Hellenic Bank announced half-year results on Friday that met analyst expectations, showing after-tax profit of €17.7 million for the period which met analyst expectations. Profit before tax was at €22.3 million. Revenue for the first half was €188.6 million.
The bank also met analyst concerns for weak assets as the Non-Performing Exposure (NPE) ratio is at 19.8 per cent. The NPE coverage ratio was at 58.3 per cent as of 30 June 2020.
Net interest income for the period was €140,5 million, capital adequacy is robust at 22.2 per cent, and the Liquidity Coverage Ratio is at 487 per cent.
“Going forward we expect Hellenic Bank to remain pro-active on the de-risking of the balance sheet, via smaller write-downs and/or portfolio sales, and on the selective healthy growth of the balance sheet through new loans and securities,” comments Jonas Floriani, an analyst with Axia Ventures Group in Nicosia.
There was an important increase in new lending which reached €439 million. The net loans to deposits ratio was at 42.1 per cent, which the bank says will enable further business expansion.
“Activity in specific sectors is showing signs of recovery,” commented Hellenic Bank Interim CEO Phivos Stasopoulos. “We are very well positioned to support our viable clients in these unprecedented challenging times.”
“We were a corporate bank, but we are now more diversified. We have almost five times the market share as in the last crisis. Liquidity is double what it was before,” CFO Lars Kremer explained.
The bank’s risk profile has improved sharply. “The cost of risk went to 175 basis points in the second quarter from 246 basis points in the first quarter. We expect it to drop to about 100 basis by the end of the year,” he added.
Kremer explained that the bank has not only provisioned to cover an increase in non-performing loans (NPL) — this is a prospective danger given the uncertain economic picture — but Hellenic scrutinizes its loan portfolio continually to detect loans that risk going bad. The bank then takes action with the borrower to try to keep the loan from winding up as an NPL.
“Our cash pile of €5 billion is being invested, and we are growing expertise in terms of investment in securities. We have €3 billion in Cypriot government bonds, and a large sum in European securities. We are making a continuous effort to invest our cash,” Kremer pointed out.
“New lending is growing, and we expect to make $900 million in loans to viable business that can deploy this money by the end of the year,” Kremer says.
The loan payment suspension scheme is not expected to continue after the initial nine month period, Kremer added. The bank expects these loans to begin regular payment at the end of the suspension period.
“We proceeded with the loan instalments moratorium for about 21,000 customers regarding loans of €2.8 billion, and the bank participates in all the other Governmental subsidy schemes aiming to finance the recovery of the economy,” Stasopoulos continued.
Former CEO Ioannis Matsis has departed. “I would like to reassure all our customers that for all of us at Hellenic Bank it is ‘business as usual,” with emphasis on Stability, Continuity and Resilience. We remain committed to our strategic objectives and in transforming the bank into a modern customer-centric organisation offering superior products and services, top level customer service and seamless experience for our customers,” Stasopoulos added.