By Stelios Orphanides
Hellenic Bank, Cyprus’s third largest lender, said on Friday that it generated a net loss of €23.4m in the second half of the year attributable to shareholders compared to a net profit of €0.7m in the same period of 2016.
The loss was mainly on increased provisions amounting to €51.8m in the first six months of the year, combined with a reduced operating profit which dropped to €51.8m in January to June from €58.8m in the same period last year, the lender said in a statement on the website of the Cyprus Stock Exchange.
The bank saw its net interest income fall in the first half of the year to €66.3m, down from €74.7m the year before. This reduced total revenue to €128.5m from €131m respectively. Total expenditure rose to €76.7m from €72.3m also respectively.
Hellenic said that its accumulated provisions for loan impairments stood at €1.4bn at the end of June.
The bank, which launched a joint venture with the Czech non-performing loans specialist APS Holdings in July, said that its stock of delinquent loans dropped to well below €2.4bn at the end of the first half of the year, from over €2.5bn in December or to 56 per cent from 58.2 per cent respectively. In the first six months of the year, it restructured €296m and wrote off €82m in debt as part of the loan restructuring agreements. In March, the bank’s non-performing loans ratio was 57 per cent.
The bank’s common equity tier 1 ratio (CET1) stood at the end of 13.88 at the end of June exceeding a regulatory minimum requirement of 9.25 per cent while its capital adequacy ratio stood at 17.55 per cent compared to 12.75 respectively, it said. At the end of March the CET1 ratio stood at 13.71 per cent while the capital adequacy ratio was 17.24 per cent. Total provisioning coverage rose to 60 per cent in June from 55 per cent six months before.
Customer deposits stood at €5.8bn in June down from €6.1bn in March while total gross loans were €4.2bn against from €4.3bn three months before, Hellenic said.
The bank’s chief executive officer Ioannis Matsis said that Hellenic, the only major Cypriot bank which did not resort to a bailout or bail-in four years ago to remain afloat, “made further progress in materialising its strategic priorities in the second quarter of 2017”.
“We reduced non-performing loans for a seventh consecutive quarter,” he was quoted as saying, adding that after restructuring €122m in loans in the second quarter the restructuring momentum continues. “Addressing problematic loans is of foremost importance and we therefore continue to explore all available options”.