By Stelios Orphanides
Hellenic Bank, the third largest Cypriot lender, said Thursday it had generated an after-tax loss of €45.7m last year, down from a €63.5m loss in 2016.
The bank’s earnings suffered a 5 per cent decline, to €234.5m in 2017, mainly due to an 11 per cent fall in its net interest income to €131.2m, Hellenic said in a statement. Its expenses rose 39 per cent to €200.9m, mainly on the cost of the voluntary exit scheme offered to 231 of its workers last year with an impact of €41.3m.
While provisions for loan impairments fell last year to €82.9m from €115.2m in 2016, profit before provisions also dropped to €33.6m from €103.2m respectively, it said. The cost-to-income ratio deteriorated last year to 85.7 per cent, from 58.3 per cent in 2016.
However, non-performing loans fell to 53.3 per cent at the end of December from 58.2 per cent a the previous year, or below €2.2bn from €2.5bn.
The reduction was partly on the sale of €145m of bad loans announced in January. The provision coverage rose to 59.6 per cent, from 54.9 per cent.
The bank’s core equity tier 1 (CET1) ratio was 14.1 per cent at the end of the year while the CET1 fully loaded ratio was 13.8 per cent, it said.
Hellenic Bank’s total gross loans fell 6 per cent last year to under €4.1bn, and its deposits dropped 5 per cent, to €5.8bn, it said.
The bank’s chief executive officer Ioannis Matsis said that the last year, in which the lender launched its co-operation with the Prague-based non-performing loans specialist APS Holdings, marked the beginning of its “transformation journey,” after it made significant progress in its strategic priorities, including a drop in delinquent loans and selling a part of them.
As a result of the above, Matsis continued, the bank’s delinquent loans “are now about 19 per cent lower than peak, partly also to an organic reduction which continued for nine consecutive quarters. It also extended fresh loans worth €0.5bn, he added,
“The group’s capital position is stronger today, with the group managing to absorb the costs related to the balance sheet strengthening initiatives, and voluntary early exist scheme during the last couple of years,” Matsis said. “The capital adequacy ratio, on a consolidated basis, was 17.7 per cent on a fully loaded basis at December 2017, well above the minimum requirement”.