.jpg)
Bank of Cyprus announced dull results for the third quarter, despite a historic milestone in the third quarter with the €1 bln in fresh capital raised. At the same time, it said that the Cyprus Securities and Exchange Commission (CySEC) approved its return to the Cyprus and Athens bourses, on Tuesday, December 16.
Its 9-month after-tax profits dropped to €76 mln from €81 mln up until the end of the first half, after a quarterly loss of €5 mln and despite generating some 60 mln in the second quarter from the disposal of local assets and foreign operations.
Profits after-tax and before restructuring costs, discontinued operations and net profit on disposal of non-core assets were €6 mln in the third quarter, for a 9-month tally of €84 mln, but after a restructuring cost of €11 mln the loss was €5 mln.
To date, restructuring costs in all three quarters totaled €32 mln, while a further €36 mln loss from discontinued operations entirely wiped out the €60 mln earned from the deleveraging process. This relates to the loss on disposal of the Ukrainian operations (€114 mln), the profit on disposal of the stake in Banca Transilvania (€47 mln), the profit on disposal of the loans in Serbia (€27 mln) and the profit from the early part repayment of the Cyprus Government Bond (€100 mln).
Year-to-date, total assets dropped 9% from €30.35 bln on January 1 to €27.48 bln at the end of September. Of these, cash and balances with central banks receded 32% to €840 mln, placements with banks rose 22% to €1.58 bln, debt securities, T-bills and equity investment dropped 25% to €2.58 bln, net loans and advances to customers dropped 9% to €19.79 bln and other assets were 3% up at €2.69 bln.
On the other hand, total liabilities were reduced by 14% to €23.7 bln, most significant of which was the 21% reduction of “funding from central banks” from €10.96 bln to 8.6 bln that relates to the repayment of the emergency liquidity assistance (ELA) facility through the European Central Bank.
However, customer deposits were also down in the January-September period, dropping 11% from €14.97 bln to 13.33 bln.
In an initial statement, CEO John Hourican said that “during the quarter we have made further progress in delivering against our strategic objectives,” adding that the Group’s performance “is underpinned by the performance of our core Cypriot operations, supporting our efforts of shrinking to strength through the disposal of non-core operations and assets.” The balance sheet was deleveraged by a further €1.1 bln during the third quarter, he said.
Hourican is confident that bank’s deposit base “continues to stabilise, with the bank experiencing positive customer flows during recent months, despite the release of €1.2 bln of blocked decree deposits in July and October. The Restructuring and Recoveries Division (RRD) is making some progress in arresting the deterioration in the Bank’s loan quality, despite the adverse legislative framework. Nevertheless, the on-going economic recession continues to impact the quality of the retail and SME clients.”
The bank said that CySEC approved the prospectus for the retail offer of €100 mln worth of new equity to existing shareholders at 24c a share the subscription period of which is to commence on December 15 and close on January 9, 2015. The prospectus is available from the bank or online at www.bankofcyprus.com (select Investor Relations/ Capital Increase 2014 / Phase 3 – Prospectus), from the lead manager of the retail offer, CISCO, at www.cisco.bankofcyprus.com , the Cyprus Stock Exchange (CSE) www.cse.com.cy , the Athens Exchange (ATHEX) www.athex.gr and CySEC www.cysec.gov.cy .
The listing of shares and trading on the CSE and ATHEX as of December 16 involves 3,873,269,066 ordinary shares issued to bailed in holders of uninsured deposits and other products of the Bank in accordance with the bail-in decrees; 5,781,443 ordinary shares issued to bailed in holders of subordinated debt securities; 858,708,764 ordinary shares issued to ‘Legacy Laiki’; and 4,166,666,667 ordinary shares from the placement and open offer to strategic investors.
The retail offer of 416,666,667 new shares will represent 4.46% of the enlarged share capital of the bank.
