By Stelios Orphanides
Hellenic Bank, Cyprus’ second largest, said on Monday it generated an after-tax profit of €35.3m in the first six months of 2018 compared with a net loss of €28.9m last year.
The improved result in the first half of the year was mainly on a €7.4m positive impact of the reversal of impairment losses compared to minus €77.6m in the first half of 2017, said a statement from the bank, which completed the acquisition of the Cyprus Cooperative Bank’s operations in September.
Hellenic, which in May completed the sale of €144m in non-performing loans to B2Kapital Ltd, a subsidiary of Norway’s B2Holding ASA, and in July last year launched its co-operation with APS Holding, a Prague-based non-performing loans specialist, said that its delinquent loans stock fell by €52m or 2 per cent to €2.1bn mainly “by the curing of restructured loans, collections, debt to asset swaps and write-offs”.
The agreement with B2Kapital “did not have a material impact on the income statement and capital position of the Bank due to existing provisions taken against these assets,” the bank said.
The bank said that in June, its proforma core equity tier 1 ratio was 13.7 per cent and its capital adequacy ratio 17.4 per cent on a transitional basis which in both cases is above regulatory requirements compared to 13.9 per cent and 17.6 per cent a year before respectively.
Hellenic Bank said that its net loan to deposits ratio stood in June at 47 per cent which allows further business expansion and added that alone in the first six months of 2018, it extended €328m in loans, 77 per cent more compared to a year before.
At the end of June, total customer deposits stood at €5.9bn, up from €5.8bn in December, while gross loans by €33m to almost €4.1bn, the lender said adding that is loan market share rose to 8.6 per cent at the end of June from 8.1 per cent six months before. The respective deposits market share was 12 per cent and 11.9 per cent.
The bank’s chief executive officer Ioannis Matsis said that the bank made progress in the first six months of the year in strengthening the lender by reducing its delinquent loans stock for an eleventh consecutive quarter.
“We have successfully completed the acquisition of certain assets and liabilities from the Cyprus Cooperative Bank that will accelerate the bank’s strategy of strengthening its franchise across Cyprus with an enlarged and diversified customer base, leading to a more diversified loan portfolio,” Matsis was quoted as saying. “Through this transformation transaction, the bank will become the second largest bank and the leading retail bank on the island. The bank will proceed with a capital raise of €150m, already approved by the EGM (extraordinary general meeting) of August 22, 2018, by the end of the year in order to fund the acquired business”.