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Tuesday, April 16, 2024

Historical profit record for Hellenic Bank

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Ιστορικo ρεκoρ κερδoν για την &Epsilon ;λληνικor Τραπεζα

Hellenic Bank surpassed itself in 2023 recording the highest profits in its history -€365.4 million- compared to €22 million in 2022 with the positive boost given by the ECB's repeated interest rate hikes to hit inflation.

The net interest income jumped by 78% year-on-yearto €563.3 million, due to the increase in prime rates and the utilization of high liquidity on the bank's balance sheet in deposits with Central Banks. Also, interest income for the year 2023 reflects the full impact of the acquisition of part of the NPL portfolio from RCB Bank during 2022.

Hellenic Bank has comfortable liquidity, with a Liquidity Coverage Ratio (LCR) of 542% and €5.8 billion placed with the ECB, which allows it to benefit from interest rate increases.

O< strong> new borrowing in 2023 was €1,204 million, up 2% year-on-year, in line with the target for the year and based on revised medium-term targets the amount is expected to be higher. It is also important that 99.7% of new lending after 2018 is serviceable.

The non-performing loan (NPL) ratio decreased to 2.5%, with the NPL provision coverage ratio at 41% and the net NPL coverage ratio with collateral at 139%. In the medium-term revised targets, the NPL ratio is estimated at around 3%.

Despite the fact that the bank has a low NPL ratio, Hellini's interim chief executive, Antonis Rouvas,during yesterday's presentation of financial results, he renewed his invitation to non-performing borrowers to come forward to find solutions, although the bank is “comfortable” with the ratio at 2.5%. Beyond the message to vulnerable households and businesses, referring to those who are strategic defaulters and continue not to pay their obligations, Mr. Rouvas warned that “we have no other options and we will recover what we have”.

< p>On the “ice” the dividend

The acquisition process of Hellenic Bank by Eurobank overturns plans for dividend distribution, despite the high profits announced for 2023 by the Cypriot banking group. “Currently this restriction exists for a number of reasons. We are in this transitional stage, in the middle of a takeover, in which the supervisors have judged that they prefer the funds to stay within the organization rather than be given as a dividend,” said Mr. Rouvas during the announcement of the 2023 results.

The chairman of the board Petros Christodoulou said that the benefits of a shareholder do not come only from the dividend, but also from the participation in the prosperity of the organization, since last year the value of the share was at €1.10 and now it is around € 2.30. “That's the return the shareholder wants,” he said, noting that “if a shareholder didn't want to participate in the economic prosperity he could buy a bond, get a 7% to 8% return and go home. Both Mr. Rouvas and Mr. Christodoulou emphasized that Eurobank's investment is a vote of confidence, both in the bank's business model and in the Cypriot economy.

In response to question on the issue of the collective agreement, Mr. Rouvas stated that the mediation of the Ministry of Labor with the Labor Union is ongoing. “We can't say more, but we are in a good mood to discuss something that makes sense, both for the staff and the bank.”

Source: www.philenews.com

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