Hel­lenic Bank posts € 690,000 in Q1 prof­its

Financial Mirror (Cyprus) - - FRONT PAGE -

Ac­cord­ing to the bank, profit at­trib­ut­able to share­hold­ers for 1Q2016 amounted to EUR 0.3 mln com­pared with EUR 6 mln in Q4 2015. In 1Q2015, profit at­trib­ut­able to the bank’s share­hold­ers in­cluded a profit of EUR 4.8 mln from dis­con­tin­ued op­er­a­tions that re­lated to the dis­posal of a build­ing owned by the group in Moscow, fol­low­ing the sale of its Rus­sian bank­ing sub­sidiary in 2014.

Profit from or­di­nary op­er­a­tions be­fore im­pair­ment losses and pro­vi­sions to cover credit risk amounted to EUR 22.7 mln in 1Q2016 com­pared to EUR 42.3 mln in Q4 2015, mainly due to the gains of EUR 16.7 mln on dis­posal of Cyprus Gov­ern­ment Reg­is­tered De­vel­op­ment Stocks, as part of the trea­sury ac­tiv­i­ties.

Ac­cord­ing to the bank, new lend­ing amounted in Q1 amounted to EUR 84 mln, whereas new non-per­form­ing loan re­struc­tur­ings amounted to EUR 160 mln.

Non per­form­ing ex­po­sures (NPEs) de­clined by 3% quar­ter on quar­ter to 58% of to­tal loans, amount­ing to EUR 2.536 mln com­pared with EUR 2.602 in Q4 2015.

The bank’s cov­er­age of the NPEs by pro­vi­sions (cov­er­age ra­tio) de­clined to 49.1% com­pared with 50.1% in De­cem­ber 2015. The fi­nan­cial ef­fects of col­lat­er­als on NPEs amounted to EUR 1.623 mln which to­gether with the to­tal im­pair­ment losses re­sult to a cov­er­age of 113%.

Staff costs were marginally up, but costs were kept slightly be­low year-ago lev­els.

“Over­all, the bank is per­form­ing well, par­tic­u­larly given the cur­rent en­vi­ron­ment, demon­strat­ing the po­ten­tial power of the Group once it is un­shack­led from the high level of NPEs,” the bank said in a state­ment.

Fur­ther­more, the pro­vi­sion charge for im­pair­ment losses to cover credit risk in 1Q2016 amounted to EUR 21,6 mln com­pared to EUR 41.7 mln in 4Q2015 where the Group in­crease the ac­cu­mu­lated im­pair­ment losses to take into ac­count the EUR 71 mln pro­vi­sions rec­om­mended by the SSM.

Cus­tomer de­posits amounted to EUR 6 bln at 31 March 2016. They com­prised of EUR 4.5 bln de­posits in euro and EUR 1.5 bln de­posits in for­eign cur­ren­cies, mostly US dol­lars.

The Group’s Com­mon Equity Tier 1 (CET 1) ra­tio stood at 13,8%, com­pared to the min­i­mum CET 1 ra­tio set by the ECB for Hel­lenic Bank of 11,75%. At the end of 1Q2016, the Cap­i­tal Ad­e­quacy Ra­tio was 17% and Tier 1 ra­tio was 16,7%.

The Group’s liq­uid­ity

re­mained

on

a sound and healthy level while the net loan to de­posits ra­tio stood at 51% in 1Q2016. On March 31, 2015, to­tal de­posits amounted to EUR 6 bln while to­tal gross loans reached EUR 4.3 bln.

The bank said it is “fo­cus­ing on sup­port­ing and re­struc­tur­ing co­op­er­a­tive and vi­able cus­tomers while at the same time de­ci­sive ac­tions shall be taken for non-vi­able and non-co­op­er­a­tive cus­tomers.”

“For th­ese cases Hel­lenic Bank will demon­strate zero tol­er­ance and will make full use of avail­able tools”.

The bank also noted it is fo­cused on pro­vid­ing new lend­ing to the local econ­omy and is ex­plor­ing op­por­tu­ni­ties to de­ploy its liq­uid­ity abroad.

The said it’s strat­egy fo­cuses on two as­pects: “Fix” and “Build”. The “Fix” as­pect of the strat­egy pre­dom­i­nantly re­lates to the re­duc­tion of the high level of NPEs. It also re­lates to ad­vance­ments in tech­nol­ogy and en­hance­ment of the cus­tomer ser­vice, as well as sim­pli­fi­ca­tion of pro­ce­dures and processes. The “Build” as­pect of the strat­egy re­lates to the growth of the loan port­fo­lio and fur­ther­ing the cus­tomer re­la­tion­ships, be those of a de­posit or lend­ing na­ture. Fur­ther, the bank is repo­si­tion­ing its In­ter­na­tional Bank­ing Di­vi­sion strat­egy re­flect­ing the chang­ing reg­u­la­tory en­vi­ron­ment.

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