Piraeus Bank S.A. (TPEIR) Earnings Call Transcript & Summary

Good afternoon, everyone, and welcome to the Piraeus Capital Markets Day. A very warm welcome to those of you here with us in the room, our webcast audience, and thank you also to our host and partners. Good also to see Piraeus has brought London, some of the Greek Sunshine as well. Now today is about delivery and the next chapter and showing how scale, balance sheet strength and digital execution underpin profitable growth. Most of you, of course, will be familiar with the Piraeus story, the largest bank in Greece. And today, it's all about how the bank has set itself up for success for the next chapter of growth. Today, we will be looking at where that growth is set to come from. Now as you can see by looking at the agenda behind me, we've got a really exciting opening lined up for you. We're going to be hearing from some key members of the executive team. Christos Megalou, will provide a CEO Strategic Overview. We'll also be assessing The Next Chapter for the Greek economy with a fireside chat with Chief Economist, Dr. Ilias Lekkos. Plus will be showcasing Ethniki Insurance recently acquired to become part of the Piraeus portfolio. We'll be looking at the strategic rationale for the acquisition. And then in part 2, we'll hear from Piraeus CFO, Theo Gnardellis, on the business plan and the financials followed by an extended Q&A with both Theo and Christos. Now today, we're going to focus on the facts, delivery and where incremental value comes from across capital earnings and operating efficiency. Q&A will then come later. Please hold your questions. Please turn your phones to silent, roving mics are in the room, online viewers are able to submit your questions via the portal. Now in a moment, we'll hear from the CEO of Piraeus, Christos Megalou. But first, let's start with a short film on Piraeus transformation journey since 2017. And as you'll see in a few moments, all the voices in this film are the team at Piraeus Bank. [Presentation]

Good afternoon, everybody, and thank you very much for being here with us in this very exciting venue to present to you our 2026, 2030 business plan. I just to acknowledge first, the volatile times that we are living in. As we know, the last 5 days have been quite turbulent, and we monitor with vigilance developments, we look at what could possibly happen in the future. A lot depends on how long this crisis will last. But I'm not here to talk about the developments in the Middle East and in Iran, but I'm here to talk about Piraeus 2026, 2030 business plan. And going straight into what Piraeus plan is promising. We want to be strong and profitable. We will improve our efficiencies, and we will optimize our capital. These are the 3 overarching strategic priorities for myself and the management team. And the key enablers, the franchise, the risk management, the platform of delivering of products, AI and technology and people and culture. And the target, you have it in front of you, what we are promising and what we are guiding the market, 18% return on tangible book value, a cost/income ratio that's going to be best-in-class in Europe from 33%, we are right now down to 30%, earnings per share growth of 10% year-on-year for the next 5 years. Dividends per share significantly improved 17% year-on-year, an improvement on shareholder returns, total shareholder returns year-on-year of 13% and a net promoter score above 20. This is what this plan is all about. Our core strengths, 4.5 million customers, 50% of the active population in Greece are the customers of Piraeus Bank, #1 in deposits, the biggest franchise branch network in the market delivering these results that we are talking about. We are very proud of our recognition in the market, but we are mostly proud for our MSCI AAA on sustainability. We are the only Greek corporate that is a AAA from MSCI in the sustainability agenda. 5 businesses that are delivering these results. 2025 was EUR 2.7 billion from businesses from individuals, from wealth and asset management, insurance and the financial markets. That's what is the Piraeus machine producing in 2025. And where are we operating? We are operating in Greece in a country where there is significant improvement in everything that talks macro. The sovereign spreads are improving, the economy grows, credit is in demand, fiscal is improving, and we have quite a lot of upside on segments. So loans to GDP, 84%, average Europe 110, assets under management to GDP and meager 12%. We see Europe at about 100, an insurance premium from the 2% that we are currently are 5% to 7% in Europe. So there is a lot of growth in this market. At the same time, we have converged. Who would imagine that Greece would be trading at par with Italy and France, but this is what is happening on the longer-term yields. Greek debt is sustainable. Greece is growing faster than the European average and will continue to grow faster up until the period we are talking about at the business plan and unemployment is at historic low, improving disposable income, improving demand for credit and affordability. The surpluses continue to be at the core of the government's agenda. And this sustained fiscal discipline is what keeps the economy going and what will be creating the growth of the future. And that's how the primary surpluses are coming in. Debt to GDP ratio, there is no other country in Europe that is reducing the debt to GDP ratio with the rates that Greece is managing to reduce historically, but also projected to go to the next few years. And that's a very positive backdrop for the effort we are doing as a bank. And let's reflect one moment on what we have achieved so far. In 2016 to 2025, look at the numbers, they speak for themselves. This is a great, a great achievement of this management team, whatever we have promised over the years we have delivered. And what could have possibly be a better launch pad than what we have achieved in 2025. The numbers are there for you to see, significant improvement across all board and 2 milestone transactions. One, the acquisition of Ethniki Insurance, the enabler of growth for the next 5 years and the launch of Snappi, the neo bank who already has 60,000 customers on board. What this plan is all about? The Piraeus 2030 plan is about profitability and growth, is about efficiencies, and is about optimizing our capital allocation and making sure our shareholders are rewarded throughout this period for their patient of being our shareholders. And how are we going to achieve this by playing to our strengths. We're going to be growing essentially the Greek economy being the #1 player in the market, growing our loans, deposits, our assets under management, and the gross written premium that Ethniki Insurance is producing and will be producing in the future. This is not about basically cost cutting, efficiency that we will be doing over the years will come because we have the ambition to take our cost/income ratio down to 30%, improving revenues and managing costs in the best possible way, achieving stellar results on the insurance business, taking the expense ratio down to 8% and delivering efficiencies from technology and artificial intelligence that we estimate here at EUR 70 million with about 80% being already in the plan that you have in front of you. Capital is an area where there's a lot of debate in Greece. And one of the things that I can tell you, we are thinking very seriously about our capital position. We are thinking very seriously about the buffers that we need to have in order to operate in a market like Greece, Eurozone country with growth rates above average. We believe that the new guidance we are giving you now the 12.5% CET1 ratio and the capital buffer of 200 and above is the right level of capital for our low-risk operation because the balance sheet of Piraeus is a low-risk balance sheet by all means. And we have distribution to the shareholders as key in our strategy, EUR 5 billion between now and 2030. And that's what we are promising, and this is what we will be delivering. How are we going to achieve that? The strategic enablers, the franchise, the risk management, very prudent risk management, the services platform, multi-omnichannel delivering on products, the use of technology and artificial intelligence and most importantly, our people, our culture and our delivery mechanism, which is enabled through our people. The franchise power and our services platform are second to none. The branches, the market share that we have in most of the country, the leading position in -- across the client age groups, the delivery that we do through the platforms, the diversification of protection and insurance and property that will come out of our new investment in Ethniki Insurance. These are going to be the enablers to achieve the results that we are promising here with this plan. And two words of Snappi. Snappi is a low cost, locally regulated, very important. But with the European banking license offering that is catering for the emerging Greek sophisticated younger generation that we see them evolving, and we see that they are attracted by our Snappi offering. We have for 3 months of operation, 60,000 clients, average age from 18 to 35, and this is where the focus is going to be for Snappi with a view of achieving within the next year, 300,000 clients on their app and usage. Quality, credit underwriting, prudent credit underwriting and making sure this is reflected across the book is our mantra and now our pillar for the next few years. We are very proud of what we have achieved in the later vintages of credit underwriting that we have been doing the last few years. We maintain this quality, and we will continue to underwrite with prudence, our mortgages book as we are, has a loan-to-value ratio at 50%, very conservative, if you look at it as compared to Europe and 73% of our exposures are collateralized. That's against an average of 50% in Europe. So a very solid, very conservative book, which we intend to continue developing this way. With the use of AI and innovation, we are planning to improve both the top line and all are OpEx. We are investing in all those areas that we see. We are building factories with Accenture and Anthropic is our new, let's say, franchise that we will be announcing very soon. And we are very focused and confident in delivering efficiencies on the one hand and top line on the other. And finally, our people. We are improving our discretionary pay, and we will be doing even more so to our people. We are hiring new people. We didn't have the opportunity to do it before, but we are now in a position to do it. And we are focusing in improving the skill set, improving the delivery of our employees. And let's look at what we can achieve with the various segments that we are working on. On the corporate and investment banking, we are the #1 bank in CIB in the Greek market. We are promising significant loan growth, high single-digit number over a year over the next 5 years. A Net Promoter Score that will be above 30 and about 50% of capital consumption will come from our exposure in CIB. Retail. Innovation, technology and delivery are going to be driving our retail offering. New products are coming. New platforms are coming. The mortgages book is developing. We were very pleased that in 2025, mortgages were up net credit expansion, EUR 100 million. We are planning EUR 300 million for '26 and a lot more for 2030. And this will be another fuel in our delivery of NII and bottom line, but the retail will play increasingly a much bigger role in our offering going forward. Wealth and asset management. We are driving AUM growth on products, on platforms. We are driving AUM growth significantly as we did the last few years and the numbers that we are presenting in this plan could definitely go better because for the next 5 years, we haven't assumed any significant market appreciation. So watch out. Things could be even better than the numbers that you see here on the chart. Insurance, that's a key pillar of our future growth. Insurance means working together with our bancassurance channel, the most efficient channel in the Greek market, motivating the agent network, 1,000 agents plus being all over Greece of Ethniki Insurance, working together with Ethniki Insurance and the management team there and Dimitri Mazarakis and his team in delivering what we believe it could be a real growth driver for the future going forward. And the numbers you see here on the chart speak for themselves. And finally, that's the story. 18% return on tangible book value by 18%, 30%. A cost/income ratio that is best-in-class in Europe, 30% by 2030, improving our customer offering with a Net Promoter Score above 20. That is what I am promising you today. Earnings per share year-on-year growth of 10%, and that's without using any buybacks. We are talking about cash dividend and without reducing the number of shares, 10% EPS growth, a dividend per share that will grow at 17% and a total shareholder return, which will be 13% taking into account return on tangible book value and dividends per share. This is what this plan is all about. This is what we will be hearing in the next hour or so. I'm very happy that all of you, you are here with me today, and you are here with the management team. And I'm looking forward at the end of the presentation to take all the questions that you can get. Thank you very much.

