Eurobank Ergasias Services and Holdings S.A. (OTCPK:EGFEY) Q3 2022 Earnings Conference Call November 10, 2022 11:00 AM ET
Company Participants
Fokion Karavias – Chief Executive Officer
Harris Kokologiannis – Chief Financial Officer
Conference Call Participants
Alevizakos Alevizos – Action Ventures
Memisoglu Osman – Ambrosia
Sevim Mehmet – JPMorgan
David Daniel – Autonomous Research
Garrido Luis – Bank of America Lynch
Operator
Ladies and gentlemen, thank you for standing by. I am Mina, your Chorus Call operator. Welcome, and thank you for joining the Eurobank Holdings Conference Call to Present and Discuss the Third Quarter 2022 Financial Results.
At this time, I would like to turn the conference over to Mr. Fokion Karavias, CEO. Mr. Karavias, you may now proceed.
Fokion Karavias
Thank you. Ladies and gentlemen, good afternoon, and welcome to Eurobank’s nine months 2022 results presentation. Together with me is our CFO, Harris Kokologiannis and the Investor Relations team. I will start with an overview of recent developments before we present our results.
The global macroeconomic environment remains fragile, with risks to the downside as more aggressive interest rate policy by central banks may drive recession to deeper levels in Europe next year. The prolonged war in Ukraine, the lack of an EU common policy to deal with the energy crisis and sticky coal inflation add to a more uncertain environment. Against this backdrop, this enjoys a better outlook. Economic growth in 2022 is a positive surprise with full year estimates revised 6%. This growth is not only based on tourism or consumption, but also on strong exports, record PPIs and double-digit increase in investments.
Tax revenues are also outperforming, and we estimate that the primary deficit despite the one-off energy support measures may be lower than the revised budget target of 1.7%. Asset quality remains resilient as the client’s payment behavior has not shown any signs of deterioration. Moreover, private sector deposits keep increasing this year by €5.5 billion in the nine-month period and residential real estate price appreciation accelerated to 9.5% in the second quarter.
However, the growth for 2023 is estimated at 2.1% with risks on the downside. This significant growth slowdown is mainly due to the weak European environment. In this context, we remain cautious and monitor closely asset quality trends as these are usually lighting the economic cycle.
Let me now focus on our financial results for the nine month period with highlights shown on Slide 5. Our strong performance continues across all business lines in the nine month period. Third quarter was robust with net profit at €173 million, which drove the nine month figure into €932 million. As a result, our tangible book value per share increased by 16% year-on-year to €1.63.
It is important that the operational trends keep improving. Specifically, looking at the core operating lines for the nine month period compared to the previous year, we noticed, NII increased by 8%, fees and commissions grew by 21%, operating expenses were slightly up in Greece and 4.7% higher at the group level. However, the cost to core income ratio reduced to 46%, a 3 percentage point improvement. As a result of the above, corporate provision income was up 18%, with third quarter core PPI reaching €289 million.
The cost of risk ratio reached 68 basis points, and therefore, core operating profit that is core PPI minus provisions increased 66% year-on-year, reaching €592 million, of which €212 million in the third quarter. Furthermore, the operations outside Greece had another quarter of solid performance with profits increasing by 39% in the nine month period to €153 million, mainly due to strong contribution from Bulgaria and Cyprus.
Our capital base strengthened significantly on a year-on-year basis. Third quarter performance added another 20 basis points to our capital ratios despite the significant new loan production. The total capital ratio reached 17.2%, up 150 basis points in the last 12 months while the fully loaded CET1 ratio increased by 190 basis points to 14.2%.
Now on trade expansion and the deposits, both continued to be strong in the third quarter. As a result, performing loans and deposits increased by €2.5 billion each in the nine month period, with all our core markets contributing to this performance. Last but not least, on asset quality metrics, NPE formation remained flattish in the third quarter, which is a performance better than our initial expectations. The NPE ratio dropped further to 5.6%, and then these coverage approach 73%.
Now in summary, Q3 was another strong quarter. Overall, our nine month results were definitely robust and the trench point to full year 2022 outlook higher than our previous estimates. Thus, we revised upwards our targets again for the full year 2022, and we now expect core operating profit of €800 million, which is circa €200 million higher than the initial target. The full loaded CET1 ratio is expected to reach 14.6% by year-end, including the effect of a synthetic securitization, we are working on.
