Hellenic Bank posts €93.3 million profit in first quarter — new lending hits €208 million

Hellenic Bank on Friday released its financial results for the first quarter of 2024, recording an after-tax profit of €93.3 million, with interim CEO Antonis Rouvas saying that the year “started on a strong footing” for the bank.

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

The bank’s robust capital position is highlighted by a pro forma Common Equity Tier 1 (CET1) ratio of 24.62 per cent and a pro forma Total Capital ratio of 30.2 per cent, both significantly exceeding minimum regulatory requirements.

Moreover, the bank continues to maintain a de-risked balance sheet, with a Non-Performing Exposure (NPE) ratio of 2.5 per cent and an NPE provision coverage of 42 per cent.

This solid financial footing is further strengthened by the bank’s agreement to acquire CNP Cyprus Insurance Holdings, which will establish Hellenic Bank as the largest insurance operator in Cyprus.

In addition to the acquisition, Hellenic Bank has also secured a framework agreement for the renewal of the staff collective agreement, ensuring stability and continuity in its operations.

Rouvas described the union agreement and the move to acquire CNP Assurances as two landmark achievements for the group.

“Firstly, following extensive negotiations and the mediation proposal of the Minister of Labour and Social Insurance, there is a framework for an agreement between the bank and Etyk for the renewal of the collective agreement,” the CEO said.

“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,” he added.

“The second but equally important development,” Rouvas continued, “relates to the bank’s agreement with CNP Assurances regarding its subsidiary CNP Cyprus Insurance Holdings Limited, operating in Cyprus and Greece”.

He explained that 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 in Cyprus.

“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,” Rouva stated.

“Upon completion, Hellenic Bank is expected to have a leading position in the insurance market in Cyprus, with market shares of approximately 30 per cent and 23 per cent in the life and general sectors, respectively,” he added.

New lending for the first quarter reached €208 million, reflecting the bank’s strong retail focus and solid customer base.

Furthermore, Hellenic Bank holds substantial market shares in household deposits, with 36 per cent of the market, and loans, where its share stands at 33 per cent.

Key financial metrics for the quarter include a net interest income of €151 million, a 40 per cent increase year-over-year, driven by favourable interest rates and a liquid balance sheet, primarily due to central bank placements.

The bank’s cost-to-income ratio stood at 33 per cent, showcasing efficient operational management.

Hellenic Bank also boasts ample liquidity, with a Liquidity Coverage Ratio (LCR) of 580 per cent and €5.1 billion placed at the European Central Bank (ECB), benefitting from the current interest rate environment.

“We are well positioned and fully committed to continue supporting our retail and business customers,” Rouvas said, noting that “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”.

He also said that “further reduction of our NPE’s ratio remains a priority for us”.

The net loans to deposits ratio is 40.3 per cent, positioning the bank well for further business expansion.

Additionally, 99.7 per cent of new lending exposures post-2018 are performing, underscoring the bank’s prudent lending practices and strong credit quality.

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

“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),” he added.

“Proof of our commitment came from the official lips of the Government where recently we were awarded the “Gold Environment Protector Award” at the Cyprus Environmental Awards for Organisations for developing and implementing environmentally friendly policies and practices, contributing to the protection of the environment,” he concluded.