Hellenic Bank Pcl (HB) reported a 591% YoY increase in net profit attributable to shareholders to CYP 20.19 mln or EUR 35 mln from CYP 2.9 and EUR 5 mln in the first nine months of 2005.
Earnings per share climbed to 8.5 Cyprus pound cent from 1.2 cent a year ago with the book value per share improving to EUR 1.37 per share for a price to book of 2.45x based on the most recent price of EUR 3.4 per share trading on the CSE, according to Financial Mirror calculations.
Total income surged 22.5% to CYP 103.8 mln from CYP 84.7 mln a year ago, while total costs were up by only 3.9% to CYP 65.11 mln from CYP 62.6 mln previously, explaining the satisfactory improvement in the results. The prospects for the remaining period of 2006 are very encouraging, the Bank said.
Net profit in the third quarter from July to September was CYP 4.9 mln or EUR 8.5 mln compared to CYP 2.1 mln or EUR 3.7 mln in the third quarter of 2005 for a 130% YoY improvement.
The Group’s results in Greece after the provision for impairment of loans showed an improvement restraining losses to CYP2,9 mln (EUR5,0 mln) compared to losses of
CYP 7,8 mln (EUR13,5 million) for the corresponding period of 2005.
The share of profit from Athena Investments climbed 124% to CYP 1.65 mln or EUR 2.85 mln from CYP 737k or EUR 1.28 mln a year ago in the same period. Hellenic Bank also booked a revaluation of investment gain amounting to CYP 1.7 mln in 9M06 compared to a gain of CYP 240k a year ago in the same period.
Shareholders’ equity reached CYP188 mln or EUR 326 mln, registering an increase of 14%. The annualised Return on Capital Employed is about 15% which is above the target set of 13% for the entire year.
On 13 November 2006 the Board of Directors of Hellenic Bank Public Company Ltd, taking into consideration the current results as well as the anticipated results at the end of the year, decided to pay an interim dividend of CYP0,02 cents (two cents) per share to the Bank’s shareholders.
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Income up
Net interest income showed an increase of 16% reaching CYP 68,1 mln (EUR118,1 mln) compared to CYP 58,8 mln. This increase was achieved in spite of the new stricter regulations imposed by the Central Bank of Cyprus from the beginning of 2006 regarding income suspension.
In Group net interest margin for the nine months of 2006 was 2,86%. (December 2005:2,86%).
Total non-interest income showed a remarkable increase of 38% compared to last year’s corresponding period, reaching CYP 35,8 mln (EUR62,0 mln).
The effect from sale and revaluation of financial instruments was significant as it
includes gains of CYP 2,7 mln (EUR4,7 mln) from the revaluation of certain derivative products at their fair value. Excluding these gains, non-interest income continues to show a satisfactory increase of 27%.
Group total expenses showed a restrained increase of 4% compared to the
corresponding figure of 2005. Staff costs represent 68,5% of the Group’s total expenses. The greater part relates to the staff costs in Cyprus where the number of staff was 1.442 in September 2006 compared to 1.431 in September 2005. The increase in staff costs in Cyprus is 9% and is due to the increased provisions for retirement benefits as well as to the vested
annual salary increments based on the provisions of the collective agreement.
In Greece, the Group is going through a period of reorganisation and restructuring with primary target the gradual return of the network into profitability. Staff costs in Greece have been restricted following the restructuring of the Group. As a result the number of staff in Greece was 384 in September 2006 compared to 391 in September 2005.
For the first nine months of 2006 the cost to income ratio was at relatively low levels of 62,7% compared to the 65% set at the three year strategic plan, mainly due to the increase in non-interest income. This improved ratio is anticipated to be maintained until the end of the year.
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Provisions for impairment of loans
The provisions for impairment of loans amounted to CYP 17,1 mln showing a decrease of 14% compared to the first nine months of 2005 CYP 19,8 mln. The annualized provision for impairment of loans for the nine months of 2006 over gross loans was 1,2% compared to 1,6% for the first nine months of 2005. In spite of the change in the definition of non performing loans, the net non performing loans were restricted to CYP 233,7 mln (EUR405.2 mln) compared to CYP 231,1 mln in December 2005. In September 2006, 63,8% of net non performing loans is covered by provisions for impairment of loans and advances and the remaining percentage is covered by collateral.
Total provisions for impairment of loans at the end of September 2006 reached
CYP 210,2 mln (EUR364,5 mln) and represent the 11,2% of total gross loans.
Customer advances showed an increase of 14% reaching CYP 1.872 mln (EUR3.246 mln) compared to CYP 1.643 mln (EUR2.849 million) in September 2005, while customer deposits showed a significant increase of 18% reaching CYP 3.010 mln (EUR5.219 million) compared to CYP 2.546 mln (EUR4.415 million) in September 2005.
In Greece, customer advances showed an increase of 25% reaching CYP 394 mln (EUR683 million) compared to CYP 316 mln (EUR548 million) in September 2005, while customer deposits reached CYP 412 mln (EUR714 mln) compared to CYP 366 mln (EUR635 mln) in September 2005, showing an increase of 13%.
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