Hellenic Bank posts Euros 28 million net profit in Q1 2018

Hellenic Bank, Cyprus’ third largest lender, which is participating in a process to acquire the performing part of the Cyprus Cooperative Bank posted net profits of Euros 28 million in the first quarter of 2018.

The Hellenic Bank said, in its financial results, that profits after taxation were attributed to a one-off sale of Cyprus government bond proceeds, a reversal in provisions for bad debts and the first effects of a voluntary retirement scheme implemented at the end of 2017.

Building on its profitability, the bank increased further its non-performing exposure coverage ratio to 62% from 59,6% in the previous quarter, while maintaining its solid capital position.

The bank’s CET1 capital ratio stood at 13.85% which is capital adequacy ratio remained broadly unchanged to 17.63% from 17.68% in the previous quarter.

Commenting on the results, Ioannis Matsis, the group’s Chief Executive Officer, said the performance reflects the results of the measures taken last year.

In terms of performance, 2018 starts with a quarterly profit after tax of Euros 28,6 million and the effects of the key measures taken in 2017, such as the Voluntary Early Exit Scheme (VEES), the reorganisation and the setting-up of APS Cyprus, are becoming now more visible, he said.

The Group’s capital position is today stronger, with the Group managing to absorb the costs related to the balance sheet strengthening initiatives and VEES during the last couple of years, he added.

The bank also said it reduced NPEs, which is the most pressing problem facing the Cyprus banking sector, for ten consecutive quarters.

NPEs declined by 2% compared with the previous quarter to Euros 2.13 billion amounting to 52.1% of total loans.

The reduction is attributed mainly to debt-to-asset swaps, the curing of restructured loans, collections and debt write offs, the bank said. A total Euros 1.42 billion or 66% of total NPEs were terminated loans, which require legal action.

After selling Euros 145 in non-retail non-performing loans last year, the bank said it continues to explore other sale possibilities.

Furthermore, the bank said it granted Euros 139 million in new loans in the fields of tourism, manufacturing, wholesale trade, transport and households.

Total loans amounted in end-M/arch 2018 to Euros 4.08 billion with deposits remaining stable at Euros 5.8 billion Net loans to deposit ratio stood at 47.9% in the third quarter of 2018.

Profit before provisions in Q1 2018 amounted to Euros 26.1 million, (loss of Euros 31.7 mln in Q4 2017) of which Euros 18 million from proceeds from the sale of government bonds.

Net interest income for 1Q2018 stood at Euros 29.3 million, down by 13% compared to Euros 33,8 million in 1Q2017. The main factors that contributed to the decrease of net interest income were the downward trend of lending rates primarily affecting the performing loan portfolio and the decreasing carrying amount of the impaired loan portfolio, the bank said.

The Group’s net interest margin for 1Q2018 amounted to 1,84%, the bank added.

Source: Cyprus News Agency