Bank of Cyprus cuts 9-month losses to 211 mln, hurt by Greece

Bank of Cyprus posted a nine-month loss after tax of 211 mln euros on Wednesday after including an impairment in the value of Greek bonds held and on higher provisions for non-performing loans.

The island's biggest lender posted a net loss of 793 mln euros in the nine month period of 2011 on its Greek bond exposure.

Bank of Cyprus was one of two local banks that sought state aid this year after its regulatory capital was eroded from heavy exposure to Greek debt.

According to European Banking Authority estimates, Bank of Cyprus's capital shortfall to reach a core tier 1 ratio of 9.0% – a measure of financial strength – is 722 mln euros.

The banking crisis was instrumental in Cyprus seeking a bailout from the IMF and its EU partners in June.

A protracted downturn in its two main markets – Cyprus and Greece, resulted in a "significant" deterioration of the bank's loan portfolio, with the bank increasing provisions by 179% to 822 mln euros compared to 295 mln euros last year.

Its non-performing loans (NPL) ratio rose to 17.1% at the end of September, compared to 14.2% at the end of June, the bank said.