Hellenic Bank announced a modest net profit of €1.1 million for the six months of 2016 ending in 30 June 2016, building on recurring operational profit and reduced non-performing exposures (NPEs) that continued for a third consecutive quarter, Cyprus News Agency reports.
Net profit for the second quarter ending on 30 June amounted to €0.41 million compared with a profit of €0.6 million in Q1, the bank announced.
Non-performing exposures on June 30 dropped by two per cent quarter on quarter whereas the annual decrease (compared with the first half of 2015) amounted to four per cent.
“The NPE ratio amounts to 57.7 per cent, whereas the coverage ratio stands at 50.2 per cent close to the European average,” the bank said in a statement.
Bert Pijls, the bank CEO said “it is encouraging to see that the bank is making progress against its strategic priorities, which are to reduce non-performing exposures (NPE) on the one hand and growth on the other.
“Our NPE ratio dropped for the third consecutive quarter. As I have repeatedly stated, Hellenic Bank will continue to explore all available options in an effort to decisively tackle the NPE problem.”
He added the banks are below previous year, loan growth is on track and market share has increased, and the net interest margin has improved.
He added, however, “that being said, the effects of the crisis are still being felt and we have had to build some additional provisions during the first six months of the year, which resulted in a profit for the group of €1 million during the first six months of 2016.”
The banks operating profit before impairment losses amounted to €58.7 million compared with €41.97 in the first half of 2015.
The bank said new loans amounted to €152 million in the first half of 2016, whereas completed restructurings reached €334 million.
Provisions to cover credit risk increased to €48.75 million in the first half of 2016 compared with €47.01m in the corresponding period of 2015.
The group posted a Common Equity Tier 1 (CET 1) of 13.92 per cent, compared to the minimum CET 1 ratio set by the ECB for Hellenic Bank of 11.75 per cent. At the end of 2Q2016, the group’s Capital Adequacy Ratio was 17.15 per cent and the Tier 1 ratio was 16.9 per cent .
The net loan to deposits ratio stood at 50.5 per cent as at 30 June 2016. On 30 June 2016, total deposits amounted to €6.1 billion while total gross loans reached €4.3 billion.
The bank said the management’s top priorities for the remainder of 2016 is the handling of the still-high level of NPEs and the growth of the loan portfolio.
“Hellenic Bank will intensify restructuring efforts with viable customers and those demonstrating improved customer behavior,” the bank said, noting however, “for non-cooperative customers Hellenic Bank will demonstrate zero tolerance and will make full use of available tools through the recent amendments on the legal and judicial framework.”
The bank reiterated that it will continue supporting the economic recovery of Cyprus and contributing towards sustainable economic growth by providing new lending to the local economy, noting that the bank is opportunities to deploy its liquidity both abroad and in new sectors of the economy.