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Hellenic Bank: Profits and lower NPEs in 2018

April 25, 2019 at 10:57am
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Hellenic Bank on Thursday announced after tax profits of €320.0 million for 2018, saying last year marked the beginning of a new era.

CEO Ioannis Matsis said he acquisition of CCB business established Hellenic Bank as the leading retail and SME bank in Cyprus whilst simultaneously de-risking the bank’s balance sheet and business model. Hellenic now has a market share of 39% in household deposits and 30% in household loans.

Hellenic had also proceeded with a successful share capital raise of €150 million.

It spoke of a robust capital position:  Pro forma CET1 ratio after the completion of €150 million capital raise is 19.0% and its capital adequacy ratio 21,7%, well above minimum regulatory requirements

As regards the balance sheet, it noted that the NPEs ratio had dropped significantly to 26.5% and  its Net NPEs to Assets ratio to 4.3%1.

In a statement, Matsis said the acquisition of CCB business established Hellenic Bank as the leading retail and SME bank in Cyprus whilst simultaneously de-risking its balance sheet and business model.

“The profitability and resulting capital position safeguards our depositors and creates shareholder value. The significantly improved capital position, especially after the successful €150 million share capital raise, supports the faster implementation of our strategic plans and enables us to fully focus on our mission: To provide an exceptional service to our customers through safeguarding their deposits and supporting the financing needs of the local households and businesses. I am particularly pleased that the strategic steps and the corrective actions we have been taking over the last few quarters and especially in 2018 started yielding evident results,” he said. 

Other key highlights:

  • The FY2018 Profit after tax of €320.0 million, is positively impacted by the negative goodwill of €297.9 million in relation to the Acquisition of CCB business.
  • 4Q2018 Profit before impairment of €38.5 million, and 4Q2018 Profit after taxation of €24.1 million, with 4Q2018 being the first quarter to include three-month results of CCB business.
  • The Bank’s balance sheet is significantly de-risked, and the loan portfolio quality has improved. The Bank’s NPEs ratio dropped dramatically from 51.6% in June 2018 to 26.5%, while the ratio of Net NPEs to Assets was reduced from 11.7% to 4.3%.
  • The cost to income ratio for FY2018 has improved to 70%, compared to the 86% for FY2017.

Rating upgrades by Credit Rating Agencies: The Bank’s strengthened franchise and market position in Cyprus following the acquisition, coupled with the successful capital raise, have led to an improved overall financial profile and outlook, as evidenced by recent rating upgrades both by Moody’s Investor Services and Fitch Ratings, to B3 and B+, respectively.