articles | 27 August 2014

Bank of Cyprus announces €81m six-month profit in 2014

Bank of Cyprus announces a six-month net profit of €81m for the first half of 2014, marking the second consecutive profitable quarter following seven loss-making quarters.

The lender said after-tax profits, excluding one-off items, reached €78m.

“The performance of the Cypriot operations, our core business, remains much stronger than the Group’s overall performance, supporting our efforts of shrinking to strength through the disposal of non-core operations and assets,” CEO John Hourican said.

Profit after tax attributable to the owners of the bank for Q2 of 2014 totalled €50 million compared with a €31 million profit in Q1 2014.

Profit before provisions for bad debts, restructuring costs and discontinued operations was €405 million, the bank said.

Profit before provisions for impairment of customer loans, restructuring costs and discontinued operations for Q2 2014 was €189 million, compared with €216 million in Q1. Provisions in the first half of the year reached €329 million – €183 million in Q2 and €146 million in Q1.

Customer outflows that followed last year’s bail-in significantly abated during the second half of 2013 and into 2014, the bank said. The deposits of the Cypriot operations fell by 2.0% during Q2 2014, compared with a reduction of 6.0% in Q1.

At the end of June, deposits in Cyprus accounted for 85% of group deposits, deposits in the U.K. for 9.0%, and deposits in Russia for 6.0%. The bank’s deposit market share in Cyprus was 25.5%, compared with 26.4% on March 31, 2014 and to 27.5% at the end of 2013.

The lender said it has raised its Core Tier 1 equity to 11.3%, from 10.5% at the end of 2013.

BoC has recently sold non-core assets of about €450 million — Ukrainian operations for €202.5 million, investment in Romanian Banca Transilvania for €82 million, and loans in Serbia for €165 million.

The bank’s results are not directly comparable to past earnings because of the bail-in of depositors in 2013. Deposits over €100,000 were converted into equity as part of a €10 billion bailout for Cyprus from international lenders.

Foreign investors, including US-based Wilbur Ross and the European Bank of Reconstruction and Development, have signed up to the bank’s capital increase, designed to bolster regulatory capital ahead of Europe-wide stress tests.

Source: Cyprus Mail

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