Bank of Cyprus Q1 profits at € 29 mln
Bank of Cyprus announced EUR 29 mln in first quarter after-tax profits, a turnaround compared to a loss of EUR 337 mln in the last quarter 2014.
The Common Equity Tier 1 capital (CET 1) ratio (transitional basis) dropped marginally to 13.9%, compared to 14.0% at end-2014, while the fully loaded CET 1 ratio remained unchanged at 13.4%.
The bank said in an announcement that gross loans and customer deposits totalled EUR 24.1 bln and 13.6 bln, respectively, with the loans-to-deposits ratio improving to 138%, compared to 141% at Q4 2014 and a high of 151% on 31 March 2014.
The emergency liquidity assistance (ELA) was reduced by EUR 500 mln to EUR 6.9 bln, while post-results, ELA was further reduced by EUR 500 mln to EUR 6.4 bln, nearing the half mark from the EUR 11.4 bln in April 2013.
Non-performing loans (in arrears for more than 90 days) totalled EUR 12.79 bln and accounted for 53% of gross loans.
The bank said it remains “appropriately capitalised”, with the CET1 ratio (transitional basis) at 13.9% at 31 March 2015 (compared to 14.0% at 31 December 2014). Adjusting for deferred tax assets, the CET1 ratio on a fully-loaded basis totalled 13.4% on March 31.
Net interest income (NII) for 1Q2015 totalled EUR 225 mln in line with the previous quarter.
Total expenses reached EUR 102 mln, down 11% from EUR 114 mln in 4Q2014, mainly due to increased non- recurring and other operating expenses. Hence, the cost to income ratio improved to 38% from 41% in 4Q2014.
Profit before provisions and impairments, restructuring costs and discontinued operations for 1Q2015 was EUR 170 mln, compared to EUR 167 mln for 4Q2014. Provisions for impairment of customer loans (continuing operations) for 1Q2015 amounted to EUR 148 mln, compared to the elevated provisions of EUR 248 mln for 4Q2014.
Profit after tax from continuing operations (excluding restructuring costs, discontinued operations and net loss on disposal of non-core assets) in the first quarter totalled EUR 57 mln, compared to a loss of EUR 107 mln for 4Q2014.
Group customer deposits were up nearly 450 mln to EUR 13.611 bln, compared to EUR 13.169 bln on 31 December 2014. Group gross loans totalled EUR 24.1 bln, compared to EUR 23.8 bln on 31 December 2014.
CEO John Patrick Hourican said that the bank reduced ELA by EUR 500 mn and continues to stabilise its deposit base while maintaining its capital position.
“The loan to deposits ratio improved to 138%, partly because of the continuation of positive customer flows. Furthermore, the improvement in the bank’s core results continued, with profit after tax from continuing operations totalling EUR 57 mln, compared to a loss of EUR 107 mln for 4Q2014,” he said.
He added that the bank’s significantly strengthened capital position and overall improvement in its financial position enhance its funding options and will facilitate access to the capital markets, especially following the recent successful debt raising by the Republic of Cyprus.
He said that depending on market conditions and investor appetite, the bank will assess the possibility of raising wholesale funding, with the proceeds of such funding used to reduce ELA.
Hourican also pointed out that the adoption of the foreclosure legislation and insolvency framework is a significant step in enabling the bank to tackle its delinquent loans and improve asset quality.