Cyprus Mail
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BoC announces €81 mln six-month profit (updated)

BANK of Cyprus (BoC) yesterday announced a six-month net profit of €81m, a day before a crucial general meeting that will vote on a €1.0bn capital increase.

It is the second consecutive profitable quarter following seven loss-making quarters.

The lender said after-tax profits, excluding one-off items, reached €78m.

“The performance of the Cypriot operations, our core business, remains much stronger than the Group’s overall performance, supporting our efforts of shrinking to strength through the disposal of non-core operations and assets,” CEO John Hourican said.

Profit after tax attributable to the owners of the bank for Q2 of 2014 totalled €50m compared with a €31m profit in Q1 2014.

Profit before provisions for bad debts, restructuring costs and discontinued operations was €405m, the bank said.

Profit before provisions for impairment of customer loans, restructuring costs and discontinued operations for Q2 2014 was €189m, compared with €216m in Q1. Provisions in the first half of the year reached €329m – €183m in Q2 and €146m in Q1.

Customer outflows that followed last year’s bail-in significantly abated during the second half of 2013 and into 2014, the bank said. The deposits of the Cypriot operations fell by 2.0 per cent during Q2 2014, compared with a reduction of 6.0 per cent in Q1.

At the end of June, deposits in Cyprus accounted for 85 per cent of group deposits, deposits in the U.K. for 9.0 per cent, and deposits in Russia for 6.0 per cent. The bank’s deposit market share in Cyprus was 25.5 per cent, compared with 26.4 per cent on March 31, 2014 and to 27.5 per cent at the end of 2013.

The lender said it has raised its Core Tier 1 equity to 11.3 per cent, from 10.5 per cent at the end of 2013.

BoC has recently sold non-core assets of about €450m — Ukrainian operations for €202.5m, investment in Romanian Banca Transilvania for €82m, and loans in Serbia for €165m.

The bank’s results are not directly comparable to past earnings because of the bail-in of depositors in 2013. Deposits over €100,000 were converted into equity as part of a €10bn bailout for Cyprus from international lenders.

Foreign investors, including US-based Wilbur Ross and the European Bank of Reconstruction and Development, have signed up to the bank’s capital increase, designed to bolster regulatory capital ahead of Europe-wide stress tests t

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