In this context, we keep targeting dividend distribution out of 2022 earnings. And see downside risks exist for the European macro outlook and following a recent discussion with our advisors, we will further review such a decision with the SSM in a period closer to our annual general assembly date. By then, we will have available the actual full year 2022 financial results and hopefully, more visibility about the impact of the external challenges.
At this point, I would like to ask our CFO, Harris Kokologiannis, to present our third quarter results and the outlook before opening the Q&A session.
Harris Kokologiannis
Thank you, Fokion. Let’s now provide some more insights to the third quarter results. Starting on Page 19, on lending growth. Performing loans increased organically in the quarter by €900 million, driven by 4.6% increase in South Eastern Europe. Year-to-date, performing loans grew by €2.5 billion, out of which €1.7 billion coming from Greek corporate, a €0.6 billion from Bulgaria. Considering the year-to-date performance and current pipeline, we have reset a full year net organic growth of €6.3 billion.
Moving on liquidity on Page 20. As shown on the right of the page, group deposits increased in the third quarter by €1.7 billion, mainly due to retail Greece, Bulgaria and Cyprus. Year-to-date, group deposits are up by €2.5 billion. Net loans to deposit ratio decreased to 74.3%, while LCR ratio reached 169% as shown on the left of the page.
Moving to MREL on Page 21. Our MREL rates as of September end amounted to 21.3%, which is 85 basis points higher than the interim target of January 1, 2023. This is the result of the last single positions and of the capital generation through organic profitability and capital enhancing transactions.
Moving to profitability on Page 25. Net interest income increased quarter-on-quarter by 5.6% to €381 million. NII has been affected positively by the base rate increase and the higher loan and bond volumes and negatively by second quarter one-off and the single preferred bond issued in June. On a year-on-year basis, NII is higher by 8.1%.
On Page 26, commission income increased quarter-on-quarter by 4.7% despite the merchant acquired this investment at the end of June. Fee income has been boosted by high lending, capital markets, network-related and cards issuing fees. On a year-on-year basis, commissions are higher by 21.1% and fees over assets ratio increased to 68 basis points.
On Page 27, group costs are higher year-on-year by 4.7%. In Greece, operating expenses, despite inflationary pressures are almost flat year-on-year as the lowest cost offset higher energy, IT maintenance and depreciation expenses. In South Eastern Europe, cost is higher due to direct momentum in Serbia and highest of cost in Bulgaria. Cost to core income ratio has been improved year-on-year by 3 percentage points, decreasing to 46.1%.
Notwithstanding the above improvement, cost management and the current inflation conditions will continue to be challenging for the coming period. Moreover, we have to fulfill our grow the bank targets, including further investments in IT and Vista. In this context, we continue optimizing our land and bank expenses. This is pursued through renegotiating contracts with significant suppliers, launching energy saving initiatives and rationalizing staff and network-related costs, targeting a further improvement of our cost-to-core income ratio.
On Page 29, we summarize operating performance for the nine months of 2022. Core PPI is higher year-on-year by 17.7% at €795 million, driven by performing loans and bonds NII, high commissions and core income from South Eastern Europe, which more than offset lower income from NPEs. Loan loss provisions are lower by 36% at €203 million. Overall, we had another strong quarter, and as a result, core operating cost is higher year-on-year by 66% at €592 million.
Moving to asset quality on Page 31. As shown on the top left of the page, NPE formation in the third quarter was slightly positive by €18 million, with fees almost flat reading for the nine months of the year. NPE stock decreased by €94 million and NPE ratio to 5.6% this translates to €2.4 billion gross NPE for the group or €660 million net of provision stock. Cost of risk increased to 75 basis points in Q3, staying higher than normalized levels. Despite the asset quality performance year-to-date, which [indiscernible] of the deterioration and substantially better than business plan, the macroeconomic outlook remains fragile with risks to the downside. This makes us take a precaution stance introducing some marginal conservative for the period ahead. Finally, on this page, coverage in the third quarter increased further to 72.7%.
Moving on capital on Page 36. Our fully loaded CET1 ratio increased quarter-on-quarter by 20 basis points to 14.2%. This is due to the quarterly profitability, which offset both macro market and the impact of business growth on RWAs. Furthermore capital in Page 37, our total cap ratio increased similarly to 17.2%.
Finally, as regards full year outlook on Page 7. Considering the core profitability trends, we revise upwards our estimate of core profit to circa €800 million from €610 million in the business plan. This translates to a year-on-year increase of circa 65% and better performance versus initial guidance by €190 million. The above reading assumes a core PPI close to €1.1 billion, and the cost of risk for the year was circa 70 basis points.