Thank you, Christos. A really interesting overview. And as Christos said, we'll come back for questions with Christos and Theo later in the session. Now in a few moments, I'll be talking to the Piraeus Chief Economist, Dr. Ilias Lekkos, an overview on the Greek economy. But now to show the central role that Piraeus plays across the Greek business sector, we're going to take a brief look into the Piraeus corporate banking franchise. Now for context, Piraeus has the largest loan book in Greece with energy, agriculture and digital infrastructure, a particular focus. Here's a flavor for you. [Presentation]

So we want to set the Piraeus story now in the context of the macro environment, both in Greece and also globally. Who would have thought that an economy seen a few years ago as Europe's headache is now truly finding its feet. So to frame the macro situation in context and to discuss The Next Chapter for Greece, I'd like to invite up to the stage Dr. Ilias Lekkos, Chief Economist of Piraeus. Ilias good to see you. First of all, I mean, you've clearly had a front row seat over the last few years to witness this remarkable transformation. Just give everyone a reminder of how much has changed in recent years. And I know you have some graphs to illustrate some data points in terms of trends in investment and consumption to start with.

Yes. I mean, thank you very much, Richard. Everybody here follows the Greek economy. So saying that the recent macroeconomic events in Greece have been volatile is the understatement of the year. I mean over the past 10, 15 years, we had to deal with the global financial crisis, the Greek sovereign crisis COVID, then the Russian invasion Ukraine and then the hiking cycle by ECB. So things have been sort of very interesting to say. But the important thing is that during that period, lessons have been learned. So nowadays, it is a fact that, as Mr. Megalou said, Greece right now has the best fiscal position in Europe. We are running substantial primary fiscal surplus Again, we have one of the most attractive sovereign debt profile. And at the same time, Greece has been able to grow by twice the euro area average over the past 2, 3 years. So overall, we are entering this new phase at a very strong position. But to answer your question about the future, the next chapter as we are discussing here, I think that people have not really appreciated that the Greek economy is still at the early stages of its business cycle. So for instance, if you look at the chart here on the screen, with the yellow line, you can see the Greek business idle. Now if you are lucky enough to be macroeconomists, you know that this is the output gap. For everybody else, it's the business cycle, okay? And with the blue line, you can see the year-on-year growth in investments, gross fixed capital formation. You can see that there is a very tight link between the business cycle and investments, both in the good years, but also in the bad years. What's really important, though, to notice is that, in the last few years, 2023, '24, '25, there is a gap between the 2. Investments have not grown fast enough and meet the return of growth in the Greek economy. And that is very important because in reality, what this graph shows you is that there is a speed limit to how fast the Greek economy can grow. We really need to invest more to improve the growth potential of the Greek economy. And this speed limit is not only on the corporate sector. If you go and look at the next chart here, you can see that there is a speed limit in the household sector as well. Now for me, the yellow line here is a very interesting and very exciting variable. Probably I'm the only one who has this feeling. But in reality, the yellow line here shows you the households confidence, households employment expectations. Now the reason that I like this variable is because it's a variable that -- it's not something that I estimate. It's not something that the government estimates. It's what the Greek households themselves feel about their employment opportunities. And you can see that when households feel confident, they consume more. They spend more. It's only natural. Again, you can see that in the past few years, there's a substantial gap about confidence expectations and consumption. Again, Greek households are still very conservative in their way of thinking. So looking forward, I think that the next chapter in the Greek economy will be sort of driven by both investments but also consumption.

Let's look then at capital productivity and corporate profitability. I mean growth is good for the local economy and Greek households. What's the business case for a foreign investor to look at Greek assets?

Yes, that's a very interesting question because growth is good if you are in Greece. But if you are a fund manager, if you are an investor looking to invest in Greece, you need to wonder why should I. And it's very interesting to see how productive is the current existing capital in Greece. Here, we can see, in a sense, the ratio of how much we produce given the existing invested capital in the Greek economy. And you can see that during the boom years of the past invest in capital was very productive in Greece. There was a huge drop during the crisis years. But if you look at the past couple of years, again, there has been a substantial recovery in the productivity of the Greek economy. And productivity means one thing, profitability. Here, you can see the EBITDA. It's not based on IFRS standards. It's based on Eurostat accounting standards. But in reality, the Y axis is in billions of euros. You can see the EBITDA of the entire Greek corporate sector. And you can see again that there has been a substantial pickup in the productivity of the Greek corporate sector over the past couple of years.

Just looking at this the lens, through the lens of foreign investors, just looking at FDI in Greece, what's the interest been until now? And where is the opportunity? Which sectors are looking most promising?

Again, I think that there has been a very popular myth is that Greece does not attract FDI. But that's not true. I mean, there are sectors like tourism, hotels or infrastructure projects but these are projects or sectors that usually analysts associate with Greece. But I don't know how many people know that, for instance, the Greek private health care sector has been able to attract substantial investments from foreign funds. Or the private educational sector has been able to attract quite a lot of interest from abroad. So there is a very nice mix of traditional sectors, but also new sectors that are emerging. Exactly.

