Hellenic Bank posts profits for fourth consecutive quarter

Hellenic Bank, Cyprus` second largest lender, announced net profit of €12.9 million in the first quarter of 2021, marking profitability for the fourth consecutive quarter despite the impact of the Covid-19 pandemic.

In the first three months of 2021 the bank showed a marginal rise in non-performing exposures by 1% quarter on quarter or by just €18 million, with officials noting that this slight rise is associated with a new EBA definition of default rather than the impact of the pandemic. IN 2020 the bank posted losses only the in the first quarter due to increase provisions following the outbreak of the pandemic in early March 2020.

Total NPEs amounted to €1.52 billion in the end of the first quarter of 2021 from €1.52 bl in the previous quarter corresponding to 15.8% of it total loans, while the net NPEs (after provisions) ratio remained unchanged to 5%, the bank said.
 
Provision charge for the first quarter of 2021 amounted to €7.4 million of which €7.1 ml for impairments, while the NPE coverage ration rose to 47.6% in Q1 2021 from 46.9% in the previous quarter, the bank added.
 
The bank’s CET1 capital ratio also rose to 22.2% in the first quarter of 2021 compared with 20.1% in the previous quarter, while total capital adequacy ratio amounted to 22.54% compared with 22.24% in the end of 2020.
 
Commenting on the results, Phivos Stasopoulos, the bank’s interim Chief Operating Officer said the “solid performance of the Bank continued, delivering an after-tax profit of €12.9 million,” adding that despite the slowdown of the economic activity, our 1Q2021 financial results demonstrate the robustness of Hellenic Bank and the resilience of our business model.”

Stasopoulos reiterated that the bank has been focused on the €2.8 billion loan portfolio of its customers that exited the debt repayment holiday in the end of 2020, noting that “the vast majority of the respective borrowers are performing well or have been offered restructuring solutions, where needed and justified.”
 
The Bank said Net interest income for 1Q2021 amounted to €65.3 million, down by 6% compared to €69.1 ml in 1Q2020, with the annual decrease driven the lower income on performing loans (lending base rates reduction) and lower income from debt securities (Cyprus Government Bonds with nominal  value of €750  million matured  in  December  2020).
 
Total expenses for 1Q2021 amounted to €66.4 million compared to €63,3 ml, marking an annual increase of 5% mainly due to higher staff costs, the bank added.
 
According to the bank, the cost to income ratio for 1Q 2021 was 74.3%, compared to 6.1% for 1Q2020 reflecting the increase in total expenses compared to the decrease in total net income.
 
Customer deposits amounted to €14.3 billion at 31 March 2021 from €14. 2 bl in the end of 2020.
 
Gross loans at 31 March 2021 amounted to €6.79 bl and remained broadly unchanged compared to €6.8 bl at 31 December 2020, with the net loans to deposit ratio amounting to 42.5%a in Q1 201 compared with 43% in Q4 2020.