2.7 billion net revenues in 2025 with net interest income arising in Q4 quarter-on-quarter, and we consider that we are now well past the trough in net interest income.

Asset quality dynamics remain solid with the NPE ratio at 2%, while organic cost of risk shaped at 52 basis points. NPE coverage increased to 73% from 65% a year ago, solidifying our balance sheet. Our assets under management increased to EUR 14.5 billion in 2025, up 27% year-on-year with EUR 1.5 billion net inflows.

Furthermore, client deposits rose by EUR 3.2 billion annually and are now at EUR 66 billion, practically our deposits almost fully funded our credit expansion in 2025. Our total capital ratio reached 18.7%, absorbing the Ethniki Insurance acquisition, 55% distribution accrual, the strong low growth and DTC amortization. We maintain a buffer of 275 basis points above Pillar 2 guidance with a CET1 ratio standing at 12.7%.

Slide 6 presents the details of our fourth quarter and full year operating results. The reported pre-provision income was up 7% quarter-on-quarter. Below pre-provision income, the quarter has some one-offs aimed at further strengthening our balance sheet in the areas of nonperforming assets and non-core participations to lay out a clean backdrop for the new strategy.

We sustainably grow our tangible book value per share now at EUR 5.9 per share, which is net of the EUR 0.30 per share cash dividend paid in June '25, the EUR 0.08 per share of share buyback in November '25 and the impact of the Ethniki Insurance acquisition.

On Slide 7, we present our strong loan origination dynamics. Performing loans increased by 11% in 2025, driven not only by all business lending segments, but also by an increase in household lending. Importantly, Q4 marked a new cycle record of EUR 250 million for mortgage disbursements.

On Slide 8, we present a detailed sector breakdown of our CIB net credit expansion of EUR 3.6 billion in 2025. As you can see, our corporate platform outreach is very granular, reaching all sectors of the Greek economy. Among other initiatives, we are increasing our presence in syndicated deals, and we are offering greenhouse technology financing solution. At the same time, we keep focusing on SME clients in Greece, as shown by the top performance in disbursements.

Slide 9 demonstrates that we have achieved Europe's strongest corporate loan growth while maintaining pricing discipline, which is a testament to the commercially rigorous approach of all of our teams. We have been able to compete and win business while pricing at par with the market average and keeping risk-adjusted returns at the core of our business credit underwriting.

Turning to Slide 10. The key milestone to note is that 2025 is the first year that mortgage loan growth, net of repayments has turned positive with net credit expansion of EUR 110 million. This follows net consumer loan growth, which already turned positive in 2024. Consumer disbursements have been growing since 2021 by 10%, but this growth was previously outweighted by heavy repayments. We now have reached an inflection point that bodes well for future expansion of our loan book and revenue streams.

Slide 11 outlines the impressive evolution of our services revenues, which is being supported by loan originations, asset management and bancassurance. Ethniki Insurance contributed for circa 1 month with the growth of the new operating model still to come and expected to elevate services revenues with expansion across all segments of the market, namely life and health protection and P&C protection. More on this during our Capital Markets Day next week.

Slide 12 demonstrates the growing trend of assets under management that reached EUR 14.5 billion in December, backed by strong net inflows of EUR 1.5 billion. We have upscaled our investment solutions offering to private banking and retail clients, incorporating robo advisors while our open architecture strategy, combining Piraeus asset management expertise with a wide suite of best-of-breed third-party products is paying off.

Slide 13 presents detailed information regarding net interest income intrinsics. In a nutshell, our growing CIB loan book drove NII improvement, along with the stabilization of base rates. Spread erosion was milder in Q4 versus the previous quarter, while deposit costs stabilized. As a result, NII rose by 1% in a quarterly basis indicating that the trough of the cycle is behind us, given current yield curves.

Turning to Slide 14. Our cost control efforts kept G&A costs under control while still making extensive IT investments. Overall, we remain cost conscious, maintaining cost-to-core income ratio below 35%.

Slide 15 provides a summary of our asset quality indicators. Our NPE ratio stands at 2%, while the organic cost of risk shaped at 51 basis points in the fourth quarter. Our NPE coverage strengthened, reaching 73%, while our Stage 1, Stage 2 and Stage 3 coverage ratios are increasing, standing higher than EU average.

Piraeus enjoys a superior liquidity profile presented on Slide 16. Our liquidity ratios remain strong as evidenced by the high balance of deposits at EUR 66 billion and 216% liquidity coverage ratio.

Turning to our capital base on Slide 17. Our CET1 ratio stood at 12.7% at the end of December, post the Ethniki Insurance acquisition, absorbing loan growth, 55% distribution accrual and accelerated DTC amortization.

Slide 18 depicts Ethniki Insurance performance in 2025. Profitability was significantly improved to EUR 45 million before tax at a recurring level from EUR 26 million in the previous year. With a leading 14% market share and 1.9 million customers, gross written premium posted growth in health and P&C.

On Slide 19, we present an update on Snappi, our neobank with its own portable pan-European banking license. Snappi launched commercially in September, it is already gaining significant traction with its fully digital, app-based, branchless, low CapEx model, as it currently has 60,000 app users.