Now many people know that the RRF, the recovery in resilience fund is being -- or has been a big part of the Greek recovery story, but the fund expires at the end of 2026. Is there going to be a cliff effect next year as funding is withdrawn? What's your view on that?

Again, this is one of the questions that I get a lot from people who look to invest or have invested in Greece. And it is true that the RRF has been a game changer for the Greek economy without any doubt, okay? But because legally, the fund expires at the end of 2026. A lot of people think that there is going to be a cliff effect and there's going to be no funding in the Greek economy after the end of this year. But this is not true. I mean if you look at this chart, this is a very sort of busy chart, but it shows you the evolution of the RRF. And I want you to focus on the blue bars. Because the blue bars shows you the disbursement of the funds to Greek corporates to finance their investment products, their investment projects. Okay. And you can see that the disbursements extend far and above 2026. So you will have disbursements in 2027 and 2028. And in fact, the data in this chart refer to December 2025. So every project that will be finalized in -- during the course of this year, will add to the size of the blue bars going forward. So the important thing to notice is that there is no cliff effect. There is a very slow tapering of the RRF funds over the course of the next 2 or 3 years.

So is there really enough support, do you think, for the Greek economy after the expiration of the RRF?

Again, I don't think that people have fully appreciated the extent of the buffers that the Greek government has been able to build during recent years. And when I say -- I talk about buffers, I think the Greek government has been very effective and very efficient in fighting tax evasion. And when we talk about fighting tax evasion, in reality, we mean that tax revenues grow far and above the pace of growth of the Greek economy. And that has allowed the Greek government to build substantial buffers that they can spend over the next few years. Just to show you some data. Here, there are 2 parts: the blue part of the bars and the yellow part. Now the blue part is something that everybody is very familiar in Greece. It's the public investment program. So it's the vehicle through which the Greek government finances large infrastructure spending, okay? So everybody knows that. What is not very clear and very obvious to people is the yellow bars. The yellow bars show you the buffers that the Greek government has been able to build through excess tax revenues. Just to give you an idea, I mean, we're talking about -- if you look at 2029, the sum of the unallocated buffer, the yellow part and the public investment program, sum up to EUR 20 billion. We said that the RRF has been a game changer. Now the RRF, the size of the RRF was EUR 36 billion. This EUR 36 billion would be dispersed to the Greek economy from 2021 all the way to 2029. Now in 2029, you will have EUR 20 billion alone coming from the Greek government. So that tells you that there's a substantial tax dividend that will be the difference -- exactly.

Given all of the above and what you save just taken us through, what's the outlook for credit?

Yes. Now this chart and the next one is the chart that my colleagues and my team didn't want me to say to you because somehow, they believe that they're going to be too difficult for you to understand, okay? So I'm going to take you through the graphs. And if you have a problem, I will apologize later on. Okay. But in reality, what you see here with the yellow line, you see business investment. Quarter after quarter at any point in time, okay? So that's the yellow line. Now the blue line is corporate lending, new corporate lending again quarter after quarter. So the ratio between the yellow line and the blue line tells you, in reality, the percentage of new business investment that's financed out of corporate lending. It's as simple as that. And you can see that in the good years between 2000 and 2008, that was very close to 100%. It was 95%, 90%, sometimes 100%. Now you can see that after the recovery of the Greek economy from 2018, 2019 onwards, investment has improved, but business funding, not so much. So right now, the percentage of investment -- business investment that's financed out of bank lending is about 65%. So looking forward, PAUSE the next chapter in the Greek banking sector will come from the expansion of both lines. So I've spent the past 10, 15 minutes saying to everybody that we need more investment in the Greek economy, but also the percentage of that investment that will be financed out of banking loans will increase as well. And talking about the last bit, talking about an untapped opportunity. Here, you can see exactly the same chart but for mortgages. So the yellow line is a residential investment and the blue line is new mortgage lending, okay? And you can see that in reality, construction activity in Greece and mortgage lending they have been dead for -- during the time of the Greek crisis. But again, you can see that residential investment has picked up from very low levels, but has improved while mortgage lending is only now beginning to basically to gain some traction. In 2025, essentially, the last 2 months of 2025, November and December were the first period, we saw the mortgage book growing again after 2009. So this is the next opportunity going forward for the Greek banking sector and the Greek economy.

So just in terms of the opportunity in the last sort of minutes or so, I mean, would it be fair to say that the way you look at the economic outlook, bringing all these things together could be characterized by cautious optimism? Is that the way you see things in terms of the next few years.

That's a very nice way to put it. I mean, the Greek economy is trying to grow and to recapture its previous status. We're trying to do so in a global environment that we all see every day -- it's very volatile. It's very unpredictable. But at least now we have the tools and we have the buffers to continue growing in this very challenging environment.

And to some extent, it would be fair to say that you've been used to volatility as well. So navigating volatility over the year.

Richard, we've seen everything.

You've seen everything.

So nothing can put us, of course.

Ilias Lekkos, thank you very much, indeed. I really appreciate.

Thank you.

So now we're going to switch things up a little as we turn our attention to a new jewel in the crown of Piraeus Bank, a brief introduction to Ethniki Insurance, which I'm going to tell you a little bit more about in detail in a moment, but we got a short film for you to sum up Ethniki's heritage, its market-leading position and its sector coverage. As I alluded to in a moment, we're going to hear from the CEO of Ethniki, Dimitris Mazarakis; and Piraeus' CFO Theodoros Gnardellis to discuss a bit more about the strategy behind Ethniki. But let's just hear a bit more about the background now in the short film. [Presentation]

You've led companies in Greece, you've led companies in the Middle East, welcome back from the Middle East now. You let the Insurance Association in Greece of insurance. You've been around the block, let's educate these guys on the Greek insurance market. What is it about?

Before we are talking about the market. First of all, I would like to welcome you and the whole management team of Piraeus for this warm welcome. It is a privilege for me to be part of this winning team, I would say, especially at that point of time, leading a legacy organization to the next chapter. And let's go directly to your questions regarding the market. Yes, I've been more than 30 years in the market. I know inside out the Greek insurance and I have seen a lot of ups and down in the Greek insurance market following the ups and downs of the Greek economy. Despite the solid recovery post COVID period, the insurance penetration in Greece remains at the level approximately of 2.5%. Well behind the European average and most of countries in the Southern Europe. This indicates a protection gap on the one hand, while on the other hand, indicates, I would say, an opportunity, a growth opportunity. Now if we consider this and taking to also consideration the fact that, as Ilias said before, that Greece has a positive story. A positive macroeconomic outlook, one. Second, there is the regulatory momentum in Greece and significant tax incentives, especially towards property, natural catastrophe insurance for both commercial and residential properties. And last, the continuous improvement of insurance awareness of the Greek population, we could expect a medium to high single-digit growth of the overall market. And at this point, I think Ethniki Insurance within the Piraeus ecosystem is very well positioned. It's very well positioned not only to follow the market growth but outperform the growth of the market.

Okay. So I mean, the cynic would say that we've been at this 2.5% penetration for a long time. But you're expecting growth above nominal GDP, so kind of a slight convergence at European average? And then what about Ethniki in more detail? Are you gaining share? What do you think you stand for going forward?

