CEO Bert Pijls: Hellenic Bank ready for growth

In an interview with the Financial Mirror, Pijls, a former executive at European financial and retail giants who was headhunted last November, sounds confident that Hellenic now has a strong cash fund to launch more products and help revive the economy by investing more.
He said that the new, lower-cost retail products “will really make a difference in (consumers’) wallets every month.”
Here is the question and answer session with the bank’s chief executive:

Q. Banks in Cyprus, and Hellenic Bank in particular, seems to be getting aggressive with new retail products. Even though the Financial Mirror would be the first to shout that "banks need to be lending again to get the economy started", does Hellenic Bank have the necessary "arsenal" to support these products?

Yes we do. Hellenic Bank has all the capabilities to support these products. First of all we have the liquidity. Secondly, we have amended our product set. Just to give you two examples, we recently launched a balance transfer loan with a rate of 4.95% as well as a housing loan at 3% with no fees. These are significant improvements that households in Cyprus will benefit from in a very meaningful way. It will really make a difference in their wallets every month.
Furthermore we have updated our marketing campaigns and we have adjusted our processes so that we can respond to customer request in an efficient and timely manner. We are definitely ready to be a very active player in the retail market.

Q. Who are these retail products aimed at – all income levels or any particular segment of consumers?

Hellenic Bank is a universal bank and thus we target a broad range of customers. We have a nationwide branch network and can and want to service any retail customer in Cyprus.

Q. What is more important – household income or good repayment track record?

As far as credit risk is concerned, it is not so much about household income as it is about the monthly amount available to service the debt. Someone with a high income but high expenses may have less funds available than someone with an average income but lower monthly outgoings. After we have established the customer’s ability to pay, we look at the customer’s repayment track record, which indicates the experience and willingness to repay. So, we use both of course.
So far, my retail experience outside Cyprus has indicated that willingness to repay is probably a slightly better determinant of the actual performance of the loan than the ability to repay, but as I said before we do use both.

Q. Will we be seeing more corporate products?

We aim to grow in all sectors, including corporate. Given our strong liquidity position in the market we don’t really need any special programmes; we can easily lend from our own funds at competitive prices. As far as our product suite is concerned, again I believe that we have all the products we need. In the case of corporate it is more a question of telling clients that we are ‘open for business’ and that if they have a financing need they will find Hellenic Bank a more than capable partner.

Q. How much of the European Investment Bank funding have you so far disbursed?

You will remember that we secured a EUR 35 mln tranche from the EIB which we matched with EUR 35 mln from our own funds for a total fund of EUR 70 mln. As of very recently we have booked just over EUR 26 mln under the EIB tranche and about EUR 19.5 mln under the Hellenic Bank tranche, for a total of EUR 45.5 mln booked. These loans are at various stages of implementation and disbursement. We still have, of course, a pipeline of applications that takes us well in excess of the EUR 70 mln in terms of demand, but these applications still need to be approved.

Q. What are the client and loan sizes? Are the loans for EUR 100,000 and up?

As far as loan sizes are concerned it is pretty varied and, yes, most loans are in excess of EUR 100,000.

Q. Hellenic Bank recently got an international award. How important are these? Surely being the "best in Cyprus" does not really mean much nowadays. Or does it?

I think they do mean a lot. Of course they are not an indication that we have arrived at our destination and can sit back and relax. Especially in the Cypriot context where there is still a lot of work to be done and much progress to be achieved. However, these awards are a valid recognition of the progress that we have made and we are proud of that recognition.
Whenever we do get an award I am most pleased for our people because they have earned us these awards through their commitment and dedication. And you know what? They deserve it!

Q. During a recent brief conversation you focused on shipping and maritime. Hellenic Bank has a dedicated division for this area. Are you a "big player among the small fish" or "small player among the big fish"?

We are indeed the only bank with a dedicated shipping centre and we have a long, fruitful, collaboration with the sector in Cyprus. We go way back. As a result, in Cyprus we are definitively a big fish among the big fish. Up until now we do not offer ship financing as a core product (no bank in Cyprus does, as far as I know) and therefore in the international arena we are a small fish amongst very big fish.
We need to recognise this and be realistic about our aspirations, but we do have aspirations to do more for and with the shipping industry. One of those aspirations is indeed ship financing and we are evaluating our options there.

Q. Is there any particular segment of maritime and shipping where you want to create your "niche"?

Hellenic Bank’s niche has always been quality and reliability of service and that is what it will remain. It is critical for the industry that the administration and payments for the vessels, as well as the payments to the seafarers all across the globe is done effectively and efficiently. I don’t think that I am exaggerating when I say that it was Hellenic Bank’s expertise in this regard that helped the Cypriot shipping industry navigate through the darkest days of the crisis in 2013 and that helped it maintain its excellent global reputation. And we could do this because we really know our clients and they know us.

Q. Isn't the current global shipping sector a bit risky for financing ship purchases or newbuilds?

As far as ship financing is concerned, as I said before, we have to be realistic. It is not our aim to finance new-builds, but most likely smaller, second hand vessels. How and when we launch this service does indeed depend on the state of the global shipping industry. A glut of new-builds, combined with a global recession has led to significant oversupply and as a result charter rates have plummeted. But vessels have an expiry date and the trends indicate there comes a point when demand does meet supply and then charter rates should correct upwards. When this will happen exactly is difficult to foretell so we have to be prudent, but we do want to participate and contribute to that recovery.

Q. Looking ahead, does Hellenic Bank remain a primarily Cyprus-centric bank or does its relationship with its shareholders allow diversification or expansion into new areas?