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Hellenic Bank Q1 profits up, landmark deals in 2024

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Hellenic Bank announced first quarter profits of €93.3 mln, up 34% year on year, but 25% below the €124.8 mln in the last quarter of 2023, mainly due to higher income from interest rates.

Earnings per share have increased from 16.9c in 1Q 2023 to 22.6c in the first quarter this year.

The main earnings driver was net interest income (NII), rising to €151 mln from €108.1 mln in the first quarter of last year, and just 4% down from €156.6 mln in 4Q 2023.

“This performance demonstrates the resilience and robustness of our business model, despite the continuing challenges and uncertainty rising from the geopolitical and economic environment,” said interim CEO Antonis Rouvas.

He said he was confident of the year ahead, having locked two landmark achievements.

“Firstly, following extensive negotiations and the mediation proposal of the Minister of Labour, there is a framework for an agreement between the bank and [trade union] ETYK for the renewal of the labour collective agreement. We can now focus on delivering our strategic plan together with our bank’s transformation and continuous innovation, prioritising customer-centricity and accelerating digital transformation.

“The second but equally important development, relates to the agreement with CNP Assurances regarding its subsidiary CNP Cyprus Insurance Holdings, operating in Cyprus and Greece. This will allow Hellenic Bank to significantly strengthen its insurance operations and become a leading financial services group with a strong presence in the financial and insurance sectors.

“This transaction fits perfectly with our business model and offers significant synergies and growth potential, enhancing the products and services offered to our broad customer base. Upon completion, Hellenic Bank is expected to have a leading position in the insurance market in Cyprus, with market shares of about 30% and 23% in life and general sectors, respectively,” Rouvas said.

Net interest income up 40% y-o-y

According to the chief executive’s statement, net interest income for 1Q2024 reached €151 mln, up 40% YoY, benefitting from interest rates and liquid balance sheet, mainly driven by central bank placements, while non-interest income amounted to €28.3 mln, up by 6% YoY.

“With a pro forma total capital ratio of 30.2%, well above the regulatory requirements, and ample liquidity (liquidity coverage ratio of 580%), we are well positioned and fully committed to continue supporting our retail and business customers.

“At the same time, we remain watchful of potential risks that could adversely affect the bank’s performance, due to the challenging economic and operational environment and elevated geopolitical risks. Further reduction of our NPEs ratio remains a priority,” Rouvas stated.

“Our strong commitment that corporate responsibility, sustainability, and green growth are fundamental pillars of the overall operation of Hellenic Bank, is reflected in the revised ESG Strategy, which became an integral part of the bank’s strategic plan, incorporating specific objectives at all levels.

“Our goal is to further enhance the profile of our loan book through healthy and sustainable growth with a strong focus on environmental, social and governance (ESG) policies. We were recently awarded the ‘Gold Environment Protector Award’ at the Cyprus Environmental Awards for developing and implementing environmentally friendly policies and practices, contributing to the protection of the environment,” Rouvas concluded.

New lending in the first quarter reached €208 mln, with the bank saying its portfolio remains retail focused, with a solid customer base and major market shares in households (36% in deposits and 33% in loans).

It added that 99.7% of new lending exposures post-2018 are considered as ‘performing’.

As regards the bank’s “ample” liquidity, it enjoys a liquity coverage ratio (LCR) of 580%, with €5.1 billion placed at the ECB, benefiting the bank from current interest rates.