BOCY an­nounces € 56 mln in 1H prof­its

Financial Mirror (Cyprus) - - FRONT PAGE -

Bank of Cyprus an­nounced EUR 56 mln in first half prof­its, say­ing in a state­ment that the “pos­i­tive mo­men­tum con­tin­ued in 2Q2016”.

The bank said that its prob­lem loans (90+ DPD) were re­duced by EUR 1 bln, de­posits were up by EUR 619 mln in the sec­ond quar­ter and the Emer­genecy Liq­uid­ity As­sis­tance (ELA) re­duced to EUR 1,5 bln.

This gives the bank a CET1 liq­uid­ity ra­tio of 14.4%. The profit af­ter tax for the sec­ond quar­ter was EUR 6 mln.

“The pos­i­tive mo­men­tum con­tin­ued in the sec­ond quar­ter of 2016,” said CEO John Houri­can.

“We re­duced prob­lem loans for a fifth con­sec­u­tive quar­ter. We com­pleted EUR 2.8 bln of re­struc­tur­ings in the first half of 2016 and re­duced prob­lem loans by EUR 2 bln or 18%. We ex­pect to drive fur­ther re­duc­tions dur­ing the com­ing quar­ters. The bank was re­spon­si­ble for two thirds of the re­duc­tion of NPEs in Cyprus since Jan­uary 2015.”

De­posits grew by EUR 619 mln in the sec­ond quar­ter, “a good in­di­ca­tion of in­creas­ing cus­tomer con­fi­dence in the bank. ELA cur­rently stands at EUR 1.5 bln and was re­duced by EUR 2.3 bln year to date. Our tar­get re­mains the full re­pay­ment of ELA as soon as pos­si­ble,” Houri­can said, sug­gest­ing he is on tar­get for its full set­tle­ment in or be­fore 2017.

“We recorded good un­der­ly­ing op­er­at­ing prof­itabil­ity at EUR 135 mln in the sec­ond quar­ter and we have di­rected this to sup­port faster de-risk­ing of our bal­ance sheet, through in­creased pro­vi­sions. Sec­ond half of 2016 prof­its are ex­pected to be sim­i­larly di­rected.,” he added.

“We recog­nise our role in en­sur­ing a sus­tain­able re­cov­ery. Since Jan­uary 2015 we have granted over EUR 1 bln of new loans and we are ac­tively seek­ing to pro­vide more credit to vi­able house­holds and con­sumers,” Houri­can con­cluded.

Mean­while, the bank’s board ha re­viewed the de­ci­sion for a pre­mium list­ing on the Lon­don Stock Ex­change (LSE), while main­tain­ing a list­ing on the Cyprus Stock Ex­change.

In or­der to achieve such a list­ing and to be el­i­gi­ble for in­clu­sion in the FTSE UK in­dex, the bank said ear­lier that it is con­sid­er­ing the in­cor­po­ra­tion of a new hold­ing com­pany.

“Al­though no de­ci­sion has been taken, fol­low­ing re­cent press spec­u­la­tion, the bank con­firms that af­ter ex­am­in­ing a num­ber of po­ten­tial Eu­ro­zone ju­ris­dic­tions, the Repub­lic of Ire­land is cur­rently con­sid­ered to be the most suit­able ju­ris­dic­tion as it is a FTSE el­i­gi­ble Eu­ro­zone coun­try, has a com­mon law le­gal sys­tem sim­i­lar to that of Cyprus and is a com­monly adopted ju­ris­dic­tion for com­pa­nies wish­ing to ap­ply for a list­ing on the LSE,” it said in an an­nounce­ment.

The other op­tions had been Spain, Por­tu­gal and Hol­land, but the lat­ter does not have an up­dated dou­ble tax­a­tion avoid­ance deal with Cyprus, and hence was dis­qual­i­fied.

The bank said that “Bank of Cyprus Hold­ings PLC was in­cor­po­rated in the Repub­lic of Ire­land ear­lier this year for this pur­pose.

“Should the list­ing pro­ceed, the bank’s head­quar­ters, man­age­ment and op­er­a­tions would all re­main in Cyprus. The new hold­ing com­pany would be, and the bank would re­main, tax res­i­dent in Cyprus. The bank would con­tinue to be reg­u­lated by the Euro­pean Cen­tral Bank and the Cen­tral Bank of Cyprus.”

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