Astrobank posted profits after tax amounting to €12.2 million in 2022, announcing that its two main targets for this year is to reduce its non-performing exposures to single digits and generate a double-digit return on equity (ROE).

This the second profitable year for the Cypriot bank, after the €3.3 million profit in 2021. Aristides Vourakis, Managing Director of the bank said in a press conference that “the bank’s efforts in the last two years to a more focused business model and rationalised operation with a swift completion of pending issues of the past has yielded strong results in 2022.”

He said that the bank in the next two weeks will announce measures aiming to alleviate performing housing borrowers from the consecutive rate hikes, along the lines of the Greek banking system models following the calls by the government.

Vourakis said the bank’s two main targets for this year is to reduce its NPL rate to single-digits and generate a double-digit ROE from 6.2% in 2022.

The bank said that the NPE ratio for 2022 dropped to 19.5% of total loans from 25.6% the previous year, while the coverage ratio remained broadly steady to 45%, with the bank noting that it opted to work out problem loans internally rather than resorting to NPE sales.

The bank’s own capital amounted to €203.7 million with the total capital adequacy ratio rising to 17.96% in 2022 from 16.58% in 2021 and CET1 ratio amounting to 16.54%, the bank said.

In 2022 the bank’s new lending amounted to €165 million compared with €240 the year before, affected by the termination of the government plan for interest rate subsidies for housing loans and rising interest rates. Vourakis said that new lending will decelerate due to the rising interest rates.

Total income dropped by 2% to €72.7 million from €74.2 in 2021, with net interest income rising to €51.2 million in 2022 from €48.1 million the year before.

The banks total expenditure declined by 11.8% year on year to €49.6 million. The cost to income ratio amounted to 68% in 2022 from 77.85 in 2021.

Astrobank’s total assets at the end of 2022 declined to €2.73 billion from €3.18 billion in 2021, mainly reflecting the repayment of €200 million of the ECB Targeted Long-term lending operations.

Net loans amounted to €1.09 billion from €1.14 billion in 2021 reflecting the repayments and recoveries from the NPE portfolio, the bank said.

Total customer deposits dropped to €2.11 billion in 2022 from €2.20 billion the year before, reflecting depositor mobility in the current rising interest environment, the bank said.