Hellenic Bank €45 million loss in 2017

Hellenic Bank reported a loss after tax of €45 million for 2017, compared to a loss of € 63 million in 2016, due to the debt write-off and high provisions for impairment losses of € 83 million, as well as the cost of a Voluntary Early Exit Scheme (VEES) of €41,3 million.

The Bank continued for the ninth consecutive quarter the reduction of Non – Perforimg Exposures (NPEs) to € 2.16 billion, accounting for 53.3% of the total loan portfolio from 58.2% in 2016. The new loans amounted to € 0.5 billion, while the bank maintained its strong capital position.

 In a written statement the Bank’s CEO Ioannis Matsis said that 2017 was a landmark year, marking the beginning of the bank’s transformation journey.

As he said in 2017, Hellenic Bank agreed the first NPL portfolio sale in the country to B2Kapital Cyprus Ltd, set up the first independent loan servicer in Cyprus through the establishment of APS Cyprus in July 2017, while it completed a Voluntary Early Exit Scheme (VEES), whereby 231 employees accepted the scheme to leave the Bank, and introduced a substantial re-organisation, enabling a more efficient corporate structure.
 
“We made significant progress in our strategic priorities, strengthening the Bank through the continuous resolution of NPEs and growing the Bank’s franchise by becoming a more customer-centric institution”, Matsis pointed out.
 
Taking into account the NPEs sale, NPEs have been reduced to €2.162 million at 31st December 2017, down by 14% compared to a year earlier. The NPEs ratio was 53% at 31 December 2017, down from 58% a year earlier. 
 
NPEs provision coverage ratio totalled at 60% at 31st December 2017, up from 55% at the end of 2016, while the Net NPEs collateral coverage totalled 136%.

 The Group’s capital adequacy ratios remained strong and above the minimum required by the relevant regulatory authorities. As at 31st December 2017, the CET 1 ratio on a fully loaded basis stood at 13,8%, and the Capital Adequacy Ratio was 17,7%,
In terms of IFRS 9, the impact is expected to be about €35 million, net of tax, and is considered manageable and well within the Group’s capital plans.
 
The net loan to deposits ratio remained at the same level, at 48% as at 31st December 2017. At 31 December 2017, total deposits amounted to €5,8 billion while total gross loans reached €4.055million. The Bank’s loan market share as at 31 December 2017 was 8,1% and its deposits market share was 11,9%.

In the written statement Hellenic Bank says it remains committed to becoming a stronger bank that meets the expectations of all stakeholders and as part of implementing its strategic targets, continues its pivotal role in the recovery of the real economy supporting creditworthy Cypriot businesses and households with a comprehensive range of quality banking services.

At the same time the Bank’s strategy also includes advancements in technology, digital transformation, enhancement of customer service, as well as simplification of procedures and processes. The operating environment, it is added, remains challenging and the Bank will remain vigilant of developments to turn them into opportunities.