The Hellenic Bank has recorded in the first quarter of 2022 an after-tax profit of €25.1 million and announced that it has already embarked on a 3-year transformation journey to unleash its potential and deploy its strategy to achieve sustainable profitability.
The Bank announced on Friday solid capital position with pro forma CET1 ratio of 19.1% and Capital adequacy ratio of 21.4%, significantly above minimum regulatory requirements, while pro forma NPE ratio was 10.4% while excluding the NPEs covered by the APS agreement was at c.3.6%.
According to a press release by the bank, commenting on the Group’s financial results for the three-month period ended 31 March 2022,Oliver Gatzke, the Group’s Chief Executive Officer, said that despite the slowdown in economic activity, our 1Q2022 financial results demonstrate the resilience and robustness of our business model.
“With a strong capital adequacy ratio of 20.53%, well above the regulatory requirements, and ample liquidity (Liquidity Coverage Ratio of 433%), we are well positioned and remain, as always, committed to supporting not only our retail customers, during this challenging period, but also our business ones, by providing financing to sectors that increase, in parallel, the competitiveness and productivity of the economy”.
These sectors could, for example, be health, education, energy, ICT, hospitality, transportation and shipping. During the first quarter of 2022 €269 million of new loans were granted, much higher than the respective period of 2021 where the new lending was €166 million, he noted.
He said that in the first quarter of 2022, we reported an after-tax profit of €25.1 million, mainly due to the release of provisions related to COVID-19.At the same time, he said that the Bank has been consistently and intensively working on improving the quality of its portfolio.He referred to the Project Starlight agreement for the sale of a €0.7 billion of gross non-performing loan portfolio and the agreement with RCB to acquire a performing loan portfolio saying that it significantly reduced our pro-forma NPE ratio to c.3.6%, one of the lowest, among peers. “The transaction with RCB increases the Bank’s client base in business lending, provides cross selling opportunities, and improves operating income through higher interest income”.
Furthermore, he said that the Bank isin the process of transforming into a customer centric organisation, by improving customers’ experience through digitalisation, streamlining of procedures and by offering simple and competitive products. At the same time, we are enhancing the profile of our loan book through healthy growth with a strong focus on Environmental, Social and Governance issues (ESG), he said.
He noted that main driver for this transformation journey is the cost reduction, following restructuring and rightsizing of the Bank. The reduction of the high cost to income ratio of the Bank, an important element of which is the staff cost which accounts for approximately 50% of the total expenses, remains pivotal in the success of the whole transformation effort, he added.
Moreover, he stressedirrevocable commitment for the signing of a new collective agreement reflecting the need to reduce costs, the gradual implementation of meritocratic, performance related remuneration, according to international best practices, and harmonisation of salaries of ex-CCI/CCB colleagues.
“I truly hope that the leadership of the Union will rise to the occasion and demonstrate a constructive and positive approach, for the benefit of our employees, safeguarding simultaneously a healthy and robust Organization for the future” he concluded.
Other key highlights are 1Q2022 Net interest income of €62.1 million, 1Q2022 Impairment losses reversal of €9.1 million, total new lending approved during 1Q2022 reached €269 million, NPEs provision coverage ratio at 32% as at 31 March 2022 while excluding the NPEs covered by the APS agreement, the ratio is adjusted to 59%, 1Q2022 cost to income ratio of 81%, robust liquidity position, with a Liquidity Coverage Ratio of 433% and a liquidity surplus of €6.2 billion, net loans to deposits ratio of 42%, enabling further business expansion and solid, stable, primarily retail deposit base.
Source: Cyprus News Agency