Cyprus Mail

Banks maintain profitability as interest margin narrows, central bank says

By Stelios Orphanides

Banks in Cyprus saw their net interest margin narrow to 2.8 per cent in June from 3 per cent in March and 3.2 per cent in June 2014, the Central Bank of Cyprus said.

The narrower margin, caused by a decline in interest rates in the Cypriot banking system which accelerated in February following a regulatory decision, did not prevent banks to maintain their profitability, as reflected in the average return on equity ratio which fell to 5.2 per cent in June from 5.7 per cent the quarter before and more than doubled compared to a year ago, the central bank said in a statement on its website today. The core equity tier 1 capital ratio in the banking system rose to 15.5 per cent in June from 14.7 per cent in March and 13.3 per cent a year before, which also reflects the injection of fresh capital in Bank of Cyprus and Hellenic Bank in the second half of 2014.

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