Bank of Cyprus announced €29 million net profit in Q1

Bank of Cyprus announced €29 million net profit in Q1

Bank of Cyprus Group announced €29 million after tax profit attributable to the owners for the quarter ending 31 March 2015, compared to a loss of €337 mn in the fourth quarter 2014.

The Common Equity Tier 1 capital (CET 1) ratio (transitional basis) stood at 13,9% at 31 March 2015, compared to 14,0% at 31 December 2014, while the fully loaded CET 1 ratio remained unchanged at 13,4%.

On 31 March 2015, gross loans and customer deposits totalled €24,1 bn and €13,6 bn respectively, with the L/D ratio improving to 138%, compared to 141% at 31 December 2014.

Emergency Liquidity Assistance (ELA) has been further reduced by €500 mn during 1Q2015 to €6,9 bn at 31 March 2015. Post quarter end, ELA was further reduced by €500 mn to €6,4 bn. ELA has been reduced by €5,0 bn since its peak of €11,4 bn in April 2013.

Loans in arrears for more than 90 days (90+ DPD) for the Group totalled €12.789 mn on 31 March 2015 and accounted for 53% of gross loans (90+ DPD ratio).

The Bank remains appropriately capitalised, with CET1 ratio (transitional basis) at 13,9% at 31 March 2015 (compared to 14,0% at 31 December 2014). Adjusting for Deferred Tax Assets, the CET1 ratio on a fully-loaded basis totalled 13,4% on 31 March 2015.

Net Interest income (NII) for 1Q2015 totalled €225 mn in line with the previous quarter.

Total expenses for 1Q2015 were €102 mn, showing an 11% decrease from €114 mn for 4Q2014, mainly due to increased non-recurring other operating expenses during 4Q2014. Hence the cost to income ratio improved to 38% for 1Q2015 from 41% for 4Q2014.

Profit before provisions and impairments, restructuring costs and discontinued operations for 1Q2015 was €170 mn, compared to €167 mn for 4Q2014.

Provisions for impairment of customer loans (continuing operations) for 1Q2015 amounted to €148 mn , compared to the elevated provisions of €248 mn for 4Q2014, which is related to the completion of the review of the Asset Quality Review (AQR) results.

Profit after tax from continuing operations (profit after tax excluding restructuring costs, discontinued operations and net loss on disposal of non-core assets) for 1Q2015 totalled €57 mn, compared to a loss of €107 mn for 4Q2014.

Group customer deposits totalled €13.611 mn on 31 March 2015, compared to €13.169 mn on 31 December 2014. Group gross loans totalled €24,1 bn , compared to €23,8 bn on 31 December 2014. The L/D ratio improved to 138% on 31 March 2015, compared to 141% on 31 December 2014 and a high of 151% on 31 March 2014.

In a written statement the Bank`s CEO John Patrick Hourican noted that the Bank against its strategic objectives during the first quarter, reduce ELA by €500 mn and continues to stabilise its deposit base while maintaining its capital position.

“The loan to deposits ratio improved to 138%, partly because of the continuation of positive customer flows, which is evidence of the increasing trust and confidence of our customers. Furthermore, the improvement in the Bank’s core results continued, with profit after tax from continuing operations totalling €57 mn, compared to a loss of €107 mn for 4Q2014” he said.

He added that the bank`s significantly strengthened capital position and overall improvement in its financial position enhance its funding options and will facilitate access to the capital markets, especially following the recent successful debt raising by the Republic of Cyprus. As he said, depending on market conditions and investor appetite, the Bank will assess the possibility of raising wholesale funding, with the proceeds of such funding used to reduce ELA.

Hourican also pointed out that the adoption of the foreclosure legislation and insolvency framework is a significant step in enabling the Bank to tackle its delinquent loans and improve asset quality.

“Through specific, deliberate and well-timed actions we are delivering a stronger, more focused institution capable of supporting the recovery of the Cypriot economy”, he said.

He added that as the leading financial institution in Cyprus, the Bank’s financial performance is highly correlated to the economic and operating conditions in Cyprus and will benefit significantly from the economic recovery.