Furthermore, taking into account the updated profitability outlook and the using securitization of €1.7 billion saving loans expected to be completed within the year. We revised our guidance for the year-end fully loaded CET1 ratio at 14.6% and for the total CAD ratio of 17.5%. These readings are higher on the initial targets by 100 and 110 basis points, respectively.
This completes my presentation, and we may now open the floor for your questions.
Question-and-Answer Session
Operator
The first question is with Mr. Alevizakos Alevizos with Action Ventures. Please go ahead.
Alevizakos Alevizos
Hi. Thank you very much and well done for a very good results. I’ve got a couple of questions. The first question comes to the new target of 14.6% core Tier 1 capital ratio for year-end. I understand that this is going to be due to some organic performance in the fourth quarter. It includes also the synthetic securitization. And can I assume that it includes your assumption on the dividend as well. What I’m trying to understand here is how much has the synthetic securitization will add and then how much are you taking into account for the dividend. And then I’ve got a second question on MREL. It looks a bit higher than my expectation, about 30 bps. So I’m wondering whether there is something inside of that, except for the senior preferred. Thank you very much.
Fokion Karavias
Thank you for your questions, as you may see on Page 7, the target for year is up 14.6% compared to 14.2% that we stand today and 13.6% that was the initial business plan. Actually, the 40 basis point increase in the fourth quarter is expected as a result of the synthetic securitization that is expected to keep close to 40 basis points to our capital. The organic profitability of the quarter and on the legacy side, of course, we have the organic growth impact as a result of the RWAs. It doesn’t include any accrual for dividends. As regards to MREL ratio, actually, it doesn’t include something more than the single preferred issued in June. The organic capital impact, i.e., the organic capital generation.
Alevizakos Alevizos
Okay. All right. And if I may follow up. Regarding the cost of risk, I can see that you’ve upgraded the target by about 5 bps from 65% to 70%. But at the same time, I see that you are increasing also the coverage. I suppose that this is something like a precautionary measure ahead of a difficult winter ahead.
Fokion Karavias
This is true. Let me take as an opportunity, your questions to give you a broader outlook about what we see in terms of asset quality. Starting from what we have seen already in the third quarter of 2022. As we have discussed and we saw in Page 31, NPE formation was positive, but very low at €18 million and overall, €11 million in the nine-month period. This is substantially lower than our expectations that we have discussed in previous calls. I think it is also interesting to have a look at the formation per segment, which is shown on Page 32. The trends that we have discussed during the previous call remain the same. More specifically, the corporate segment, which is on the bottom right of Page 32, keep showing negative formation and the Retail segment shows positive formation, although in low numbers.
So in summary, as we mentioned already, we have not seen any sort of deterioration on asset quality trends. Although we do recognize that inflation and higher interest rates are a burden on households available income in the corporate merchants. So in this context, we have run some thorough analysis of our portfolio, not only in Greece, but in all our core markets. The main conclusions for this analysis is that, overall, we feel comfortable with our corporate exposures as corporate balance sheets remain quite robust.
In retail, in Greece, the most sensitive loan segment is mortgage loan. Because of that, we have segmented our portfolio. We have run an interest rate sensitivity analysis on that with the following results for a total maturity LIBOR increase by 300 basis points. 50% of the mortgage portfolio has a relatively small effect on monthly installments around 10%. The rest 50%, for the rest, 50%, the impact is about 20% to 25% monthly installment increase, which is not a small number. But if we look at the actual euro impact on the monthly installment of this latter segment, this is about €60 to €70, which is a relatively manageable amount. So this is what our analysis.
At the same time, we should take into account some credit positive factors, that some of them we mentioned already. These are the increase of private deposits by €5.5 billion in the nine-month period, a trend which continued in the third quarter. Second, the government support measures related to energy cost that has mitigated the higher energy prices for most of the households. This is a total package of about €15 billion. The strong growth in the economy in 2020, but also the expectation of still positive growth in 2023.
In terms of unemployment, we have some graphs, quite interesting graphs on Page 45 that you could look at. Unemployment keeps dropping, reaching the lowest levels of the past decade. And last but not least, we see a positive wealth effect through real estate prices, especially residential real estate prices, which keep improving as we present on Page 48 of your presentation.
