The worsening of profitability was mainly on an increase in provisions to €85.3m in January to September against €64.1m in provisions in the respective period of 2016, the lender said on Thursday. Net interest income dropped to €99.2m from €110.7m respectively.

The bank, which in July launched APS Debt Servicing, a joint venture with the Prague-based APS Holdings, to manage its non-performing loan stock and real estate assets, said that the ratio of its delinquent loans dropped for the eighth consecutive quarter to €2.3bn in September or 55.7% of total loans from €2.5bn or 58.2% in December last year. The coverage ratio of provisions was 61.4%.

The lender said that its core equity tier 1 (CET1) ratio stood at 14.45% at the end of the third quarter against a regulatory requirement of minimum 9.25%. The capital adequacy ratio stood at 18.12 against a minimum 12.75% set by the regulator.

“We made further progress in materialising our strategic priorities in the third quarter of 2017,” the bank’s top executive Ioannis Matsis said. “The capital basis of the group remains strong”.

Matsis said that the impact of the implementation of the international financial reporting standard 9 in January next year will have an impact of more than €25m and less than €50m on the bank’s capital compared to June 2017.

A voluntary retirement scheme announced by the bank recently will help reduce costs and improve the bank’s cost-to-income ratio, of 63.9% in September compared to 57.9% a year before, Matsis said. The lender is introducing a new organisational structure in an attempt to improve customer service and reduce costs.

In the first nine months of 2017, the bank extended €334m in fresh lending, Matsis said.

Source: Cyprus Mail