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