Hellenic Bank announced that it had a “marginally profitable” first half of 2016, realising a profit of €1.1 mln, approving €152 mln in new and with further restructurings of €334 mln.
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“Overall, the bank is on the right track, given the challenging economic environment both in Cyprus and internationally,” it said in an announcement.
Hellenic said its management is “totally focused and fully dedicated to addressing the non-performing exposures (NPEs),” that decreased for a third quarter in a row. As at June 30, NPEs decreased by 2% from March 31 and by 4% compared to 31 December 2015, with the NPE ratio declining to 57.7% whilst the coverage ratio improved to 50.2%.
Despite moving into a low interest rates environment, Hellenic Bank said it’s net interest margin increased to 2.1% at June 30 as a result of continued repricing of deposits and income generated from the new exposures.
The Group said it maintains robust capital adequacy ratios, above the minimum required by the relevant regulatory authorities. As at June 30, the Common Equity Tier 1 (CET 1) ratio stood at 13.92%, compared to the minimum CET 1 ratio set by the ECB for Hellenic Bank of 11.75%. At the end of 2Q2016, the Group’s Capital Adequacy Ratio was 17.15% and the Tier 1 ratio was 16,9%.
During the first half of 2016 the Group maintained its strong liquidity position. The net loan to deposits ratio stood at 50.5% as at June 30. Total deposits amounted to €6.1 bln, while total gross loans reached €4.3 bln.
The total expenses for the 6-month period decreased by 6% compared to the same period of 2015. The cost to income ratio for the first 6 months of 2016 was 55.2%, compared to 64.7% for the first six months of 2015.
The bank said management’s top priorities for the remaining of 2016 is the handling of the still high level of NPEs and the growth of the loan portfolio by intensifying restructuring efforts with viable customers and those demonstrating improved customer behaviour.
“However, for non-cooperative customers Hellenic Bank will demonstrate zero tolerance and will make full use of available tools through the recent amendments on the legal and judicial framework,” it said.
“It is encouraging to see that the bank is making progress against its strategic priorities, which are to reduce non performing exposures (NPE) on the one hand and growth on the other,” said CEO Bert Pijls.
“Our NPE ratio dropped for the third consecutive quarter. As I have repeatedly stated, Hellenic Bank will continue to explore all available options in an effort to decisively tackle the NPE problem. Our expenses are below previous year, loan growth is on track and our market share has increased, and our net interest margin has improved. That being said, the effects of the crisis are still being felt and we have had to build some additional provisions during the first 6 months of the year, which resulted in a profit for the Group of €1 mln during the first 6 months of 2016.”