Now outside Greece, we have run a similar exercise. In Cyprus for which we present some metrics on Page 16, we have no exposure to the Retail segment and none of the indicators point to any sort of deterioration so far. NPEs are very low, about 2.2%, and their coverage is extremely high at 19%. In Bulgaria, which is on Page 15, there is an exposure both on the Retail and the Corporate segment. However, in this country, there are significant wage increases that have taken place during the last several months. These increases fit negatively on the inflation, which is one of the highest in the EU.
But wage increases improve the ability for loan servicing. The private sector leverage remains low in this economy. It is less than 60% of the GDP. And in particular, for our bank, the NPE ratio has declined below 4%, with coverage more than 8%. So overall what we have seen is quite relaxing at the moment.
For the fourth quarter 2022, formation at the group level is anticipated to be positive and higher than that of the third quarter of 2022. However, despite the trends that we have seen so far and Despite the analysis that we have run, which is, as I said, quite relaxing, we should take into account that NPE formation may be a lagging indicator.
Therefore, as Harris mentioned before, we have adopted a prudent and proactive approach in our provisioning policy, introducing a sort of margin of conservative. As a result, the cost of risk increased from the 64 basis points in the second quarter to 75 basis points in the third quarter. For the full year 2022, the cost of risk now is estimated at the circa 70 basis points instead of 65%. And the NPE coverage will remain high. This is the mathematical effect of higher cost of risk and relatively low formation. Therefore, the NPE coverage will remain still at 70% and the NPE ratios would further decrease to 5.5%.
Alevizakos Alevizos
Thank you very much. That was comprehensive. Thank you again for the presentation.
Operator
The next question comes from the line of Memisoglu Osman with Ambrosia. Please go ahead.
Memisoglu Osman
Hello, many thanks for your time and the presentation. I was wondering if you could – thank you for giving the revised estimates. I was wondering if you could give us a bit more color on the NII outlook for 2022. Your plans on TLTRO, deposit cost developments. And also your Q3 fee performance was quite impressive despite losing the merchant acquiring part. So any one-offs there? What’s the outlook for fees for Q4 and beyond? Thank you.
Fokion Karavias
Thank you, Osman, for the questions. If I miss some of your latter question, please let me know. So overall, the nine month performance has been – it is true that it has been strong across all areas, despite the volatile environment. For the full year 2022, core PPI is now expected to reach €1.1 billion. The [indiscernible] that was the initial guidance and €12 billion that was the exactly previous one in core operating profit at €800 million. That it is €50 million higher than the previous one provided in the previous results call.
Other that normalized retail tax value may be a bit higher than 11% and normalized EPS of €0.17. Now as regards to the constituents of the core PPI for the full year 2022, and then you may make your calculations about the fourth quarter, NII is expected to increase by low teens year-on-year between 12% to 13%, again, a reduction of 3% in our initial business plan. So of course, the delta is due to the higher income from rising Euribor rates. We now have incorporated the 200 basis points increase of ECB rates from July up to now in the further 50 basis points expected in November.
Furthermore, the boost on NII is expected by high credit expansion. We expect loan growth, €3 billion for the full year 2022. And increased bond position since 2022, we should have increased positions by close to €2 billion compared to the end of the previous year. It is true, same things fees – I’m going to fees commissions that they showed noteworthy performance in 2022 so far.
And for the full year 2022, we expect to grow – fees expected to grow at the mid-teens level, I would say against the 6% previous estimate, mainly on lending fees, I would say that lending fees, capital market, including investment banking and network related to the fees are the main drivers of this over-than-expected performance. And these actually offset the lag that we had as compared to the initial performance, the initial expectations of all the asset management and wealth-related fees due to the macroeconomic uncertainty. So that’s about fees and commissions.
As regards to deposit costs, in general, the deposit cost remains quite subdued. However, in due time, time deposits should follow the trend of Euribor rates. And in our model specifically, we have assumed that the pass-through rate for time deposits will gradually increase from current levels to around 60% to 70% next year.
Now the other – next point was about TLTRO. Now as you can see TLTRO as you know very well, the carbon council of ECB decided at the end of October that as of 2023 of November, interest rate subsidy ends [indiscernible] we took into account all the periods with beneficial rates is eliminated. In this context, the council also decided to offer back additional voluntary and repayment dates.
Now the first question is whether we plan to redeem in whole or in part our TLTRO. The answer is most probably not because from a profitability point of view, it’s going to be neutral. However, we hear certain LCR benefits, which we don’t want to lose. So most probably, we are going to keep TLTRO until it’s maturity.