Turning to the second section of our presentation for our positioning within the competitive landscape. I want to point out that Piraeus is in a leading position in Greece in terms of performing loans, deposits, equity brokerage and network as highlighted on Slide 21. In addition, Piraeus ranks at par or above average on all major KPIs in the European banking space.

In Slides 22 to 27, we present the key metrics for Piraeus versus European bank averages.

On Slide 22, Piraeus delivers best-in-class loan growth in Europe, outpacing EU peers by wide margin.

On Slide 23, our net interest margin is far above the European average, reflecting our pricing power and effective balance sheet management.

Slide 24, net fee and commission income over assets is well above the European average and the best in Greece.

Slide 25, our cost-to-core income ratio is best-in-class in Europe, demonstrating our ongoing focus on operational efficiency and cost discipline.

On Slide 26, Piraeus' return on tangible book value is well above the EU average, highlighting our ability to generate superior returns for our shareholders.

Concluding with Slide 27, despite our strong fundamentals in absolute and relative terms in relation to our European peers, Piraeus trade below EU banks with similar earnings implying significant upside for our shareholders.

And with that, let's now open the floor to your questions.

[Operator Instructions] The first question is from the line of Sevim, Mehmet with JPMorgan.

I have just a couple of questions, please. One on the fee income this quarter, which you renamed to revenues for service -- from services. It seems like a very good strong print. I was just wondering if there are any one-offs or anything else to highlight in that print? Or is this a good run rate for us to consider for 2026? And maybe related to that also, it seems like a strong initial contribution from the business in just 1 month. I was wondering how we should think about 2026 when it comes to revenue contribution and integration costs here and maybe anything else that we should be aware of when it comes to modeling the business?

And finally, just wanted to ask on the payout ratio, which came in higher than expected with the EUR 0.40 per share dividend payment. But at the same time, your CET1 fell slightly below the target of 13%. So how do you balance this? And going forward, should we think about this level of payout ratio as the base? Or is there anything that you'd like to highlight here as well?

Sevim, and thank you for the question. I'll start with the fee income. We had indeed a very strong fourth quarter, and this is highlighting the franchise value of Piraeus. We have always maintained that we are a strong earner in fees over assets and particular areas like asset management, the banking business, the bancassurance are areas of growth for us, and they will continue to be.

For the fourth quarter, there were a few, let's call it, highlights, especially on the investment banking side. So I wouldn't extrapolate this number for the whole of the year. But I would just say, and of course, we will come with guidance on next week on our Capital Markets Day in London. I would just say that this is an indication of the strong franchise value that results in fees from services for Piraeus Bank.

Now, on the payout ratio and the level of capital, first of all, we thought that we felt very comfortable with the level of capital that we were in, given the balance sheet and given the way the bank has derisked over the years. And therefore, to give an extra return to our shareholders from 50% to 55%, we thought it was more than appropriate given the fact that with the level of CET1 that we are currently at, we are at a total capital level of above 270 basis points above P2G.

And of course, this whole exercise was facilitated by the fact that the P2G went down to 1%. So as you can imagine, given the strong fundamentals of the bank, we thought that this reduction on the P2G should be passed to our shareholders. And this is what we did right now rewarding our shareholders with an extra 5% on the payout ratio.

On your question, Mehmet about Ethniki, I mean this is really 1 month plus a few days that you're seeing here. Let's just wait for the 5th of March, where we're going to be giving you guys a detailed guidance. We're giving a preview of the solo result. I mean, it's still an audit, and it's going to be published by the end of March, but we're giving you kind of a preview on Page 18. But we'll discuss much more about Ethniki and the accounting effect and the value effect on the group consolidation on March 5. Let's just wait for that.

The next question is from the line of Caven-Roberts, Benjamin with Goldman Sachs International.

Just 2, please. Firstly, could you please provide some further color on the one-offs that were recorded this quarter? And if we should expect any further one-offs going into 2026, for instance, relating to the recent Katseli ruling?

And then secondly, on the net credit expansion, just looking through the different categories, as you mentioned, a very positive pickup in mortgages, but large corporate net credit expansion was a little lower in Q4. Could you elaborate on how we should think about that mix and run rate going forward?

Ben, indeed, quarter 4, we found the opportunity, and we recorded some one-off expenses, I would say, below the normalized line. What primarily we did was on the cost side, there were some adjustments that we did on VES and some transaction-related costs with the Ethniki trade, valuation adjustments that was done on the equity and the NPA line. And of course, on loans, we're all aware of the Swiss franc legislative actions that happened throughout the quarter. And as a result, there was an additional adjustment there.

Given the nature of these adjustments, I would not say that these are to be repeated in the future. We will not have, again, one-offs of that kind going forward. Overall, the guidance and the profitability communication that we will be giving and we have given in the past regarding '25 is on the reported side. So our objective is always to be meeting that, both on a returns ratio perspective and on a nominal perspective. This is what we did. So kind of nothing to write home about there that produces the future.

Robert, also on the loan growth, as we were going into the fourth quarter, we were well above our target of EUR 3.5 billion by some margin. And therefore, there was no real urgency on pushing forward. So naturally, we have been slowing down a little bit in the fourth quarter so that we will be in a position to have a very strong Q1. So nothing to think about the Q4 credit expansion, especially on the CIB other than that the trend is very strong. We have a very strong pipeline. And as we will come up with a new guidance on the 5th of March on our Capital Markets Day, you will see this coming through.

