CYPRUS: Popular Bank expects lower losses for 2012

Cyprus Popular Bank, the island’s second largest lender, expects reduced after-tax losses for 2012 compared with its record loss in 2011, it said in a stock exchange filing.

In an announcement dated December 31 but released on Wednesday, the nationalised bank said lower losses were anticipated from reduced impairment charges on Greek government bonds and goodwill.
It said, however, it would book higher provisions and anticipated lower operating income in a challenging business climate in both Greece and Cyprus, its two main markets.
Popular, aka Laiki, reported a 2.5 bln euro net loss in 2011 and sought a state bailout of 1.79 bln euros in return for the state now controlling 84% of the bank.
The bank has undertaken a cost-cutting plan that includes reducing its branch network in Greece and Cyprus by nearly a third and offering redundancy packages to staff.
Last week Bank of Cyprus, the island's largest bank, warned of worse results in 2012 on tougher provisioning regulations saying that its Core Tier 1 ratios may even be below 5% announced in November.
The bank posted a nine-month loss after tax of 211 mln euros on November 28, while according to European Banking Authority estimates, Bank of Cyprus's capital shortfall to reach a core tier 1 ratio of 9.0% – a measure of financial strength – is 722 mln euros.
Both Laiki and Bank of Cyprus are waiting for a review of the island’s banking system by PIMCO to assess the size of the national bailout from international lenders.