Bank of Cyprus announces “optimistic” Q1 profits

The Bank of Cyprus Group, the premier Cypriot lender with extensive exposure to the troubled Greek market, announced “optimistic” results for the first quarter, with profits after tax rising 33% to 99 mln euros from the first quarter of 2011, and after writing off some 231 mln in Greek sovereign debt.
This follows a massive 1.68 bln euro haircut in its Greek government bond holdings in 2011.
Following the recent capital increase of about 592 mln euros raised from a rights issue and conversion of convertible bonds, the bank said it only needs to secure a further 200 mln euro before the June 30 deadline set by the European Banking Authority for a safety cusion by banks exposed to toxic bonds.
The results prompted the bank’s chairman Theodoros Aristodemou and CEO Andreas Eliades to declare in a joint statement that “the first quarter results give a note of optimism.”
They said that the bank achieved “significant profit increase” through a sound management of revenuies and expenses that helped enhace the bank’s capital and anticipate profits in the second quarter as well.
The bank announced a 4.1 percentage increase in its return on equity to 15.1% and a 8.9% reduction in its cost to income ratio.
Loans were up 2% from the same quarter last year to 28.8 bln euros, deposits declined by 7% to 29.2 bln, while non-performing loans were up 4.3 percentage points to 11.9% of the loans portfolio.
Earnings were up 6% to 378 mln euros, of which 295 mln or a 7% rise was from interest.
For the rest of 2012, the bank said it aims to reduce its assets in property, improve profitability and attract more depositors.
Profits after tax were up 55% in Cyprus, operational losses in Greece were limited to 3 mln euros after tax, profits in Russia were lower than in the first quarter of 2011, as were rpofits in other areas.
The Group reported total assets of 38.6 bln euros as at March 31, operating 573 branches in Russia, Greece, Cyprus, Ukraine, Romania and the U.K., employing 11,175 people.