Bank of Cyprus Q1 profit beat forecast

Bank of Cyprus Group (BOCY) reported net after tax profit of EUR 81 mln for the first quarter of 2010, easily beating and surpassing analyst forecasts of EUR 69-71 mln. At the same time there was a positive contribution to profit from all the markets in which the Group operates. Net interest income recorded an increase of 33% reaching EUR242 mln in the first quarter 2010, demonstrating the Group’s ability to achieve increased recurring income even in adverse economic conditions.
The Group maintained its strong balance sheet with high capital adequacy (Tier 1 ratio 10,2%), ample liquidity (loans to deposits ratio 90%) and satisfactory loan quality (ratio of non-performing loans at 6,0%).
The return on equity reached the satisfactory level of 13,3% and the efficiency of the Group was improved with the cost to income ratio reducing to 51,0%.
The performance of the first quarter 2010 reaffirms the appropriateness of the Group’s chosen business model, allowing it to continue its expansion tackling effectively the challenges of the difficult operating environment and be ready to take advantage of any opportunities that may arise.
The Group’s net interest margin reached 2,60% for the first quarter 2010, an increase of 47 basis points compared to the first quarter 2009 (2,13%) and 9 basis points compared to the fourth quarter 2009 (2,51%).
At 31 March 2010 Group loans and deposits recorded an annual increase of 8% and 4% respectively, while from the beginning of 2010 the increase amounted to 3% and 2% respectively.
The non-performing loan ratio reached 6,0% at 31 March 2010 compared to 5,6% at 31 December 2009 and the provision coverage ratio (provisions % non-performing loans) stood at 58%. The coverage ratio including tangible collateral amounted to 122% (109% taking into account tangible collateral valued at forced sale value).