Hellenic Bank reported net profits of €189 million for the first half of the year, marking an 18% increase year-on-year. This growth is largely attributed to a nearly 30% rise in interest income, driven by the European Central Bank's rate hikes.

According to the Bank’s results for the six months ending June 30, Hellenic Bank saw significant capital growth, with its Common Equity Tier 1 (CET1) ratio adjusted to 29% and its capital adequacy ratio at 32%. The non-performing loans (NPL) ratio stood at 2.4% (excluding loans covered by the Asset Protection Scheme), while liquidity reached €5.3 billion, with a Liquidity Coverage Ratio (LCR) of 517%.

On September 18, the Bank will enter a new era as its Annual General Meeting will appoint a new Board of Directors, proposed by its majority shareholder, Greece’s Eurobank, which now holds 55.9% of the Bank’s equity. Michalis Louis is expected to take over as Chief Executive Officer, having been nominated as an executive director.

In a statement regarding the financial results, the Bank’s interim CEO, Antonis Rouvas, emphasized, "Eurobank’s decision, as one of the largest financial institutions in Greece, to invest in Hellenic Bank is a vote of confidence in our business model, our franchise, and by extension, the country’s economy."

The Bank’s net interest income for the first half of 2024 amounted to €304.4 million, up 29% compared to €235.4 million in the first half of 2023. This increase is mainly due to higher interest income from deposits with Central Banks (€5.3 billion) and securities, following the continued rate hikes by the ECB throughout 2023, as well as an increase in base lending rates.

The net interest margin (annualized) for the first half of 2024 was 3.28%, compared to 2.41% for the first half of 2023, positively impacted by the rise in net interest income.

However, total non-interest income for the first half of 2024 decreased by 1%, reaching €57.4 million compared to €58 million in the same period in 2023. This decline was primarily due to lower net fees and commission income, which stood at €34.4 million.

The return on tangible equity (ROTE) was 24%, with the net book value per share rising to €3.99 at the end of June 2024, from €3.54 at the end of December 2023.

Total expenses for the first half of 2024 amounted to €145.2 million, up 15% compared to €126.1 million in the first half of 2023. This increase was mainly due to higher administrative and other expenses, as well as personnel costs. On a quarterly basis, total expenses increased by 4%.

Personnel expenses (for 2,256 employees) for the first half of 2024 were €65.4 million, compared to €60.7 million in the first half of 2023, representing an 8% increase and accounting for 45% of the Group’s total expenses (H1 2023: 48%) due to salary increases and the automatic wage indexation (ATA).

Administrative and other expenses for the first half of 2024 amounted to €69.6 million, up 29% compared to €54.0 million for the first half of 2023.

The cost-to-income ratio for the first half of 2024 was 40.1%, compared to 43.0% for the first half of 2023.

Customer deposits amounted to €15.0 billion as of June 30, 2024 (March 31, 2024: €14.9 billion; December 31, 2023: €15.3 billion). Deposits remained stable from the first quarter of 2024 but decreased by 2% from December 31, 2023. The Bank’s market share of deposits as of June 30, 2024, was 28.2%, compared to 28.7% on March 31, 2024, and 29.4% on December 31, 2023.

The net loans-to-deposits ratio was 39.8% on June 30, 2024, compared to 40.3% on March 31, 2024, and 39.4% on December 31, 2023.

Additionally, by the end of June, the Bank had fully repaid its financing from Central Banks, having settled its borrowing under the ECB’s targeted longer-term refinancing operations (TLTRO III) amounting to €2.4 billion.

The Group’s gross loans stood at €6.0 billion as of June 30, 2024, compared to €6.16 billion on March 31, 2024, and €6.17 billion at the end of December 2023, as loan repayments offset new lending.

The Bank’s market share of loans was 25.1% on June 30, 2024, down from 25.8% at the end of December 2023.

New lending for the first half of 2024 amounted to €472 million, representing a 27% decrease year-on-year, compared to €647 million in new loans during the first half of 2023.

Non-performing loans totaled €411 million as of June 30, 2024, down from €450 million on March 31, 2024, and €464 million on December 31, 2023, reflecting an 11% reduction from the end of 2023 and a 9% decrease from the second quarter of 2024. Excluding NPLs covered by the Asset Protection Scheme, NPLs amounted to €100 million.

The Group's NPL ratio as of June 30, 2024, was 6.7% (March 31, 2024: 7.3%; December 31, 2023: 7.5%). The NPL ratio excluding loans covered by the Asset Protection Scheme stood at 2.4% (December 31, 2023: 2.6%).

According to the results, the Group’s adjusted supervisory capital amounted to nearly €1.9 billion at the end of June 2024, up from €1.7 billion at the end of December 2023. Due to the non-payment of dividends, the Bank’s profitability is considered retained earnings, contributing to organic capital generation.