The next question is from the line of Kemeny, Gabor with Autonomous Research.

I have a question on your capital distribution. If you could comment on how you think about the mix of cash dividends and buybacks going forward in light of the strong performance of the shares recently? That's the first one.

And the second question on the net interest margin. Do you see the NIM stabilizing going forward? Is this -- is Q4 a good run rate for the coming quarters? Or do you see any additional headwinds coming through?

Gabor, I mean, on capital distribution, the way we are right now, we think cash. So that's what we were planning for, for '26, and this is how we strategically look to conduct ourselves in the future.

And on the NIM, Gabor, indeed, I think we're reaching a point given the interest rate status and what we're seeing on spreads where NIM is finding its lows. There are some tailwinds actually on the ratio that we'll be discussing next week. But I'll refer you to the 5th of March for those.

Right. Just a quick -- another quick one on your capital ratio. I think you had a valid case for increasing your payout, the CET1 ratio, slightly dropped below 13%. How would you think about steering your capital going forward? Are you looking to built it up to 13% or above? Or is there now a possibility that you stay maybe a little bit below that?

Gabor, look, I think this is a franchise that generates earnings. It's a high-yielding one, high distribution one and generates capital as well. We have been talking about our strategic direction and philosophy on distributions and rewarding our shareholders. In the future, as we generate more capital, we will be following the same strategic direction. We will come with specific guidance on the Capital Markets Day. But our philosophy is this is capital accretive franchise, and we have to be delivering back capital to our shareholders.

The next question is from the line of Nellis, Simon with Citibank.

First question would be on the losses from participations or impairments. Can you just elaborate on what the nature of those one-offs are?

Second question would be on the increase in bancassurance fees. I guess that's with existing insurance partners. How do you see that transition from existing insurance partners to Ethniki occurring and the impact it might have on that line? Those will be my 2 questions.

Simon, yes, the one-off part of the adjustments on associates had to do with one of a particular case that exists in our book. We saw some market intrinsic, some market information that led us to do a one-off valuation adjustment on the particular exposure. As I said, this is a very one-off situation. This does not prelude to any further such one-offs. It was something that we found an opportunity to do now so that we can have a kind of clean horizon ahead with no kind of gray areas or question marks.

And how much was that, if I could ask?

EUR 35 million was the one-off adjustment that we have done on the equity side. You can find it on Page, I believe, 52. So on the banca fees, yes, it was a strong quarter. I mean, generally, banca as a franchise, we know that Piraeus is running the strongest banca sales. Quarter 4 was particularly strong. It is with the existing partners that we've got. The arrangements that we've got with the 2 bancassurance partners are, of course, active, and it's a testament of how the network continues to produce insurance regardless of other things that might be happening on the side. The particular line, I think, we will see it next week in conjunction with a lot of other things that are affecting the future overall of the group when it comes to insurance sales and insurance revenue. So let's just hold on for another week.

The next question is from the line of Novosselsky, Ilija with Bank of America.

So one question on your interest expense paid on deposits. So I can see that it's constant in the quarter. So as far as I know, that relates to both the actual expenses on deposits and also the hedge impact, and both of them seem to be constant. I would kind of expect both of them to have a positive impact. So maybe if you can tell us how we should see interest expenses on customer deposits developing from here, maybe split between the 2 impacts?

And then again, if I stay on the hedges, if I look into the Excel data set on the NII section, I see big changes in the non-maturing deposit hedging cost, which is kind of offset by a similar change in the IRS liability side. So maybe if you can tell us what has caused that because the change is around EUR 90 million in each of the lines.

And maybe finally, one more on the hedges. So you started with EUR 10 billion. You have about EUR 9 billion now. So how can we expect the portfolio to develop throughout this year?

Ilija, overall, the deposit cost, as you saw, we have netted out and well pointed out with the NMDs. It's on 29 basis points right now. It is a flat situation. There's multiple, I would say, minor movements there. But for the future -- I know we're trying to keep the line, but you guys keep coming back on guidance for the future. But for the future right now, what we can tell you is that it's a stable outlook. So if you want to make an assumption, I think that's a fair one.

My answer to your hedging question from a strategy perspective, it depends a little bit on our outlook on interest rates. So we will be discussing that next week. I've said many times when one believes that when one believes that you have reached a terminal level of interest rates and those positions stop having value or you can -- you're free to kind of materialize and monetize the value that these carry. But again, let's discuss this more next week.

The next question is from the line of Souvleros, Andreas with Eurobank Equities.

And congratulations for the results. I have 1 quick question, which is regarding the calendar provisioning that is around EUR 300 million, if I'm not wrong. And you mentioned a meaningful drag on the common equity Tier 1 ratio. So could you please clarify under what timeline or condition this is expected to be reversed?

Andreas, thank you for the question. Indeed, it is, of course, part of the capital reduction that you use for -- following the calendar provisioning guidance. It will reduce over time. The expectation is that -- I would say with growth rapidly, probably around the 50% mark over the next 5 years. Part of the recovery strategy, that's the way calendar works, you front load, and then, eventually, as recovery, hopefully, you release.

The next question is from Gil Santivanes, Fernando with Intesa Sanpaolo.