Yes, we are expecting the growth of the market higher than the GDP growth because as I said, we combine all these factors, and I strongly believe that we are in an inflection point. Now as far as Ethniki what I said before that we are very well positioned. This is based on the following, let's say, factor or truth. First of all, Ethniki Insurance, as people would say, Ethniki Insurance is one of the few multi-distribution channel career. We have a leading agency, a leading non-tight agency. And of course, we have bancassurance that is going to -- we're going to up our game, especially the next -- over the next charter with Piraeus bank. We are a company that we have a leading presence in each and every line of business. We are doing life, investment, health, personal accident, but also we're doing property and casualty, motor, mobility, property and all other financial liabilities risk. So multi-distribution, multiline of business, scale. Today, just for today because tomorrow we're going to be the leader. But today, we are the second largest in premium insurer in Greece. Then the brand equity. I don't think that there is any other brand in Greek insurance market that could compare with Ethniki Insurance. And last is the customer advocacy. Another area that we excel and the relationship NPS is at least 12 points above the NPS of the market, the average NPS of the market. So combining all this along with a great management team that we have built in Ethniki, make me confident that the next chapter, not only we're going to win the future, but we are going to dominate the future.

Good. I like that. So let's talk then about Piraeus. I mean we're going to talk a little bit about how Ethniki is plugging into Piraeus financially from a customer franchise perspective. So we know what Ethniki will do for Piraeus. But what can Piraeus as an owner as a channel do you think do for Ethniki?

I would say 3 things. First, stability. For many, many years, especially after the financial crisis, Ethniki Insurance was for sale. So it is critical to have that shareholder stability as long as an insurance company is a long-term player, investment, financial institution that shareholder stability is critical for us, for our people, for our sales force to know what should expect in the future. So stability is the one. Second is the scale. I think Mr. Megalou mentioned before, that we are in a position to combine a leading face-to-face distribution channel, agency tight agency and not tight agency along with the most productive bancassurance platform in Greece. So the result is going to be what you can see in the screen here. We're going to dive down, actually, the revenue over the next 5-year period. And the bancassurance is going to lead that transformation. Today, bancassurance is 17%, and we are going to PAUSE of the total revenue, and it's going to reach almost to 50% by 2030. So bancassurance is going to be the engine of growth and create that scale. And the third is synergies. Synergies across all the functions of both organizations from technology and procurement to asset management and people. I heard before to talk about the investment in technology and AI and how we're going to optimize, let's say, and improve the efficiency. With Piraeus, we are talking about how we're going to take advantage of specific AI investments that are relevant for both for Piraeus Bank, but also for Ethniki as well as the game. Taking all this into consideration, I think that we are creating that engine for growth. And this -- and our aspiration for 2030 reflects that we can see, the gross written premium dove down, as I said, we can see the return on equity, significant increase. At the same time, we shrink our expense from 13% to 18%, as Mr. Megalou mentioned before, and this is not a cost-cutting game. It is a scale game because when you grow, you are creating economies of scale. And at the same time, we are investing in technology in order to become more efficient, to become more efficient, and improve the customer experience. So all of them at the end of the day, is going to triple our profit before tax from from -- at the solo level, I'm not going to talk right now at the corporate level because you cover all of them. But yes, again, if you allow me, stability, scale, and synergies are the secret recipe and what Piraeus bring to Ethniki.

Good. Hopefully, it won't be so secret after the end of the day. Your priorities, 5 years. It's a 5-year plan. Tell me the 5 things you want to focus on.

Yes. The first priority is the accelerated growth. We will continue to professionalize our tight agency. We will accelerate the bancassurance sales, optimize the non-tight agency and experiment in digital. This is the first strategic priority. The second is the 360 coverage of our customers, either we're talking about retail customers or corporate customers and how we're going to improve the customer experience. The third one is operational efficiency. As I mentioned before, we're running a holistic program for continuous improvement or business process reengineering, and we are trying to embed into the organization, the mindset of eliminate, simplify and automate. So taking all of this, we strongly believe that we are going to go to 8% in the region of 8% expense rate. Then are the synergies is the fourth priority. And I -- the more I work with Piraeus, the more I see the synergies and the opportunities, either in the revenue side or in the cost efficiency side. So synergies is the 4 priority. And last but not least, is the capital efficiency and how we are going to strengthen our balance sheet and our P&L through our real estate strategy, through reinsurance strategy and, of course, by concluded our shelf strategy that will allow us to differentiate our value proposition, protect the legacy but also differentiate the value proposition in the market. And last but not least, we have the same enabler as the mother company Piraeus data and technology and talent and culture.

Great. But you're not of the hook yet. So forget these guys, forget these cameras, what are you holding back? What have you not given me?

Okay. I will ask you to go out, and I'm going to talk -- it's a tricky question.

Hold you accountable.

As I said, the more I work with the team here, the more I realize that there are untapped opportunity, even though we have a very, let's say, aggressive stressing plan, there are opportunities in both retail and corporate business. And especially in bancassurance. Again, the Piraeus bancassurance is the most productive and efficient bancassurance platform in Greece. However, we are skewed towards unit-linked or asset management type of products. There is room to leverage our Greece customer base with protection type of products with life, with personal accident, with health, but also with motor, with property. So we're going to cover 360, as I said before, the needs of individual. And at the same time, we have heard about the focus areas in the corporate. There is a significant untapped opportunity in corporate that will give that certainty to investors to continue that journey. So yes, there are some opportunities that we have to work further the next 5 to 6 months with Vasilis with CEO. And I'm going to be in position to share with you my secret later this year. And for sure, I'm going to commit for the next plan cycle. But for the time being, I think we have a very aggressive plan and the focus is to deliver that plan. And we're confident that we can do that and deliver our promises and build the credibility quarter-by-quarter, year-by-year.

And I need to put you all the time. Thanks for doing this.

Thank you.

Appreciate it. Thank you.

Okay. So that brings part 1 to a close. We're now going to give you all a breather with a 15-minute break. Coffee and Tea is at the back. And then after the break, we're going to turn our attention to digital solutions across the bank, the CFO's business plan and financials and that much promised extended Q&A with both Theo and Christos. So we'll see you all shortly. [Break]

Ladies and gentlemen, ladies and gentlemen, if I could ask you to return to your seats to please bring your teas and coffees. Back to your seats with you as we start the next session. So ladies and gentlemen, in Part 2, as you can see from the agenda here, we're going to focus on execution, how technology, data and product innovation, elevate, experience and returns. Also coming up, we're going to be looking at the business case for Piraeus, with Piraeus CFO, Theodoros Gnardellis. So of course, you saw earlier on, followed by an extended Q&A but he will also be joined by Christos Megalou. Can I also ask you when -- if you have questions to -- please wait for the mic to come to you before you ask the question so everyone in the room and also on the webcast can hear your question. First though, before we get to that Q&A, we're going to look at how Piraeus is innovating in digital solutions from retail mortgage platforms like Odyssey to investor tools such as brainy and FarmClick in the agricultural sector. So here's a snapshot for you. [Presentation] .

Okay. We got 20 minutes for this. So why own Piraeus?

