In a presentation to analysts on Tuesday, the bank’s management shared updated projections based on its first-quarter results and provided insights into how it plans to meet its ambitious target.
For the first quarter of 2025, Piraeus reported net interest income of €481 million. This marked a decrease of €33 million compared to the final quarter of 2024, primarily due to the drop in the Euribor—Europe’s key benchmark interest rate. The Euribor plays a significant role in determining income from variable-rate loans, making its decline a challenging factor for all eurozone lenders. Piraeus is no exception, but the bank has taken active steps to cushion the blow.
To mitigate the impact of the lower Euribor, Piraeus strengthened both its loan issuance and its investments in securities, which contributed positively to quarterly earnings. These efforts helped offset some of the shortfall caused by the drop in interest rates. Despite the rate environment, the bank’s core financial metrics remain strong, according to its leadership.
Reflecting market conditions, the bank revised its forecast for the average Euribor rate in 2025 from 2.30% to 2.15%. Even with this downward revision, Piraeus believes its NII target is still within reach, supported in part by the relatively low cost of customer deposits, which currently stands at just 0.49%. This is notable given the increasing share of time deposits, which typically carry higher interest rates.
The bank’s strategy for the rest of the year includes expanding its lending portfolio, with expectations to issue between €1 billion and €1.2 billion in new loans by the end of 2025. Management is also confident that the bank’s exposure to interest rate fluctuations is manageable. For every 25-basis-point decrease in the Euribor, the estimated loss in interest income is around €30 million—an amount Piraeus considers absorbable within its broader financial framework.
