Citi forecasts Bank of Cyprus ’08 profit at EUR 485mln

Citibank analysts are forecasting that Bank of Cyprus will report EUR 485.4 mln in net profits for 2008, having maintained their price target at EUR 4/share. Bank of Cyprus will release preliminary 2008 results before market open on 3 February. The full audited results and the 2009 financial targets will be announced after market close on 25 February.
“We are decreasing our estimates slightly mainly due to lower expected trading income,” note Citi analysts, adding that the results will also include the acquisition of the Russian bank Uniastrum for 2 months, hence pushing up revenues (4Q08E – EUR317m) and costs (EUR160m).
Citi expect the core Cyprus and Greece business units to report relatively stable revenues qoq, with volume growth largely eroded by margin pressure (continued deposit pressure). Underlying likely weak non-NII will be compensated for by a FX gain (as in 3Q).
Cyprus offshore banking trends have remained robust during 4Q08 despite the macro upheavals in Russia. BoC's loan growth remains robust: we expect c25% yoy loan growth in Cyprus and Greece. Given the environment, NPLs will be a focus, but we expect limited deterioration in the quarter.