Ladies and gentlemen, thank you for standing by. I am your teleconference call operator. Welcome, and thank you for joining the CrediaBank conference call to present and discuss the Q3 2025 financial results. All participants will be in a listen-only mode, and the conference is being recorded. The presentation will be followed by a question and answer session. Should anyone need assistance during the conference call, you may signal an operator by pressing star and zero on your telephone. At this time, I would like to turn the conference over to Mrs. Eleni Vrettou, CEO of CrediaBank. Mrs. Vrettou, you may now proceed.
Thank you very much. Ladies and gentlemen, good morning and welcome to our nine months 2025 results conference call. I am Eleni Vrettou, the Chief Executive Officer of CrediaBank. I am joined here today by Mrs. Valerie Skoubas, our CFO, Mr. Evangelos Kanelis, Chief Strategy Officer, Mr. George Kouroumalos, Chief Risk Officer, and Mr. Konstantinos Manolopoulos, Deputy CFO and Head of Investor Relations. After my introductory remarks, Valerie will go into more detail over our financial performance, and then we will turn to Q&A. Let us start with a brief overview of our results. CrediaBank has accelerated momentum in the Q3 of this year, delivering another set of record results in line with the target set, driven by high new disbursements resulting in stellar growth rates in net interest and fee income.
As a result, we reached another record in the history of the bank, delivering recurring pre-provision profits of EUR 58.9 million in the nine months, marking 11 consecutive quarters of quality growth and confirming the strength of our business model. The first nine months of 2025 were marked by a series of major changes for CrediaBank. The first international issuance of bonds of Tier 2 and AT1 bonds in the bank's history. The collaboration with Euronet, which led CrediaBank having the largest ATM network in Greece available with no charge for our clients. The rebranding of the bank with a new identity, name, and new branch concept. The completion of the operational and IT integration of ex-Attica and ex-Pancreta systems. The bank's first move for international expansion with the upcoming acquisition of the 70% of HSBC Malta, which is subject to regulatory approvals.
All of the above, as well as many other initiatives, contribute to the transformation of the bank and place CrediaBank in a new dynamic position within the Greek banking ecosystem. At the same time, we're also taking advantage of opportunities in retail lending in Greece through key transactions, such as the acquisition of a portfolio of performing residential mortgage loans of approximately EUR 90 million from the Spanish financial institutions, Unión de Créditos Inmobiliarios. The transformation journey of CrediaBank is evolving, leading to the establishment of a modern bank with upgraded metrics, enhanced profitability, strong capital adequacy, and soon international presence. Our main goal remains to further improve customer experience across all points of contact with the bank, from digital platforms to the physical branches, for the benefit of clients and obviously for our shareholders and employees.
The operational integration has also been the prerequisite and foundation for launching the bank's full digital transformation program in both customer-facing applications and internal processes, which will further optimize the bank's cost structure, at the same time improve the customer journey and create efficiencies. Within this very busy and intense business framework, we have set the foundations to deliver the medium-term targets as set in our business plan, which include elevated growth rates and efficiency improvements. Despite the integration challenges that naturally stem from such complex projects, we have managed to deliver both growth as well as execution on achieving the targeted synergies, I'm thankful to all my colleagues for their commitment, drive, and resilience.
We still believe that the performance of our financial metrics and the net credit expansion achieved provide strong evidence that the new bank has a solid commercial appeal and that there is a clear need for banking alternatives in a mature and consolidated banking environment such as Greece. Proof of this is that for yet another quarter, we grew faster than our historical market share and well above the market average. Turning more specifically to our financials. On loans, new disbursements jumped to 45% year-on-year to EUR 819 million in the Q3 and EUR 2.4 billion new disbursements in the nine months, setting a new record for our bank and exceeding our full year target of EUR 2.1 billion. Our loan book expanded by 8% quarter-over-quarter versus just 1% for the market.
This means that we have increased our market share in new loan production to more than 15% versus 11% in the Q2. This is significantly higher than the market share in the back book, which is north of 3%. Our liquidity position remains solid, with customer deposits strongly up 9% year-to-date or by circa EUR 600 million to approximately EUR 6.7 billion and with a significantly improved mix, as core deposits now account for 37% of our deposit base versus 42% in the nine months 2024. In the same vein, our cost of deposits further improved as our time deposit cost has squeezed 37 basis points quarter-over-quarter, compared to the 9 basis points average year drop. This trend is expected to continue as there is a time lag in the repricing process.