This is a very general one regarding the latest Supreme Court ruling the last period of February on interest payments. Can you give us some color or some views on the balances the bank has? What potential impact might we see? And if this ruling is to be adhered by banks or not? Any color would be very helpful.

Let me start on the Katseli Law by saying that the Katseli Law served its purpose, I would say, when it was legislated in 2010. If you look at the exposures that we have in our book right now and feel we will follow up with the numbers. All the Katseli Law exposures that we have in our balance sheet are Stage 1 paying loans and performing, which means that there was some good work done out of this law. And we are monitoring this decision. And also, we have to wait, I'm afraid, for the final script because details matter, but we can give you an outlook of what we have in our books and what that could potentially mean.

So, Theo?

So Fernando, the overall book that we've got right now on the balance sheet of such loans is about EUR 50 million. Obviously, depending on how the decision will be scripted, there might have to be adjustments there, which is a percentage of that. We have hypothesis, obviously, which is being budgeted within 2026. That will be included in any guidance -- in the guidance we give out next week, but you understand it's a percentage of EUR 50 million, so actually excluding the margin of error of any cost of risk estimation for the future.

[Operator Instructions] The next question is from Potgieter, Stephan with UBS.

You've answered most of my questions. So just on follow-up on the Katseli loans, the ruling there. Obviously, you're outlining your own exposure, but do you have any views of what this could mean for the industry? I suppose most of these loans are sitting in the securitization structures, the regular scheme, if you have any views on that?

Stephan, again, we need to wait for the actual detailing because the impact might range a lot, obviously. It's a cash recovery question of the securitizations. It doesn't concern Piraeus Bank or the banks overall given the fact that these loans are derecognized. But in terms of the overall recovery, the outlook of HAPS and what that means, this is to be seen as we see the details. Overall, the outfits are producing cash reserves.

We've -- the overall recoveries that come out of these loans are a percentage. I would say a small percentage of the expected recoveries. We'll see that -- what that means for this phase for the future. But overall, I think, for the bank's balance sheet, no effect.

Ladies and gentlemen, there are no further questions at this time. I will now turn the conference over to Mr. Megalou for any closing comments.

Thank you all for participating in our full year 2025 results conference call. We now want to welcome you to our Piraeus Capital Markets Day, which will be held in London on Thursday, the 5th of March, where we will be presenting our strategic plan from 2026 to 2030. As already communicated, before the strategic presentation, we will hold an analyst-only session to discuss any questions and any technical aspects of the new business plan. We look forward to seeing you all next week in London. Thank you.

Ladies and gentlemen, the conference has now concluded, and you may disconnect your telephone. Thank you for calling, and have a good afternoon.

Ladies and gentlemen, thank you for standing by. I am Mina, your Chorus Call operator. Welcome and thank you for joining Piraeus Financial Holdings conference call and live webcast to present and discuss Piraeus' 9 months 2025 financial results.

At this time, I would like to turn the conference over to Piraeus Financial Holdings' CEO, Mr. Christos Megalou. Mr. Megalou, you may now proceed.

Good afternoon, ladies and gentlemen, and good morning to those joining us from the U.S. This is Christos Megalou, Chief Executive Officer. And I'm joined today by our CFO, Theo Gnardellis; Chryssanthi Berbati; and Xenofon Damalas to present and discuss Piraeus third quarter and 9-month 2025 results. Today, I'll take you through the 2 first sections of the presentation, covering the main financial and business achievements for the 9-month period and demonstrating Piraeus' standing in the European banking landscape. This will be followed by a Q&A session.

As always, detailed analysis of all the key performance drivers of Piraeus is incorporated in the latter sections of the presentation. The slides are also accompanied by a comprehensive Excel worksheet with historical financial and business figures. In addition, along with our IR materials, we published today our new sustainability blueprint, covering the full spectrum of questions from stakeholders. All the materials can be found on our corporate website.

And let's begin our presentation with Slide 4. Piraeus is the leading bank in Greece, ranking first across all major business lines. We serve 4.5 million clients with a workforce of 7,400 employees. Our total assets stand at EUR 83 billion, with EUR 37 billion in client loans and EUR 64 billion in client deposits, representing 28% market share and deposits. We operate an omnichannel distribution platform with 3,000 -- 370 branches, 1,300 ATMs and 3 million digital clients. Our mobile lab is top-ranked, reflecting our commitment to digital excellence and customer satisfaction.

Financially, we demonstrated robust strength with return on tangible equity at 15%, cost-to-income ratio at 34%, loan growth of over EUR 3 billion year-to-date, up 9% since December '24, total capital ratio at 20.6%, and liquidity coverage ratio at 217%. We are a leader in sustainable banking with EUR 4.3 billion in sustainable financing, EUR 1.65 billion in Green bonds outstanding and a strong focus on supporting small businesses and farmers. Our leading market position, sustainable long-term business model, and strong recurring earnings are reflected in our recent upgrade to investment grade rating by Fitch. Piraeus is now rated investment grade by 3 of the 4 main major credit rating agencies. All these outstanding results have been delivered, thanks to our people and our clients.

The macro environment is favorable. As you can see on Slide 5, the gap to precrisis GDP, investment and financing suggest multiyear expansion ahead. Real GDP growth remains above the EU average, strongly supported by investments and employment has declined markedly and continues to trend downwards, further strengthening our operating environment.

