BOCY announces € 56 mln in 1H profits
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.”