Overall, approximately 60% of our time deposits will get repriced in the next three months and approximately 75% in the next six months. Our top-tier loans to deposits ratio of 62% stands below our peers and allows us to implement our strategy of financing the healthy part of the Greek economy across all segments unabated. Total client assets, meaning deposits plus assets under management in our wealth management business, were shaped at €7.5 billion, 10% increase year to date. Asset quality dynamics remain strong, with the NPE ratio flattish quarter-over-quarter at 2.9%, in line with Greek banks, following a very successful HAPS transaction in the last quarter of 2024. Our NPE coverage is also satisfactory at a prudent 48%, while new NPE flows are well contained, being approximately 1% on annual basis on average for the last four quarters.
On the P&L front, we delivered another impressive quarter and recorded a new all-time high recurring pre-provision income, thanks to the strong performance of our core income lines. Specifically, our recurring pre-provision income jumped up 116% year-on-year to EUR 68.9 million, which is a new record for our bank. On a like-for-like basis, meaning excluding the income contribution of NPEs in our previous year's performance, our recurring pre-provision income grew more than four-fold year-on-year. Key drivers of growth were NII and fees. NII grew 1% quarter-on-quarter and 86% year-on-year, benefiting from strong net credit expansion, higher loan and bond volumes, as well as lower cost of deposits. On top of that, fees contribution to total revenues rose further to 17% from 15% in the previous quarter, primarily driven from lending and network fees.
We continue to remain focused strategically on the expansion and improvement in our product offering, particularly in the areas of wealth management, transaction banking and insurance, in order to further enhance the fee income generation of the bank. On the cost side, cost containment efforts have started to bear fruit as recurring operating expenses dropped by 10% quarter-on-quarter, driven by lower personnel and G&A costs. Turning to synergies, implemented actions thus far have already locked in EUR 15 million of cost savings on an annualized basis. Valerie will further elaborate on that front shortly. As far as the bottom line is concerned, our recurring profit before tax hit a new high at EUR 40.8 million in the nine months 2025 results from just EUR 2.2 million a year ago, indicating the disciplined focus on profitable growth.
Lastly, on capital, which stands well above the regulatory minimum requirements, things have also moved in line with our expectations. CET1 ratio widened by 20 basis points quarter on quarter to 10.6%, benefiting from the synthetic securitization despite the elevated loan growth and incremental restructuring actions post-merger that have also consumed capital. We anticipate organic capital generation and additional capital actions such as non-core asset disposals before year-end to further improve our capital position in the coming quarters. For the remaining of the year and for 2026, our key priorities have not changed. More specifically, these priorities are, first priority is the execution and smooth integration of the bank in Malta. As next steps, we expect to sign the sale and purchase agreement before the end of the year, as well as all related transaction documents and proceed with all the required regulatory approvals.
In the meantime, we remain focused on designing and implementing all required systems integration in very close cooperation with HSBC, so as to ensure operational readiness as soon as possible. With respect to Malta, we shall present our new business plan in the coming months. As part of our overall efforts to have strong governance and oversight of the Malta operation, a new member joined the bank's executive committee as Chief of International, with full responsibility with regards to the successful completion of the transaction, business continuity and Malta operations, as well as business growth going forward. The second priority is to gain further market share in Greece, both in retail and wholesale banking across all our product areas. Given our targeted market share gains, we are expanding our product palette offering, continuously launching new products while we still aim in offering the best possible service to our clients.
Within this framework, we are already launching in this quarter various new products such as the POS overdraft, the pension account proposition, the payroll proposition, green programs and others that address our target of further market share gains. Also, we will be looking opportunistically at transactions that make sense for us to acquire in the secondary loan market. Third priority is the launch of our ambitious digital transformation plan, aiming at achieving operational excellence both in the digital products and platforms available to the customer, but also internally. Our goal is to improve customer experience and customer journey across all our products and channels.
In parallel, we are working on reviewing our target operating model to ensure that the organizational structure of the supporting and control functions is the optimal one to support the new business model and ensure no interruption or distraction from the Greek business, the growth of which remains a top priority of CrediaBank regardless of the international expansion. In the context of our transformation operational excellence initiatives, we are also reviewing processes and procedures to ensure higher efficiencies and productivity, which will ultimately lead to better customer experience, higher revenue, lower costs, and ultimately higher profitability. Fourth priority is to continue to improve efficiency and profitability as the organization matures by further streamlining the bank post completion of the merger. Our cost efficiency will be further supported by our investments in digitalization, which will be rolled out gradually in the next two to three years.