Piraeus is the fastest-growing Greek banking profit pool exists. If somebody wants to invest in Greek banking growth, Piraeus is the fastest growing by far. We saw it on track record, and this is what this plan is committing to. Efficiency 30% cost-to-income. You heard from our CEO, lowest in Europe, not because costs go down. But because we are investing in technology to contain the cost increase so that the efficiency increases. So revenues outpaced cost increases while doing massive technological investments. And number three, it's a differentiator. Optimize customer allocation. We're big distributors. We're committing to distribution of EUR 5 billion over the next 5 years. We're going to make a lot of money on this franchise, and we're going to give it back to shareholders. We're going to deploy it so that shareholder value continues to increase and people can start feeling it. We've proved that this year with the distribution step up to 55%, taking the capital to our target capital level of 12.5%, close to 12.7%. Profitability increase. 10% CAGR on EPS, taking us from EUR 0.82 to over EUR 1.3. Where is that coming from? Clearly, the growth of credit funded by a low-cost deposit is generating and sustaining the strong NII effect that this balance sheet has. EUR 0.55 comes from NII. EUR 0.15 comes from insurance and asset management that we can discuss whether that is all that there's there or there's more. But this is where this plan snapshot has been taken. It has been taken at 15% insurance and asset management fees. OpEx, EUR 0.10, OpEx will increase, right? It will increase by EUR 0.10 a share. But as you see the overall picture paints together with the tax normalization rate of 29%, based that 1.3 years. This is where the money is going to come from. Let's talk about loans first. The Greek credit asset class. This is what we're about. EUR 15 billion of corporate loans will be added to the balance sheet over the next 5 years. Most of it from infrastructure large corporate, substantial part from SME and shipping. But more importantly, on NII, it's happening profitably. The spread erosion is contained to 35 basis points between now and 2030. We're landing at 1.8% spread. This is happening normally. It happens linearly. It goes down linearly. We've seen it go down linearly. The erosion has been happening at 5, 6, 3 basis points per quarter, it's a great defense on pricing that's going on by the corporate franchise and the control functions there, and it's a result of the RAROC focused culture of Piraeus, where funding cost needs to be paid for. Proper ECL assumptions are there in terms of expected credit losses. Everybody needs to pay for capital. That calculates naturally to the fair spread of the exposures, and we do not cannibalize prices. Retail, we love retail. We love what's going on. We've been waiting for it. The biggest question we've been getting from you guys is real estate markets are thriving. GDP is growing. Why are mortgages not there? What's going on? I think it took time, right? Interest rates normalizing, rental yields going up, mortgages are increasing in this plan. We had EUR 100 million of net credit expansion in 2025. We're taking that up to EUR 500 million in 2030. What's making us all the more optimistic for that? The growth that happened in 2025 that led to this expansion did not come from state-sponsored programs. The state sponsor programs were giving 200 million dispersals in '24 and '25, all the delta came from arms length price mortgages. And it came from all the macro stuff that Ilias talked about before, that gap of equity-only transactions going on, the fact that people were waiting for lower interest rates. You can get a fixed rate mortgage 20 year now in Greece for a very attractive price with what the franchise is doing on retail. And it's just better to buy than rent. And we think this is what's going on, and it will continue to happen. Healthy addition also from small business, total growth, EUR 2.5 billion out of the EUR 18 billion, EUR 19 billion credit growth we're going to be seeing. Lots of stuff going on in retail right now, pushing innovation, as [ Vasilis ] just talked about with Harris and George in the video. One thing we're particularly proud of, and we're going to launch this what called Project Odyssey. Now Odyssey is what customers used to go through in Greece to take a mortgage. We need to rethink the branding when we actually launched this because the outcome is going to be, I don't know, if I can, maybe, it's an AI-powered digital platform. It will operate as a stand-alone branded digital broker, where people can go in, upload documents and get very quick update on what's going on, feel more comfortable that they're not trapped in some funnel, 9-month funnel of banking and state bureaucracy until they get that light end in the tunnel. Client assets. Piraeus is the #1 depositor in Greece. We grew deposits by EUR 3.3 billion in 2025. We grew AUM by EUR 3-plus billion -- in AUM in 2025, half of it from net sales. This is not a big customer asset plan, right? We're assuming a 3% CAGR in deposits and we're assuming a 7% CAGR on assets under management. Client assets are growing on this plan at half the pace they grew in 2025. Why? Just to prove that even if this was to happen, if the deposits doesn't -- don't pick up at the level that we expect, the plan can fund itself, and I will explain what that is in a bit. So how is the plan funding itself? PAUSE We're going to be adding EUR 19 billion of loans over the next 5 years. The corporate loans and the retail loans. Not a lot of bonds, we're way up there. We've got EUR 17 million of bonds. We're going to add a couple. When we find opportunities that's going to be there. Cash and that's kind of the net delta. But how are we funding this? EUR 12 billion come from deposits. As per track record, it could be more, we'll discuss. It's an NII upside, but right now, the assumption, the planned snapshot is for EUR 12 billion. But the plan gets funded from reduction of non-yielding assets, that EUR 6 billion negative is DTA, HAP senior notes, real estate does not making us any money on repossessed. We're monetizing all of that over the coming period. And that's why NIM goes up from 2.2% to 2.6%, why would NIM go up otherwise. We got spread erosion, maybe coupled by the one rate increase we're expecting, we're expecting in 2027 midyear. So theoretically, it shouldn't. But it does, it does because of this. Because you've got EUR 6 billion of no revenue-generating assets that go away, they become cash and that positive effect goes up. That's the only reason why Piraeus has been having a NIM handicap versus some of its peers, not because their asset -- our asset classes are lower yielding, but because we were carrying this big bulk of nonyielding assets, that was bringing the average down. That goes away. And what used to be 20% of nonyielding asset, the balance sheet becomes 10%. And the LDR goes from 67% to 75%, a much healthier balance sheet, much faster revenue-generating balance sheet than what we had in the past. Nobody cares about Ethniki here, but let's talk about it for a little bit. Ethniki revenue in 2027 will add to our fee line EUR 120 million. That number becomes EUR 210 million in 2030, very rapidly increasing. Why is that? It's because the GWP, as Dimitris told me before, grows to 1.6%, primarily because of that bank apart. The GWP contribution from the banking channel that Ethniki now was in partnership with generated EUR 100 million. The Piraeus franchise in 2030 will generate EUR 700 million. And that's simply business as usual, Piraeus, traditional bancassurance power, selling united products, primarily 90%, 95% of the production is that. Once you do that, then you start accumulating what we call contractual service margin, which means future profitability of these contracts are getting plugged into the balance sheet. And they start increasing the reserves of Ethniki and then it amortizes over time in the P&L. And that's why the EUR 120 million jumps to EUR 210 million and will continue to be jumping in the coming years. We do not just look career limiting move to the fund. We do not just look at P&L, right? We're not selling oranges. We're selling long-term insurance contracts. So monitoring that stock of future profit, monitoring CSM is what Dimitris and I and the teams are always looking at when we look at productivity of products. So overall, a very healthy plug on the P&L on the fee line. It's the primary reason of fee growth for the Piraeus franchise going forward, and then we can discuss the other assumptions. Very healthy balance sheet solvency goes up, as we said, above 150%. It was actually a higher number. We kind of saved it down because it will look much higher. One thing to remember, solvency ratio level threshold, 100%. That's kind of the regulatory floor, healthy levels, 140% to 150%. Solvency ratio goes way up because we're assuming very minimal dividends from the daughter to the parent. If we were to increase that, those dividend levels, solvency would go down, but CET1 will go up. So the CET1 trajectory that we've got now assumes practically 0 dividends out of Ethniki. We're keeping the money there to fund other growth opportunities to create a stronger company, but it is a CET1 upside option if we choose to pull it. Expense rate, same story as Piraeus, I would say, right? It's scale, tech investment, keeping efficiency higher and combined ratio very healthily going down below 95% and strong productivity. NII, we talked about those EUR 0.55. That's basically on the EPS growth. That's basically EUR 1.9 going to EUR 2.6. Most of it coming from the growth, growth at a healthy 4.5%, defending that spread and keeping the erosion that we have on the load spread on the left. So that combined, we can get that net 700 NII plug. It's very important. It's a big part of the assumption of the plan, right? 850, massively outpaces the 150 erosion that the spread gives us. And then, of course, a healthy addition by bonds countering the very low-cost deposits. So EUR 12 billion of deposits is basically counted by EUR 2 billion of bonds. Revenue from services. That's the new name for fees. Banking, flat. Flat banking fees throughout 5 years' time, it's an assumption. It's a revenue pool. It includes transactions. We know about the fintech erosion, there's pricing, there's also some regulation going on. It's an assumption. Other people are talking about mid-single-digit growth or low single-digit growth. The assumption is that we can achieve our key aspiration through insurance and asset management. Asset management is plugging in 50. Insurance and bancassurance is plugging a EUR 125 million that is coming from the EUR 210 million of obviously that we mentioned before. Is that all? As I tried to push my friend Dimitris before, it's definitely not all. But this is where we are right now, right? This is what we have modeled right now, simply taking into account the plug of Piraeus into Ethniki as well as what that brings to the franchise in terms of productivity. In terms of P&L, it brings -- I think we've calculated -- if we were to take it out and replace it with the previous status quo, calculates about EUR 35 million to EUR 40 million synergies out of this EUR 125 million. But definitely, the production opportunities there. Most of this production, as we said, is life-saving products. You can package it up with AUM, if you want and talk about it in conjunction with wealth management. In effect, out of the EUR 700 million that we've got on bancassurance targets for 2030, 10% is protection, right? And we're talking about the biggest corporate franchise in the country and the biggest retail franchise in the country. We're not selling car insurance. We're not selling B2B. How big could that be? And estimate first says that we could probably identify opportunities of about EUR 70 million additional premium over the coming years with very attractive loss ratios. So that would plug into that number as well. I think the story is that we will keep working and tap the opportunities, quantifying them bottom up, but we do not guide top down from stuff from benchmarks. We guide for things that we're feeling, that we're selling, that we're doing. But the more you pull on this thread, the more stuff you find out. OpEx. OpEx, as we said, goes up. Does it go up a lot? No, it goes up about 10% over the 5-year period. Why does it only go up by this because we've got about EUR 60 million of AI efficiencies plugged into the plan. And I think with Harris said, there's more to come on this. But the first use case we got in front of us said that we can economize between staff costs and G&A, about EUR 60 million AI. The rest and most of the adjustment comes from depreciation by doing the technology investment, but also from salary adjustments and variable compensation that absolutely needs to happen in Piraeus to step up that cost per FTE to approximately close to about EUR 70,000 from the current EUR 54,000 in alignment with other benchmarks. And it's money well spent for all this productivity that's coming in and translates to a cost-to-income ratio, as we said of 30%. Asset quality, we never stop. Balance sheet looks great. We never stop, right? NPE ratio continues going down 1.5%. The repossessed portfolio of real estate, which has taken some hype in the past. We're the #1 seller of repossessed properties right now in Greece. We sold more than EUR 200 million of properties closing contracts in 2025 at a profit. And we continue going down to that pace, and we're going to be dropped below EUR 0.5 billion over the coming years. But at that pace, we're not going to be doing massive inorganics, taking big losses for shareholders. We've set up the organic machine and it's working well. And DTC, another big star of the show a couple of years back is basically going away much faster than we thought. We reached single-digit DTC over CET1 level, including prudential deductions that we did. And we're doing over very strong profitability and very strong distributions and basically, we're here away after 2030 from getting rid of this thing once and for all saying that letter to the ministry and say, we're out of this law and be done with this. Capital. 12.7 is a starting point. Our CEO talked about the adjustment of the CET1 target 12.5 after the projected derisking of the balance sheet and the improvement of capital buffers that we've seen. But what's very important here, why did we do this? People come to us and say, why did you step up distribution to 55%? Why did you dip into your 13% articulated target? Because we know this. We know the profitability that's coming. We know how much capital is getting generated. We know that we have a better balance sheet. And now is the time to give it -- to start giving back to the shareholders, set the baseline at that 55% and gradually step it up to 60% and 65%, give our distribution on a 60% average payout that basically comes out of 22% 12 points of CET1 generation through P&L, 7 of which is what we need for all of that growth we talked about. So what do we do? We make money. We use what we need to grow and the rest we deploy. This plan is talking about cash deployment. And this is what the primary distribution at some of we've got in this plan is. It could be something else. But the baseline assumption is that we're going to be distributing in cash, what was mentioned by our CEO about EUR 5 billion of dividends over the next 5 years' time, to reach the same levels, I would say, 13.5. I would not pay a lot of attention to the 13.5% or had some questions as to why 13.5, why are you not talking to the 12.5 you talked about? This is the bottom our plan, right? We calculate the profit, we calculate the distribution. We set out the payout ratio. The most important thing is that in gross or model, these 3 blocks even themselves out. This is what we want to do. I've got 20 seconds, but I think I'm done. So I think we can switch it to Q&A. So Mr. [indiscernible], if you want to come back. And [indiscernible], Deputy CFO; and [indiscernible], Head of IR, you guys have a mic incase we've got a question from the crowd.

