Hellenic Bank posts 9M €240.7 mln profit
Source: Financial Mirror
Hellenic Bank announced on Tuesday a net profit of €240.7 million for the first 9 months of 2023.
According to a Hellenic Group statement, this profit was mainly driven by the higher interest income from placements with Central Banks, other banks and debt securities.
In addition, the bank retains a solid capital position with a CET1 ratio of 21.7% and a total capital ratio of 27.4%, significantly above minimum regulatory requirements.
Also, Hellenic announced a de-risked balance sheet with an NPE ratio of 2.7%, excluding the NPEs covered by the APS agreement.
It is noted that transforming and addressing structural challenges are on track, focusing on digitalisation and efficiency improvements.
During the first nine months of the year, the bank proceeded with a new lending of €900 million, which increased by 11% annually.
Antonis Rouvas, the Group’s Interim Chief Executive Officer, stated that Hellenic Bank’s performance continued to be strong in the third quarter of 2023, with profit for the first nine months after tax totalling €240.7 million.
He said the main performance drivers remain the higher interest income from Central Bank placements and debt securities due to the higher ECB interest rates and lower total expenses reflecting the 2022 VEES.
He pointed out that the bank’s performance for the first nine months demonstrates the strength of its business model.
“With about €900 million of new loans granted during the nine months of 2023, up 11% year on year, we remain on track to achieve our annual lending target of €1.2 billion.
“The de-risking actions have reduced the NPE ratio to 2.7% (excluding the NPEs covered by the APS agreement).
“With a total capital ratio of 27.4%, significantly above the regulatory requirements, and ample liquidity (Liquidity Coverage Ratio of 506%), the bank’s Balance Sheet remains robust at challenging times of economic uncertainty and rising geopolitical risk,” Rouvas said.
Credit agencies
He argued major credit rating agencies have recognised the significant strengthening of the bank’s fundamentals.
In October 2023, after 12 years, Moody’s Investor Service upgraded the bank’s long-term deposit rating to an investment grade of Baa3.
Fitch Ratings upgraded the bank’s issuer default rating by two notches to BB+ this month.
“Nevertheless, we remain watchful for any risks that could affect the bank’s performance due to the challenging economic and operating environment, with rising interest rates, high inflation and heightened geopolitical risk”.
Rouvas considers it imperative that the country has a stable and functional foreclosure framework for addressing strategic defaulters and reducing moral hazard.
He added 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 country’s sovereign credit ratings.
“We reiterate our commitment to support our vulnerable customers and to work closely with the authorities for any proposed measures that will address the long-standing issue of NPEs; however, the continuous discussion about changing the legal framework is destabilising”.
Rouvas stressed the Group’s constructive stance and commitment towards finding solutions to all pending issues through dialogue and with the support of the Ministry of Labour.
Other key highlights of the results are net interest income of €379.7 million, up by 84% annually, benefitting from rising interest rates and liquid balance sheet, mainly driven by placements with Central Banks.
The cost-to-income ratio was 36% (adjusted for the Deposits Guarantee Scheme contribution and Special Levy), driven by higher NII and lower staff costs due to the December 2022 Voluntary Early Exit Scheme.
The 99.6% of new lending exposures post-2018 are performing.
NPEs provision coverage ratio (excluding NPEs covered by the APS agreement) was 45% as of 30 September 2023.
The original article: Financial Mirror .
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