Hellenic Bank Records €1.1M Profit in 2016

Hellenic Bank had a marginally profitable first half of 2016, realising a profit of €1.1 million. The Bank continued to support the economic recovery of the country by approving €152 million of new lending in the first half of 2016. During the same period, the Bank also completed further restructurings of €334 million.

NPEs

The Management of the Bank is totally focused and fully dedicated to addressing the Bank’s non-performing exposures (NPEs). NPEs recorded decrease for a 3rd quarter in a row. As at 30th June 2016, NPEs decreased by 2% from 31 March 2016 and by 4% compared to 31 December 2015, with the NPE ratio declining to 57.7% whilst the coverage ratio improved to 50.2%.

Net interest margin increased to 2,1%

Despite moving into a low interest rates environment, Hellenic Bank’s net interest margin increased to 2.1% at 30th June 2016. The improvement is the result of the continued repricing of the deposits and the income generated from the new exposures.

Strong Capital Position

The Group maintains robust capital adequacy ratios, above the minimum required by the relevant Regulatory Authorities. As at 30th June 2016, the Common Equity Tier 1 (CET 1) ratio stood at 13.92%, compared to the minimum CET 1 ratio set by the ECB for Hellenic Bank of 11.75%. At the end of 2Q2016, the Group’s Capital Adequacy Ratio was 17.15% and the Tier 1 ratio was 16.9%.

Strong Liquidity

During the first half of 2016 the Group maintained its strong liquidity position. The net loan to deposits ratio stood at 50.5% as at 30th June 2016. On 30th June 2016, total deposits amounted to €6,1billion while total gross loans reached €4.3 billion.

Expenses

The total expenses for the 6-month period ended 30th June 2016 decreased by 6% compared to the respective period of 2015. The cost to income ratio for the first 6 months of 2016 was 55.2% compared to 64.7% for the first six months of 2015.

Main Targets for the Remainder of the Year

The Management’s top priorities for the remaining of 2016 is the handling of the still high level of NPEs and the growth of the loan portfolio.

Hellenic Bank will intensify restructuring efforts with viable customers and those demonstrating improved customer behavior. However, for non-cooperative customers Hellenic Bank will demonstrate zero tolerance and will make full use of available tools through the recent amendments on the legal and judicial framework.

Hellenic Bank is supporting the economic recovery of Cyprus and contributing towards sustainable economic growth by providing new lending to the local economy. At the same time the Bank is exploring opportunities to deploy its liquidity both abroad and in new sectors of the economy.

Hellenic Bank CEO, Bert Pijls, states, “It is encouraging to see that the Bank is making progress against its strategic priorities, which are to reduce non performing exposures (NPE) on the one hand and growth on the other. Our NPE ratio dropped for the third consecutive quarter. As I have repeatedly stated, Hellenic Bank will continue to explore all available options in an effort to decisively tackle the NPE problem. Our expenses are below previous year, loan growth is on track and our market share has increased, and our net interest margin has improved. That being said, the effects of the crisis are still being felt and we have had to build some additional provisions during the first 6 months of the year, which resulted in a profit for the Group of €1 million during the first 6 months of 2016.”