Already the Bank of Cyprus, the Central Cooperative Bank and Hellenic Bank have presented significant profits during the first months of 2016. The announcement of the Cypriot banks’ fiscal results will be in the wake of the European stress tests that took place one week ago. Cypriot banks did not partake in the stress test, but European banking in general is alert since there are still significant risks at bay.
Red loans, deficits in capital and low profits are at danger of creating a new shock in the credit sector of the Eurozone. Cypriot banks are facing a common problem with Eurozone credit institutions, that of non-performing loans, which are valued at €25 billion.
Cypriot banks are doing their best trying to collect the delayed debts hoping that the red loans will decrease as the economy recovers.
In contrast to the recent past, Cypriot banks are well-stocked in capital, above the supervisory limit of 11.75%. The Core Tier 1 capital ratio according to the results of the first half of 2016 is 14.3% for the Bank of Cyprus, 15.7% for the Cooperative Central Bank, and 13.8% for Hellenic Bank.
A few weeks ago the Bank of Cyprus announced that it will present net profit of €56 million for the first half of 2016, while for the second quarter net profit, after tax, was limited to €6 million.
In general, the results announced for the first quarter of 2016 show that the banking sector is starting to stabilize.