Hellenic Bank said on Monday the acquisition of the Cyprus Co-operative Bank (CCB) is expected to accelerate its strategy of strengthening its banking franchise across Cyprus with an enlarged and diversified customer base.
Announcing the completion of the acquisition of certain assets and liabilities of the CCB, Hellenic Bank said that the agreement concerns the acquisition of the balance sheet, as well as specific operations of the CCB. The balance sheet comprises of a portfolio of primarily performing loans, Cyprus Government Bonds, cash and customer deposits.
After the completion of the capital increase, the capital position of the Bank will be significantly strengthened, with the Common Equity Tier (CET) 1 ratio and the total capital ratio exceeding 14% and 17%, respectively.
“The acquisition is expected to accelerate the Banks’ strategy of strengthening its banking franchise across Cyprus with an enlarged and diversified customer base. The perimeter acquired is complementary to the Hellenic Bank’s existing business model and creates economies of scale and synergies,” it said.
It noted that “Hellenic Bank’s existing loan portfolio focuses on corporates and SME and with this expansion, the number of Hellenic Bank customers will exceed 550000, establishing it as a leading bank in Cyprus in the retail banking sector. The deposit market share rises from 12% to 32%, while the performing loan market share is multiplied from 7% to 22%.”
Moreover, the quality of the portfolio is improving and the balance sheet risk decreases from day 1, since Hellenic Bank’s non-performing loans (excluding NPLs covered by APS) ratio drops dramatically from 52% to around 25%, while the percentage of non-performing loans (excluding NPLs covered by APS), in relation to the total of the assets, is reduced from 12% to 5%.
Hellenic Bank said it will continue to maintain high liquidity, with the expected ratio of net loans to deposits around 50%, allowing it to further support the financing needs of its clients and the economy in general.
Regarding the branch network, the objective of the Bank is to rationalize the network so that it is perfectly positioned in the geographical area of Cyprus to fully meet customer needs as well as to maintain the Bank’s competitiveness and viability.
The Bank will close nearly 100 branches within the next year. These branches were included in CCB’s plan for closure and the daily volume of transactions does not justify their existence. 43 of these branches (28 part-time and 15 full-time) will be closed by the end of September 2018.
Nevertheless, it is noted, Hellenic Bank will continue to maintain the largest branch and ATM network compared to any other banking organization in Cyprus. The Bank’s network will be enhanced by mobile banking units. Hence remote villages, in which there are no banks, will be covered by the mobile units that will offer the services and products offered by a regular branch. Soon, customers will be informed about the routes.
The use of mobile branch units will enable the Bank to service even more clients and have a presence in even more areas than currently does. Affected customers can also visit the nearest network branch or any other convenient branch and will be enjoying high quality service.
At this stage, nothing changes in daily banking transactions. The deposits and credit facilities of former CCB customers are transferred with the same terms and conditions. At the same time, customers can have access to loan products and banking solutions that the Bank can offer in very competitive terms. For any information, customers can contact HB’s branches, the call centre and the dedicated website www.hellenicbank.com/skt which is constantly updated by providing all the necessary information.
Hellenic Bank stressed that the fast and seamless transition to the new era and the smooth integration of former CCB systems and staff is a strategic priority. A specific, detailed integration plan has been drawn up and a special team will monitor the implementation of the plan, made up of Hellenic Bank staff and specialized consultants
Regarding the staff, 1100 ex-CCB workers will continue working for Hellenic Bank. This staff, along with the existing Hellenic Bank staff, is the Bank’s driving force for the achievement of its strategic goals, through a common vision, mission and values.
Hellenic Bank CEO Ioannis Matsis said that “the acquisition is expected to accelerate the Bank’s strategy of strengthening its banking franchise across Cyprus with an enlarged and diversified customer base. This expansion establishes Hellenic Bank as the leading retail and SME bank in Cyprus”
“Through the acquisition, we achieve a significant improvement in the quality and structure of the Bank`s assets and hence in its financial profile, allowing it to concentrate on achieving its strategic goals,” he noted.
Matsis assured the new clients “that we will work hard so that the transition to the new era is as smooth and seamless as possible. Our passion for work, our dedication and respect to our customers, shareholders, staff and associates are the core values that guide us, and they will continue to do so.”