Bank of Cyprus Group’s profit after tax for 2009 reached EUR313 mln, while return on equity was maintained at 14,0%, in line with Management’s forecasted profit range of EUR 300-400 mln, but below analyst forecasts of EUR 330 mln.
Net interest income and commissions for 2009 reached EUR1.091 mln compared to EUR1.010 mln for 2008 recording an annual increase of 8%. The Group’s net interest margin reached 2,39% for 2009 compared to 2,52% for 2008.
The Group capital adequacy ratio stood at 11,7% at 31 December 2009. The tier 1 ratio and core tier 1 ratio reached 10,6% and 7,4% at 31 December 2009 from 7,2% and 6,5% respectively the previous year.
Return on equity remained at a satisfactory level (14,0%) in a particularly challenging and negative environment. The Group maintained its efficiency, with the cost to income ratio contained at 52,4% despite the negative economic environment and the recent expansion of its network in Russia, Romania, Ukraine and Greece.
Greece profits tumble
Bank of Cyprus operations contributed EUR 282 mln or 90% of overall profits, while profits from Greece fell sharply to only EUR 3 mln in 2009 from EUR 74 mln in 2008. A year ago, the Greek operations contributed 15% of total Group after tax profits.
United Kingdom and Australia also contributed to the Group’s profitability, with profit after tax for 2009 amounting to EUR9 mln and EUR2 mln, respectively. In Romania and Ukraine profit after tax for 2009 reached EUR9 mln and EUR0,4 mln respectively.
In Russia profit after tax for 2009 reached EUR7 mln. The recovery in profitability which started from the third quarter of 2009 led to a profit of EUR20 mln for the second half of 2009, compared to a loss of EUR13 mln for the first half of the year. The Group, having identified opportunities for growth in the Russian market, recorded an increase of 17% in loans for the fourth quarter of 2009 compared to the third quarter 2009. The total increase in loans for 2009 reached 20%.
Provisions hiked
The provision charge for 2009 was hiked by 171% to EUR 248 mln with the provision charge in Cyprus hiked by a whopping 534% to EUR 78 mln. In Greece the provision charge was increased by 84% to EUR 120 mln.
The non-performing loan ratio increased, taking into consideration the worsening economic environment in Cyprus and Greece, reaching 5,6% at 31 December 2009 compared to 5,2% at 30 September 2009. In light of the worsening economic environment, the provision charge for the impairment of loans for 2009 increased to 0,96% of total loans. The Group maintained a high provision coverage ratio (provisions % non-performing loans) of 59% at 31 December 2009. The remaining balance on non-performing loans is fully covered by tangible collateral. The coverage ratio including tangible collateral amounts to 127% (113% taking into account tangible collateral valued at forced sale value).
At 31 December 2009 the Group’s loans amounted to EUR26,51 bln recording an annual increase of 6% mainly due to the weak demand for lending in the two main markets of the Group, Cyprus and Greece. The Group’s total deposits at 31 December 2009 reached EUR28,58 bln recording an annual increase of 2%. At 31 December 2009, the Group’s shareholder funds amounted to EUR2,42 bln.
