Coop Cen­tral Bank sees prof­its at € 41mln from € 1.7bln loss

Financial Mirror (Cyprus) - - FRONT PAGE -

The Co­op­er­a­tive Cen­tral Bank an­nounced net prof­its of EUR41.2 mln for 2014, a ma­jor turn­around from the EUR1.7 bln losses at the end of 2013 that had prompted the gov­ern­ment to res­cue the bank with EUR1.5 bln and im­pose a rad­i­cal re­form pro­gramme.

The bank said its prof­its were achieved de­spite an in­crease in ac­cu­mu­lated pro­vi­sions of EUR2.97 bln and sus­tain a sat­is­fac­tory level of liq­uid­ity, al­ready seen af­ter the ECB’s stress tests last Oc­to­ber when it re­ported a cap­i­tal sur­plus of EUR331 mln.

“Last year, we saw a sat­is­fac­tory rate of con­fi­dence re­turn­ing to our cus­tomers and mem­bers who have em­braced this change with a sig­nif­i­cant inflow of new de­posits,” said CCB Chair­man Ni­cholas Had­jiyian­nis.

In­come from in­ter­est dropped from EUR411.7 mln in 2013 to EUR378.4 mln last year, while net rev­enues rose from EUR377.8 mln to EUR392.3 mln. Thus, op­er­at­ing prof­its were 10.2% higher at EUR192 mln from EUR174.3 mln in 2013, while the cost to in­come ra­tio was low­ered to 37.4% from 40.6% the year be­fore af­ter cost-cut­ting, re­duc­tion of the fran­chise net­work and merger of branches.

The bank’s bal­ance sheet stood at EUR13.94 bln, in­clud­ing own funds of EUR1.25 bln, boost­ing the cap­i­tal ad­e­quacy ra­tio to 13.5%, safely be­yond the ECB’s min­i­mum re­quire­ment of 8%.

The bank’s loan­book was re­duced from EUR10.8 bln to EUR10.1 bln as part of a delever­ag­ing process, with non­per­form­ing loans out­stand­ing for more than 90 days at EUR6.7 bln or 51.1%, while the to­tal of all NPLs was at 55.8%.

De­posits were re­duced by just over a bil­lion eu­ros to EUR12.4 bln from EUR13.5 bln at the end of 2013, but the bank said that af­ter the ECB stress test re­sults, new de­posits reached about EUR500mln. The CCB said that the ra­tio of loans to de­posits was at “a very healthy 81.6%” which al­lows it to pro­ceed with fur­ther low-cost lend­ing.

Af­ter the gov­ern­ment res­cue, the bank was na­tion­alised and merged all 93 Co­op­er­a­tive Credit So­ci­eties into 18 SPIs with 292 branches and re­duced the work­force to 2,703.

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