Bank of Cyprus 1st Q resuts at €63mln

Bank of Cyprus (BoC) announced on Thursday net profit for the first quarter of 2009 amounting to 63 million euros, recording a 46% drop compared to the corresponding period of 2009.

A press release issued by BoC says that the level of profitability ''was satisfactory despite the negative economic environment.''

Net interest income fell by 2% to 181 million euro, compared to the 2008 first quarter, mainly affected by decreases of the euro and other currencies' base rates and the squeeze of deposits rates.

Cyprus and Greece, the two main markets in which the Group operates, contributed positively to its profitability with net profit of 55 million euro and 7 million euro respectively. Operations in Romania and Ukraine also made a positive contribution (net profit of 2 mln and 1 mln respectively), while operations in Russia amounted to net loss of 6 mln, mainly due to the Group's decision to contain lending and strengthening Uniastrum Bank's liquidity.

Furthermore, the Group increased by 138% the provision charge for impairment of loans ''taking into consideration the worsening of the economic environment and the expected partial deterioration of the loan portfolio.''

According to the release, total expenses for Q1 2009 reached 156 million euro, recording an increase of 31%, mainly due to increased staff and operational costs because of the Group's network expansion in Greece and new markets. BoC increased its branch network from 305 branches to 589 and the number of its employees from 6.996 to 11.999 an increase mainly attributable to the acquisition of Russian Uniastrum bank.

The Group said it maintains its forecasts for ''satisfactory profitability'' for 2009 and for profit after tax between 300 and 400 million euro.