So here we are. Looking forward to your questions. Yes. Ben? Microphone..

This is Ben Caven-Robertsfrom Goldman Sachs. Just 2 questions for me, please. First, could you elaborate a bit on the fee opportunity outside of Ethniki. So obviously, there's banking fees is one component of it, but also the wealth and asset management fees and the opportunity you see there. And then secondly, just on Ethniki, how are you thinking about the role of AI within that business? And whether there's any potential competitive impact from some of what we've been hearing about more in the industry around greater price comparisons and AI tools that might help consumers look at different insurance products using AI.

Let me cover the first question and Theo you cover the second one. Now on fees, it was very clearly indicated also in the graph, we have almost flattish, the banking fees, one could argue, that obviously, there could be a little bit higher over time. We have been able to achieve growth in our banking book. And usually, this we associate with fees as well. But we wanted to be prudent and conservative, and we wanted to show that this plan is not based on, let's say, exaggerated arguments about the future. On the other area of growth, we have been able, over the last 3 years to grow significantly our wealth and asset management business. And in this plan, we have a high single-digit growth and not as much as what we have been growing the book and the fees over the last -- over the last 3 years. And again, there, we wanted to be conservative. We think we can do better but we don't want, again, to base the whole story of the growth of Piraeus in numbers that people will start criticizing. So solid numbers, results that they are coming through, the estimates that we have on the growth of wealth and asset management fees, don't take into account any price appreciation of the market going forward for the next 5 years. We see the dips and the ups and downs of the market. So you could safely assume that -- we could be talking a higher number. Now if I start giving out numbers and guidance, [indiscernible], we started telling you're promising thing to the market. But what I can tell you for sure is that this is a conservative plan and wealth and asset management even their banking fees in a way are 2 areas for growth. And everything that we can achieve through the first plan of Ethniki Insurance and the second plan is going to be coming on top. Theo?

Yes. I mean the AI opportunity is blown up. People keep talking about it. The fact is that the use cases are still materializing. Investments are happening. Definitely, on all 3 areas, Ethniki can benefit. And there's a strong AI budget in conjunction with the overall group for AI in the future. I think the use cases in Piraeus are crystallizing a bit faster on Ethniki both in terms of commercial and kind of live pricing that's going on as well as claims management, definitely lots of application there. Crystalizing the digital strategy and the direct sales on digital channels, how that's going to come out is important for the next plan. I think we see the opportunity. I don't think we've grasped it yet, definitely not to materialize to numbers. So I wouldn't bake any of that in this current plan yet. I think in the coming phases, we're going to see more of that. Yes, Alex.

This is Alex Boulougouris from Euroxx our Securities.

A bit closer to the mic.

This Is Alex from Euro Securities. Very detailed and thorough. A quick clarification on the insurance segment. and the bancassurance agreements that Ethniki Insurance had with NBG and you had with, I believe, NBG with NN and Ergo. Could you clarify this has been unwind now and how does -- if you could clarify this a bit better.

Absolutely. Theo?

