Hellenic Bank profit seen up 54%

Hellenic Bank is forecast to boost net profit during the first quarter of 2006 by 54.1% year-on-year to CYP 4.6 mln from CYP 3 mln a year ago in the first quarter according to Egnatia Financial Services estimates.

The Board of Directors of Hellenic Bank is scheduled to meet on 26 May 2006 to examine the 1Q06 results, which are seen improving on the back of an improved stream of revenues, coupled with HB’s cost containment efforts, as well as lower provision levels.

Specifically, Egnatia expect total operating revenues for 1Q06 to advance by 11.0% YoY to CYP 31.7 mln due to a robust net interest income (NII) growth associated with the solid expansion of the Group’s loan and advances portfolio. NII is seen at CYP 22.2 mln (+11.7% YoY). Egnatia also expect that operating revenues will be underpinned by satisfactory growth in net fees and commission income (+14.9% YoY), as well as a solid growth associated with revenues from insurance activities.

On the costs side, Egnatia expect total operating costs for 1Q06 to reach CYP 22.5 mln, up by 9.8% YoY and the cost to income ratio for 1Q06 to improve to 70.5% from 71.7% in 1Q05, amid the Group’s continued strive for cost containment, as expressed in the form of a staff “hire-freeze”, increased efficiency of the Greek branches through the consolidation of operations, the use of technology and alternative distribution channels, as well as the centralization of the Group’s operations and the rationalization of costs at all levels. Consequently, core profits are estimated to reach CYP 9.4 mln, up by 16.5% YoY.

Loan loss provisions are expected to fall by 12.6% YoY to CYP 4.9 mln, despite the increase in HB’s retail lending which continues to increase its weight in it’s loan book; this reduction in provision levels is the result of an improvement in HB’s debt collection department.