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Financial Mirror (Cyprus) - - FRONT PAGE -

Hel­lenic Bank, the is­land’s sec­ond big­gest lender that avoided a pub­lic bailout after pri­vate in­vestors stepped in and pumped about EUR 100 mln ear­lier this year, said the board will con­vene on Oc­to­ber 25-26 to re­view cap­i­tal mat­ters as well as the fi­nan­cial re­sults for the first 9 months.

The bank had an­nounced last month that it would pro­ceed with a pro-rata rights is­sue (of an as yet un­spec­i­fied size) to its ex­ist­ing share­hold­ers to “support the needs of Hel­lenic Bank Group’s business plan while at the same time re­in­force the bank’s Common Eq­uity Tier 1.”

The bank said that the fresh cap­i­tal rais­ing is part of the Euro­pean Cen­tral Bank’s over­all as­sess­ment ex­er­cise, or ‘stress test’, that will be pub­lished on Sun­day for all 130 Eu­ro­zone sys­temic banks, in­clud­ing four in Cyprus.

Group Chair­woman Irena Ge­or­giadou said in a state­ment that “both the strong bal­ance sheet and the com­fort­able liq­uid­ity make up the plat­form upon which Hel­lenic Bank Group would ac­tively and cat­alyt­i­cally par­tic­i­pate in the re­cov­ery and support of the Cyprus econ­omy.”

Last month, the bank in­tro­duced 151 mln new shares that arose from the con­ver­sion of company con­vert­ible (CoCo) bonds, with only 25 mln CoCo bonds re­main­ing out­stand­ing.

The bank, that se­cured fresh cap­i­tal from in­sti­tu­tion­als Wargam­ing.net, New York-based hedge fund Third Point and lo­cal in­vest­ment house Deme­tra, an­nounced on Septem­ber 1 that first half after-tax losses dou­bled year-on-year to EUR 95.5 mln, due to a de­te­ri­o­ra­tion of the bank’s loan port­fo­lio and fur­ther in­crease in pro­vi­sions.

Ge­or­giadou, in her first re­port to share­hold­ers after her ap­point­ment in May, warned that the Cyprus econ­omy and so­ci­ety con­tin­ued to face “an un­prece­dented cri­sis”, but that the ob­sta­cles faced by the cri­sis will be over­come bring­ing bet­ter days for all. She said that dur­ing the sec­ond quar­ter, the bank strength­ened its bal­ance sheet fur­ther with com­fort­able liq­uid­ity and im­proved cov­er­age of non-per­form­ing loans (NPLs). De­posits in­creased by 6% since the end of 2013, and the net loans to de­posits ra­tio im­proved even fur­ther to a best in class ra­tio of 57%.

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