26/05/2022 09:02
AstroBank announced Wednesday a net profit of €3.3 million in 2021, and €18 million before provisions, against a net loss of €18.1 million in 2020. The bank attributes its profitability to the new more rationalized, organisational structure and its focused business efforts.
The results were presented by the bank’s CFO Andreas Artemiou and the Bank’s CEO Aristidis Vourakis, during a press conference.
The Bank also said it has reduced its Non - Performing Exposures (NPEs) to 25.6% at the end of 2021, from 30.3% the previous year and at 24.1% in the first quarter of 2022.
The Bank’s capital adequacy ratio was 16.58%, up from 15.02% the previous year, reflecting internal capital generation through profitability and reallocation of capital commitments on assets. The Core Tier 1 ratio, consisting of common equity, stood at 15.31% at the end of 2021.
Liquidity remained strong during the year with an LCR ratio of 260% at the end of 2021. The loans to deposits ratio remained stable at 52%.
During the year, AstroBank advanced new loans were c. €240 million, one-third of which being retail, mainly mortgages benefiting from the government’s interest subsidy scheme, and two-thirds SME qualifying loans.
Total assets of AstroBank as of December 31, 2021 reached €3,018 million vs. €2,833 million in the same period in 2020. The increase reflects continuous increase in deposits to €2,191 million vs. €2,106 million as of December 31, 2020. Loan balances increased from €1,100 million as of December 31, 2020 to €1,137 million as of December 31, 2021. The mild growth reflected, is attributed to the significant repayments during the year and acceleration of NPE resolutions offsetting the significant new loan origination.
Liquidity of AstroBank remained strong during the years with LCR ratio of 260% at the end of 2021 as opposed to 246% as at December 2020. Net Loans to deposits ratio remained essentially stable at 52%. AstroBank as of December 31, 2021 maintained liquidity and treasury assets of €1,643 million also reflecting the European Central Bank long term refinancing operations.
Net interest income (NII) for the year ended 31 December 2021 was €48.1 million, decreased by 3.2% compared to €49.7 million for the year ended 31 December 2020. The decrease was mainly driven by the lower investment income from bond maturities, lower income from non-performing loans (significant resolutions) and the full year cost from Tier II bonds issued during 2020. The decrease is partially offset by the increased interest income from new loan production, the ongoing reductions in the average cost of deposits and the negative interest rates on funding from Central Banks.
Net fee and commission income for 2021 amounted to €16.9 million, compared to €14.4 million for 2020 driven mainly from the introduction of higher fees and commission from the revised transaction tariff effective from June 2021.
Total operating expenses reduced to €56.7 million in 2021 from €78.6 million in 2020.
Pre – Provision Income amounted to €18.1 million as opposed to an €8.8 million loss in 2020. 78% was from core activities while 22% from special transactions.
Profit after Tax amounted to €3.3 million compared to a loss of €18.1 million in 2020, mainly due to the completion of a Voluntary Retirement Scheme with a total cost of €17 million.
Balanced policy between lending and investment
For his part, Vourakis said that the bank remains committed to the Cypriot economy with loans of €250 million last year, while recycling funds committed to problems of the past, which are placed in new productive development activities, such as the health sector, renewables, tourism and light industry.
He added that the bank is operating successfully with significantly reduced staff, more than 20% less than at the beginning of 2021.
"We want to be the customer bank where you can talk to someone, who offers you personalized service," he said, adding that their expectation is to be a modern and flexible bank.
Asked how the bank will manage the excess liquidity, he said that the bank pursues a balanced policy between lending, investing in highly rated securities and holding liquidity with the Central Bank.
The bank is not affected by the situation in Lebanon
Asked on the impact on the bank from the financial situation in Lebanon, Vourakis said that the bank is not affected and although it has Lebanese shareholders it is a licensed and operating bank in Cyprus that does not have branch activities. "We are not a Lebanese, but a Cypriot bank," he added.
As for the activities in Lebanon, he said that they have no activities in Lebanon but a very limited financial exposure and that they have provisions for the 2% of the funds which are at risk.
"We have no real exposure to what is happening in Lebanon," he said. He added that Lebanese deposits comprise a very small part of the total.
AstroBank is a Cyprus-licensed Banking Institution that was established in 2008 and operates under the supervision of the Central Bank of Cyprus. It employs around 420 staff and has 15 branches across the island. It has around €3 billion in total assets and its equity amounted to €190 million on 31 December 2021.