Bank of Cyprus reported Friday that their profits for the first nine months had been gobbled up by an early retirement scheme, offering up to €200,000 to employees who chose to exit.
The island’s largest lender posted €9 mln in losses for the first nine months after profits were absorbed by the Voluntary Retirement Plan, launched in the summer.
The scheme resulted in the desired voluntary departure of some 550 employees but cost the bank €104 mln.
Compared to the same period in 2021, the Bank of Cyprus’ financial results reported profits of €20 mln.
According to the bank, the net interest income for the first nine months was €234 mln, up 5% yearly.
The bank expects net interest income for 2022 to exceed €350 mln, reflecting the Group’s favourable position for further interest rate increases.
The net interest margin in Q3 was 1.39% (compared to 1.49% last year) and was negatively impacted by the corresponding increase in average interest-bearing assets.
Non-interest income was €237 mln (from €204m last year, up 16%) and consists of net fees and commission income of €142 mln, net foreign exchange trading gains and net profits from financial instruments of €24 mln, net income from insurance operations of €48 mln, net gains/(losses) from revaluation and sale of real estate investments and sale of real estate inventories of €11 mln and other income of €12 mln
The year-over-year increase was driven by increased net fee and commission income, increased net foreign exchange trading and net gains/(losses) on financial instruments and higher insurance income and fewer claims.
Net fee and commission income were €142 mln, compared to €128 mln in the first nine months of 2021 (up 11% year-on-year), mainly due to the introduction of a revised list of fees and commissions in February 2022 and the extension of charging liquidity fees to a wider group of customers in March.
Net insurance income was €48 mln, compared to €43 mln for the nine months of 2021.
The 13% year-on-year increase was mainly driven by new business development and positive changes in valuation assumptions, which were partially offset by higher claims in the insurance industry.
Total revenue was €471 mln, compared to €427 mln last year (up 10%), mainly due to changes in net interest income and net royalty and commission income.