“Despite renewed restrictions due to Covid-19, NBG started the year with a strong quarter. Momentum reflects the success of our Transformation Program –currently completing its 3rd year– the strength of our franchise, and the commitment of our team.
Solid financial results were observed across all key aspects of our business: profitability, asset quality and capital. On the profitability front, we delivered a very strong quarterly PAT of c€560m, reflecting continued improvement in operating lines as well as a strong trading result. 1Q21 Group core operating profit reached €95m, up by 42% yoy, on higher core income and sharply lower costs, yielding a cost-to-core income of 52%, improved by nearly 9ppts yoy.
Regarding asset quality, our domestic NPE exposure is now at €4.1b, further reduced since YE20 on sustained negative organic formation despite Covid-19. Following the expiry of all of our moratoria by YE20, payment performance remains encouraging, with less than 7% of moratoria beneficiaries in early arrears (>30dpd) and immaterial transitions to the NPE perimeter, well within our 2021 guidance. Our NPE coverage has increased by c200bps qoq in 1Q21, reaching 65% on a run rate of 114bps.
On the capital front, we have enhanced our strong capital position, delivering CET1 and Total CAD ratios of 16.1% and 17.1% respectively, up by c40bps qoq. The latter is expected to improve further by c170bps upon the completion of the Frontier and Ethniki Insurance transactions, expected in the next few months.
As the vaccination program rolls out in Greece, accelerating strongly, while at the same time mobility restrictions are relaxed, the Greek economy is set to recover sharply in the remaining three quarters of the year. Additionally, European RRF’s support is a unique opportunity to change the structure of the Greek economy towards a more dynamic and sustainable growth thesis. With these optimistic prospects, we are devoted to deliver a well-capitalized Bank with strong returns and a high-asset quality balance sheet, providing value-added to our clients while supporting sustainable growth, the Bank of first choice in Greece.
Pavlos Mylonas Chief Executive Officer, NB
