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Hellenic posts €35m after tax profit in first half 2018

September 10, 2018 at 9:50am
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Hellenic Bank said on Monday it had posted an after tax profit of €35m in the first half of 2018 amid continued high lending momentum and a further reduction in non-performing exposures (NPEs).

In an announcement, Hellenic said that during the first half of 2018 the Group’s proforma CET1 ratio stood at 13.7% and the capital adequacy ratio at 17.4%, well above minimum regulatory capital requirements.

The bank continued supporting the growth of the economy by financing creditworthy households and businesses, it added with €328 million of loans  approved in the first half of 2018, supporting industry sectors such as tourism, manufacturing, wholesale trade and transportation, as well as households.

As part of  HB’s strategic priorities to reduce NPEs, Hellenic on June 6 completed the agreement to sell an NPL portfolio of predominantly non-retail unsecured exposures, to B2Kapital Cyprus Ltd, a wholly owned subsidiary of Norwegian B2Holding ASA .

The gross contractual outstanding balance of the portfolio was €144m comprising of 1,082 borrowers and 1,809 facilities.  In addition to organic reduction of the problematic portfolio, Hellenic said it remained focused to accelerate the de-risking of its NPEs through portfolio disposals and other transactions.

The level of NPEs has been reduced to €2.11 billion on June 30, 2018, down by 2% compared to the €2.162 billion on December 31, 2017.

“The decrease was mainly driven by the curing of restructured loans, collections, debt to asset swaps and write offs,” it said.

The NPEs provision coverage stood at 62% as at June 30, 2018 (December 31, 2017: 61%). Taking into account tangible collaterals, the net NPEs collateral coverage stood at 142% as at June  30, 2018.

Looking ahead, the bank referred to the completion in September of the transaction of acquisition of certain assets and liabilities of the Co-operative Central Bank which is expected to accelerate the bank’s strategy of strengthening its banking franchise across Cyprus with an enlarged and diversified customer base.

“The business acquired is complementary to the Hellenic Bank’s existing business model and creates economies of scale and synergies,” it said.

Hellenic Bank’s existing loan portfolio focuses on corporates and SME and with this expansion, the enlarged customer base of Hellenic Bank will exceed 550,000, establishing it as a leading bank in Cyprus in the retail banking sector.

The deposit market share rises from 12% to 31%, while the performing loan market share is multiplied from 7% to 22%. Following the acquisition, the Bank aims to continue its pivotal role in the recovery of the real economy supporting creditworthy Cypriot businesses and households with a comprehensive range of quality banking services.

One of the bank’s strategic priorities is to timely execute the integration plan, for the fast and seamless transition to the new era and the smooth integration of former CCB systems and staff, it added.

Commenting on the results, CEO Yiannis Matsis said that during 1H 2018 the bank had made further progress in its strategic priorities, strengthening the bank through the continuous resolution of NPEs and growing its franchise by becoming a more customer-centric institution.

“In terms of performance, the Group reported profit after tax of €6.7 million for 2Q 2018 and €35.3 million for 1H 2018. The effects of the key measures taken in 2017, such as the Voluntary Early Exit Scheme (VEES), the reorganisation and the setting-up of APS Cyprus, are becoming now more visible,” he said.

He also noted that as a result of the deal with the CCB, Hellenic will become the second largest bank and the leading retail bank on the island.