Efficiency gains are already evident, as depicted from our improving cost-to-income ratio and the overall containment of our cost base. The effort is a nonstop one and is still ongoing. Within our revised targeted operating model, more synergies should come to the fore, while incremental gains should also emerge, especially on the revenue side, as we are exploring the synergies from the asset management and insurance subsidiaries of the Maltese entity. These, however, should start bearing fruits from 2027 onwards. Fifth priority is to diversify the revenue streams away from net interest income, focusing on fee generation capacity. We are indeed pleased with our fee growth performance, as fees have more than doubled year on year in the 9-month period. However, we feel that our fee level is suboptimal in absolute terms, and we have plans to further diversify revenue streams away from NII.
Within this framework, our focus remains on wealth management and the further expansion of the banc assurance product offering, both of which are expected to increase the non-credit related fees of the banking. Additional investments are also directed in our transaction banking offerings, both in payments but also trade finance, in order to capture higher fees from that business as well. Sixth priority is to complete the upgrades and refurbishments under the new branch concept across all our networks. The second new experience branch concept is soon opening in Crete and others will follow. The revamping is not only the building, though. We're investing in upskilling our workforce through dedicated trainings and certifications and providing employees with the necessary tools needed to support our aspirational targets. As stated in the past, our unique proposition includes some basic principles.
CrediaBank aspires to be a trusted partner for clients, shareholders, and investors. In our new branch model, clients will meet a welcome manager, the tellers will be at the level of the client to ensure comfort when transacting. Technology will be used to supplement and support our people and our clients and not acting as an area of frustration, not dominating the branch, but supporting the branch. All our new branches are equipped with the most modern technology, including the virtual teller machines, that provide the ability to transact virtually with all the transactions that would normally take place in the branch. Seventh priority is to enhance our capital further. We are highly focused on continuing to strengthen our capital base through additional non-dilutive actions, which is among our key priorities.
On that front, as promised, we already delivered another 70 basis points of capital in the Q3 via new synthetic securitization. On top of that, we have also decided to monetize our merchant acquiring business, our offsite ATMs, and the card issuing and management cooperation in line with the rest of the peers in the Greek market. That should most probably conclude by year-end. We are also reviewing all other non-core banking assets that could be exploited to generate additional capital, along with other actions that will end up being capital accretive. Within this framework, we are also examining various options around growing inorganically, including collaborations and small bolt-on acquisitions, particularly in areas that would enhance our fee income generation capacity.
Finally, I would like to close by saying how proud we all are around the progress achieved in the last three years with constantly improving results and growth despite the heavy restructuring required. The bank's revolution and evolution will continue as we are committed to follow our strategic plan, which will lead us to a sustainably highly profitable banking institution. Our commitment to the bank's turnaround and growth is supported by our agility and determination. As such, I would like to reiterate our target and ambition. This is not to become Greece's largest bank. Rather, it is to become the best bank for our customers, our employees, our shareholders, and the regulator. Thank you once again for your time today. I will now pass the floor to Valerie to present our nine months 2025 financial results in more detail.
Good morning from my side as well. I'm Valerie Skoubas, the CFO of the bank. I will start with the key highlights of the nine-month results as presented on slide nine. We delivered another set of record results powered by strong momentum in our core income line. Specifically, our profitability remains on an upward trajectory as nine months recurring pre-provision income more than doubled year-on-year, reaching EUR 58.9 million, setting a new record for the bank. On a more positive tone, recurring core pre-provision income, which excludes volatile non-core income, grew impressively 25% quarter-on-quarter, marking 11 consecutive quarters of quality growth. Moreover, adjusting for NII income, our nine-month pre-provision income rose more than fourfold compared to the same period last year. Key drivers of the stellar performance was the robust core income growth.
Specifically, nine months 2025, the net interest income surged by 86% year on year and 1% quarter on quarter, fueled by strong credit expansion and higher loan and bond volume, despite the declining interest rate. Moreover, lower cost of deposits and improved deposit mix added further support. Core deposits augmented further their contribution and now account for 47% of the deposit base, compared to 42% same time last year, nine months 2024. It is important to highlight at this stage that the contribution of NPEs was nearly zero. Following the cleanup, 99% of interest income is attributed to performing exposures versus the 84% one year ago. On top of that, fee income more than doubled on a yearly basis, thanks to robust growth across all lines.
