The lender saw its net interest income drop to €29.3m in the first quarter from €33.8m a year before and its total expenses increase to €41m from €39m respectively, it said in a statement on the website of the Cyprus Stock Exchange on Friday. The bank’s provisions fell to €3.2m from €27.3m respectively.

The lender which announced the completion of the agreement to sell €145m in non-performing loans with B2Kapital Cyprus signed five months ago, said that its non-performing loans stock fell by €34m in a quarter to €2.1bn at the end of March to 52.1% of the total which is 21% below the peak. In December, the non-performing loans ratio of Hellenic –which in July transferred the responsibility of the management of loans in arrears to a unit co-owned with the Prague-based APS Holding– stood at 53.3%.

“The quarterly reduction was mainly driven by the curing of restructured loans, collections, debt to asset swaps and write offs,” the bank said adding that the provision coverage of its non-performing loans stock stood at 62% at the end of the first quarter, compared to 61% in December. “Taking into account tangible collaterals, the net non-performing exposures collateral coverage stood at 142% as at 31 March 2018”.

The bank said that its core equity tier 1 (CET1) capital ratio stood at 13.9% at the end of the first quarter while its capital adequacy ratio stood at 17.6%.

Hellenic, which has submitted a binding offer to acquire the Cyprus Cooperative Bank’s operations, added that it extended in the first three months of the year fresh lending of €139m to customers leading to a quarterly 1% increase of total gross loans to €4.1bn, increasing its loan market share to 8.5% in March from 8.1% in December. Its €5.8bn deposits accounted for 12.2% of total deposits compared to 11.9% in December.

Last year, Hellenic generated a net loss of €45m after posting a net loss of €63.5m the year before.

Hellenic Bank’s chief executive officer Ioannis Matsis said that the bank made further progress in the first quarter in its strategic priorities in addressing challenges related to the quality of the loan portfolio. 

“In terms of performance, 2018 starts with a quarterly profit after tax of €28.6m and the effects of the key measures taken in 2017, such as the voluntary early exit scheme, the reorganisation and the setting-up of APS Cyprus, are becoming now more visible,” Matsis said. “During the first quarter of 2018, we continued the de-risking of the balance sheet”.

He added that Hellenic’s capital adequacy ratio was “well above the minimum requirement”.

“In terms of IFRS 9 (International Financial Reporting Standards 9), the impact was €34m million conservatively inside the range we previously communicated,” and resulted from net of taxes, he continued. “The impact is phased in over a five-year period for regulatory purposes and is considered manageable and well within the group’s capital plans”.

Source: Cyprus Mail