Hellenic Bank eyes organic growth, to double loanbook
Hellenic Bank, the third biggest lender that is trying to shed its conservative image of the past by attracting new business, aims to use its strong liquid assets base to double its loan portfolio through organic growth, and not through acquiring distressed or other portfolios. But new loans will probably have to wait until parliament approves the final batch of laws on foreclosures and insolvencies, that have kept the rate of nonperforming loans in the island’s banking system hovering at about 50% of the national loanbook, more than double the rate at bailed-out Ireland.
Hellenic’s NPLs in its 9-month results appeared at 56% of the EUR 4.4 bln loan book, up from 46% at the end of 2013.
The bank’s CEO, Bert Pijls, has said that demand for new loans is strong, as its recent offer of “cheap loans” for corporates carrying a 3% interest, has already attracted bids for EUR 45 mln from a pool of EUR 70 mln co-financed by the European Investment Bank.
“We are looking at opportunities to maybe invest our liquid assets slightly differently but within the prudent management the bank has always had in the past,” Pijls told the Cyprus News Agency. As a result, Pijs added, the recently recapitalised lender that boasts Daniel Loeb’s Third Point Hellenic Recovery Fund and online game developers Wargaming.net among its major shareholders, has seen its deposit base rising steadily in 2014 and in 2015.
According to Financial Mirror data, deposits as at September 30 were up 11% year-on-year to EUR 6.13 bln, from 5.51 bln in the same nine-month period last year. And this at a time when the Central Bank of Cyprus announced that September saw the highest deposits outflow from the banking system since July 2013, as total deposits fell by EUR 850.6 mln.
“When there is uncertainty, it is better to be liquid. Being liquid means we are strong, liquidity means we have an opportunity to grow,” Pijls said.
The CEO is confident that the bank will double its lending in 2015 over 2014 but cautioned that the absence of a proper legal framework on foreclosures, which is currently the thorny issue of Cyprus’ economic adjustment programme.