So there's 2 segments of this story. There were exclusive bancassurance agreements, as you said. When it comes to Ethniki with the previous bancassurance partner, that has been resolved, and the parties have mutually agreed to release themselves of exclusivity as of 2027. Hence, the assumption of being introduced into the network of Piraeus. When it comes to the Piraeus prior and current active relationships even in 2026, we're still big sellers of bancassurance products with these relationships. The assumption is that, that stock will run down in the future, and that's why you see kind of a gradual drop of these third-party fees that we mentioned. So I would say that legally, Ethniki and the previous partner have been -- have agreed to release themselves. And that was the major component of the strategy, bringing Ethniki into the network. That's why this is happening as of 2027. We're using 2026 as a migration year, prepping products, shifting the culture of the network so that we do not experience any blip, either of the customer experience or nor on the sales productivity of the network. It's a great addition for us, especially outside the urban areas, where the Ethniki brand very, very strong. And actually, I think it will facilitate sales there from a brand perspective of Ethniki. But from a commercial perspective, we need to make sure that everything is working. IT systems, you click the button, you get the contract, everything needs to work in play. That's why we took that year to prepare and not suffer in turbulence in the commercial productivity.

Andreas Souvleros from Eurobank Equities. Your medium-term target for deposits seems relatively conservative. Does this -- could this be interpreted as intensifying competition ahead of digital banks and this -- and I have another question. Does your business plan imply any gain in your market share in loans or in asset under management and deposits.

Okay.

Quick answer to the first one is, no. It's not because of competition. It is simply the assumption to be very fair is. This is what we need to fund the plan. This is what we need to fund the growth plan. But if you look at it, you're right, on average, there's a EUR 2 billion growth. Last year, we did EUR 3.3 billion, EUR 2 billion growth per annum. Last year, we did EUR 3.3 million. If you want to correlate that with the delta is what I always like to look at, the delta of deposits over the delta of loans. So what percentage of the loans growth is being funded by deposits. It's a much higher ratio and it has been a much higher ratio than what is plan assumes. Now that means that in terms of customer assets, there's an upside, if you want to put it on deposits. That's an NII upside, clearly. If you want to put it on -- if you want to say, no, I'm going to hold back on deposit because I want to push asset management much more than it's a fee upside that was mentioned before. It's clearly there. We cannot say that it's smart. Market share effect is that with these numbers, market share would go down in deposits, but it hasn't gone down for the past whatever number of years of Vasily, which makes us confident that this is what I need to fund the plan kind of number rather than what will commercially actually happen.

Alex, a bit closer to the -- we can't hear you.

Alex Demetriou from Jefferies. Two questions. Firstly, on the wealth management strategy. Is it really just further penetration of your customer base that you have now? Is it growing the private bank? Or kind of a little bit more color there would be really helpful. And just secondly, if we think about one of the other things that's kind of hampered mortgage growth more recently, it's also been around the kind of supply housing in Greece. How do you kind of see that evolving over the next couple of years? Is it further investment or these properties coming back online? Any hopeful there.

Alex, on the Wealth and Asset Management business. Basically, what we have there is the private banking business we have the mutual fund business, which is essentially the retail product that we distribute through our banking network, the very efficient sales network that we have. And we have what we call the third-party business, which is basically the private bank that introduces clients outside Greece, I mean, with our partners in Switzerland and in Europe. All of it together is a port that grew up significantly the last few years with assets under management of around EUR 14 billion and fee port, which is from meager EUR 30 million, EUR 40 million to about EUR 110 million EUR 120 million in '25, and will continue to grow. The strategy varies multi. So we have digital products that we are already launching, one very efficient product that I personally use is brainy, which is the robo-adviser that we are distributing through our Piraeus Securities business for our securities clients but it's basically an electronic platform, a robo-adviser that allocate you on the basis of your of your perceived risk profile and your willingness to risk or not. Then we have the platform of the private banking itself, which is using the UBS platform of advisers or electronic advisory, which we're using to optimize our investment proposition to our clients and the biggest mutual fund business in the Greek market, which is the engine of growth for the fees of the business, which is basically the mutual fund, which we distribute through the retail network of Piraeus. Now as to how this whole thing is structured is single product owned by Piraeus in the mutual fund business, open architecture in private banking, high net worth individuals and family offices. So we do both plus the technology improvements on the technology front. So the growth in that business will come also from disposable income ability to invest client money and so on and so forth. We have been very efficient in actually turning retail banking clients 66 billion of deposits, the largest deposit number in the Greek market into asset management clients improving the discretionary basis of our client base. And that has been also a game changer as well. Theo?

Question about mortgages, right? And how is -- yes. I mean it's difficult to correlate what we see here as increased mortgage demand to macro elements. If that was the case, we would have modeled this change long back. And probably we have answers to the questions as to why it did not happen sooner? Why is it not happening bigger? The fact is that intrinsically, the market, yes, housing supply will increase because of renovation that's going on to all properties, closed properties. You know all of these stats. I think more importantly, right now, we've got kind of this benign mix of rental yields going up, disposable income going up and people have monetary certainty. They know they can get fixed rate mortgages for a long period of time. They don't need to expose themselves into payment volatility in the future anymore given where the curves are. That's flattening of the risk-free curve together with a healthy spread addition is creating that piece and quiet to people, and they feel more comfortable. What we need to take out of the equation is the Odyssey. We need to take out the Odyssey of the equation, and I think we're going to be able to get to that EUR 500 million of of expansion.

We were really positively disposed by the EUR 100 million net credit expansion that we saw last year PAUSE in mortgages, even without deploying this new platform and some of the other stuff because of the market intrinsics that we just talked about, and we expect to see more. So is going to be an engine for growth in mortgages for the next few years. Simon? Gabriel.

Is this working?

It is working.

Gabor Kemeny from Autonomous. Just knowing that the investors in the room can invest in 4 large Greek banks. potentially. Can you just distill again into a few sentences of what you think differentiates Piraeus relative to the peers. And the reason I'm asking is some of the factors we heard about like high single-digit loan growth. DTA on the balance sheet, in our securitization, which can be invested into higher-yielding assets. This is something which I believe all 4 can offer. So just once again, the key differentiating factors at Piraeus.

Theo.

So we cannot hide the growth opportunity that this franchise brings. We are, as I said, the #1 Greek lender, we are -- whoever wants to back in to invest in regrowth and not regional growth or whoever wants to invest on greed credit, this is what we're about. We were the #1 lender expansion expanding. We continue being with this guidance and funded by a very strong low-cost deposit book. And that's a clear differentiator. The other thing I would say is that in terms of capital allocation, management and distribution, we're bringing the level down to where we think it's right for shareholders. We're not holding back any buffers, right? That's why we came out with big distribution numbers here. So if you look at yields, if you look at just pure EPS growth, which, by the way, is without buybacks, right? We're pure cash payers in this plan and EPS grows 10%, no buybacks, right? So big profitability growth coming from big Greek credit growth with whatever assumptions you want to talk about the market in terms of ECL about the quality of the market center. So we're not talking about other areas. And all of the money that's made out of this franchise comes back to shareholder gets deployed for shareholder value.

And Gabor, just to say here. I mean, what really -- if you look at PAUSE what we have achieved from 2016, '17 to where we are now, the journey of the last few years. And you acknowledge where we were then and when we are now -- the big differentiation of pyros vis-a-vis the market is that whatever we have promised in very, very challenging situations and markets, we have delivered that's what we are achieving with we have achieved in the past, and that's what we are claiming that we will do in the future.

Very fair point. Just one more question from me. The volatility in the past few days. Yes, I believe that your bonds have been volatile, like every other Greek banks bonds, but maybe a bit more than that. So I guess if there is a message from credit mark is that maybe you should be running with a little more capital. What would be your response to that?

