Piraeus Bank, one of Greece’s major financial institutions, has recently begun to show signs of strain in its underlying performance metrics, despite maintaining a broadly resilient earnings profile. Over the past several quarters, the bank has experienced a steady decline in net interest income (NII), a key revenue driver. From €530 million in the third quarter of 2024, NII slipped to €514 million in the final quarter of the year, dropped further to €481 million in the first quarter of 2025, and edged down to €474 million in the second quarter—an overall decline of 11% in less than twelve months.
Pre-provision operating profit has followed a similar trajectory, falling from €305 million in the second quarter of 2024 to €244 million by the second quarter of 2025. This marks the lowest level recorded over the past year and highlights sustained pressure on the bank’s core operations. Earnings per share from core operations have also declined, moving from €0.23 to €0.19 over the same period.
The pressure is not confined to the bank’s core banking activities. Other operating income has consistently underperformed, posting losses of €10 million in both the third quarter of 2024 and the first quarter of 2025, and a marginal €1 million loss in the second quarter of this year. These weak results from non-core activities have further constrained the bank’s total revenue.
In addition, provisions for non-performing loans have shown notable volatility. After spiking to €127 million in the fourth quarter of 2024, provisions dropped sharply to €35 million in the first quarter of 2025, only to rebound to €94 million in the second quarter. This inconsistent trend points to continued challenges in credit risk management.
The bank’s adjusted reported earnings per share (EPS) have also been under pressure. EPS fell from €0.25 in both the second and third quarters of 2024 to €0.14 in the fourth quarter, before stabilizing just below €0.22 in the first half of 2025.
Despite these headwinds, the management team at Piraeus remains confident in the bank’s long-term potential. Speaking during the presentation of the bank’s first-half results, CEO Christos Megalou emphasized that Piraeus stock continues to trade at a significant discount to its European peers. According to the bank, its shares are currently valued at 1.1 times tangible book value (P/TBV) for 2025. In comparison, banks in markets like Italy and Spain with similar—or even lower—expected returns on tangible equity are trading at up to 1.5 times. Based on the bank’s fundamentals and anticipated profitability, Piraeus management estimates a fair value of up to €9.10 per share. This suggests potential upside of more than 33% from the current trading level of €6.81.
Piraeus Bank is also advancing with its strategic acquisition of Ethniki Insurance, one of the largest insurance providers in Greece. The transaction, valued at €600 million for full ownership, is expected to be completed by the end of 2025, subject to regulatory approvals. While the bank did not comment on specific regulatory matters—such as the FICO framework or the “Danish Compromise”—it reaffirmed its goal of securing full integration of the insurance business within its supervisory reporting. If approved, this integration is expected to minimize the capital impact of the acquisition and could boost the bank’s CET1 capital ratio by around 50 basis points.
Ethniki Insurance holds a 14.6% share of the domestic insurance market, including 17% in the life insurance segment and 11% in general insurance, with total premium volume reaching €850 million in 2024. Although the bank has yet to factor in potential synergies from the deal, it expects the acquisition to enhance key financial metrics—raising return on tangible equity by one percentage point and boosting earnings per share by more than 5%, based on current projections. Following the completion of the transaction, Piraeus Bank's CET1 capital ratio is projected to temporarily settle at around 13%.