Further down our P&L, total revenue was also boosted by strong non-core revenues, leading recurring total revenues up 91% year-on-year in the nine months 2025. Recall that our other income in Q1 2025 was boosted from an episodic, but recurring revenue of circa EUR 5 million relating to a structured finance deal we concluded. On the cost side, obviously, costs were also affected from the full consolidation with ex-Pancreta doubling year-on-year. Nonetheless, recurring operating expense dropped by 10% QoQ, thanks to lower personnel and G&A costs. Thus, recurring cost-to-income ratio squeezed by 400 basis points QoQ to 62.4% in Q3. Post implementation of the VES, which kicked off in February, total head count decreased by 255 concluding to 1,229 employees, while we are operating a network of 65 branches throughout the country.
As a result, locked in synergies on an annualized basis from the executed Voluntary Exit Scheme, the branch rationalization and other actions topped the EUR 15 million mark. With respect to provisions, the total P&L charge reached EUR 15.8 million in the nine months 2025. This includes EUR 12.1 million of recurring provisions, EUR 1.8 one-off provisions, and EUR 1.9 for the cost of the synthetic securitization, which we implemented last year, as well as an amount related to last year's securitization. As a result, our underlying cost of risk shaped at 43 basis points for the nine-month period. While our all-in cost including the aforementioned one-off and the cost of the synthetic shaped at 57 basis points.
Recurring profit before tax hit a new high and came in at EUR 40.8 million September year to date 2025 from just EUR 2.2 last year, due to the robust performance of core revenues, NII, and net fee, and the efficient cost containment. Reported earnings before tax stood at EUR 13.9 against a loss of EUR 384 million last year. Results were burdened from circa EUR 37 million one-off costs for the Voluntary Exit Scheme and other restructuring charges. These will accelerate the realization of synergies, which will already add to EUR 15 million on an annualized basis, having circa a two-year period payback time. If we turn to slide 21 to our balance sheet. First and foremost, we have posted new records both on the asset and the liability side.
In more detail, Q3 reported the 2nd-best performance of the bank despite the seasonality, with disbursements up 45% year-on-year and 31% compared to Q4 2024. The nine months 2025 disbursements stood at EUR 2.4 billion, exceeding our full year target of EUR 2.1 billion. We have managed to achieve net credit expansion of EUR 306 million in Q3, just EUR 3 million lower compared to Q2, leading to a net credit expansion of EUR 848 million in the nine months, well on track to meet our full year guidance of more than EUR 1 billion. Turning back to slide 18, we have EUR 5.2 billion of loans. This includes the EUR 1.1 billion senior of the two securitizations. Corporate lending remains the spearhead of growth, while retail lending is also gaining momentum. As a result, we continue to outperform the system as our loan balances grew 8% quarter-on-quarter versus just 1% for the market.
We therefore estimate that our market share in new production exceeded the 15% mark. We also have EUR 1.5 billion of securities with GGBs, including T-bills and other sovereigns constituting the bulk, 80% of the total. Our EUR 272 million DTA is clean of any DTC. As shown on slide 22, group deposits rose by 9% year-to-date, outperforming again the markets that grew by 2% year-to-date. Deposits hit a new high at EUR 6.7 billion and represent our main source of funding, constituting 82% of total liabilities and equity. Individual deposits represent the bulk of the deposits at 61%. Total client funds stood at EUR 7.5 billion, supported primarily by deposits, while assets under management grew 11% year-to-date. If we move to slide 28, we present the evolution of our CET1.
Our CET1 ratio widened by 20 basis points Q on Q to 10.6 from 10.4 in Q2, well above the regulatory minimum of the 8.7%, benefiting from a synthetic securitization of the elevated loan growth that consumed 80 basis points, as well as the front-loading of all the restructuring actions post-merger.
Which include branch closures, the Voluntary Exit Scheme and integration costs that have cost us 20 basis points. As discussed in previous conference calls, front-loading restructuring charges was a strategic decision that allows us to realize synergies earlier, as a result, the temporary pressures on our regulatory capital is in line with our strategy and our expectations. Looking into the coming quarters, CET1 will be supported from organic capital generation and additional capital actions, as such, non-core asset disposals and the monetization of the sale of the offsite ATMs. Finally, let's turn on slides 33 and 34. Asset quality dynamics remain positive with our NPE ratio flattish QoQ at 2.9%, in line with Greek banks and our cash coverage ratio stable QoQ at 48%. In the same manner, new NPE flows are well contained, being at circa 1% on average on an annualized basis.
With that, I have concluded my presentation. We may now open the floor for Q&A.
