Eurobank nets €1.3 billion profit in 2022


Eurobank announced on Thursday a net profit of 1.3 billion euros in 2022, compared to 328 million in 2021, and included 231 million euros gains from the completion of the spinoff of the merchant acquiring business (project 'Triangle').

Adjusted profit before tax totaled 1.5 billion euros and adjusted net profit reached 1.2 billion in 2022.

Fokion Karavias, CEO, commenting on the results said: "Eurobank’s staff and management are shaken and deeply grieved by the tragic railway accident. Our thoughts lie with the families of the victims, to whom we express our deepest sympathy, and we wish a quick recovery to the injured.

"In 2022 we focused on growing our business, while supporting our clients to take advantage of the strong post pandemic recovery.

"Despite the negative impact of increased geopolitical volatility, disruption in supply chains and persistent inflationary pressures, economic activity remained robust in Greece and our other core markets.

"On this backdrop, our business model’s strength was reflected across all lines of our financial results, beating year targets for profitability, asset quality and capital. Credit expansion came strong in 2022, increasing loan balances by 3.3 billion euro, mainly to businesses.

"As such, we contributed to the efforts for the Greek economy to achieve a growth rate, significantly higher than the EU-average. Furthermore, we added close to 300 basis points to our capital base and reduced the NPE ratio to 5.2%.

"A well-capitalised banking system, free from the non-performing loans burden, is a key precondition for the Greek economy to regain investment grade soon. Further to our strong financial performance, we are committed to making a contribution to society.

"In 2022, more than 20% of the gross new corporate disbursements were environmentally sustainable, supporting our customers’ green transition.

"Beyond our business activities, we expanded our Corporate Social Responsibilities program and we are active in several fields, with a focus on the demographic challenge, youth entrepreneurship, inclusive finance and education.

"Within this frame, we continued the actions under our flagship initiative on Greece’s demographic problem, by moving a number of permanent Eurobank jobs out of Athens to the periphery, at Evros Region.

"Going forward and over the next three years, we aim at a return on equity of 12-13% by growing our business organically and exploring potential market opportunities.

"The above financial objectives rely on our well diversified business model, with more than a third of our core operating profit coming from Bulgaria and Cyprus.

"Rewarding shareholders is now becoming key in our strategy. Specifically for 2023, the amount earmarked for dividend distribution will be used in an optimal way to bid for the 1.4% HFSF stake through a share buyback scheme.

"For next year onwards, we envisage a payout ratio of at least 25%, in the form of cash dividends and share buybacks. Overall, we are pleased that we consistently outperform our targets for several years.

"Our strong balance sheet and a tested business model make us confident about capturing the growth prospects in our region, supporting an inclusive economy, delivering sustainable returns, and rewarding our shareholders for years to come."

Elsewhere, Public Power Corporation SA (PPC) on Thursday announced that it has reached a binding agreement with Enel SpA to acquire all of the equity interests held by Enel and its subsidiaries in Romania for a total consideration of approximately 1.260 billion euros, on a total enterprise value of approximately 1.900 billion.

The total consideration is subject to customary adjustments and includes an earn-out mechanism in relation to a potential additional payment based on a future value uplift for the retail business.

The closing of the acquisition is expected to occur by the third quarter of 2023 and will be subject to certain conditions precedent customary for this kind of transaction, including, among others, clearance from the relevant antitrust authorities.

The acquisition represents a transformational event for PPC’s growth strategy with the acquisition of a significant renewables portfolio (both operating and pipeline), leading electricity distribution and supply businesses, as well as PPC’s first material expansion into a new geography.

PPC intends to finance the acquisition with a combination of debt and cash on balance sheet, with 800 million of committed debt financing in the form of a 485 million 5-year term loan facility through Greek banks and a 315 million bridge facility through international banks.

Citigroup Global Markets Europe AG, Goldman Sachs Bank Europe SE, HSBC Continental Europe, AXIA Ventures Group and Euroxx Securities SA are acting as financial advisors and Milbank LLP as legal advisor to PPC in connection with the Acquisition.

Mr. Georgios Stassis, Chairman and Chief Executive Officer of PPC, stated: “This acquisition is fully consistent with what we have presented in our November 2021 strategic plan, which assumed international expansion in the Southeastern Europe area and activities of Enel in Romania are a perfect fit in this regard in terms of both geography and business.

"This is a unique chance to acquire an integrated utility platform at an attractive valuation, setting PPC on the path to becoming a leading Clean Utility player in the South-East Europe area. We are confident that this significant development will drive growth and improve PPC’s competitiveness on both an international and domestic level, benefitting our customers, and ultimately resulting in value creation for all our stakeholders.”

"PPC is a leading generator and supplier of electricity in Greece providing electricity to approximately 5.7 million end-customers. In addition, PPC holds a 51% interest in the Hellenic Electricity Distribution Network Operator S.A., which is the sole owner and operator of the electricity distribution network.

"For more than 70 years, PPC has been at the forefront of Greece’s power industry and an integral part of the country’s process of electrification.

"PPC is publicly listed and its shares are traded on the Main Market of the Athens Exchange with a market capitalisation of approximately 3 billion euros as of 8 March 2023."

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