Bank of Cyprus to double in size by 2010

Bank of Cyprus Pcl (BOC), the island’s largest financial institution now expanding into Romania, Russia and the Ukraine in addition to its extensive operations in Greece, UK and Australia is on course to double its size by 2010 under a prudent and sound expansion policy that does not take undue risk, aiming to create value for the Bank’s shareholders, said Group CEO Andreas Eliades.

During his address to the Bank’s EGM called to approve a number of resolutions ahead of the adoption of the euro by Cyprus from January 1, 2008, Eliades said Bank of Cyprus is double its size compared to 2005 when the new three year plan was introduced and is on course to double its size again by 2010.

During the last 3 years, Bank of Cyprus shareholders have seen the value of their holding increase five-fold, far more than what was promised and is usually the norm.

“We shall provide details of our Strategic Growth Plan 2008-2010 in February,” said Eliades, adding that this will take into account the expansion course in the new countries where the Group is now entering, the existing markets where it operates as well as liquidity and other risk factors.

Bank of Cyprus Chairman Lefterios Ioannou said the Bank has one of the best risk management procedures in place. It was also revealed during the meeting that Bank of Cyprus has no exposure to sub-prime loans and is not affected by the problems facing global banks.

Eliades made several references to the tremendous contribution and the zeal with which the Bank of Cyprus staff are working to make sure that the Bank reaches its targets.

“Our staff, together with our clients and you our shareholders are the strong pillars on which Bank of Cyprus is based and is counting to fuel its growth,” said Eliades.

“We always set high objectives, which at the beginning look difficult to achieve, but through consistency, hard work and careful planning, we reach and surpass our targets,” said Eliades.

He also referred to an earlier announcement whereby Bank of Cyprus revised higher its own profitability forecast for 2007 to EUR 486 mln from EUR 415 mln made in February as proof that the profitability of the group is at excellent levels.

“Despite intense competition in the market, Bank of Cyprus managed to lift its total loans to EUR 9 bln for a 32% YoY growth with the share of the bank in the local market having advanced to 28.6%.”

The ratio of non-performing loans to overall loans is also on the decline, and was 6% by end of September 2007 from 9.7% a year ago, through an effective implementation of risk management procedures.

Referring to the operations in Greece, Eliades said the expansion drive is on target with total loans in Greece at EUR 7.6 bln and total deposits at EUR 8.3 bln with a 3.7% market share. He said 135 branches will be in operation by end of 2007 with another 15 to be opened soon after, bringing the total to 150 by first quarter of 2008, which is close to the target of opening 200 branches.

Even in more mature markets such as the UK and Australia, Bank of Cyprus is gaining ground with loans in the UK up 18% and deposits 17%, while in Australia, loans jumped 47% while deposits were up 19%.

“Our prudent management and steady and responsible expansion drive has been one of the key reasons why more than 500 foreign institutional investors have decided to allocate funds to the Bank and now hold 35% of Bank of Cyprus capital,” said Eliades.