Hellenic Bank has posted its financial results for the previous fiscal year, exhibiting a solid foundation for the year to come, despite reduced profit and total net income due to the Covid-19 pandemic and its effects on the broader economy.
The bank posted a total net income of €391.3 million, reflecting a 3 per cent drop year-on-year, as well as profit after tax of €50.5 million, a 53 per cent drop from the previous fiscal year. Both of these figures reflect the effect of the pandemic, as well as the limitations imposed on the economy as part of the response from the government in its aim to limit any dire consequences to public health.
“In a difficult year and a challenging environment resulting from the pandemic, Hellenic bank has shown exemplary resilience. This year has been a true stress test for almost all businesses across all industries and sectors around the world,” said General Manager Phivos Stasopoulos.
“We remained focused on providing quality services to our clients. We keep re-evaluating the market and our own services so that we can keep providing the best services we can. Importantly, we can keep funding our viable customers and keep helping our country’s recovery efforts,” Stasopoulos added.
Outgoing Hellenic Bank CFO Lars Kramer explained that the reduction in the bank’s non-performing exposure (NPE) has dropped in an organic manner over the previous fiscal year.
“It is worthwhile noting that despite the absence of a major deal to offload Non-Performing Exposure in 2020, we still managed to decrease them by around 40 per cent,” said Kramer.
The exact figure stands at 41 per cent reduction in NPE’s during the previous fiscal year, with the net figure being reduced to 2.8 per cent of total assets.
“This area is still being actively managed, and we are working hard to improve it,” added Kramer.
The bank also touched on the hotel sector and the hospitality industry in general.
“The company has a €433 million exposure to the accommodation and food service activities sector,” said Chief Risk Officer Joseph Antoniou.
“We are encouraged but we are maintaining a reserved stance until more information comes in,” Antoniou added.
General Manager Phivos Stasopoulos explained that this sector has experienced the most impact from the pandemic, not just in relation to the bank itself, but in general.
“Just going by common sense and without needing specific figures to call back on, the hospitality sector has been hit very hard. That includes everything, hotels, restaurants, and other businesses. Beyond that, all retail clients who are employed in this industry have also been affected. So both the business owners and the people who work for them have felt the repercussions of the pandemic and the subsequent lockdowns,” Stasopoulos said.
In terms of how this has affected the bank’s approach, Antoniou explained that these customers have been reclassified accordingly so that the bank maneuvers in a more prudent way in how it implements its provisioning practices.
In regards to the handling of the pandemic and the recent issue with vaccinations, Head of Economic Research Andreas Assiotis refused to focus on short-term reactions on the issue.
“We need to see the bigger picture. The handling of the pandemic in Cyprus has been better than elsewhere in Europe, including the vaccination percentage per capita. I dont think recent hiccups with the portal will affect the macroeconomic picture. There is a major effort being made, especially with the vaccination programme and we need to focus on how it can be concluded successfully,” Assiotis noted.
Stasopoulos also provided an update on the bank’s new CEO, as well as CFO Lars Kramer’s exit from Hellenic Bank.
“In terms of our new CEO, we have chosen the new CEO and the European Central Bank (ECB) is in the process of his approval, which is a mandatory requirement as you know. We will soon have him with us for the assumption of his duties,” Stasopoulos said.
“In regards to Lars’ departure and his replacement, the process has started and it is almost complete. We should have announcements on this issue within the next few days,” he added.