Hellenic Bank reports €240.7m in 9M2023 profit after tax

The bank's performance continued to be strong in the third quarter of 2023, with 9M2023 profit after tax totalling €240.7 million, Antonis Rouvas, Hellenic Bank Group’s Interim Chief Executive Officer, has stated.

He was commenting on Hellenic Bank Group’s financial results for the nine-month period ended 30 September 2023.

As noted by Rouvas, the main performance drivers remain the higher interest income arising mainly from Central Bank placements and debt securities due to the higher ECB interest rates, as well as lower total expenses reflecting the 2022 VEES. The Bank’s 9M2023 performance demonstrates the strength of its business model.

"With about €900 million of new loans granted during 9M2023, up 11% year on year, we remain on track to achieve our annual lending target of €1,2 billion. The de-risking actions taken have reduced the NPE ratio to 2,7% (excluding the NPEs covered by the APS agreement). With a total capital ratio of c.27,4%, significantly above the regulatory requirements, and with ample liquidity (Liquidity Coverage Ratio of 506%), the Bank’s Balance Sheet remains robust at challenging times of economic uncertainty and rising geopolitical risk," Rouvas said.

He also noted that the significant strengthening of the Bank’s fundamentals has been recognised by major credit rating agencies. "In October 2023, the Bank’s long term deposit rating has been upgraded to an investment grade of Baa3 after 12 years by Moody’s Investor Service. In November 2023 Fitch Ratings upgraded the Bank’s issuer default rating by 2 notches to BB+," Rouvas elaborated.

He added, "Nevertheless, we remain watchful for any risks that could affect the Bank’s performance due to the challenging economic and operating environment, with rising interest rates, high inflation and heightened geopolitical risk."

According to the Group's Interim CEO, "We consider it imperative that the country has a stable and functional foreclosure framework for addressing strategic defaulters and for reducing moral hazard. Although the non-performing loans were mostly shifted outside the banking sector, the level of problem loans in Cyprus remains one of the highest in Europe limiting the sovereign credit ratings of the country. We reiterate our commitment to support our vulnerable customers and to work closely with the authorities for any proposed measures that will address the long-standing issue of NPEs, however the continuous discussion about changing the legal framework is destabilising."

As far as labour issues are concerned, Rouvas said he would like to stress the Group's constructive stance "and irrevocable commitment towards finding solutions to all pending issues through dialogue and with the support of the Ministry of Labour and Social Insurance."

Other key highlights regarding the Group's performance in the third quarter of 2023:

• 9M2023 Net interest income of €379,7 million, up by 84% y-o-y, benefitting from rising interest rates and liquid balance sheet, mainly driven by placements with Central Banks
• Cost to income ratio of 36% (adjusted for the Deposits Guarantee Scheme contribution and Special Levy) driven by higher NII and lower staff costs due to December 2022 Voluntary Early Exit Scheme
• 99,6% of new lending exposures post 2018 are performing
• NPEs provision coverage ratio (excluding NPEs covered by the APS agreement) at 45% as at 30 September 2023
• Ample liquidity, with an LCR of 506% and with €6,0 billion placed at the ECB (excluding TLTRO of €2,3 billion)
• MREL to TREA ratio at 29,8%, well on track to fully comply with the December 2025 final binding MREL requirement.