Let's move now to Slide 6 for the key highlights of our 9-month 2025 performance. We generated normalized net profit of EUR 854 million, corresponding to return on average tangible book value of 15%. This leads us to upgrade our 2025 target to approximately 15% from 14% previously. Our earnings for the 9 months are EUR 0.62 per share. We expect to exceed our guidance of EUR 0.80 per share for 2025.

On the back of our strong year-to-date performance, we have commenced an interim distribution to our shareholders out of 2025 profit in the form of a EUR 100 million share buyback that will be completed in November. In total, we are on track to exceed a EUR 500 million distribution out of the 2025 profit or approximately EUR 0.40 per share, which corresponds to a 6% yield based on our closing price on 30th of September.

We have expanded our loan book by EUR 3.1 billion during the 9-month period to EUR 36.8 billion in total. Today, we are raising our full year target for net credit expansion to over EUR 3.5 billion from EUR 3 billion previously. We delivered EUR 648 million net revenues in the third quarter with net interest income stabilizing at the same level as the second quarter and fees increasing by 5% year-on-year. Our revenue diversifying efforts are reflected in our net fees over net revenues of 25% and fees over assets of 0.8%, 80 basis points. Both metrics are best-in-class in Greece and close to the -- or above average in Europe. Net fee income reached EUR 489 million in the 9 months, consistent with our upgraded target of EUR 650 million for 2025.

Our cost to core income ratio stood at 34% among the best in the European banking market, reflecting our strong cost discipline. Our asset quality dynamics remain solid with the NPE ratio of 2.5%, while cost of risk shaped at 49 basis points in line of our target of approximately 50 basis points for 2025. Our assets under management increased to EUR 14.3 billion during the 9-month period, up 30% year-on-year, exceeding the upgraded 2025 target of above EUR 13.5 billion. Furthermore, client deposits rose by 5% annually and are now at EUR 64 billion. Our total capital reached 20.6%, absorbing the 50% distribution accrual, strong loan growth and DTC amortization. We maintain a buffer of 460 basis points above Pillar II guidance or 310 basis points, including the Ethniki Insurance acquisition, which is expected to close in the fourth quarter.

Slide 7 presents the details of our third quarter and 9-month operating results. We sustainably grow our tangible book value per share now at EUR 6.09 per share, which is net of the EUR 0.30 per share cash dividend paid in June 2025.

On Slide 8, we present our strong loan origination dynamics. Performing loans increased by EUR 3.1 billion in the 9 months, driven not only by all business lending segments, but also by an increase in household lending. Importantly, Q3 marked a new cycle record of EUR 190 million for mortgage disbursements. The strong performance leads us to revise upward our 2025 net credit expansion target to EUR 3.5 billion from EUR 3 billion previously.

On Slide 9, we present a detailed sector breakdown of our CIB net credit expansion of EUR 3.2 billion in the 9-month period. As you can see, our corporate platform outreach is very granular, reaching all sectors of the Greek economy. Among other initiatives while increasing our presence in syndicated deals, and we are offering greenhouse technology financing solutions. We are also very happy to be the bank of choice for SME clients in Greece as shown by the top performance in disbursements.

Slide 10 demonstrates that we have achieved our loan growth outperformance while maintaining pricing discipline, which is testament to the commercially rigorous approach of all our teams. We have been able to compete and win business while pricing at par with the market average and keeping a risk-adjusted return at the core of our business credit underwriting.

Turning to Slide 11. The key milestone to note is that mortgage loan growth, net of repayments has turned positive by EUR 45 million in the third quarter and overall, marginally positive in the 9 months. This follows net consumer loan growth, which already turned positive in 2024. Mortgages and consumer disbursements have been growing since 2021, mortgages by 20% annually and consumer by 10%, but this growth was previously outweighted by heavy repayments. We now have reached an inflection point that bodes well for future expansion of our loan book and revenue streams.

Slide 12 outlines the impressive evolution of our net fee income, which is being supported by asset management, bancassurance and loan originations. Our diversified model brings outstanding results, and these do not yet include the anticipated incorporation of Ethniki Insurance in our group, which will elevate net fee income with expansion across all segments of the market, namely life and health protection and P&C protection. The group will take advantage of the synergies between our nationwide network of strong relationship management from mass retail to corporate on the one hand, and the insurance factories expertise and franchise on the other.

Slide 13 demonstrates the growing trends of assets under management that reached EUR 43 billion in September, backed by strong net inflows of EUR 1.3 billion. We have upscaled our investment solutions offering to private banking and retail clients, incorporating robo advisers, while our open architecture strategy, combining Piraeus asset management expertise with a wide shoot of best-of-breed third-party products is paying off.

Slide 14 presents detailed information regarding net indirect income intrinsics. In a nutshell, our growing loan book, partly offset the material drop in base rates of circa 35 basis points in Q3. Time deposit downward pricing is driving funding costs lower. As a result, NII decline, decelerated considerably, standing at just minus 0.5% in the third quarter. Growth in NII is expected from Q4 onwards.

Turning to Slide 15. Our cost control efforts kept operating expenses in the third quarter stable versus the previous quarter despite the Snappi launch and the insurance transaction-related costs. Overall, we remain very cost conscious and on track to meet our annual targets.

