Hellenic Bank posts profits for four consecutive quarters

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Hellenic Bank, Cyprus’ second-largest lender, announced Q1 net profits of €12.9 mln, the fourth consecutive quarter in positive territory despite the impact of the Covid-19 pandemic.

In the first three months, the bank showed a marginal rise in non-performing exposures by 1% quarter on quarter or by just €18 mln.

Officials said the slight rise is associated with a new EBA definition of default rather than the impact of the pandemic.

In 2020 the bank posted losses only in the first quarter due to increased provisions following the pandemic outbreak in early March 2020.

Total NPEs amounted to €1.52 bln in Q1 2021 from €1.52 bln in the previous quarter corresponding to 15.8% of total loans, while the net NPEs (after provisions) ratio remained unchanged to 5%.

The provision charge for Q1 2021 amounted to €7.4 mln, of which €7.1 mln is for impairments.

The NPE coverage ratio rose to 47.6% in Q1 2021 from 46.9% in the previous quarter.

Hellenic’s CET1 capital ratio rose to 22.2% in Q1 2021 compared with 20.1% in the previous quarter, while the total capital adequacy ratio was 22.54% from 22.24% at the end of 2020.

Phivos Stasopoulos, the bank’s interim Chief Operating Officer, said: “Solid performance of the Bank continued, delivering an after-tax profit of €12.9 mln.”

“Despite the slowdown of the economic activity, our 1Q2021 financial results demonstrate the robustness of Hellenic Bank and the resilience of our business model.”

Stasopoulos said the bank was focused on the €2.8 bln loan portfolio of its customers that exited the debt repayment holiday in December.

“The vast majority of the respective borrowers are performing well or have been offered restructuring solutions, where needed and justified.”

Net interest income reached €65.3 mln, down by 6% from €69.1 mln in Q1 2020, with the annual decrease driven by lower-income on performing loans (lending base rates reduction) and from debt securities (Cyprus Government Bonds with a nominal value of €750  mln matured in December).

Total expenses for Q1 2021 were €66.4 mln from €63.3 mln, marking an annual increase of 5% mainly due to higher staff costs.

Cost to income ratio was 74.3%, compared to 6.1% last year, reflecting the increase in total expenses compared to the decrease in total net income.

Customer deposits amounted to €14.3 bln on 31 March 2021 from €14. 2 bln at the end of 2020.

Gross loans were €6.79 bln and remained broadly unchanged compared to €6.8 bln in December, with the net loans to deposit ratio at 42.5%a from 43% in Q4 2020.