Attica Bank: Returned to profitability in 2023 – Significant decrease in NPLs

A return on profitability was recorded in 2023, with a recurring operating (pre-foreseeing) amounting to EUR 21.9 million compared to a loss of EUR 38.5 million in the corresponding comparative period. During the fourth quarter of the year, Attica Bank’s recurring operating profits amounted to EUR 10,4 million, showing an increase of around 50% compared to the third quarter of the year, while in the corresponding quarter of 2022, the result was injurious, of EUR 4.3 million. In addition, the bank announced pre-tax profits of EUR 28,6 million over losses of EUR 356,6 million in the corresponding comparative period. A notable increase occurred in the Group’s recurring operating revenues on an annual basis of EUR 93.2 million compared with EUR 48.3 million in the corresponding comparative period. The level of net interest income on a recurring basis is a new high in recent quarters, while on an annual basis it recorded a significant increase of 82.6%. As Attica Bank points out, the main factors in this change were the strong new disbursements, the increase in interest rate income from loans and claims, as a consequence of the increases in floating rate interest rates and the increase in revenues from the bond portfolio. Net revenue from commissions was set at 9m euros showing an increase of 58% annually. The Group’s total deposits were strengthened and reached levels of 3.2 billion euros with the balance of the accounts showing a significant 6% increase on an annual basis. Strong liquidity profile with liquidity coverage index (LCR) at 251.3% in December 2023. As regards the net Credit Extension, it amounted to EUR 324 million leading to a market share of 7.7%. The CET1 ratio was 12.8%, remaining substantially unchanged on a quarterly basis despite the credit expansion that occurred in the last quarter of the year. New disbursements of EUR 688 million were made for the year 2023. The new disbursements were accelerated following the completion of the Bank’s share capital increase in April 2023, with the remarkable performance achieved in the last quarter of the year, where the new disbursements amounted to EUR 306 million, of which EUR 294 million relates to business banking and EUR 12 million to retail banking. The Group’s non-performing exposures (MEAs) showed a significant decrease on both an annual and quarterly basis, despite continued interest rate increases by the ECB and inflationary pressures. Following completion of the Astir portfolio sale I during the third quarter, the ACE index was further reduced to 56.9% by an improvement of 880 μb on an annual basis, while the coverage index was 61.3%. The administrative announcement states: In 2023 it was a time-station for the Attica Bank Group, as the management’s intensive efforts have put the Bank on a full consolidation and return to operational profitability after several years. Attica Bank’s performance throughout 2023 confirmed the systematic implementation of our goals. The increased interest revenue by 86%, continued increased lending mainly to small and medium-sized enterprises and the reduction in operating costs were the key to changing the page achieved this year. We managed to improve all the functional lines of the Group’s organic sizes, presenting for the 4th consecutive quarter a positive recurring functional result, which amounted to €28.6 million at year level, demonstrating the commitment of the Management to the objective set for the resolution and re-establishment of Attica Bank in the context of the implementation of the Business Plan. The implementation of the Business Plan and the dedication of all executives to return to operational profitability allowed us to present positive tangible results, not only by improving our fundamental sizes, but also by presenting an unprecedented for data dynamics in banking, taking into account the Bank’s historical course. There is now a structured transformation plan, with new procedures that made the Bank more efficient and flexible, with new products, with new dynamics and extroversion. The Bank now creates an organic capital and, in addition to its strong liquidity, €6.2 billion, it can finance even more effectively individuals and businesses. The significant positive performance for the use of 2023 mainly stemmed from the increase in the Group’s recurring operating revenues, which amounted to €93.2 million compared to €48.3 million during the previous period. Attica Bank, like the other banks, benefits from raising interest rates at interest rate, but the main benefit in its revenues comes from expanding its operations on the one hand and on the other hand from reducing operating costs. The successful completion of the Share Capital Increase of €473.3 million strengthened the Bank’s capital adequacy and liquidity, confirming the trust of both old and new shareholders. This is evident from the fact that the Bank showed a strong increase in other loans (excluding securitisations) by 31% already in 2023, mainly resulting from the strengthening of small and medium-sized enterprises. Overall for 2023, net credit expansion amounted to €324 million with the Bank leading to a market share of 7.7%. Attica Bank’s credit expansion is expected to increase further and in 2024 as a result of the implementation of our Business Plan. Emphasis will be given to corporate banking, especially small and medium-sized enterprises, as well as to the financing of freelance professionals, such as engineers, offering holistic products. Furthermore, the new disbursements were also accelerated in the 2nd half of 2023 and amounted to €497 million (against €191 million in the 1st quarter of the year). In particular, new disbursements to small and medium-sized enterprises amounted to €257 million, i.e. 37% of the total, during the year 2023. We continue to focus on the dynamic sectors of the Greek economy that concern major projects in energy, infrastructure, tourism, real estate and also manufacturing. The main concern for Attica Bank is the best customer service through the gradual optimization of internal functions. Attica Bank wants to become the customer’s choice bank, a result of the customer-centric service model we are building. In this context, we went on to expand our activities to financial products and services, taking into account the growing trend in the market for bond issues. At the same time, for the first time, the Bank created and disposed of a Mutual Chapter bearing its name, demonstrating flexibility to enter new markets. Our main objective remains to clear assets from non-performing loans and reduce the relevant indicator. In this context, the successful completion of the investment fund agreement under the management of AB CarVal Investors, L.P. for the sale of the entire portfolio of Astir I securitisation, strengthened both the Bank’s capital and liquidity, giving it additional impetus to continue the transformation and development process, as it is the first transaction of definitive recognizability of AIA. In addition, in October 2023, we proceeded to repurchase all the bonds of the Metexelixis and Omega securitisations, aiming to best manage them through the tools we will have at our disposal. Non-performing exposures have also decreased over the last quarter of the year, with the index going down to 56.9%, while benefiting from the increase in the updated portfolio by 23% annually. It is noted that the Bank’s further consolidation of its balance sheet will be considered in parallel with the possibility of placing part of its ACEs under the “Herakles III” guarantee scheme, at the same time as the processes for the possible merger with the Pangretian Bank, which are currently not decided. Any decision by the Management to submit to the “Herakles III” programme will be taken on the basis of an assessment of the impact on the Bank’s results and only on the condition that any impact will be offset by other relevant capital support actions. The Bank will inform the investment public in time of any decisions under the “Herakles III” programme when this assessment has been completed. The Bank’s Management appears very optimistic for this year, as it has sufficient liquidity and capital, which it channeles to the market to support businesses and households. With flexibility, personalised service, modern banking culture, but also the appropriate manpower, Attica Bank has all the guarantees to succeed. The new year, which coincides with the 100th anniversary of its founding, marks the beginning for a new clean, sufficiently capitalized, flexible and customer-centric Bank, which aims to return value to its shareholders, employees and customers. As early as 2024, the Management of Attica Bank, in the context of its strategic planning, has launched all the necessary actions to merge with the Pangretian Bank, aiming at synergies that will result in resolution of both credit institutions through increasing their size and presence in banking events.

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