The National Bank posted a significant improvement in profitability in the first half of the year, continuing with strong performance across all sectors.
According to the announcement by the National Bank of Greece :
Net interest income continued to show resilience against the expected normalization trend. They declined by 3% quarter-on-quarter, but strengthened by +13% year-on-year, reaching €1.2 billion in H1 2024, absorbing the full impact of customer deposit hedging costs, higher MREL issuance, as well as lower Euribor rates partially absorbed by the increase in net interest income on loans as a result of strong disbursements in Q2 2024.
Net interest margin was 323bps in 1H2024, well above our 2024 target of <290bps, now upgraded to over 300bps. o Commission income growth of +15% year-on-year and 6% quarter-on-quarter reflects increased transaction volumes, with double-digit growth across all individual commission categories, particularly in investment product commissions and lending, with the latter benefiting from a rebound in new loan production. The number of transactions increased by +10% year-on-year, as a result of a +22% year-on-year increase in digital channels Continued moderation in operating expenses in H1 2024, with Q2 2024 costs unchanged on a quarterly basis. On a comparable basis , operating expenses increased by just +3.6% p.a. in H1 2024, with the cost to organic revenue ratio maintained at 30% Credit risk costs stood at 55mmb in H1 2024, reflecting negligible organic M&A flows The return on equity ratio was 17.4% in terms of organic profit after tax and 18.1% in terms of attributable profit after tax in H1 2024, not adjusted for excess CET1 capital above regulatory limits Our financial performance in H1 2024 led to an upgrade of our targets in all key areas – Strong balance sheet, with trends strengthening in Q2 2024, leveraging increasing leverage Group-wide performing loans of €31.4 billion in H1 2024, up +€0.9 billion year-on-year and +€2.4 billion. per annum (+8% p.a.), as a result of a strong recovery in Corporate Banking disbursements2 to €2.5 billion in Q2 2025, with Retail Banking disbursements maintaining the positive momentum of Q1 2024. Overall, Q2 2024 disbursements reached a multi-year quarterly high of €2.8 billion. Current approved but undisbursed business loans set the stage for achieving the credit expansion target for 2024 Fixed rate asset exposure provides protection against ECB interest rate normalization Group-wide deposits in Q2 2024 reversed the negative seasonality of Q1 2024, with balances remaining almost unchanged from the beginning of the year and increasing by +€1.4bn year-on-year Net cash in H1 2024 amounted to €9.1 billion, despite high disbursements, providing strong support to net interest income, which represents a unique comparative advantage for the Bank Moody’s upgraded the credit rating of the EIB by 2 notches to BBB’, one notch above investment grade, highlighting our strong balance sheet and the maintenance of high organic profitability Adjusting for the negative impact of variable fee accruals mainly in H2 2023 versus their equal distribution during 2024 . Bank-wide. Include additional loans disbursed by Cyprus, National Leasing, National Factors
Results for the first half of 2024
NPAs stood at €1.2 billion in Q2 2024. The coverage ratio of NCI from accumulated provisions was 86%, with the corresponding coverage ratios of Stages 2 and 3 being 8% and 50% respectively
The positive trends regarding the quality of our loan portfolio in H1 2024 led to a revision of our FY2024 credit risk cost forecasts to <60mb from <65mb previously The CET1 ratio stood at 18.3%, with the Total Capital Ratio3 at 20.9% The CET13 ratio increased by +50mb from the start of the year to 18.3% in H1 2024, including a provision of ~0.5% on weighted assets (RWAs) for a 40% dividend distribution in 2025 from 2024 earnings, reflecting strong profitability. Total Capital Adequacy Ratio stood at 20.9%, up +70bps year-to-date The Group’s MREL ratio was 25.9%, exceeding the January 2025 minimum MREL requirement of 25.3% The Transformation Programme supports the achievement of sustainable results
We are focused on strengthening sales, increasing cross-selling, and improving the quality of our services, both in Corporate (new centralized customer service unit and innovative new products) and Retail Banking (improved service model for individuals with significant potential, new products that contribute to commission income generation, as well as expanding partnerships with third parties to promote the Bank’s products and services)
Our ongoing efforts to upgrade our digital services continue to deliver impressive results, as confirmed by the increase in monthly active users to 3 million. (market shares: 31% in mobile app users and 26% in internet banking users), as well as digital sales at 1.4 million units since the beginning of the year (market shares: 41% in cards, 33% in consumer loans, 45% in bank insurance plans)
We continue to invest in upgrading our technology infrastructure (replacing our Core Banking System -Core Banking System-, moving to a paperless operating model and integrating GenAI capabilities), as well as in continuous improvements to the Bank’s operating model (simplifying and optimizing key centralized processes)
We are integrating climate and environmental issues into our business strategy (new products and services for the renewable energy market and energy retrofit of homes), our processes (adoption of the European EU Taxonomy Regulation and the Sustainable Financing Framework) and our supervisory reporting (measurement of financed and non-financed greenhouse gas emissions and assessment of progress towards our zero environmental footprint targets -netzero t
For the first half 2024 results, Mr. Pavlos Mylonas said:
“The second quarter developed positively in many areas. The Greek economy showed signs of strengthening amid further improvement in business and labour market conditions, as well as strengthening fixed capital investment. In addition, economic activity indicators point to sustained positive momentum. Strong fiscal credibility and ongoing sovereign credit upgrades provide additional protection against exogenous risks.
In this favorable macroeconomic environment, we once again achieved strong financial results in H1 2024. Indeed, organic profit after tax increased by 27% year-on-year to €646 million in H1 2024, with a return on tangible equity ratio of 17.4%. The positive momentum in organic
earnings reflects the resilience of net interest income against the decline in interest rates, as well as strong growth in fee and commission income as a result of accelerating economic activity. It also reflects prudent expense management and the gradual normalisation of credit risk costs as a result of negligible NPL flows. These results have prompted us to revise upwards the financial targets we have set for the period 2024-2026.
Strong profitability further strengthened our capital buffers, which are at the highest levels in the domestic banking industry, resulting in an increase in our CET1 ratio and Total Capital Adequacy Ratio of approximately 50μb. and 70b.b. since the beginning of the year, to 18.3% and 20.9% respectively. The capital surplus provides the Bank with significant strategic flexibility, including future capital distributions to shareholders. As a first indication of this intention, following our return to dividend distribution, paying 30% of net profit in 2023, we are taking a dividend provision of 40% of this year’s earnings, with the ambition to significantly increase our dividend distribution in the future.
The comparative advantages of our balance sheet continue to stand out. Loan disbursements rose sharply, reaching their highest levels in recent years of €2.8 billion in Q2 2024. In addition, net cash in H1 2024 strengthened by €1.1 billion year-on-year to €9.1 billion, providing significant support to net interest income and further enhancing the National Bank’s unique liquidity advantage.
With an eye on the future, we will continue to focus strategically on the technological and digital optimization of the Bank’s infrastructure, which will enable us to support the growth path of the Greek economy, providing our customers with innovative financial solutions and an enhanced experience. With the trust and dedication of our people, who form the backbone of our organization, we will continue to deliver value to our shareholders, while fostering a culture of excellence and a customer-centric approach.”