Look, volatility is there and it has always been in the banking markets. We look at the big picture, and we are confident that in an economy like Greece with a rate that is growing the level of capital that we create over time, which is based on very conservative assumptions. And is not buying the sky. We is not our, let's say, prerogative in order to feel comfortable with ourselves to keep equity away from our shareholders. And that was the philosophy and our philosophy always. So we are creating capital out of this plan with bake volatility into our assumptions. Risk management is the work that the banks do and touch wood, we do it very efficiently. And we want to reward our shareholders taking our target CET1 from 13% to 12.5% was a reflection of the P2G reduction where PAUSE the regulators came and said this bank is less risky than it was before. So P2G 24, 25 basis points down. And we said we have to give this to our shareholders. We increased our payout ratio from 50% to 55%. That's the philosophy that we are running this bank for not PAUSE to feel comfortable accumulating capital and sitting on idle capital but use it for the benefit of the shareholders. Simon.

Simon

I was hoping that you could maybe elaborate a bit more on the integration of Ethniki into Piraeus, what needs to be done in terms of technology, staffing. And also, I know this is -- you're trying to look forward, but Ethniki was loss making, what, 2 years ago. Can you just kind of tell us what's been done maybe this is for Dimitris on how to -- how it's improved the profitability so far? And what further actions need to be taken to achieve your plans? Because I think a lot of the growth is coming from Ethniki.

All right. So there's a very big project, as you can understand, going on right now and has been going on in Paris. Around the integration of Ethniki has multiple aspects. So the most important ones are, one, I would said, product. It's a product design that comes from ethnic from the franchise of the bancassurance, giving out the specs as to what customers are expecting out of the branches and then Ethniki prepping themselves with products running the actuarial exercise ruling the pricing exercise, preparing their products for launch. Second one is PAUSE where the systems and the procurement systems are coming in the front end with the branches that need to be linked to the back end with Ethniki they need to be there. And the third one is governance, risk management controls and overall compliance, right? So we're setting up risk appetite framework adjustments, policies, how to make sure that solvency is correlated with CET1, what does good look like? What does bad look like setting up the KPIs. This is very important. Because as risk starts being generated more and more, we need to make sure that the balance sheet is always secure. We need to go to the level 2 KPI, the Level 3 KPI because in insurance, if something goes wrong and you find out too late, then there's not much you can do. So that's clearly their own profitability, that loss-making that you saw in the past was from what I discussed on reserves in the previous session on reserves that Ethniki we had to take to protect its health book. That's gone right now. It's very well reserved and the profitability goes up by a reduction of claims and containment of expenses as they grow their top line. This year, 2025, it was a EUR 48 million profit. I think in 2026, we're going to 70-ish, 66, Okay. But what's more important is the profit generation that comes out of '27. That is the year that perils gets plugged in and the bancassurance GWP kind of steps up. So that loss-making picture that you had, think about it as one-off reserves provisions that had to be taken to protect the book. The book now is well protected. So we're starting with a baseline of EUR 50 million profit right now, not minus x we're stepping it up very healthily over the coming years, the turbo boost happens in '27 when the power of the Piraeus network comes into the franchise. PAUSE.

But the bancassurance angle PAUSE Simon is really powerful. This is the most efficient, most effective bancassurance franchise in the market. We've proven it before. The #1 player is there because of us. Ethniki will be the #1 player from 2017 onwards. So there is a lot that we can gain also on the top line with this association.

Alberto.

We're going to get to Alberto in a bit.

It's just 2 follow-up questions on insurance. So Cecile Monford, Credit Agricole. The first one is you say Ethniki is going to be plugged in, in '27. What is the equipment rate you expect in 2030 and in the long term? And the second one is on the solvency ratio. I understand that 250% is the normal evolution of the solvency ratio. Is it your target? Meaning if it was -- if you had to upstream dividend, would you issue debt in order to maintain this ratio?

On the first one, the question was what.

Is the equipment rate. What's the percentage of Piraeus customers you hope to equip with Ethniki products?

Oh, the penetration...

The penetration.

So the fact is that when it comes to penetration, we've got about a 20% penetration right now on the active customer base with bancassurance products. This assumes it becomes 25%. So not a radical change. As I said, Banca 1.0, as we call it, is Piraeus as is plugged into Ethniki and creating a much bigger company. We said that I think is the #2 company, but as our CEO said, it's only the #2 and not the #1 because we made the #1 what it is, right? So that's definitely -- it's not a penetration, not a massive penetration. That's what Banca 2.0 can help us with. Look at other customers, other opportunities, everybody needs to be protected. Everybody needs to accumulate for the future. I think those state bailout thinking will gradually go away. The government is pushing for that, giving the incentives. So there's a big protection opportunity out there, both on the individual and on the business side. And the other one was...

Solvency Solvency ratio.

Solvency ratio. As I said, definitely not the target. The target is around 150%. I would say 50, 60 points above kind of the threshold is what we want to be about. I guess the natural question out of that would be, okay, fine. So why are you not dividending out stepping up your CET1? Probably we will. So that 13.5% potentially higher. If we were to sold back 250, it's at least a percentile point, probably a percentile 5 on the CET1 that gets plugged in. So that 13.5% could become even higher. And then the next will come what about distributions. But we're not going to be solving for 250. This is just to show that the profitability of Ethniki is such that it is creating a very strong balance sheet. It can protect itself against turbulence if it ever was to happen. It will not -- the CET1 of the group would not suffer if there was volatility and if there was turbulence on the insurance side of the group.

Not a question for me, but from my partner, Alberto Nigro. So he asks, considering the cautious stance on fees on insurance solvency ratio and on the Danish compromise, capital will grow much faster than what you are projecting. How can you deploy this capital? What is the preference between organic and inorganic growth versus a faster higher payout ratio? And he says, sorry for not being there.

Yes. Well, look, we are the management team that is no shy when it comes to doing strategic transactions. When it came to our attention that we had the opportunity to buy a very big player in the insurance market. We took this opportunity and we did Ethniki Insurance. That's in our DNA. So if there is an opportunity in the future and we have accumulated capital, obviously, we are going to be in a position to take it, if we so choose. That's number one. Number two, again, we don't want to accumulate capital for the sake of accumulating and sitting on it and feeling comfortable. We want to be distributing to our shareholders. So #1 priority is going to be shareholder distribution, as we said. As we will grow capital, if opportunities come our way, and we feel comfortable and there is a strategic rationale and there is accretive to the offering of Piraeus, we might as well take it. Areas -- one area could possibly be asset management. We feel we can do more there if we find a target that's acceptable to us and on a return profile that we want. Investment banking is another area. With the Euronext acquisition, we see an opportunity in actually becoming a regional player in brokerage and investment banking. And that's another area where we could possibly deploy some excess capital. But what we can promise is that whatever excess capital we generate, we will be using with distribution returns being the #1 priority for us.

Anything else?

Any other questions? Okay. Well, we are really on time. It says we have still 1 minute 34 -- is it over, the red. This is what it means. So first of all, I'd like to thank you all for being so patient. I was betting with the team that it's going to be impossible to keep for 2 hours so many people in the room and that the people will start leaving as we do the presentation. But obviously, it didn't happen. I thank you for that. I think we are very happy to have you here and giving you an opportunity to look at our -- the way we look at the future as Piraeus. I think we are -- and we were in a position to demonstrate to you that we have the ambition, we have the tools and we have the capacity to deliver on what we are promising. And what we are promising, it's no exaggeration is one of the most profitable growth stories in the banking sector in Europe. And with that, I'd like to thank you all for being patient, and thank you very much for being with us.