Ladies and gentlemen, at this time, we will begin the question and answer session. Anyone who wishes to ask a question may press star followed by one on their telephone. If you wish to remove yourself from the question queue, then you may press star and two. Please use your handset when asking your question for better quality. Anyone who has a question may press star and one at this time. One moment for the first question, please. The first question comes from the line of Varelas Theodoros with Pantelakis Securities. Please go ahead.
Yes, good morning. Congratulations for the strong set of results. I have a couple of questions. The first one, I see that on a quarterly basis, the net lending expansion has accelerated the last couple of quarters from around EUR 200 million- EUR 300 million. I was wondering if you can give us any idea how the future should evolve for the bank, given that you're about to reap the benefits of your restructuring efforts the past year. How do you expect net lending expansion to be in mid 2026? That's my first question. On the term deposit cost, I see it coming at 1.7%. Maybe you can tell us where is the new business coming and how the mix should evolve going forward. Finally, if you can give us an update on the important acquisition you made on Malta.
Thank you.
Okay. First of all, on the credit expansion, just to say that, as you've seen, we are very clear to our year target for this year. We have said EUR 1 billion for 2025. It seems that we will comfortably exceed this one. The same guidance we had given for 2026, that we're going to be over EUR 1 billion. Again, we are comfortable that with the pipeline and various deals and the momentum of the bank, we are still going to be exceeding this target for 2026. We're going to be close to EUR 1.2 billion then and constantly growing. The important thing to say is that our credit growth is actually balanced across the different customer segments. What we see is that about 50% comes from the large corporate segment. The remaining comes from SMEs and individuals.
What is very pleasing is that we also see the retail business continues to grow with all the investments that we're driving towards branches, new systems and the people upskilling. Overall, I think a very well-balanced mix across the different parts of the Greek economy. If I may speak on the acquisition or the transaction, I would say that effectively, as we said, we hope we will sign the SPA and all the relevant transaction documents before the end of the year. That is still pending because of the formality, which is the French Works Council ratification consultation process. This is because the seller is established in France, so it's mandatory that for all disposals by French entities, this consultation process needs to be concluded first. Once we sign the sale and purchase agreement, we actually proceed with the regulatory filing.
In the meantime, we work with the systems migration together with HSBC to ensure that we have the operational readiness. That means that no dependence on systems by HSBC and everything is part of the CrediaBank systems, infrastructure and architecture, as soon as possible. In terms of timeline, we believe that the regulatory approval process will be complete by the end of the H1 of 2026. We are in very close cooperation, and consultation already with the MFSA, but also with ECB indirectly. After that, as you know, once we get the regulatory approvals, we will need to launch the mandatory tender offer for the minority shareholders of the bank in Malta, which is a process that typically takes between six to eight weeks.
All in all, we don't see that the regulatory approvals is going to go beyond the Q3 of 2026, if this answers your question. In terms of the actual operational readiness, we are very much focused to conclude this by the end of 2026, but it might actually take a couple of extra months, so latest by the Q1 of 2027. Did this answer your question?
Yes. Thank you very much. Maybe if I can follow up on the deposit evolution and costs.
Yeah.
going forward, how you see the dynamics. Thank you.
Hi, Theodore, this is Konstantinos. Thanks for your question. If you go to slide 12, we present the evolution of deposit cost and loan yields respectively. As we have said in the past, we have been seeing a contraction of time deposit costs for our bank. That was to the tune of more or less 10 basis points per month, so 30 basis points per quarter. This has been the case throughout 2025. In the first three quarters, you have seen that already costs have dropped a lot. New production is coming at lower levels than the 170 you see for Q3 and to the tune of 20- 30 basis points at least.
Given also that approximately 60% of our time deposits get repriced in the next three months and approximately 75% in the next six months, it's fair to assume that rates will continue dropping further, obviously supporting our net interest margin.
Yeah.
Okay.
Absolutely. Thank you and all the best.
Thank you.
Thank you.
Once again, to register for a question, please press star and one on your telephone. As a final reminder, if you wish to register for a question, please press star and one on your telephone. Ladies and gentlemen, there are no further questions at this time. I will now turn the conference over to Mrs. Eleni Vrettou for any closing comments. Thank you.
Thank you very much for your time today. As discussed, we will see you again in the full year 2025 results. Before that, most probably sooner with our investor day where we will be presenting our business plan for the combined entity, including Malta acquisition and the Greek business as well. Stay tuned. Thank you once again for your time and attendance today.
Ladies and gentlemen, the conference is now concluded and you may disconnect your telephone. Thank you for calling and have a pleasant evening.