articles | 02 April 2015

Bank of Cyprus revises 2014 loss upwards to €261m

Bank of Cyprus’s audited results showed the lender made a €261m after tax loss in 2014 and revised upward its unaudited loss by €5m posted on February 25, the lender said.

The loss last year resulted from a €303m loss caused by discontinued operations related mainly to operations in Russia, Bank of Cyprus said in an emailed statement today. In 2013, in which the lender was forced to sell its operations in Greece and use its customers’ deposits to recapitalise itself as part of the bailout, it posted a €2.1bn loss, which was mainly caused by losses on disposals of its Greek units.

Total income rose to €1.2bn last year compared from €1bn the year before mainly on a net interest income increase to €967m from €880m respectively, the bank said. Total expenses fell to €426m in 2014 from €435m in 2013, mainly on reduced staff costs which fell to €234m from €265m respectively. The decrease in staff costs was partly offset by increased operating costs which rose from €170m in 2013 to €192m last year.

The bank saw its loan portfolio drop last year to €23.8bn from €26.7bn in 2013, it said adding that its saw its non-performing loans drop by €85m in December 31, 2014, to below €15bn compared to September 30, Bank of Cyprus said. Still, the non-performing loan ratio as defined by the European Banking Authority rose to 63% in the last quarter of 2014 by two percentage points compared to the third quarter.

“Loans in arrears for more than 90 days totalled €12.7bn at 31 December 2014 and accounted for 53% of gross loans,” Bank of Cyprus said adding that 90 days or more past due loans “decreased by 3% or €325m during the fourth quarter of 2014, compared to an increase of 3% or €386m during the third quarter of 2014”.

“The decrease in the 90 days or more past due primarily relates to the Cypriot operations where the bank’s efforts to restructure and collect delinquent loans are gathering pace, as well as to the disposal of the majority of the Laiki UK loan portfolio,” the lender said. “The provisioning coverage ratio of 90 days or more past due totalled 41% at 31 December 2014, while taking into account tangible collateral at fair value, 90 days or more past due are fully covered”.

The lender reduced its provisions for impairment of customer loans to €666m last year from €941m in 2013.

“During 2014, the group disposed its Ukrainian operations, its investment in the Romanian Banca Transilvania, its loans in Serbia, assets in Romania and the majority of the United Kingdom loan portfolio acquired from Laiki Bank,” Bank of Cyprus said. “Currently, the Bank is running a process to dispose of its operations in Russia. Furthermore, the bank is actively running down its loan and real estate portfolio in Romania”.

The bank also continues its efforts to dispose its real estate assets in both Greece and Cyprus, it said.

Source: Cyprus Mail

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