BOC 9M profit up 158%

Bank of Cyprus Group profit after tax for the 9 months ended 30 September 2006 (9M06) recorded an increase of 158% compared to the corresponding prior year period beating analyst projections. The improvement in all of the Group’s profitability indicators continues to be significant. The development of the Group’s business in Cyprus, combined with the cost containment program, the very positive course of the Group’s insurance operations and the continuation of its dynamic expansion in Greece contributed to the profitability improvement.

The improvement in the Group’s loan portfolio and quality indicators is remarkable. Specifically, the ratio of non-performing loans to total loans has improved from 9,3% at 1 January 2006 to 6,6% at 30 September 2006.

Group profit after tax for the 9 month period ended 30 September 2006 reached C£130 mn (€226 mn) compared to C£50 mn (€87 mn) for the corresponding prior year period, recording an increase of 158%.

• As a result of the significant increase in the Group’s profitability, the Group return on equity increased by 9,9 percentage points compared to the corresponding 2005 period, reaching 21,2%.

• Profit before provisions reached C£204 mn (€353 mn), recording an annual increase of 58%.

• The cost to income ratio improved to 46,9% compared to 57,8% for the corresponding period last year.

• The above results reflect:

The positive effect of the steps taken for:

Improvement of income (27% increase in net interest income, 11% increase in fee and commission income and 14% increase in income from insurance operations).

Containment of the rate of increase of expenses to 2% compared to the rate of increase of deposits and loans of 17% and 19%, respectively.

Increase of loans (annual increase of 19%).

The increase by C£9 mn (€16 mn) in the profit from sale and change in fair value of financial instruments.

The profitability improvement in the Group’s Cyprus operations is remarkable:

80% increase in profit before provisions to C£134 mn (€232 mn).

269% increase in profit after tax to C£100 mn (€174 mn).