Attica Bank SA: – H1 2022 Group financial results


GROUP FINANCIAL RESULTS H1 2022

  • Operating loss of €20.13 million mainly due to the reduction in interest income and the resulting reduction in the results of the Bank’s financial operations and investment portfolio.
  • Interest income decreased by 32.9% compared to the comparative period, mainly due to a weaker interest base following the completion of the Omega securitization transaction in 2021.
  • Increase in fee and commission revenue by 21% year-over-year; Substantial continuous improvement over the past five quarters.
  • Rationalization of the cost base thanks to a further reduction in personnel expenses of 9.8% offset by the increase in recurring operating expenses of 3.4% on an annual basis.
  • Deposits at €2.73bn vs loans after provisions at €1.36bn
  • New disbursements in the first half of 2022 for an amount of 185 million euros.
  • Regulatory NPE ratio at 67.6%
  • Group capital ratios CET1 at 6.4% and CAD at 9.94%; Capital restoration procedures underway jointly with the support of the main shareholders of the Bank (TMEDE, Linoa LTD-Ellington Solutions and HFSF).

Management statement

In an environment of significant macroeconomic challenges, where the global and European economy is of concern, due to geopolitical risks and distress over the sufficiency of energy reserves, the outlook for the Greek economy remains strongly improved due to the impressive recovery tourism and because of the significant new investments that have been launched.

During the first half of the year, which had the effects of the health and economic crisis that the COVID-19 pandemic continued to cause, economic activity in Greece managed to absorb all the extreme challenges and exceed all expectations set for early 2022.

In the current context, characterized by complex and unprecedented challenges, the Bank benefits from the support of its main shareholders TMDE, Linoa LTD – Ellington Solutions and HFSF. In particular, based on the capital plan approved on 30.9.2022, as well as the business plan approved on the aforementioned date, Attica Bank is accelerating its operational and commercial transformation actions. In this context, the aforementioned main shareholders of the Bank have agreed to reinforce the prudential capital of the Bank, for a total amount of 490 million euros, of which 459 million euros will be covered by the aforementioned shareholders. Specifically, an amount of €300 million will be used to establish additional provisions for the impairment of the Bank’s total NPE securitisations, while the remaining amount of the total will be allocated to the management of the NPEs and the restructuring of the Bank. , in order to become operationally profitable by the end of 2024.

During the first half of the year, there is a significant improvement in commission income compared to the comparative period of 21%, with the greatest improvement achieved thanks to the increase in commission income on loans of 32% and 30 % thanks to the increase in commission income. e-services for a continuous 2nd quarter.

Operating expenses presented an increase on an annual basis reflecting the increase in general and administrative expenses and the increase in amortization due to the implementation of a new business plan and the Bank’s strategic investments mainly in the IT sector. The prudent management of recurring expenses as well as the reduction of staff costs compensated for the reduction in the Bank’s workforce of 106 employees on an annual basis.

In addition, new disbursements in the first half amounted to approximately 185 million euros as well as the improvement in the quality ratios of the loan portfolio. In addition, there is no evidence of an increase in NPEs from customers who joined government support programs, nor from other customers. The pace of NPE formation remains unchanged during the second quarter of 2022. Attica Bank’s liquidity remains high, maintaining the level of its customers’ deposits at 2.73 billion euros.

2022 will be the year in which the foundations will be laid for Attica Bank’s return to profitability thanks to the capital increase of 490 million euros and the implementation of a new business plan for the period 2022-2025 . In this context, the restoration of the balance sheet will also be carried out and capital funds will be released, which will be channeled with the optimization of all the main operating lines, with the aim of further strengthening the profitability of the Bank so that for Attica Bank is prepared to face any unexpected macroeconomic challenges in the foreseeable future.

To date, the process relating to the 2022-2025 business plan has been completed, which includes all appropriate actions to strengthen regulatory capital and is supported by the written agreement of shareholders for a capital increase of 490 million euros. , by 2022. plan, which includes significant transformation actions, has been approved by the Bank’s internal bodies and will be submitted without delay to the competent supervisory authorities. Management’s objective, based on the Bank’s new business plan for the period 2022-2025, is to emphasize growth and extroversion by focusing on financing, strengthening and providing of global banking solutions in the real economy, so that the Bank returns to profitability by the end of 2024.

Attica Bank is committed to evolving its corporate culture towards one that is even more human-centric and diverse and to upgrading the skills of all its employees through continuous investment in training, infrastructure and tools as well as the implementation of practices that support people’s well-being and facilitate work-life balance.

Growing progress of

Loan disbursements

Strong liquidity and

financing capacity

Capital plan

Shares for capital

reinforcement

Balance Sheet Highlights

  • Attica Bank continued its growing progress in granting new loans in line with its strategic plan.
  • Gross loans amounted to €1.68 billion and excluding Astir 1 & 2 gross loans amounted to €1 billion. New disbursements amounted to €185 million, of which €171.1 million related to business loans and €13.8 million to individuals. Attica Bank’s strategy focuses on financing investments mainly in the energy, infrastructure and tourism sectors.
  • The Bank maintained its strong liquidity profile with deposit balances amounting to €2.73 billion at 30.06.2022. Current and savings accounts amounted to €1,072 million and term deposits to €1,654 million. The minimum prudential liquidity ratios remain well above the threshold during the first half of the year. In particular, the LCR stands at 157% (June figures) and the gross loan/deposit ratio at 61.9%.
  • At the same time, the average cost of deposits decreased further by 13 basis points compared to the 2021 financial year, while a further decline was observed in the average cost of time deposits by 14 basis points. The significant improvement in liquidity has led the Group to focus more on cost management throughout 2022, in an effort to find a balance between attracting deposits and reducing interest charges.
  • Based on approved business plan 2022-2025, the main shareholders of the Bank have agreed to strengthen the regulatory capital of the Bank, for a total amount of 490 million euros, of which 459 million euros will be covered by the aforementioned shareholders in order to gradually regain organic profitability by the end of 2024. In addition, on 30.9.2022, the Bank’s Management received a letter in which reference is made to the basic principles of the first agreement of the main shareholders, which provide on the one hand for the non – inclusion of Omega, Astir
    securitizations 1 and 2 in the State guarantee support scheme for the Bank’s securitizations “HAPS 2” on the basis of the establishment of additional impairment provisions by the Bank for the NPE securitizations of an estimated amount of 300 million euros and to increase the Bank’s share capital by an amount of 490 million euros by 2022, of which approximately 459 million euros will be covered by the Main

Shareholders and vis-à-vis the HFSF in accordance with the provisions of article

  • 8.7 of L.3864/2010 in force. Based on the foregoing, the Major Shareholders will submit and draft the final contractual legal documents which will reflect the entire agreement. Finally, it is stated in the letter that, in the opinion of the major shareholders, the agreement in principle will guarantee the long-term viability of the Bank as it effectively deals with all its non-performing exposures and its development trajectory for the future. . .

  • Attica Bank has also planned additional actions aimed at further strengthening its equity through the active use of the Bank’s investment properties.
  • In addition, with regard to the restoration of the Bank’s balance sheet and the radical reduction of NPEs, based on the approved business plan, in the foreseeable future, the Bank’s Management will engage an international consulting firm to assess actions and alternative scenarios concerning the optimal management of the securitized portfolios, taking into account the regulatory framework, with the aim of further gradually reducing the credit risk linked to the aforementioned portfolios in the Bank’s balance sheet for the period 2022-2025.

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Disclaimer

Bank Attica SA published this content on September 30, 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unmodified, on September 30, 2022 21:13:07 UTC.

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