Hellenic Bank posts €69.7 million first quarter profit — focus on transformation plan

Hellenic Bank on Friday released its financial results for the first quarter of 2023, posting a profit of €69.7 million, solidifying a robust performance during this period, while the bank’s transformation plan continues to be implemented.

The bank explained that the organisation’s strategic plan to transform the bank aims to address structural challenges, and focuses on digitalisation and efficiency improvements.

According to the published information, the bank is in a solid capital position, with a CET1 ratio of 19.3 per cent and a capital adequacy ratio of 25.1 per cent, significantly above minimum regulatory requirements

Crucially, there is also evidence of a de-risked balance sheet, with the bank’s non-performing exposure (NPE) ratio standing at 9.3 per cent, which,  when excluding the NPEs covered by the APS agreement, drops to 3.4 per cent.

“The completion of Project Starlight during the first quarter of 2023 heralds a new era for the bank,” the bank said in a statement, while noting the securitisation of approximately €0.8 billion of NPEs and the sale of the APS Debt Servicer.

What is more, the bank made note of the successful issuance of Tier 2 Subordinated Notes worth a total of €200 million in March 2023, which attracted significant international investor interest.

Commenting on the Group’s financial results for the three-month period ending March 21 2023, Oliver Gatzke, the Group’s Chief Executive Officer, stated that 2023 started on a strong footing for Hellenic Bank, as the bank recorded a solid first quarter, by generating profits of €69.7 million, mainly due to higher income and cost rationalisation.

“This performance demonstrates the resilience of our business model and our focus to continue to unlock value, supporting our customers and subsequently the growth of the economy,” Gatzke said.

Furthermore, the Hellenic Bank CEO noted that the first quarter of 2023 was marked by turbulent financial market conditions both in the US and in Europe.

“Hellenic Bank remained unscathed by these developments, mainly due to its strong capital position (Capital adequacy ratio of 25.1 per cent) and ample liquidity (Liquidity Coverage Ratio of 454 per cent),” he said.

“Our robust financial position enables us to continue supporting our retail and business customers by providing competitive, tailor-made, credit products and services,” he added.

What is more, the bank’s new lending during the first quarter of 2023 reached €315 million, up by 17 per cent year-on-year, increasing its market share on new lending to 35 per cent until April 2023, up from 28 per cent in 2022.

Net interest income reached €108.1 million, demonstrating an increase of 74 per cent compared to the first quarter of 2022, which is primarily a result of the global higher interest rate environment.

Moreover, the bank noted that the adjusted cost-to-income ratio stands at 40 per cent, which is in line with the bank’s medium-term objectives.

“The bank continues to focus on its cost management initiatives to compensate for the unabated growth of labour-related expenses, such as CoLA and automatic salary increments,” Gatzke concluded.