Now as to the impact of the ECB decision on our NII for 2022 is zero because the bank already accruing at the current and more than averaging rates. For 2023, of course, it will keep a theoretical impact, i.e., the impact of the ECB decision versus the stages before the decision is going to have an impact close to €50 million for 2023 and close to €30 million for 2024. I don’t know whether I can list some of relative assets.
Memisoglu Osman
No, no. That’s very helpful. Just one follow-up, if I may. On the time deposit side, you mentioned pass-through is likely to increase to 60% to 70%. Would you be sharing what it’s like these days? Also, are you seeing any deposit shift from savings and sites to time deposits in a material way these days?
Fokion Karavias
So answering your second part of the question, the answer is no. At the end of a couple of months earlier, the time deposits accounting for close to 15% of total. As we speak, they account to 18% to 19%. So there is some small set, but not something material. I’m not sure I’ve understood the first part of your…
Memisoglu Osman
Sorry, that was for pass-through assumptions.
Fokion Karavias
The answer is yes. It was about the pass-through rate.
Memisoglu Osman
So it’s 60% to 70% you assumed next year? What is it like these days? I’m guessing it’s at a lower…
Fokion Karavias
Around quite low, close to 20%, I would say.
Memisoglu Osman
Thank you very much.
Operator
The next question is from the line of Sevim Mehmet from JPMorgan. Please go ahead.
Sevim Mehmet
Good evening. Thanks very much for the presentation. I’ll just have one clarification on your new €800 million core operating profit guidance for the full year. Obviously, this is a very solid target. But at the same time, if you look at the nine month delivery, it sounds like you are guiding for a flat development in the last quarter compared to 3Q. And given there will be more rate impact to be seen in the last quarter, as you also commented, are you baking in any explicit slowdown elsewhere? Or is this simply just a relatively conservative or broad guidance, let’s say?
Fokion Karavias
No. The answer is no, we don’t expect any slowdown in any material way at, let’s say, any part of our operations. Of course, in the fourth quarter, we are going to have higher NII due to the Euribor rates. Fees are expected quite strong. On the other side, due to seasonality, we should expect a higher OpEx level and the higher cost of risk as a result of – in order to reach let’s say, the business level. But you may appreciate that as usual, we provide the estimates that are, let’s say, in a conservative context.
Sevim Mehmet
Yes. That’s a very clear. Thank you again for all the commentary on asset quality in 2023 earlier. Now taking into account all the data that you have at your disposal today and the ones you mentioned, is it reasonable to expect that cost of risk would remain at current levels next year? Or should it go towards the normalized levels? Or should it go up? So what’s your bottom line on this, so to say?
Fokion Karavias
As we said for this year, we expect a cost of risk of 70 basis points. These days, we are effectively forming the budget for 2023. And I would like to share with you news about the cost of risk, but also other lines of income statement upon its completion.
Sevim Mehmet
Okay. Fair enough. Thank you. And finally, maybe just on the dividend, I really do appreciate this quarter early and the process will start at a later time. But is there an ongoing discussion with SSM already given all the headlines we see also at the European level at the moment? And what would you say is your overall comfort level with an initial dividend payment from this year’s earnings?
Fokion Karavias
As we have said during the previous calls, but as I also mentioned a few minutes ago, we have a continuous dialogue with SSM on this area on the issue of dividend along with other issues. What is – a fact is that the 2022 performance was much stronger than the initial budget that we had shared with the SSM. And it is our view that this strong performance justifies dividend distribution.
As such, our Board keeps targeting dividend distribution out of the 2022 earnings at a prudent payout ratio, as we have also said before. Now on the net debt side, there exist downside risks because of the weak European market outlook. And in the context of the dialogue that we have with the SSM, we had the opportunity to discount the above in the recent constructive meeting about what we had. And the conclusion of this meeting is what I mentioned that we will review further this issue in 2023, in a period closer to our annual meeting. By then, we’re going to have in place the actual full year 2022 financial results, the 2023 budget and as I said, hopefully, more visibility about the external challenges.
Sevim Mehmet
Okay. That’s all very good. Thanks very much.
Operator
The next question comes from the line of David Daniel with Autonomous Research. Please go ahead.
David Daniel
Congratulations on the results and thanks for taking my questions. I’ve just got a quick one on MREL, noting the transaction you did earlier in the year. Are you looking at Q4 to potentially more MREL and also you’ve got the Tier 2. Should we kind of expect you to look at the Tier 2 based on your previous comments before printing you senior? Just an update would be good. Thanks.
