Piraeus Bank: Results at 14/2, new business plan and placement in early March

The countdown for the sale of the HFSF's stake in Piraeus Bank to investors has begun. Next week, on 14 February, the bank's results for the 2023 financial year will be announced, along with the new three-year business plan for the period 2024 - 2026. Immediately afterwards, the Prospectus will be filed with the Securities and Exchange Commission.

Last week, Piraeus Bank announced that its 2023 results would be announced earlier, on Wednesday, February 14, compared to the original schedule of February 28, an acceleration that raised suspicions that the placement would also be accelerated.

According to reports, the government's aim is for the placement to take place in the first week of March, taking advantage of the very positive international climate for Greek equities and Greek assets in general, as reflected in the placement of National Bank of Greece, the Athens International Airport placement and the general performance of the Athens Stock Exchange.

The acceleration of the results announcement does not materially change the timing of the HFSF share placement for early March, and we certainly won't see the placement in February. The acceleration of the announcement of the results appears to be linked to the relevant procedures and requirements of the stock exchange authorities in order to ensure that the review of the Prospectus can be done comfortably and that sufficient time is given to the investment community.

New business plan

Along with the 2023 results, the bank's chief executive, Christos Megalou, will also present the new business plan for the three-year period 2024 - 2026. The bank's new business plan will be more ambitious compared to the previous business plan and the big difference is that it will be a purely growth plan as the consolidation of the loan portfolio with the reduction of NPEs is basically completed.

It is recalled that the previous business plan 2022 - 2025 presented by the management in April 2022 targeted new loan originations of EUR 27 billion over the three-year period, doubling profitability with recurring pre-provisioned earnings reaching EUR 1.2 billion euros, a dividend distribution for the 2024 financial year, a further 25% cost reduction, a focus on technology and a strategic partnership with Natech, a reduction in NPEs to European levels (3%) and the strengthening of the bank's presence in markets such as asset management. Targets exceeded.

Strong investors' interest

At the same time, in the presentations and contacts made by Piraeus Bank's management with investors in Europe and the US, the response from investors exceeds even the most optimistic estimates.

In the past weeks, the bank's staff has held dozens of meetings with investors both in London and New York. In New York, some 25 meetings of Piraeus had 25 meetings with investors in New York in the context of the bank's non deal roadshow, while a further 20 meetings were held in the context of the JP Morgan conference. In addition, a roadshow of Tr. Piraeus roadshow in London, with the participation of approximately 30 investors.

The investors included some of the best known and largest investment houses, such as BlackRock, Morgan Stanley, Fidelity, Capital, Wellington, Bank of America, etc.

The strong investor interest is reflected in the Athens Stock Exchange where, despite the imminent allocation of such a large block of shares (up to 27%), the stock is moving strongly upwards, gaining more than +10% in the last six sessions.

According to stock market sources, investor interest is very high and a large participation of strong investment houses and domestic investors is expected and the HFSF package could be absorbed in its entirety with great ease.

However, the exact percentage of the HFSF to be placed on the market has not yet been 'locked in', which will be decided in cooperation with the advisors shortly before the start of the share placement process. The allocation of the entire state stake (27%) is supported by strong economic rationale as the full privatisation of the bank will send a strong signal for the full return of the bank to European normality. And for the market, the disposal of the entire stake would have a particularly positive effect as the increase in the free float would significantly enhance the trading activity of the share.

It is recalled that from Davos, Prime Minister Kyriakos Mitsotakis had stated that it has not yet been decided whether the Greek state will sell part or all of its stake in Piraeus Bank.