As announced by the Bank, in spite of the volatile economic conditions, the Bank recorded positive return, posting a profit of €6,2 million, compared to a second-quarter loss of €11,8 million.
According to the financial statements approved by the Board of Directors on Wednesday, net interest income for the third quarter increased by 25%, on a quarter on quarter basis, reaching €35 million. The total net income reached €57 million, increased by 4% from the previous quarter.
Total expenses during the third quarter amounted to €37,3 million, increased by 5% mainly attributable to the charging of the fourth quarter deposits special levy instalment. Impairment losses amounted to €12,1 million, compared to €33,9 million for the year’s secondquarter.
As at 30 September 2015, the Group’s assets amounted to €7,5 billion, and deposits increased by 1% during the third quarter, reaching €6,3 billion.
The Group’s liquidity remained comfortable as its total cash and placements with banks amounted to €3 billion. During the third quarter, in order to optimise the performance of excess liquidity, the Bank proceeded with prudent investments in bonds. Gross loans reached €4,4 billion, while the net loans to deposits ratio stood at 50%.
As at 30 September 2015, Non-performing exposures (NPEs) amounted to €2,68 billion, with the ratio remaining essentially unchanged at 61%. The NPEs’ coverage ratio increased to 46%, and loan impairment provisions amounted to €1,24 billion.
In accordance with the 2015 third-quarter financial statements, following the investment of the European Bank for Reconstruction and Development (EBRD) in Hellenic Bank’s share capital, the Group’s Capital Adequacy Ratio is at 18,2%, the Tier I Capital Ratio at 16,7% and the Common Equity Tier 1 (CET1) Ratio at 13,8%.
The Supervisory Review and Evaluation Process (SREP) conducted by the European Central Bank (ECB) is currently in progress along with the on-site inspection. These processes are expected to be completed over the next few months; however, the Group’s capital adequacy is at a level which, should the Bank decide to adopt ECB’s pre-draft comments and recommendations from their on-site inspection on credit quality, which are not expected to exceed €70 million, the Group currently has the capital capacity to absorb such and be in compliance with both its Pillar I and revised draft Pillar II add-on capital requirements.
According to the press release, management of the high levels of NPEs is a leading priority for Hellenic Bank and the economy as a whole and management is implementing a specific road map for dealing with the Non Performing Exposures. As at the date of the third-quarter results of the Bank, the Board of Directors emphasised that the Bank’s three key priorities are profitability and growth whilst maintaining its healthy liquidity and capital adequacy ratios.
The CEO of Hellenic Bank, Bert Pijls, in a statement about the results noted that the Hellenic Bank continues its pivotal role in the recovery of the Cypriot economy supporting Cypriot businesses and households with a comprehensive range of quality banking services. He noted that the improvement in the macro environment of Cyprus is a clear indication of the recovery of the Cypriot economy, and he encouraged borrowers with non-performing loans to actively engage with the Bank in a transparent manner in order to progress with sensible and equitable restructurings.
Source: Famagusta Gazette
