Hellenic Bank on Friday released its preliminary group financial results for 2023, posting a full-year profit of €365.4 million, while profit for the fourth quarter alone stood at €124.8 million.

Commenting on the group’s financial results for 2023, Antonis Rouvas, the group’s Interim Chief Executive Officer, stated that “in 2023, Hellenic Bank proved its resilience, delivering solid results despite challenges and uncertainty rising mainly from the geopolitical and economic environment”.

“We managed to deliver an enviable set of financial results with a profit for the year of €365 million mainly due to higher interest income arising primarily from Central Bank placements and debt securities, as well as lower total expenses following the 2022 Voluntary Early Exit Scheme (VEES),” he said.

“This confirms the progress made on several fronts, inclusive of our transformation towards a client-centric and technology-driven bank,” Rouvas added.

According to the results, Hellenic Bank reported a robust capital position with a pro forma Common Equity Tier 1 (CET1) ratio of 22.8 per cent and a Regulatory Total Capital Ratio of 28.4 per cent, both significantly exceeding minimum regulatory requirements.

Hellenic Bank Interim CEO Antonis Rouvas

Hellenic Bank Interim CEO Antonis Rouvas (file photo)

In terms of its portfolio, the bank’s commitment to a de-risked balance sheet has resulted in a pro forma Non-Performing Exposures (NPE) ratio of 7.5 per cent.

In addition, when excluding NPEs covered by the APS agreement, the ratio drops even lower to 2.5 per cent, reflecting the bank’s risk management strategies.

“The resilience of our business model was also acknowledged by international rating agencies, with both Moody’s and Fitch upgrading the Bank’s long-term deposit ratings to Baa3 and BBB-, respectively, placing it at investment grade for the first time since the 2013 crisis,” Rouvas explained.

“Moreover, the decision of one of the largest financial organisations in Greece to invest in Hellenic Bank, constitutes a vote of confidence in our business model and franchise and as a result in our country’s economy,” he added.

The bank also noted the successful completion of Project Starlight in 2023, which involved the securitisation of approximately €0.7 billion of Non-Performing Exposures and the sale of the APS Debt Servicer.

Regarding lending performance, the results show new lending of €1.2 billion, representing a 2 per cent year-on-year increase. This figure aligns with the annual Medium-Term Targets (MTT) previously set by the bank.

The bank also highlighted its focus on retail operations, making note of its solid customer base and a significant market share in households, where Hellenic Bank commands 37 per cent in deposits, and 33 per cent in loans.

Referencing the bank’s new lending during 2023, Rouvas stated that “financing sectors such as health, education, energy, ICT, shipping, hospitality and transportation remain a high priority to us, contributing to the competitiveness and productivity of the economy”.

Moreover, he said that “at the same time, we remain watchful of potential risks that could adversely affect the bank’s performance, due to the challenging economic and operational environment and elevated geopolitical risks”.

In terms of Net Interest Income, the bank recorded a substantial growth of 78 per cent year-on-year, reaching €536.3 million in net interest income for the fiscal year 2023.

The report also underscored the bank’s strong asset quality, with 99.7 per cent of new lending exposure post-2018 performing well, showcasing the bank’s commitment to maintaining a healthy asset portfolio.

“Further reduction of our NPE’s ratio remains a top priority for us,” the CEO said, noting that “although non-performing loans were mostly shifted outside the banking sector, the level of problem loans in Cyprus remains one of the highest in Europe, limiting the sovereign credit ratings of the country”.

“We welcome the ‘Mortgage to Rent’ scheme which is a favourable arrangement safeguarding housing for vulnerable households and we reiterate our commitment to supporting our vulnerable customers,” he added.

The bank also achieved a cost-to-income ratio of 34 per cent in 2023, attributed to higher Net Interest Income (NII) and reduced staff costs resulting from the December 2022 Voluntary Employee Exit Schemes (VEES).

Moreover, Hellenic Bank maintains ample liquidity, with a Liquidity Coverage Ratio (LCR) of 542 per cent and €5.8 billion placed at the European Central Bank (ECB), excluding the Targeted Longer-Term Refinancing Operations (TLTRO) of €2.3 billion. The bank stands to benefit from higher interest rates with this strategic liquidity positioning.

The results also pointed out that with a net loans to deposits ratio of 39.4 per cent, Hellenic Bank is well-positioned for further business expansion, signalling a positive outlook for the future.

“In 2023, our transformation journey, to address structural challenges and unleash hidden potential remained on track,” Rouvas said, referencing the steps taken towards digitalisation, “further enhancing our digital channels offering a lending product online, as well as streamlining the network of branches, processes, and cost management“.

What is more, Rouvas reaffirmed the bank’s commitment to corporate responsibility, sustainability, and green growth, describing them as fundamental pillars of the overall operation of Hellenic Bank.

In addition, he stated that the revised ESG strategy has become an integral part of the bank’s strategic plan, incorporating specific objectives at all levels of the bank’s operations.

“Our goal is to further enhance the profile of our loan book through healthy growth with a strong focus on ESG,” Rouvas said

Rouvas concluded by thanking the bank’s board and shareholders for their support, before assuring them that “the Hellenic Bank team remains fully committed to achieving its goals and strategic objectives”.