* NPEs down 3% q-o-q to 58% of all loans *
Hellenic Bank announced group net profits amounting to EUR 0.69 mln for the first quarter that ended on March 31, 2016, down from 12.3 mln a year ago, with turnover also down by about 15 mln in the same quarter.
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According to the bank, profit attributable to shareholders for 1Q2016 amounted to EUR 0.3 mln compared with EUR 6 mln in Q4 2015. In 1Q2015, profit attributable to the bank’s shareholders included a profit of EUR 4.8 mln from discontinued operations that related to the disposal of a building owned by the group in Moscow, following the sale of its Russian banking subsidiary in 2014.
Profit from ordinary operations before impairment losses and provisions to cover credit risk amounted to EUR 22.7 mln in 1Q2016 compared to EUR 42.3 mln in Q4 2015, mainly due to the gains of EUR 16.7 mln on disposal of Cyprus Government Registered Development Stocks, as part of the treasury activities.
According to the bank, new lending amounted in Q1 amounted to EUR 84 mln, whereas new non-performing loan restructurings amounted to EUR 160 mln.
Non performing exposures (NPEs) declined by 3% quarter on quarter to 58% of total loans, amounting to EUR 2.536 mln compared with EUR 2.602 in Q4 2015.
The bank’s coverage of the NPEs by provisions (coverage ratio) declined to 49.1% compared with 50.1% in December 2015. The financial effects of collaterals on NPEs amounted to EUR 1.623 mln which together with the total impairment losses result to a coverage of 113%.
Staff costs were marginally up, but costs were kept slightly below year-ago levels.
“Overall, the bank is performing well, particularly given the current environment, demonstrating the potential power of the Group once it is unshackled from the high level of NPEs,” the bank said in a statement.
Furthermore, the provision charge for impairment losses to cover credit risk in 1Q2016 amounted to EUR 21,6 mln compared to EUR 41.7 mln in 4Q2015 where the Group increase the accumulated impairment losses to take into account the EUR 71 mln provisions recommended by the SSM.
Customer deposits amounted to EUR 6 bln at 31 March 2016. They comprised of EUR 4.5 bln deposits in euro and EUR 1.5 bln deposits in foreign currencies, mostly US dollars.
The Group’s Common Equity Tier 1 (CET 1) ratio stood at 13,8%, compared to the minimum CET 1 ratio set by the ECB for Hellenic Bank of 11,75%. At the end of 1Q2016, the Capital Adequacy Ratio was 17% and Tier 1 ratio was 16,7%.
The Group’s liquidity remained on a sound and healthy level while the net loan to deposits ratio stood at 51% in 1Q2016. On March 31, 2015, total deposits amounted to EUR 6 bln while total gross loans reached EUR 4.3 bln.
The bank said it is “focusing on supporting and restructuring cooperative and viable customers while at the same time decisive actions shall be taken for non-viable and non-cooperative customers.”
“For these cases Hellenic Bank will demonstrate zero tolerance and will make full use of available tools”.
The bank also noted it is focused on providing new lending to the local economy and is exploring opportunities to deploy its liquidity abroad.
The said it’s strategy focuses on two aspects: “Fix” and “Build”. The “Fix” aspect of the strategy predominantly relates to the reduction of the high level of NPEs. It also relates to advancements in technology and enhancement of the customer service, as well as simplification of procedures and processes. The “Build” aspect of the strategy relates to the growth of the loan portfolio and furthering the customer relationships, be those of a deposit or lending nature. Further, the bank is repositioning its International Banking Division strategy reflecting the changing regulatory environment.
