The Bank of Cyprus said it will post a net profit of around EUR 50 mln in the first quarter, building on “strong momentum” in its loan restructuring activities.
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The bank said in a trading update that it has completed further restructurings of lending exposures across the spectrum of its loan portfolio.
“This resulted in around EUR 1 bln reduction in loans in arrears for more than 90 days (90+ DPD) for the first quarter of 2016, with the ratio of 90+ DPD to gross loans declining to 47% as at 31 March 2016 from 50% at 31 December 2015,” the bank added.
Moreover, the bank announced that a further reduction in 90+ DPD is expected during the remaining quarters of 2016, reflecting the restructuring momentum and the improving economic and operating conditions in Cyprus, with the provision coverage of 90+ DPD expected to be around 50%.
“Profit after tax for the first quarter of 2016 is expected to be around EUR 50 mln,” the bank said, adding that Common Equity Tier 1 capital (CET1) ratio (transitional basis) is expected to increase to about 14.3%, up from 14.0% at 31 December 2015, “reflecting the profitability of the first quarter of 2016 and the ongoing reduction in risk weighted assets.”
Noting that the bank’s liquidity position continues to improve with deposit inflows picking up during April, BOCY added “the improving liquidity position has allowed the bank to repay EUR 600 mn of ELA post 31 December 2015, reducing it to current level of EUR 3.2 bln.”
The announcement follows the rating action last week from Fitch that affirmed the bank’s covered bonds at ‘BB+’ assigning a ‘stable’ outlook, following the upgrade of the bank’s Issuer Default Rating (IDR) to ‘B-’ from ‘CCC’ a few days earlier.
Fitch said that the upgrade of the bank’s IDR has not led to an upgrade of the covered bonds’ rating because they are already rated at their current maximum achievable rating of ‘BB+’, which is also the country ceiling for Cyprus.
Fitch had also upgraded Hellenic Bank’s Long-Term IDR to ‘B’ from ‘B-’.
Meanwhile, announcing changes to the Group organisational structure, the bank said Christakis Patsalides was promoted to Deputy CEO and Chief Operating Officer, who together with other executives will report directly to CEO John Hourican.
The other members of the Executive Committee are: Chief Risk Officer – Michalis Athanasiou; Finance Director – Eliza Livadiotou; Director, Consumer & SME Banking – Charis Pouangare; Director, Corporate Banking – Panicos Nicolaou; Director, International Banking Services and Wealth, Brokerage & Asset Management – Louis Pochanis; Executive Chairman, Insurance – Aristos Stylianou; CEO, BOC UK & Channel Islands – Nick Fahy; Director, Real Estate Management Unit & Overseas Run Down – Miltos Michaelas; Director, Restructuring & Recoveries – Nick Smith.
The Director Human Resources, Solonas Matsias and the Director Corporate Affairs, Michalis Persianis will report to the Deputy CEO. The Director Human Resources will functionally report to the Board Human Resources & Remuneration Committee, while the Director Corporate Affairs will also retain a direct reporting line to the CEO on strategy setting issues.
The Director Compliance, Marios Skandalis reports to the Audit Committee and will functionally report to the Deputy CEO. The General Manager of EuroLife, Artemis Pantelidou will report to the Executive Chairman, Insurance, while the Director Internal Audit, George Zornas reports directly to the Audit Committee.
