Hellenic Bank has become leaner and more efficient – CEO

Hellenic Bank CEO Oliver Gatzke on Wednesday said that since first being appointed to the role 15 months ago, the bank has evolved into an organisation with a leaner management structure, with the aim of further progress in the coming years.

Speaking at the bank’s annual general meeting, Gatzke said that “in a challenging environment, Hellenic Bank rose to the occasion and supported its viable customers, households and businesses, providing more than €900 million in new loans in 2021”.

The Hellenic Bank CEO said that the bank’s strategy revolved around four key pillars, with the first one focusing on growth, enhancing customer engagement, improving product promotion and emphasizing ESG initiatives.

In addition, the bank has proceeded with cost rationalisation actions by modernising operations, streamlining the branch network and reducing the number of employees.

The other two pillars included actions to reduce non-performing entities (NPEs), and the optimisation of funds and financing.

Referring to the first pillar, Gatzke said that “we support our customers and finance the growth of the economy through sound new loans”, noting that the RAROC risk-based pricing tool acts as a guide for the bank, allowing it to provide good quality lending, with more than €550 million in new loans during the first half of the year, reflecting a 43 per cent increase compared to 2021.

“The new lending target of €1.2 billion can be confirmed and, given the higher interest rate environment, we anticipate improved profitability,” Gatzke said.

In addition, he continued, the recent acquisition of a non-performing loan portfolio worth more than €330 million from RCB increased the bank’s corporate lending customer base and improved operating income through higher interest income.

“Looking ahead, I must emphasize that our 3-year transformation journey is well underway. We aim to improve customer experience, increase revenue and at the same time increase efficiency. We are in the process of transforming into a customer-centric organisation, improving the customer experience, through digitisation, streamlining our processes and offering simple and competitive products,” he said

In relation to the second pillar, he noted that “during 2021 and 2022, in our effort to streamline our branch network and physical footprint, we closed 24 stores”, adding that the bank is now operating with 25 per cent fewer branches compared to 2020, while comfortably meeting new lending targets, especially in retail.

Furthermore, Gatzke explained that by the end of 2022, another 9 branches will close down in order to further optimise the bank’s cost structure.

“The cost streamlining and management initiatives of the transformation plan are on track and this will further reduce our costs and increase our efficiency,” he said.

“Administrative costs are already being reduced and in terms of headcount, in 2021 and 2022 our staff has been reduced by more than 220 people, mainly due to layoffs and temporary staff,” he added.

What is more, Gatzke said that the bank’s aim is to preserve its asset quality while further reducing NPLs through organic deleveraging, even if these are covered by the Asset Protection Plan.

“We remain cautious about the challenges ahead and are proactively reaching out to our clients to ensure they continue to perform well,” Gatzke said.

“We continue to forecast marginal earnings for the end of the year. We are confident that we will exceed our medium-term profitability targets as announced at the end of 2022, due to progress on our strategic objectives and the changing interest rate environment, where higher interest rates are expected to have a positive impact on net interest income,” he concluded.