Slide 16 provides a summary of our asset quality indicators. Our NPE ratio stands at an all-time low of 2.5%, while the organic cost of risk shaped at 49 basis points in the third quarter in line with our annual target. We note the ongoing reduction of NPE servicing fees down 5 basis points year-on-year. On Stage 1, Stage 2 and Stage 3 coverage ratio, we are increasing them, and we are now higher than the EU average.

Piraeus enjoys a superior liquidity profile presented on Slide 17. Our liquidity ratios remain solid as evidenced by the high balance of deposits at EUR 64 billion and the 217% liquidity coverage ratio. Moreover, we are the Greek bank with the highest Green bond issuance, totaling EUR 1.65 billion.

Turning now to our capital base on Slide 18. Our CET1 ratio stood at 14.6% at the end of September, absorbing best-in-class loan growth, 50% distribution accrual and accelerated DTC amortization. Piraeus has a 460 basis points CET1 buffer at the end of Q3.

Slide 19 outlines the significance of digital banking and technology for Piraeus. Digital transformation continues to drive efficiency with 99% of transactions now digital and 3 million digital active users. Gen AI, virtual assistance and automation initiatives have delivered significant productivity gains.

On Slide 20, we present an update on Snappi, our neobank with its own portable pan-European banking license. Snappi launched commercially in September and is already gaining significant traction with its fully digital, app-based, branchless, low CapEx model. Snappi has 30,000 app users after less than a month of operations. We will update you on Snappi's progress and plans for expansion with our Q4 results.

On Slide 21, we present our 2025 revised targets. Based on our 9-month performance, we are upgrading our guidance on net credit expansion to more than EUR 3.5 billion for the year and a return to tangible book value guidance to 15% from 14% previously. We remain confident in our future trajectory because of our proven ability to deliver sustainable, profitable growth and create value for our shareholders.

Let's turn now to the second section of our presentation for our positioning within the competitive landscape. Piraeus is in a leading position in Greece in terms of performing loans, deposits, equities brokerage and network as highlighted on Slide 23. In addition, Piraeus ranks at par or above average on all major KPIs in the European banking space.

Slides 24 to 30, we present the key metrics for Piraeus versus European bank averages. On Slide 24, Piraeus delivers best-in-class loan growth in Europe, outpacing EU peers by a wide margin. On Slide 25, our net interest margin is far above the European average, reflecting our pricing power and effective balance sheet management. On Slide 26, net fee and commission income of our assets is well above the European average and the best in Greece. On Slide 27, our cost-to-core income ratio is best-in-class in Europe, demonstrating our ongoing focus on operational efficiency and cost discipline.

On Slide 28, Piraeus return on tangible book value is well above the EU average, highlighting our ability to generate superior returns for our shareholders. On Slide 29, Piraeus implied cost of equity remains high given the relatively tight sovereign risk premium, suggesting further relating potential. And finally, concluding with Slide 30. Despite our strong fundamentals in absolute and relative terms in relation to our European peers, Piraeus trades below EU banks with similar earnings, implying significant upside for our shareholder.

And with that, let's now open the floor to your questions.

The first question is from the line of Boulougouris Alex with Euroxx.

Three questions on my end, if I may. The first is regarding the improvement we have seen in the mortgage disbursements. Could you clarify this is related to the My Home 2 program or should we see it as more change of trends going forward given the -- that is my first question.

The second is regarding time deposit costs. We have seen a good decline, about 20 bps Q-on-Q. How should we see that going forward, assuming rates stabilize at about 2%? What should be the normalized run rate in terms of time deposit cost?

And my third question regarding asset management fees. We've seen a very strong growth of 38% in the 9-month period. Would it be possible to give us a guidance or a split of how much is -- of that derives from net new business and how much is from the market effect approximately?

Alex, thank you. Thank you for the question. Just to focus on your first question on mortgage growth. It is actually -- we believe change in the way things are developing in the market in Greece. It is a reflection of more interest that we see across the board on mortgages, which is resulting in new disbursements. Our very successful program in terms of applications and balances has not materialized in disbursements yet. So we expect that this will take effect mostly towards the end of this quarter, but most importantly, in the new year. So we are projecting net credit growth in mortgages. And of course, we'll come up with the guidance for '26 where we do expect further net credit growth in that particular segment of our business.

I pass on to Theo for your second question.

Yes, Alex. I think so regarding the time depot cost. I mean, obviously, we're on a downward trend with the reduction of the Euribor. I think the 1.60% has further room. We're currently at around 1.55%. I mean, I wouldn't say that the beta is substantial to -- for us to expect further substantial growth going forward. I think we've kind of landed where we expected to be, but we still have some room, maybe 5, 10 basis points down on the overall TD cost.

And Alex, on your third question on the asset management. We have on Page 13, the way we lay out -- the way the book is growing, there is a part of it that is the market effect. But -- and also, EUR 1.3 billion is the net inflows. So given the way we account for the market effect, the large part of the fees that you see is relating to the net inflows. And then we see how this will develop towards the end of the year. But given what we see in terms of market intrinsic, we do believe that we will be ending up the year with EUR 100 million plus fees for 2025.

Okay. Many thanks. But I assume that this 38% is as a proxy, we could see from the split between net inflows and the market effect that you mentioned on Page 33 to see the differentiation of how much comes from net inflows and how much on the market effect?

