Piraeus Bank reported a mixed set of results for the third quarter of 2026, which came in below market and NBG Securities estimates.
However, according to the brokerage’s commentary, the deviations were mainly due to volatility in fee income, weaker performance in non-core activities and higher provisions, rather than any material deterioration in the bank’s underlying performance.
In particular, net interest income (NII) rose 6.6% quarter on quarter to €542 million. The increase was attributed to higher interest rates, income from the bond portfolio, and loan and deposit volumes, despite a modest squeeze on margins.
By contrast, fee income fell 13.6% to €217 million. NBG Securities said the decline was linked to one-off factors, comparison with a strong second quarter, when investment banking activity was elevated, and fluctuations in the performance of Ethniki Insurance.
Pressure from non-core activities and costs
Non-core activities also weighed on performance, posting losses of €29 million, compared with a profit of €28 million in the previous quarter. This was mainly due to trading losses amid volatility in bond markets, other operating losses, and charges related to impairments and investments.
By contrast, costs showed a positive trend. Recurring operating expenses fell 5.3% quarter on quarter to €231 million, while the cost-to-core-income ratio improved to 30.5%, from 32.2% in the second quarter.
The cost of risk (CoR) stood at 63 basis points, compared with 45 basis points in the previous quarter. The brokerage noted that around 40 basis points related to a portfolio classified as available for sale. As a result, normalised net profit came to €281 million, down 17.5% quarter on quarter.
2027 targets
Despite the softer third-quarter performance, Piraeus management reaffirmed its 2026 targets, noting that there was scope to exceed its forecasts for net interest margin and fee income.
It also raised its ambitions for 2027, a move that, according to NBG Securities, reflects management’s confidence in its ability to continue delivering strong performance.
On distributions, the bank announced an interim cash distribution of €0.10 per share, implying a gross dividend yield of about 1%. The ex-dividend date was set for 21 December, with payment to be made from 28 December.
Overall, NBG Securities considers the results fair, despite its initially more cautious assessment of third-quarter performance, given the impact of market volatility and non-recurring factors.
As the brokerage notes, despite short-term pressures, the outlook appears more encouraging, with growth in net interest income, cost control and raised ambitions for 2027.