Hellenic Bank Public Co. Ltd. (HB) lifted first quarter profit by 130% year on year to CYP 6.83 mln from CYP 2.96 mln a year ago in the same period and very close to the CYP 7.5 mln reported for the whole of 2005.
The improvement in the results came on the back of a 19% increase in total income to CYP 34.1 mln while costs were contained at CYP 21.8 mln for a 6.7% increase.
The strategy, as previously stated by HB CEO Makis Keravnos to the Financial Mirror is to boost income in double digit numbers while keeping cost increases in single digits.
The cost to income ratio during the first quarter was reduced to 64%.
Provisions still up
The provision charge was up at CYP 5.17 mln compared to CYP 5.07 mln in the first quarter of 2005. Hellenic has stated that its target is to bring provision charge to 1% of total advances. The total Non Performing Loans (NPLs) reached CYP 246 mln end of March 2006 compared to CYP 231 mln end of December 2005. The total provision reserve end of the first quarter was CYP 197 mln from CYP 190 mln end of 2005 and represents 11% of total gross loans.
Athena boost
Core profit from banking operations was up 49.8% at CYP 12.2 mln excluding profit from share of associate, Athena Investments, which contributed CYP 989k in additional profit during the first quarter of 2006 compared to CYP 435k a year ago in the same period.
The sharp increase in equity prices helped HB book a revaluation gain of CYP 532k in Q1’06 compared to a loss of CYP 371k a year ago in the same period.
Net profit for the group was up 130% at CYP 6.829.000 compared to CYP 2.968.000 a year ago.
The operations in Greece staged a moderate rebound, reducing the loss to CYP 637.000 in the first quarter compared to CYP 1.41 mln losses in the first quarter of 2005.
Shareholders equity improved by CYP 9.17 mln to CYP 174.47 mln from CYP 165.3 mln at the end of 2005.
Target feasible
The Group reaffirmed its end of 2006 target of reaching a cost-to-income ratio of 69% and boosting return on equity to 11%.
The net interest margin in the first quarter was 2.82% from 2.86% before. Staff costs, which make up 69% of total costs were up 9% in Cyprus on 1435 staff (1427 end March ‘05), while for the whole group, including the 381 staff in Greece (419 Q1’05), the total increase was 7%.
Total advances were up 3% to CYP 1.7 bln while customer deposits were up 18% to CYP 2.6 bln. In Cyprus, advances increased 3% to CYP 1.37 bln while in Greece advances were up 5% to CYP 339 mln.
Customer deposits in Cyprus were up 18% to CYP 2.2 bln while customer deposits in Greece were up 19% at CYP 380 mln end of first quarter.