Fokion Karavias
Okay. Let me provide you a overview as regards MREL and Tier 2. As you may see on Page 21 of the presentation based on the official or the latest decision the MREL requirement is 27.4% of RWAs and there is a short fall of close to €2.5 billion to be covered in the next three years by end of 2025. The interim not binding MREL target for the 1st of January 2023 is 20.5%, and we already have exceeded this by 85 basis points. That is equivalent to – close to €400 million as MREL ratio stands at 21.3% in nine months of 2022.
For the fourth quarter, we are not envisaging any other transaction. And for next year, obviously, we should tap the market for single preferred to reach the target of 2024 now. However, the exact amount will be defined following the completion of 2023 budget and, of course, equally important the capital plan.
Now as regards Tier 2, I remind you that what I mentioned in the previous call as well, but according to the agreement signed with a Greek state that is fully subsided the issue. Ecolution kicks in as of February next year. In parallel, as the instrument is entering its sixth year of tenure, it starts a gradual linear phaseout of a regulatory contribution of 20% per annum or by €190 million per annum.
Now taking into account the market volatility, we are exploring all options at the time, including not within the current instrument as it is apart from Tier 2, MREL [indiscernible] instrument, and it implies spreads compared very well with single-preferred spread. In this case, we will proceed in the forthcoming, let’s say, quarters to smaller, partial Tier 2 issuances that are commensurate to the capital phase out of the current instrument.
David Daniel
Thanks. Could I just double check? I think you said you weren’t looking at the market in Q4. Was that just in relation to MREL or MREL and Tier 2?
Fokion Karavias
Most probably both.
David Daniel
Okay. Thank you.
Operator
The next question comes from the line of Garrido Luis with Bank of America Lynch. Please go ahead.
Garrido Luis
Yes. Hello. Good afternoon. I have two questions, please. The first on asset quality. Can you give us some indication of what you think is a reasonable stress loan loss rate in mortgages? Maybe some color on why you think that the cycle might be different than in previous stress period. Then secondly, on fees, you have a fairly upbeat outlook on the increase in fees in the context of households being squeezed with – You’ve mentioned the 20% to 25% higher monthly mortgage costs. What do you think your competitors will do here? Do you think these increases in fees will be even politically possible? Thank you.
Fokion Karavias
Let me start with the fees, can you find the spent, correct your question. Yes, we are a bit higher on our outlook for full year 2022. So we now expect mid-teens increase. The major part of this increase is coming from the business side, from the corporate side and relates to the lending-related commissions, i.e., new lending levels of guarantee and loan commitments. This is a major driver of lending fees increase. The other major driver relate as well with the institutional markets. It relates to capital markets and investment banking. And another part related with network transactions and credit cards. This relates more to the growth of the economy and the credit growth, I’m not sure I can answer this.
Garrido Luis
Yes, that makes sense. Thank you very much. And then just on the asset quality maybe. I was just wondering if you have a reference point for a stress scenario on loan loss rate in mortgage in the past? And maybe if you could comment on how this cycle might be different if you think it is.
Fokion Karavias
Let me answer your question from a qualitative point of view. To repeat what I said before, that out of our different loan portfolios in Greece and also in the region, we have identified the Greek mortgage portfolio as the most sensitive to the current balances for obvious reasons. We have run a detailed analysis on this portfolio, especially looking on how sensitive this portfolio is to rate increases. We have identified that 50% of this portfolio is going to experience material increases in terms of monthly installments in the area of 20% to 25%, which is something that we should keep in the back of our minds and monitor very closely month after month.
Now on the positive, this percentage change is not small in terms of euro amount, it translates to about €60 to €70 increase. Which is not a very big amount. It is a relatively manageable amount. Now these are obviously averages and there are segments within subsegments, within the segment that have higher installment increases. Definitely, our focus over the next few quarters is going to be to monitor very closely this portfolio.
Garrido Luis
Great. Thank you.
Operator
Ladies and gentlemen, there are no further questions at this time. I will now turn the conference over to Mr. Karavias for any closing comments. Thank you.
Fokion Karavias
Let me thank you all for participating in this call. Let me also thank you for your questions. We’re going to be available for any sort of follow-up. Also, Eurobank is going to participate in the After Stock Exchange event in London in about 15, 20 days and we are looking forward to meet most of you there. Thank you very much.
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