Hellenic Bank profits surge 353% in 2006

Hellenic Bank Pcl (HB) reported a spectacular 353% YoY increase in net profit during 2006 to CYP 34 mln or EUR 58.8 mln from CYP 7.5 mln or EUR 13 mln a year ago.

HB Chief Executive Officer Makis Keravnos said the impressive performance was made possible on the back of a substantial increase in profits from ordinary activities by 98%, which demonstrates the return of the Group to substantially improved profitability.

Total net income registered an increase of 26% reaching CYP147,1 mln (EUR254,4 mln) compared to CYP116,8 mln (EUR202,0 mln) in 2005.

The positive results of the Group have been favourably affected by the recovery in the Cyprus Stock Market, on account of profits from investments in shares and from the shareholding of the Group in the associated company ATHENA Cyprus Public Company Ltd.

By contrast, total expenses showed a restrained increase of only 4% reflecting the systematic effort made by the Group to control expenses in order to improve the cost to income ratio. As a result of these, the cost to income ratio stands at 60,1 % compared to 72,4 % in 2005.

The systematic actions of the Group to improve loan portfolio quality coupled with the strengthening of reserves for the impairment in the value of loans made in previous years, resulted in the reduction of provisions by 3% in 2006, which amounted to CYP22,8 mln (EUR39,5 mln).

The Group Balance Sheet total reached CYP3.798 mln (EUR6.568 mln) compared to CYP3.081 mln (EUR5.328 mln) in 2005, registering an increase of 23%. Total loans and advances to customers exhibited an increase of 17% reaching CYP1.949 mln (EUR3.371 mln) compared to CYP1.667 mln (EUR2.883 million) in 2005. Customer deposits registered a substantial increase of 24% reaching CYP 3.111 mln (EUR5.380 mln) compared to CYP2.503 mln (EUR4.329 mln) in 2005.

 

Operations in Greece

Operations in Greece registered gradual improvement. The Group aims to develop further its operations in Greece, return the network to profitability and secure a steady return of its investment in Greece. An application has already been submitted to the Central Bank of Cyprus for the opening of five new branches in Greece. For the period under review, the operations of the Group in Greece exhibited substantial improvement in operating profits which amounted to CYP1,8 mln (EUR3,1 mln) compared to CYP1,8 mln loss (EUR3,1 mln) in 2005.

 

Strong Capital Base

Total shareholders’ equity has been further strengthened, reaching CYP212,5 mln (EUR367,6 mln) compared to CYP165,3 mln (EUR285,9 mln) in December 2005, registering an increase of 29%.

Group return on equity has reached 18% compared to 5% in 2005. At the end of 2006 the capital adequacy ratio of the Group was around 14%.