Three in a row

Financial Mirror (Cyprus) - - FRONT PAGE -

Hel­lenic Bank an­nounced prof­its for the third quar­ter in a row, with earn­ings more than dou­ble from last year at EUR 5 mln, the level of non-per­form­ing loans re­duced sig­nif­i­cantly and liq­uid­ity ra­tios im­proved.

The bank said prof­its from ‘con­tin­u­ing op­er­a­tions’ rose to EUR 5.0 mln, com­pared to EUR 1.9 mln for 9M 2015.

It said in an an­nounce­ment that it “is sup­port­ing the re­cov­ery of Cyprus econ­omy and ap­proved EUR 240 mln of new lend­ing dur­ing the first nine months of 2016. Dur­ing the same pe­riod, the bank also com­pleted fur­ther re­struc­tur­ings of EUR 490 mln. Over­all, the bank said it is on the right track, and this is proven by the strong cap­i­tal ad­e­quacy ra­tio of 17.66%.

CEO Bert Pi­jls said the bank “made fur­ther progress ex­e­cut­ing our strate­gic pri­or­i­ties in the third quar­ter of 2016. We re­duced NPEs for a fourth con­sec­u­tive quar­ter to their low­est level post De­cem­ber 2014. We com­pleted al­most half a bil­lion of re­struc­tur­ings dur­ing the first three quar­ters of 2016 and the loan re­struc­tur­ing mo­men­tum re­mains strong, with an in­creased num­ber of re­struc­tur­ing agree­ments in the pipeline. We con­tinue to ex­plore all op­tions in an ef­fort to de­ci­sively ad­dress prob­lem­atic loans, us­ing a tool case of sus­tain­able so­lu­tions such as debt to as­set swaps, bal­ance re­duc­tions, ma­tu­rity ex­ten­sions, grace pe­ri­ods, in­stal­ment re­duc­tions and ser­vic­ing sup­port.”

“We bol­stered the Group’s CET1 ra­tio by 45 ba­sis points to 14.37% due to lower risk weighted as­sets and or­ganic cap­i­tal gen­er­a­tion,” Pi­jls said, adding that the Group’s cap­i­tal ra­tios are com­fort­ably above the min­i­mum reg­u­la­tory re­quire­ments.

He added that the bank recorded prof­its for a third con­sec­u­tive quar­ter in 2016, with profit af­ter tax for 3Q2016 of EUR 3.9 mln.

“A very low loans to de­posits ra­tio en­ables our lend­ing ex­pan­sion and about EUR 240 mln loans were ap­proved since the be­gin­ning of the year, sup­port­ing cred­it­wor­thy house­holds and busi­nesses,” Pi­jls said.

The level of NPEs has been re­duced for a fourth con­sec­u­tive quar­ter to EUR 2.395 mil­lion at Septem­ber 30, down by 4% com­pared to June 30 and by 8% com­pared to De­cem­ber 31, 2015. The ra­tio of NPEs to gross loans as at Septem­ber 30 was re­duced to 57.1% (30 June 2016: 57.7%, 31 De­cem­ber 2015: 59.2%, 30 Septem­ber 2016: 61.2%).

The an­nounce­ment fur­ther said that the Group main­tains ro­bust cap­i­tal ad­e­quacy ra­tios, above the min­i­mum re­quired by the rel­e­vant reg­u­la­tory au­thor­i­ties. As at Septem­ber 30, the Com­mon Eq­uity Tier 1 (CET 1) ra­tio stood at 14.37%, com­pared to the min­i­mum CET 1 ra­tio of 10.50% set by the ECB (as per draft SREP). At Septem­ber 30, the Group’s Cap­i­tal Ad­e­quacy Ra­tio was 17.66% and the Tier 1 ra­tio was 17.42%.

Dur­ing the first nine months of 2016 the Group main­tained its strong liq­uid­ity po­si­tion. The net loan to de­posits ra­tio stood at 50% as at Septem­ber 30. On Septem­ber 30, to­tal de­posits amounted to EUR 6.0 bln while to­tal gross loans reached EUR 4.2 bln.

The to­tal ex­penses for the nine-month pe­riod amounted to EUR 107.8 mln, down by 6% com­pared to the EUR 114.2 mln of the re­spec­tive nine-month pe­riod in 2015, mainly due to de­creases in ad­min­is­tra­tive and other ex­penses. The cost to in­come ra­tio for the nine-month pe­riod ended Septem­ber 30 was 57.9%, com­pared to 64.8% for the nine-month pe­riod ended Septem­ber 30, 2015.

The bank said that “the man­age­ment’s fo­cus re­mains on the han­dling of the still high level of NPEs, the growth of the loan port­fo­lio and pro­ceed with ad­vance­ments in tech­nol­ogy and en­hance­ment of the cus­tomer ser­vice, as well as sim­pli­fi­ca­tion of pro­ce­dures and pro­cesses.

“The Group is fo­cus­ing on re­struc­tur­ing loans in a sus­tain­able man­ner and on mu­tu­ally ben­e­fi­cial terms us­ing a toolset of sus­tain­able so­lu­tions. The eco­nomic re­cov­ery is ex­pected to ac­cel­er­ate the pace of tackling NPEs

“As part of im­ple­ment­ing its strate­gic tar­gets, the Group is fo­cused on sup­port­ing the econ­omy’s re­cov­ery and con­tribut­ing to­wards sus­tain­able eco­nomic growth. The bank main­tains suf­fi­cient liq­uid­ity to ex­ploit op­por­tu­ni­ties while main­tain­ing its fo­cus on or­ganic growth.”

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