The island’s biggest lender Bank of Cyprus has posted after tax profits of €2 mln in Q2 2019 and €97 mln for the first six months to June as it forges ahead with reducing bad debt and a new CEO.
The Bank said the non-performing exposure (NPE) ratio was reduced to 33%, while coverage increased to 50%. NPEs stood at €4.3 bln (€2.2 bn net), with a 71% reduction since 2014.
It reported a €300 mln NPE reduction in Q2 2019 and €457 mln in the 1st half of the year.
Total Capital ratio stood at 18.1% and CET1 ratio at 15.2%.
BoC also said that the completion of the sale of €2.7 bln NPEs (Project Helix) added 140 bps to capital in the Q2.
“We completed the sale of €2.7 bn non-performing loans in Project Helix in June, which added 140 bps of capital,” said outgoing CEO John Patrick Hourican in a statement.
“Our on-going organic non-performing exposure reduction amounted to €300 mln for the quarter, bringing total organic reduction in the first half of 2019 to €457 mln, in line with our organic target of €800 mln for 2019. This was the seventeenth consecutive quarter of organic reductions in NPEs,” he added.
Hourican noted that during the quarter deposits remained broadly flat at €16.4 bln and that the cost of deposits reduced by 8 bps.
“In the second quarter of 2019 new lending rose 13% from the previous year to €548 mln, helping support the continued growth in the Cypriot economy. Overall in the first half of 2019, we lent €1.1 bln to customers in Cyprus.
Our loan to deposit ratio at the quarter-end stood at 67%. The Bank continues to operate with a significant liquidity surplus, which at the end of the second quarter amounted to €3.8 bln”.
BoC announced that on 26 August the European Central Bank approved the appointment of Panicos Nicolaou as the Group Chief Executive Officer and Executive Member of the Board of Directors.
Panicos Nicolaou will assume his duties on 1 September 2019 and said: “I am fully committed to ensuring Bank of Cyprus continues to play a vital role in supporting the local economy.
I am under no illusions about how much there remains to be done, but I am excited at the opportunity and our potential.”
Commenting on his departure after six years at the helm Hourican said: “I am extremely proud of the progress the Bank has made since late 2013 when I joined the executive team. The Bank is returning to strength, through a disciplined approach to balance sheet repair and disposal of non-core business.”
BoC also announced a revision of its organizational structure, re-organizing the Group along the structural areas of Functions, Business and Legacy to create more focus and better alignment with its key objectives.
