BoC sees steady 2011 de­spite Q1 profit dip

Kathimerini English - - Business & Finance -

Bank of Cyprus yes­ter­day re­ported a 13 per­cent drop in first-quar­ter net profit to 71 mil­lion eu­ros, hurt by ris­ing pro­vi­sions for bad loans and a spe­cial tax slapped on Cypriot len­ders.

The fig­ure, how­ever, beat an­a­lysts ex­pec­ta­tions, as they were ex­pect­ing net earn­ings of around 62 mil­lion eu­ros.

The bank, which is also present in Rus­sia, Aus­tralia, Ukraine, Ro­ma­nia and the UK, said that non- per­form­ing loans rose to 7.6 per­cent at the end of March, up from 6 per­cent in the same pe­riod a year ear­lier.

“Mar­kets con­tinue to face un­cer­tainty but, de­spite this, the group has man­aged to achieve prof­itabil­ity with a pos­i­tive con­tri­bu­tion com­ing from all mar­kets,” An­dreas Iliadis, Bank of Cyprus CEO, said in a state­ment.

A re­cent is­sue of con­vert­ible cap­i­tal se­cu­ri­ties has boosted BoC’s cap­i­tal ad­e­quacy to 12.3 per­cent, help­ing boost liq­uid­ity and se­cure fur­ther growth, it added.

Look­ing ahead, the Ni­cosi­abased lender ex­pects net earn­ings this year to be at 2010 lev­els de­spite wors­en­ing eco­nomic con­di­tions in Greece, which ac­counted for 35 per­cent of its loan book at the end of March. Growth is seen com­ing from the Rus­sian mar­ket af­ter it boosted its pres­ence in the coun­try through the ac­qui­si­tion of Unias- trum Bank in the mid­dle of 2008.

“Re­gard­ing op­er­a­tions in Rus­sia, the group ex­pects con­sis­tent busi­ness ex­pan­sion and im­prove­ment in prof­itabil­ity, re­sult­ing in a higher con­tri­bu­tion to group prof­itabil­ity,” the bank added.

Seven per­cent of to­tal loans, nearly 2 bil­lion eu­ros, comes from Rus­sia, while Cyprus ac­counts for 49 per­cent of the bank’s to­tal 29.1bil­lion-euro loan book.

STE­LIOS BOURAS

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