Eurobank Cyprus H1 profits soar 144%

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Eurobank Cyprus posted soaring profitability after tax for the first half of 2023, with net profits approaching full-year gains for 2022 due to rising interest rates.

Eurobank Cyprus, a subsidiary of Greek Eurobank SA, said in a statement that profit after tax for the first half of 2023 was €90.8 mln, which increased by €53.6 mln or 144% compared with H1 2022.

Furthermore, profitability for the first six months is close to the bank’s profit for 2022 of €94.3 mln.

The ECB has embarked on a monetary tightening cycle imposing nine rake hikes in 12 months to control soaring inflation.

Cypriot banks benefit due to their large liquidity held at the EU central bank.

According to the bank, the effective management of operating costs and higher operating profits further improved the bank’s Cost-to-Income ratio, which decreased from 32% in the first half of 2022 to 19% in 2023.

Eurobank Cyprus’ Capital Adequacy and Common Equity Tier 1 (CET1) ratios remained strong, increasing to 29.9% during the first half and by 260 basis points compared to 31 December, and remain “significantly higher than the minimum regulatory requirements set for 2023”.

The bank added that the loans to deposits ratio (excluding loans secured by deposits) is 31%, with total deposits reaching €7,261 mln, representing an increase of €58m since the beginning of the year.

Michalis Louis, Eurobank Cyprus’ CEO, said: “The first half of 2023 ended with a positive outlook, which allows the bank to continue to support entrepreneurship, sustainable investments, and its private clients.”

“A key priority is to continue to evolve and provide high-quality, specialised services to our customers through a customer-centric approach, which has always been a core element of our modus operandi and differentiates Eurobank from the competition.

“We proceeded, from 1 June 2023, with a reduction of our interest rate on mortgage loans by 50 basis points for a one-year period to reward and support individual borrowers who are up to date with their loan repayment obligations.

“To further increase the bank’s activities, we have emphasised upgrading our Private Banking division, providing integrated services and products through the Group’s presence in Cyprus, Greece, Luxemburg, and the UK.

“Eurobank has always held a leading position and provided innovative services in the field of Wealth Management and will continue to do so in the future,” Louis said.

He urged the government to continue “without any hesitation” to prudently manage the country’s public finances while remaining committed to achieving a fiscal surplus to upgrade Cyprus’ credit rating.

“The positive image created in the past few years must be maintained and further strengthened in the period ahead.

“Any decisions must be well thought out since the current circumstances, both at the international and domestic level, do not allow for complacency”.