Hellenic Bank posts €189 million after-tax profit in first half of 2024
Hellenic Bank on Friday posted a profit after tax of €189 million for the first half of 2024, marking an 18 per cent increase compared to the same period during the previous year.
In addition, the bank’s solid capital position was highlighted by a pro forma CET1 ratio of 26.55 per cent and a pro forma Total Capital ratio of 32.19 per cent, both significantly above the minimum regulatory requirements.
“Hellenic Bank’s performance for the first half of 2024 was solid,” said interim CEO Antonis Rouvas, who noted that the bank’s profitability was primarily driven by higher interest income.
“This performance demonstrates the resilience and robustness of our business model, despite the continuing challenges and uncertainty rising from the geopolitical and economic environment,” he added.
According to the bank’s financial results, Hellenic Bank also made progress in reducing risk, with a non-performing exposure (NPE) ratio of 2.4 per cent, excluding NPEs covered by the APS agreement.
The results showed that the NPE provision coverage, also excluding those covered by the APS agreement, stood at 39 per cent.
Elsewhere, one of the significant developments for Hellenic Bank was the agreement with CNP Assurances on CNP Cyprus Insurance Holdings, which is set to create the largest insurance operator in Cyprus.
“In July 2024 we signed a Sales and Purchase Agreement with CNP Assurances to acquire its subsidiary CNP Cyprus Insurance Holdings Limited, operating in Cyprus and Greece,” the chief executive officer said.
“This will allow the bank to significantly strengthen its insurance operations and become a leading financial services group with a strong presence in the financial and insurance sectors in Cyprus,” he added.
He further stressed that “upon completion, Hellenic Bank is expected to have a leading position in the insurance market in Cyprus“.
The bank also reached a framework agreement for the renewal of the collective staff agreement.
Rouvas said that the bank “managed to overcome a long-lasting issue” with bank workers’ union Etyk, explaining that “this will allow us to focus on delivering our strategic plan, together with our bank’s transformation plan, prioritising customer-centricity and accelerating digital transformation“.
In terms of lending, Hellenic Bank provided €472 million in new loans during the first half of 2024.
The bank said that it continues to focus on the retail sector, maintaining a strong customer base with significant market shares in household deposits and loans, at 36 per cent and 33 per cent, respectively.
“New lending during the first half of 2024 reached €472 million, as we continue providing competitive, tailor-made credit products,” Rouvas stated.
“At the same time, we remain watchful of potential risks that could adversely affect the bank’s performance, due to the challenging economic and operational environment and elevated geopolitical risks,” he added. He also noted that “further reduction of the NPE ratio remains a priority“.
As has been previously reported, Eurobank has become the majority shareholder of Hellenic Bank, holding a 56 per cent stake, following the conclusion of the mandatory takeover bid.
“The decision of Eurobank, one of the largest financial organisations in Greece to invest in Hellenic Bank, constitutes a vote of confidence in our business model and franchise and as a result in our country’s economy,” Rouvas said.
“With the successful conclusion of the mandatory takeover bid procedure leading to a total direct participation of 55.9 per cent a new era starts for Hellenic Bank,” he added.
Other key highlights include a net interest income of €304 million for the first half of 2024, a 29 per cent year-on-year increase, driven by high interest rates and a liquid balance sheet.
In terms of the bank’s net interest income, liquidity and total capital ratio, Rouvas said “we are well positioned and fully committed to continue supporting our customers”.
The bank also noted that nearly all new lending exposures since 2018, specifically 99.7 per cent, are performing.
The bank’s cost-to-income ratio, adjusted for the Deposit Guarantee Scheme contribution, Special Levy, and Transformation costs, stood at 35 per cent.
Hellenic Bank’s results also showed that the bank has maintained ample liquidity, with a liquidity coverage ratio (LCR) of 517 per cent and €5.3 billion placed at the European Central Bank (ECB), benefiting from current interest rates.
Furthermore, as of June 30, 2024, the bank’s net loans to deposits ratio stood at 39.8 per cent.
The interim CEO also pointed out that the improvement in the bank’s fundamentals has been recognised by major credit rating agencies.
He noted that in July 2024, Fitch Ratings upgraded the bank’s Issuer Default Ratings to an investment grade rating of BBB-, while in June 2024 Moody’s Ratings initiated a review for a possible upgrade of the bank’s ratings.
Elsewhere, Rouvas reiterated the bank’s “strong commitment towards corporate responsibility, sustainability, and green growth”.
He said that this “is reflected in the revised ESG strategy, which became an integral part of the bank’s strategic plan, incorporating specific objectives at all levels of our operations”.
“Our goal is to further enhance our loan book through healthy and sustainable growth with a strong focus on ESG,” he said.
Finally, Rouvas also mentioned that the bank’s annual ESG Impact Report for 2023 was recently published, stressing that it incorporates the bank’s “pledge and efforts for a more sustainable economy”.