€365m profit reported in Hellenic Bank Group financial results for 2023

"In 2023, Hellenic Bank proved its resilience, delivering solid results despite challenges and uncertainty rising mainly from the geopolitical and economic environment," Antonis Rouvas, the Group’s Interim CEO has stated, commenting on the Group’s financial results for the year ended 31 December 2023.

He continued that, in 2023, Hellenic Bank proved its resilience, delivering solid results despite challenges and uncertainty rising mainly from the geopolitical and economic environment.

"We managed to deliver an enviable set of financial results with a profit for the year of €365 million mainly due to higher interest income arising primarily from Central Bank placements and debt securities, as well as lower total expenses following the 2022 Voluntary Early Exit Scheme (VEES). This confirms the progress made on several fronts, inclusive of our transformation towards a client centric and technology driven bank," Rouvas said.

The Interim CEO went on to note, "The resilience of our business model was also acknowledged by international rating agencies, with both Moody's and Fitch upgrading the Bank's long-term deposit ratings to Baa3 and BBB-, respectively, placing it at investment grade for the first time since the 2013 crisis. Moreover, the decision of one of the largest financial organizations in Greece to invest in Hellenic Bank, constitutes a vote of confidence in our business model and franchise and as a result in our country’s economy."

Also according to Rouvas, "New lending during 2023 reached €1,2 billion, up 2% YoY, marking another record year for Hellenic Bank. Financing sectors such as health, education, energy, ICT, shipping, hospitality and transportation remain a high priority to us, contributing to the competitiveness and productivity of the economy. Net interest income reached €536 million, up 78% YoY, while non-interest income for 2023 amounted to €128 million, up by 26% YoY. With a pro forma total Capital Ratio of 28,4%, well above the regulatory requirements, and ample liquidity (Liquidity Coverage Ratio of 542%), we are well positioned and fully committed to continue supporting our retail and business customers in the future."

"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 continued.

The Interim CEO also underlined that, "Further reduction of our NPE’s ratio remains a top priority for us. Although 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 welcome the ‘Mortgage to Rent’ scheme which is a favourable arrangement safeguarding housing for vulnerable households and we reiterate our commitment to supporting our vulnerable customers."

Antonis Rouvas also listed other highlights for 2023, including Project Starlight was completed as planned. "The transaction has significantly de-risked the Bank’s balance sheet by around €0,7 billion, with the NPE ratio, excluding the NPEs covered by the Asset Protection Scheme, reduced to a low 2,5% in December 2023," he said.

Another highlight saw MREL Tier 2 Subordinated Notes of €200 million issued at 10,25% in March 2023, the Interim CEO noted.

"In 2023, our transformation journey, to address structural challenges and unleash hidden potential remained on track. Decisive steps were taken towards digitalization, further enhancing our digital channels offering a lending product online, as well as streamlining the network of branches, processes, and cost management.

Reaffirming our commitment that corporate responsibility, sustainability, and green growth are fundamental pillars of the overall operation of Hellenic Bank, the revised ESG Strategy became 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 growth with a strong focus on ESG (Environmental, Social and Governance)," Rouvas said.

Meanwhile, other key highlights of the report include, FY2023 Net interest income of €536,3 million, up 78% YoY 99,7% of new lending exposure post 2018 are performing; FY2023 cost to income ratio[1] of 34%, driven by higher NII and lower staff costs due to December 2022 VEES; Ample liquidity, with an LCR of 542% and with €5,8 billion placed at the ECB[2] (excl. TLTRO of €2,3 billion), benefiting the Bank because of higher interest rates; and Net loans to deposits ratio of 39,4%, enabling further business expansion.