Hellenic Bank announced a net profit (after tax) of €24.2 million, compared to losses €11.7 million last year, with the Bank’s CEO Oliver Gatzke announcing that the Bank expects profits before tax in 2023 to reach €200 million, which translates into a ROTE before tax higher than 17%.
“This exceeds our expectations and confirms the good progress in implementing our transformation towards a client centric and technology driven bank. Adjusted for extraordinary cost of the Voluntary Early Exit Scheme (VEES) we have achieved profit of €95 million which reflects the strength of our business model in a positive interest rate environment following the latest rate increases by the European Central Bank,” Gatzke said.
At the same time, the Bank announced a record high for new lending, reaching €1.2 billion, up 30% YoY. Net interest income reached €300.8 million, up 17% YoY, while non-interest income for 2022 amounted to €113.4 million also demonstrating a 10% increase compared to 2021.
Furthermore, in 2022 the Bank acquired around €346 million worth of performing loans from RCB, which significantly improved the corporate lending franchise. At the same time, through the signing ‘Project Starlight’, the NPEs are reduced by around €0.7 billion and the pro-forma NPE ratio, excluding the NPEs covered by the Asset Protection Scheme, to 3.6%, with closing expected in early 2023.
“With a strong capital adequacy ratio of 21.4%, pro forma for the Starlight project, well above the regulatory requirements, and ample liquidity (Liquidity Coverage Ratio of 444%), we are committed and well positioned to continue supporting our retail and business customers in the future”, Gatzke noted, adding that €6.1 billion are placed at the ECB, positioning the Bank to benefit from rising interest rates.
The net loan-to-deposit ratio was at 39% at 31 December 2022 compared to 40% at 31 December 2021. Adjusted for portfolios held for sale, the net loan-to-deposit ratio is down to 38% at 31 December 2022 and 31 December 2021.
The expense-to-income ratio for the year 2022 decreased to 68%, compared to 73% for the year 2021, reflecting the increase in total net income despite the increase in total expenses.
Gatzke also said that decisive steps were taken toward digitalization, as well as streamlining the network of branches, processes and cost management, and further enhancing the digital channels in order to transform our Bank into a customer centric organization.
“The impact of our transformation plan, as well as higher global interest rates, give us confidence in achieving our medium-term ROTE (Return on Tangible Equity) target of at least 10% already in 2023”, he pointed out.
In 2022 approximately 600 employees left the Bank, through the exit of temporary staff and permanent staff through a successful VEES. Gatzke expressed his appreciation to the staff: “those who left the Bank for their valuable services and commitment for all their years of service and those who remain at the Bank and for their resilience, hard work and successful handling the high volume of work after the exit scheme.”
Regarding the Bank’s ESG goals, Gatzke noted the enhancement of the profile of the Bank’s loan book through healthy growth with a strong focus on Environmental, Social and Governance issues (ESG). For the implementation of the ESG Strategy, the Bank also set clear and forward-looking targets with focus on becoming an energy efficient Bank and a climate neutral Bank by 2050, on diversity & inclusion and employee wellbeing. The Bank also aims to enhance Risk Management frameworks and disclosures, to support customers and investors in their green transition and have a positive impact on community.
SOURCE: CYPRUS NEWS AGENCY