Actually, Alex, not exactly pro rata. The market effect is on year about EUR 9 million. Currently, what you're seeing EUR 5 million is a market rate effect on this particular quarter. Actually, it's not 50-50 as we see on the AUM, yes.

The next question is from the line of Kemeny Gabor with Autonomous Research.

Yes, my first question would be on your spreads and loan growth relations. I believe your corporate lending spread declined a little bit in Q3. Do you see this as being in line with the market? And is this kind of 5, 6 basis point contraction, what you would expect going forward in the next few quarters? And a related question to that would be, shall we expect your NIM to stabilize? Or when you guide for sequential NII growth, does this assume any more NIM contraction from the Q3 level? And then finally on Ethniki. Where do you believe you would be in a position to elaborate in more detail on your strategic initiatives and financial targets from this business?

So first question, spreads. Slight erosion, about 7 basis points seems to be in line with the market. We've got also the spread evolution, how it has happened on the business loans and portfolio on Page 10. We're following also market status, things seem to be in line. This slight spread erosion is countered right now, over countered by volumes. So overall, on Page 14, we're showing the NII breakdown. The performing exposure gross interest income dropped by EUR 11 million.

Within that, there is a volume stroke spread net effect of almost positive EUR 10 million. So really, the reduction was going on in the performing exposure is primarily driven by the base rate drop of more than 30 basis points that we have had on the accruing base. So overall, this slight spread erosion is over countered by volume growth, creating a positive NII situation on the performing exposures, given the trajectory of the risk-free. So if one believes that the risk-free has reached the floor, and it seems that it has, we are currently accruing at 2.06%. There's maybe 5, 6 basis points to go to the current spot Euribor. Then we're looking at a turnaround on the NII and potentially even a slight increase in Q4 going forward, which answered, I think, your second question that we're looking at a NIM stabilization right now. I think the erosion has stopped always with a footnote on the risk-free as to what's going to happen in the future.

On Ethniki, exciting work going on and has been happening over the last 2 months in quite a lot of detail. A lot of levers to be pulled. The business plan is being detailed. So we can elaborate as your very rightfully asking in the Q4 results. This is when we will come out and talk about the upside and the story going forward. We can tell you 2 things right now that the guidance that we have spoken about on '26, '27 holds '28, which is what we call the transition years. '28, we're looking at upside versus the guidance that we've spoken until now. And this is simply by pulling the levers of bancassurance integration, eventual integration of Ethniki franchise onto the Piraeus network. And with many -- and it's kind of like a first cut with many more levers to pull going forward, focusing primarily on stepping up protection insurance, which even in the current bancassurance franchises, including our own, still has a long way to go.

That's very helpful color. Thank you, Theo. Just 1 small follow-up. When you say '26, '27 intact, do you mean the EUR 90 million PBT contribution by '27? Is this the main assumption?

Yes, yes. So the guidance that we have spoken about, which is currently on Page 40, assumes kind of EUR 60 million to EUR 70 million in '26 and EUR 90 million in '27. [ PBIT ] that still holds as a base assumption. There's no change to that. That's why we keep reposting that page for you guys. But I can just preview you in view of the business plan that, as I said, will be discussed in Q4 that '28, we're going to be looking -- and '29, we're going to be looking at different numbers.

Encouraging. Thanks very much.

The next question is from the land of [ Minares Filippo ] with JPMorgan.

So I have 2. The first one, if I look at the capital bridge on Slide 18, there was no negative effect from other items this quarter, while I think it was negative by 30 basis points in the second quarter. So if you can please comment on what were the positive items, which offset the negative impact of DTC and AT1s? And then maybe a small followup on this. If you can please remind us what capital benefit you expect to see in the fourth quarter from SRTs?

And then the second question on fee income. I mean, in light of the trends that you've seen so far this year, I was wondering if you could please give us an update on what level of organic growth you would see in fees beyond 2025, if you exclude the impact of Ethniki. Thank you.

On the Page 18 bridge on the other part, this really includes mostly the DTC effect. It's really prudential stuff that are going on. The DTC effect, the extra amortization that we're doing, mostly mitigated by other DTA that gets recognized by the nominal increase of the CET1 and that kind of is a zero-sum game. Then sometimes on this particular block, we might have the AT1 coupon on a particular quarter or we might have other prudential deductions that they have to do with calendar effects and so on. We just didn't have such this quarter. And as a result, this coming to be a zero-sum game at this particular quarter.

On the SRTs, yes, we've got a deal in play. The RWA economy of that, I would say, is targeted between EUR 500 million and probably about EUR 1 billion of RWA mitigation is quite a large deal that's going on right now. We've talked about SRTs in the past. We're the first bank to introduce them. The cost over CET1 has dropped below 9%, either the eventual CET1 economization if you calculate it on -- given the capital status of the bank. Right now, the cost ratio is below 9%, substantially below the cost of equity. So it's a good thing to do. So that will continue being a capital management tool for us going forward.

And your third question on fees going forward. Well, I guess you're talking about what's going to be happening in the coming years. Let's hold off for the business plan in Q4 to talk about the organic expectations. Obviously, Ethniki is a step change. The accounting also will change. So a lot of things will change as of '26. I would say, let's pause for that for now.

Our next question is from the line of Butkov Mikhail with Goldman Sachs.

