Hellenic Bank Group Public Co. Ltd. managed to overturn previous losses with a return to profitability after reporting that the net profit for 2005 reached CYP 7.51 mln compared to a loss of CYP 15.31 mln in 2004 and a loss of CYP 14.4 mln in 2003.
Hellenic CEO Makis Keravnos told analysts when presenting the results that the worst is over for the group and based on the new strategic plans and targets set by the Board, the outlook will be positive.
“We have set an ambitious target to reduce the cost-to-income ratio from 72% in 2005 to 69% in 2006,” said Keravnos, stressing that it will take some time before HB can catch up with its peers in its ability to reduce the cost-to-income ratio to below 60%.
Keravnos promised that once the 3-year strategic plan currently in the making is formulated, then the Bank will be in a position to announce its medium and long term targets.
While the Cyprus operations showed a spectacular turnaround with pretax profits surging to CYP 19.03 mln compared to a pretax loss of CYP 11.83 mln a year earlier in 2004, the Greek operations continued to be a laggard, with pretax losses surging in 2005 to CYP 10.14 mln from a loss of CYP 4.14 mln in 2004.
The Manager of the Greek operations promised that “this year we shall break even or give a small profit.”
A significant factor helping the Cyprus operations rebound in profitability was the massive reduction in provisions for doubtful debts, which fell to CYP 15.14 mln from CYP 39.1 mln a year earlier, while provisions for bad debts in Greece shot up to CYP 8.33 mln from CYP 6.33 mln in 2004.
The overall provision charge for 2005 fell to CYP 23.48 mln from CYP 45.46 mln in 2004 for a year-on-year reduction of 48%. HB Financial Controller George Appios said the Bank is aiming to bring the level of its annual provisions charge to 1-1.2% from the current 1.4% rate.
Balance Sheet
The Group Balance Sheet total exceeded CYP 3.1 bln compared to CYP 2.7 bln in 2004, registering an increase of 15%. Customer advances reached CYP 1.67 bln compared to CYP 1.63 bln in 2004, rising by 2.4%. Customer deposits exhibited a significant growth of 20%, reaching CYP 2.50 bln compared to CYP 2.08 bln in 2004.
Taking into account the aforementioned results as well as the medium term strategy and the need for expansion and further strengthening of the Group’s capital base, the Board of Directors has decided to suggest to the Annual General Meeting, that no dividend be distributed for the year 2005.
