Hellenic Bank said Friday it has generated a first-quarter net profit of €14.9m on the acquisition of the co-op bank and de-risking its balance sheet.
“The financial results of the first quarter of 2019 prove that the now enlarged Hellenic Bank is performing at a much better rate compared to the equivalent first quarter results of 2018,” CEO Yiannis Matsis said.
The lender’s profit before provisions was €35.9m. Total lending in Q1 reached €177.2m and the non-performing exposures (NPEs) coverage ratio was 55.2 per cent.
In the fourth quarter of 2018, the lender generated a €24.1m net profit, €38.5 before impairments.
The NPEs ratio stood at 26.5 per cent or 32.6 per cent including those managed by asset management firm APS.
Hellenic said its liquidity coverage ratio was 536 per cent while its loans to deposits ratio was 42.6 per cent, enabling business expansion.
“The acquisition of the CCB operations and the simultaneous de-risking of our balance sheet and business model established Hellenic Bank as the strongest and most viable bank in Cyprus, safeguarding our depositors’ assets, generating value for our shareholders and providing good quality products and services to all our customers,” Matsis said.
Matsis did not rule out offloading NPEs to international investors but he added that reducing the bank’s stock to under 20 per cent did not depend on one sale.
Matsis said reducing NPEs under 20 per cent was the equivalent of €305m.
He said the bank was planning to appoint consultants to examine the viability of various methods to reduce NPEs with the aim of finding the best option in line with its strategy.
“The risk to our balance sheet is not that big. In reality, we have NPEs with a net worth of €700m while the collateral is €1.2bn.”
Matsis also struck a note of caution over opposition plans to reverse the current foreclosures legislation, saying it will have negative repercussions on the banking system and the economy.
“Such a development could mean increased capital needs since a change in the collateral framework would result in lower collateral values in the banks’ balance sheets,” he said.
He said he did not understand how the MPs came up with the proposals; “I don’t know if they are tactical moves but we must get serious.”