Athens, Feb 27 (Reuters) - Eurobank of Greece raised its profit forecast for the upcoming years on Thursday following a robust net profit report for 2024, driven by increased net interest income and expanding foreign operations.
The bank posted a net profit of 1.45 billion euros ($1.51 billion) for 2024, marking a 27% increase from the 1.14 billion euros in 2023, supported by its ventures in Cyprus and Bulgaria.
In line with other Greek financial institutions benefitting from improved net interest earnings and the Greek economy's strong recovery, Eurobank revised its core profit projections upwards for the upcoming years.
The bank anticipates that core operating profit will reach 1.9 billion euros in 2027, up from 1.78 billion euros in 2025, driven by the merger with Cypriot Hellenic Bank, organic loan growth, and wealth management, as stated in a bank release.
Greek banks are now stabilizing and returning to profitability after being nationalized in the aftermath of the financial crisis in late 2009, necessitating multiple capital injections from the government.
Following the reduction of bad loan ratios, the elimination of state ownership, and a return to profit, these banks received approval from the European Central Bank last year to resume dividend distributions for the first time in 16 years.
Emphasizing a robust capital foundation and consistent performance, Eurobank's CEO Fokion Karavias asserted, "We are distributing 50% of our profits to our shareholders through cash dividends and share buybacks."
Despite declining interest rates, net interest income, reflecting the difference between lending and deposit rates, surged by 15.3% to 2.5 billion euros in 2024 compared to 2.17 billion euros in 2023, as per the bank's statement.
Net fees saw a significant increase of 22.4% year-on-year to 666 million euros, while the non-performing exposure ratio decreased to 2.9% of its total loan portfolio from 3.5% in 2023.