Hellenic Bank Records Robust 9-Month Profits of €240.7 Million, Bolstered by Strategic Measures

Hellenic Bank has announced impressive financial results for the first nine months of 2023, revealing an after-tax profit of €240.7 million. The bank attributes this robust performance to increased interest income derived from placements with Central Banks, other financial institutions, and debt securities. Antonis Rouvas, the group’s interim Chief Executive Officer, highlighted that the main drivers of this positive outcome are higher interest income, particularly from Central Bank placements and debt securities due to elevated ECB interest rates, along with lower total expenses reflecting the 2022 VEES.

Rouvas emphasized that the bank's performance underscores the strength of its business model. Notably, Hellenic Bank maintains a solid capital position, boasting a CET1 ratio of 21.7% and a Total capital ratio of 27.4%, exceeding regulatory thresholds. The bank strategically manages its balance sheet, achieving an NPE ratio of 2.7%, excluding NPEs covered by the APS agreement, effectively minimizing risk.

Despite ongoing economic and operational challenges, Hellenic Bank remains committed to its transformation efforts, addressing structural issues with a focus on digitalization and efficiency enhancements. The bank's efforts have been recognized by major credit rating agencies, with Moody's Investor Service upgrading its long-term deposit rating to an investment grade of Baa3 in October 2023, and Fitch Ratings upgrading the Bank’s issuer default rating to BB+ in November 2023.

Rouvas, however, remains cautious, acknowledging the challenging economic and operating environment marked by rising interest rates, high inflation, and heightened geopolitical risk. The bank's commitment to supporting vulnerable customers and collaborating with authorities for proposed measures to address the long-standing issue of NPEs is reiterated. In terms of labor issues, Rouvas stressed a constructive stance and commitment to finding solutions through dialogue.

The financial report also highlights key metrics such as an 11% year-on-year increase in new lending, totaling €900 million for the period, aligning with the bank's annual targets. Net interest income saw a substantial 84% year-on-year rise, reaching €379.7 million, attributed to escalating interest rates and a well-managed liquid balance sheet. The bank's cost-to-income ratio stands at 36%, adjusted for contributions and levies, influenced by higher net interest income and reduced staff costs following the Voluntary Early Exit Scheme implemented in December 2022.

Moreover, the bank's results showcase ample liquidity, a provision coverage ratio for NPEs at 45%, and a solid provision coverage ratio for NPEs (excluding those covered by the APS agreement). Hellenic Bank is well on track to comply with the final binding MREL requirement by December 2025, with a liquidity coverage ratio of 506% and a comfortable MREL to TREA ratio of 29.8%.

Hellenic Bank's financial results reflect a strategic and resilient approach in navigating the complexities of the economic landscape, positioning itself as a key player in the financial sector.

By fLEXI tEAM