CYPRUS: Coop Bank profits at €41m from €1.7b loss

The Cooperative Central Bank announced net profits of €41.2 mln for 2014, a major turnaround from the €1.7 bln losses at the end of 2013 that had prompted the government to rescue the bank with €1.5 bln and impose a radical reform programme.

The bank said its profits were achieved despite an increase in accumulated provisions of €2.97 bln and sustain a satisfactory level of liquidity, already seen after the ECB’s stress tests last October when it reported a capital surplus of €331 mln.
“Last year, we saw a satisfactory rate of confidence returning to our customers and members who have embraced this change with a significant inflow of new deposits,” said CCB Chairman Nicholas Hadjiyiannis.
Income from interest dropped from €411.7 mln in 2013 to €378.4 mln last year, while net revenues rose from €377.8 mln to €392.3 mln. Thus, operating profits were 10.2% higher at €192 mln from €174.3 mln in 2013, while the cost to income ratio was lowered to 37.4% from 40.6% the year before after cost-cutting, reduction of the franchise network and merger of branches.
The bank’s balance sheet stood at €13.94 bln, including own funds of €1.25 bln, boosting the capital adequacy ratio to 13.5%, safely beyond the ECB’s minimum requirement of 8%.
The bank’s loanbook was reduced from €10.8 bln to €10.1 bln as part of a deleveraging process, with non-performing loans outstanding for more than 90 days at €6.7 bln or 51.1%, while the total of all NPLs was at 55.8%.
Deposits were reduced by just over a billion euros to €12.4 bln from €13.5 bln at the end of 2013, but the bank said that after the ECB stress test results, new deposits reached about €500mln.
The CCB said that the ratio of loans to deposits was at “a very healthy 81.6%” which allows it to proceed with further low-cost lending.
After the government rescue, the bank was nationalised and merged all 93 Cooperative Credit Societies into 18 SPIs with 292 branches and reduced the workforce to 2,703.