The first quarter loss was mainly on increased provisions which rose by €5.7m to €27.3m compared to the respective period of 2016, the bank said in a statement on its website on Wednesday. Net interest income dropped by €4m to €33.8m in the first quarter.

Hellenic reduced in the first quarter its non-performing exposures 2% compared to the quarter before and an annual 5% to below €2.5bn, the lender said adding that bad loans dropped for the sixth consecutive quarter. The non-performing loan ratio dropped to 57% at the end of March from 58% in December.

The 90 days-past-due loans fell an annual 12% to €1.9bn in the first quarter, the bank said. The ratio compared to the overall portfolio fell to 44% in March compared to 50% a year before.

“Most importantly, (the) non-performing exposures provision coverage ratio improved to 57% at 31st March 2017 up from 50% a year earlier,” the bank said. “The 90 days-past-due provision coverage ratio improved to 63%, up from 54% a year earlier”.

Hellenic said that it restructured €174m in non-performing loans in January to March and approved €89m in new lending in the same period.

The bank’s common equity tier 1 ratio stood at the end of the month at 13.7% and its total capital adequacy ratio stood at €17.2m which is “well above the minimum regulatory requirement,” it said.

The bank achieved further progress in the first quarter by reducing its bad loans and the loan restructurings, a strategic priority of the bank, Hellenic’s chief executive officer Ioannis Matsis commented.

“Nevertheless, we are fully aware that there is a lot more work to be done to achieve significant reduction in non-performing exposures, and cognizant of the challenges ahead, we continue to explore all available options to decisively address problematic loans, using a toolset of sustainable solutions such as debt to asset swaps, balance reductions, maturity extensions, grace periods and instalment reductions,” he was quoted as saying. “To this end, our agreement with APS Holding a.s., subject to completion and regulatory approvals, to create the first debt servicing and real estate asset management platform in Cyprus, will spearhead our efforts to effectively tackle the problematic assets in our balance sheet”.

Matsis, whose appointment was approved by the regulator in April, said the increase in provisions for loan impairments in the first quarter resulted from “the use of more refined inputs for certain files in the individual assessed portfolio” which also led to an increase in the provisions’ coverage ratio to 57% which further strengthened the bank’s balance sheet.

“Due to elevated provisions, the Group reported a loss after tax of €10 million for the quarter, which was significantly lower” compared to that of the quarter before, he said.

Source: Cyprus Mail