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Hellenic Bank sees earnings at €89.3mn in Q1 and profit of €12.9 million

hellenic bank financial results

Hellenic bank saw earnings of €89.3 million in the first quarter of 2021, and profit of €12.9 million after tax.

These figures slightly exceeded analyst expectations.

Profit before impairment losses, meaning the depreciation of business assets in market value, for the same period were €22.9 million.

New lending figures for the first quarter of the year amounted to €166 million, an area which has been affected by the protracted coronavirus pandemic.

“The pandemic has always has a delayed and cumulative effect. So in the first quarter of 2021 we observed decreased demand for certain banking services, such as new loans,” said Hellenic Group General Manager Phivos Stasopoulos.

“Businesses now are more focused on survival, cutting losses, ensuring viability, and sorting out their relationship with their banks and push any on growth-related activities at a later time,” Stasopoulos added.

In terms of capital, the banks had CET1 ratio, which is calculated by looking at a bank’s core capital relative to its risk-weighted assets,  of 20.20 per cent, and a capital adequacy ratio, which is a measurement of a bank’s available capital expressed as a percentage of a bank’s risk-weighted credit, of 22.54 per cent.

“With a solid capital adequacy ratio of 22.54 per cent and strong liquidity (Liquidity Coverage Ratio of 480 per cent), we are very well positioned and we are supporting our viable customers and financing the recovery of the economy,” said Stasopoulos in a statement.

In terms of Hellenic Bank’s loan portfolio quality, the bank stated that it continues to clean its portfolio up through “organic and non-organic” means.

The bank’s NPEs (non-performing exposures) to the gross loans ratio were 22.4 per cent, while the figure of net loans to deposits ratio was 42.5 per cent, with the latter reflecting a 0.5 per cent drop year-on-year.

Andreas Assiotis, the bank’s Chief Economist, expressed reserved optimism about the economy overall, but stressed that the recovery may not be felt by every part of the economy in the same manner.“Developments are still hinging on how the pandemic progresses. We are pleased to see the drastic reduction in daily cases. Our vaccination programme is one of the best in Europe with more than 50 per cent coverage up to this point,” Assiotis said.

“Support measures appear to be working, primarily because we are not observing a noticeable increase in unemployment. Besides keeping people employed, we have also seen an almost unaltered demand for services. We have also seen that GDP did not decline more than 2 per cent (1.6) in the first quarter which is better than the EU average,” he added.

“In the short term, we are also expecting economic growth of about 4 per cent which takes into account the tough year we’ve had in 2020. However, I must note that the growth will not be evenly spread across all sectors. Some sectors will perform better than others,” Assiotis concluded during the press conference’s core segment.

In terms of the slight increase in non-performing loans, which is roughly 0.1 per cent, this was not attributed to the pandemic.“This is negligible and it is the result of a change in certain definitions which resulted in more NPL’s being reported in the latest report. It’s a technical matter and is not particularly related to the effects of the pandemic,” said Stasopoulos and Joseph Antoniou, the bank’s Chief Risk Officer, in a shared response.

Stasopoulos expanded on this issue, adding that a combination of a cautious approach and the pandemic’s delayed effects may yet have a further part to play in the future.“Our priority in the fourth quarter of the previous year, as well as in the first quarter of this year, was to support our existing customers and not pursue growth for the bank. We especially wanted to support customers who have had certain issues and try to determine the root cause of their issues and try to find a solution,” Stasopoulos said.

“This approach appears to be having a positive effect. We have a very low percentage of late payments and a low percentage of new non-performing loans. Of course, we have not seen the full effects of the pandemic so we are remaining cautious and we will be monitoring how the situation unfolds. Especially in a banking system that is still recovering from 2013. Other banks in Cyprus are also maintaining a prudent and cautious approach so we are not unique in this regard,” he added.

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