I have a few questions on NPE service and fees, which have been reducing sequentially. So what further trajectory do you see there? And how maybe the pricing works on this line for us to understand? Where do you see it on the normalized to medium-term basis?

And then also on Ethniki Insurance, when do you expect to obtain the FICO status? And also, can you comment what criteria -- is there some specific criteria on the asset side or other metrics to qualify for this status or for the Danish compromise and where you will be post the completion of transaction there? Thank you very much.

Yes. I think well spotted at the -- within that line in Page 16, where we talk about servicing and protection fees. There is an obvious drop. This is all due to servicing fees, the servicing element of that. Service fees have almost been halved. That has been a result of a successful negotiation that we've done on the contract. So I would say that we're looking at right now is kind of a -- the end game was 15 basis points between servicing and protection.

On Ethniki, I mean, it's a journey, right? Article 49, which is what we all used to be calling Danish Compromise has a lot of requirements. The most important thing and the reason why that article exists is because one needs to understand properly measure, monitor and stress insurance and actuarial risks that one is taking when they are a substantial part of the balance sheet. So -- and that is definitely, I would say, a 2-year journey until we can establish ourselves in supervisory submissions and dialogues and also internal governance evolution that need to happen.

The FICO status has some nominal thresholds as the directive of 2002 prescribes. But I would say that this is a secondary for us right now. We care about delivering the return without Danish Compromise application on the capital, making sure that this is a return accretive story, and we can guide for a successful story in the coming plan. And I would say that the FICO status and Danish Compromise treatment will come, as I would say, on the cherry as a cherry on the nominal capital when it happens, but it's definitely nothing in the short-term period. And it's not -- we don't want to let it be a distraction in us meeting the profitability targets of Ethniki.

Okay. Very clear. Thank you very much.

The next question is from the line of Nellis Simon with Citibank.

Just 2 somewhat technical ones for me. I see the difference between the pro forma and CET1 and the reported is around 20 basis points, so not that big. But just curious when you think the pro forma and reported numbers will harmonize.

And then the second one is on other impairments. So it was EUR 35 million in the quarter. I think EUR 25 million is because of the school building charitable donation. Just wondering what the other EUR 10 million is related to.

Simon, the pro forma element of the 20 basis points has to do with upcoming derecognitions on deals that have been held for sale. That's primarily baking in, I would say, RWA recognition that's going to be happening upon completion of these deals.

On your other impairment question, well spotted. I mean, the EUR 25 million is indeed because of that. The other EUR 10 million has multiple things in it, rationalization of some equity positions that we've done. So really, we're talking about stories of EUR 1 million, EUR 2 million, EUR 3 million each, summed up to the EUR 10 million. There's nothing major for us to be projecting going forward or using that number as an extrapolation mechanism.

Okay. And then just in terms of the RWA reduction, I mean how long do you think it'll take before these projects are completed?

So it's really a matter of quarters right now. We're managing most of these deals have been signed. So within 2026, we should be able to see [ reported match ] -- with nothing else in play, we should be able to reported match the pro forma number.

The next question is from the line of Potgieter Stephan with UBS. The next question is from the line of Memisoglu Osman with Ambrosia Capital.

Two from my side, one [indiscernible] topical with the [indiscernible] increase that you're guiding now. I know it's early working on the plans and all that. But any color on if this -- we should take this increase as opposed to your guidance, what would be the factors supporting this? Or what am I missing if we should still wait for the official figures from you?

And then the second one is just a technical one. On the income from associates, I see a big jump quarter-on-quarter. Just wondering what [indiscernible] that. Thank you.

In the RoaTBV upgrade was a result of some P&L items that happen better. We've been monitoring them over the past quarters. Trading was a substantial part of it, also fees to some extent. So given the reality, given what we know right now, so close to the end of the year, this was something that should be upgraded.

No comment on the 2026. Again, guys, I mean, it's not time right now. A lot of things are changing. We want to be able to give you a detailed view on that. I know you're all eager but we just have to be patient until the Q4 results.

On the income from associates. Again, it's one of those lines similar to the question of Simon before. [indiscernible] one of those lines has multiple things, this particular situation. We can, again, multiple things moved, but we did have 1 associate investment in an asset management like firm that we had done that substantially upsized in value, and we recorded it in the Q3 P&L.

The next question is from the line of Potgieter Stephan with UBS.

Hopefully, you can hear me now. Just a quick question on the cost of risk. So I think you calculate 49 basis points. Just to understand, I think that's the underlying organic cost of risk is at EUR 68 million. I get closer to 60 basis points or what am I missing there?

Stephan, it has to do with the annualization mechanism that you're using. The calculation is for 49 right now. The guidance takes for 50. So I think that's -- it's very important not to lose track that to estimate the full year number is what matters so that people don't get confused, but we will have and you can take it off-line with us to explain through the analyst spreadsheet as to how the calculation works.

Ladies and gentlemen, there are no further questions at this time. I will now turn over the conference to Mr. Megalou for any closing comments. Thank you.

Thank you all for participating in our 9-month 2025 results conference call. We will be in the states of next week and in London in November and December. We look forward to discussing with you all. In the meantime, we are focusing on delivering a strong finish to year 2025 and preparing our brand-new business plan to be presented to the market along with our full year 2025 results in early March 2026. Thank you very much.