articles | 30 August 2016

BOC posts €56m in H1 2016 after-tax profits

Bank of Cyprus, the island’s largest bank, said that it generated an after-tax profit of €56m in the first half of 2016, as its profit in the second quarter shrank to €6m, in line with a profit warning issued on July 28.

The bank said that its net interest income dropped in the first six months of the year to €360m from €439m in the respective period of 2015, which led to a 10% drop in overall income to €482m, the bank said. Total expenses rose 4% to €202m.

The bank said that its outstanding emergency liquidity assistance from the central bank dropped to €1.5bn mainly on an increase in deposits which rose by €619m in the first six months of the year. The emergency funds from the European Central Bank fell by €9.9bn after peaking at €11.4bn in April 2013 and by €2.3bn since January.

The bank’s non-performing loans dropped to €12.5bn or 59.3% of its portfolio from €13.3bn and 61% a year before, it said. Loans with more than 90 days in arrears fell in the first six months of the year by €2bn, or by €1bn every quarter since December.

The bank posted in the second quarter a total of €96m in provisions for loan impairments compared to €62m the quarter before, Bank of Cyprus said.

Sources with knowledge of the situation said that the bank’s Real Estate Management Unit sold a total of €94m in properties acquired as part of restructuring agreements and is in negotiations to sell properties worth €45m.

The lender’s chief executive officer John Hourican said that the lender completed a total of €2.8bn in restructurings in the first six months of 2016 which helped the bank reduce its problematic portfolio by €2bn or 18%. He added that the group’s core equity tier 1 capital ratio stood at 14.4% at 30 June 2016.

“We expect to drive further reductions during the coming quarters,” Hourican was quoted as saying. “The bank was responsible for two thirds of the reduction of non-performing loans in Cyprus since January 2015”.

Hourican added that Bank of Cyprus extended €1bn in new loans since January 2015.

Source: Cyprus Mail

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