Bank of Cyprus sticks to prelim results, losses adjusted by €10mln

The Bank of Cyprus announced its audited results for 2013, with losses adjusted upwards from the preliminary figures released a month earlier by €10 mln to €2.05 bln.
Despite monumental efforts to integrate the now-defunct Laiki Popular Bank into its Group, the biggest headache for the island’s leading lender remains the recovery of non-performing loans, currently estimated at €14.04 bln or 53% of gross loans.
This concern was highlighted in a note by Moody’s Investor Service on Wednesday, following the rating agency’s action to raise the deposit outlook from ‘negative’ to ‘positive’ and affirmed its Ca long-term deposit ratings.
Post-results, the bank said in a statement issued on Thursday that it’s priority remained the restructuring plan, as agreed by the Central Bank of Cyprus and the Troika of international lenders that imposed the €3.8 bln bail-in on unsecured depositors, while the bank’s extensive operation in Greece was sold to Piraeus Bank, together with the operations of Laiki and Hellenic Bank as well.
The statement added that “as part of its deleveraging strategy, the bank has reached an agreement to sell its Ukrainian business to ABH Ukraine Limited, a member of the Alfa Group [of Russia]. The sale consideration is €225 mln and the proceeds will enhance the bank’s liquidity position. The accounting loss is approximately €126 mln and the impact on the Group’s capital is estimated at €49 mln or 0,2 percentage points negative on the Group’s capital ratios.”
The bank added that the sale of the Ukrainian arm falls under the Group’s strategy of focusing on core businesses and markets and disposing operations that are considered as non-core. Officials were in Russia this week to review the operations of the Uniastrum subsidiary, in which it controls a 80% stake, but management had said in earlier comments that it would consider keeping, if the network started contributing to Group earnings once again.

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