* ATHEX listing “may be postponed”; Q4 net profits at €7 mln *
Hellenic Bank aims to build up its market share through organic growth, and not necessarily through buyouts of Greek or other smaller lenders, its chief executive told an extraordinary meeting of shareholders, prior to a media briefing last Friday.
The parallel listing of shares on the Athens Stock Exchange (ATHEX) is in the pipeline, but if developments are not encouraging the bank may note proceed, while foreign expansion is also out of the question for the time being.
Hellenic wants to build up its market share in Cyprus, at present 7.1% of loans and 13.8% of deposits, with an encouraging loans-to-deposit ratio of 51%.
The recently recapitalised lender, majority controlled by foreign funds, announced an operating profit for 2014, before provisions, totalling EUR 158 mln, up 22% from 2013, claiming a strong capital position and “comfortable liquidity” encouraging the group to aim for growth.
But net losses for the year reached EUR 119 mln, hampered by the high rate of non-performing loans, valued at 56.6% of the group’s loanbook in the fourth quarter, obliging the bank to consider 47.5% provisions coverage for NPLs.
CEO Bert Pijls said that “after a turbulent two years, we ended 2014 on a steady note, eventually leading to a much improved year in 2015.”
“NPLs are under control and the international business division produced very high fee income,” Pijls said, adding that it is critical for the bank to enter 2015 with a positive momentum, as three primary risks remain – the outstanding foreclosures issue, a region with instability and geopolitical developments that affect customers and depositors (i.e. Russian and Ukrainian businesses).
According to the preliminary results announced by the Group, as at end of 2014 Core Tier I ratio stood at 13.5% and deposits increased by 15%, “facts that demonstrate the great trust enjoyed by the bank from shareholders and depositors alike,” it said.
The operating profits before provisions amounted to EUR 158 mln, with the fourth quarter of 2014 alone ending with a net profit of EUR 7 mln.
The primary objectives of the bank for 2015 are the effective management of NPLs and the expansion of its loan portfolio, it said.
“With comfortable liquidity on hand, Hellenic Bank intends to play a leading role in the recovery of the real economy by funding viable businesses and households with new credit facilities,” the bank added, as it announced lower lending rates.
CEO Pijls said that there are “many opportunities” for growth, but stated that the bank “is not involved in any conversation about any takeover.”
“We are well capitalised, we have not been bailed-in or bailed out, we have liquidity and therefore we have an opportunity to grow”, he said.
Pijls said that when the foreclosure law is finally approved, the benefit will be on the restructuring side.
“We are not a real estate company and we do not want to become one,” he said in reference to a public myth that banks are eager to foreclose on primary homes and possibly sell these portfolios to foreign investors.
“The main benefit of the foreclosure law is to bring customers to the table and make the customer viable. A total of 25% of cases of NPLs have been approved for restructuring, 30% are under review, 10% have been rejected and 5% of the cases the customers have found a cure. So we have reviewed around 70%”, he added.
Referring to the agreement with the European Investment Bank which provides for a total of 70 mln euros for Cypriot companies, he said already that there is demand for 54 mln euros.
