NICOSIA: Bank of Cyprus (BoC) announced yesterday a nine-month net loss of ¤1.94bn ($2.66bn), mostly on the back of provisions for winding up its Greek operations and bad loans.
The shortfall for the recession-hit Mediterranean island’s largest lender compared with ¤211m in after tax losses in the year-earlier period.
The bank said disposal of its Greek operations resulted in a loss of ¤1.45bn in the first three months of 2013.
Profit before provisions, impairments and restructuring costs reached ¤224m for the third quarter and ¤438m for the nine months.
In March, Cyprus clinched a ¤10bn rescue package from the European Commission, European Central Bank and International Monetary Fund to bail out its troubled economy and oversized banking system.
The deal included the closure of the island’s second-largest bank, Laiki, and a 47.5 percent “haircut” on deposits above ¤100,000 at the Bank of Cyprus.
The bank has since undergone a major restructuring, which included absorbing the good assets of the former Laiki Bank.
The number of its branches has been reduced to 133 from 203, and another six are scheduled to close in 2014.
The bank said its deposit base was “showing signs of stabilisation” in the past couple of months.
New CEO John Patrick Hourican said in a statement that “our priority remains to restore investor and customer confidence in the bank.”
“The large customer outflows experienced in the immediate months following the Eurogroup decisions have abated significantly, suggesting the growing confidence of customers towards the bank.”
He said the Core Tier 1 capital ratio, or ratio of core equity capital to total risk-weighted assets, now stands at 10.2 percent, compared with 10.5 percent in the second quarter. That exceeds the minimum nine percent set by the central bank.
BoC said that, under a new definition, loans in arrears of more than 90 days accounted for 48 percent of gross loans at the end of September, compared with 36 percent in June, and that provision for bad debts was ¤697m.
BoC said it suffered not only from disposing of its Greek operations, but also absorbing Laiki’s operations in Cyprus and Britain and discarding its retail business in Romania.
Deposits totalled ¤15.46bn on September 30, compared with ¤28.44bn at the end of 2012 — a 46 percent drop.
AFP
