Bank of Cyprus, the island’s largest lender, said that it expects to post a €50m profit after tax in the first quarter of the year in which it managed to reduce the share of its 90 days past due loans to below 50 per cent.
The share of loans with more than 90 days in arrears fell to 47 per cent at the end of March from 50 per cent at the end of 2015, a drop that translates into a reduction of delinquent loans by €1bn, the bank said in an emailed statement on Wednesday.
Further reduction in loans with more than 90 days in arrears “is expected during the coming quarters of 2016, reflecting the restructuring momentum and the improving economic and operating conditions in Cyprus,” Bank of Cyprus said. “The provision coverage of 90 days past due is expected to be around 50 per cent”.
The lender’s core equity tier 1 ratio is expected to have increased to 14.3 per cent in March from 14 per cent in December, Bank of Cyprus said.
The bank’s outstanding emergency liquidity fell by €0.6bn in March compared to December to €3.2bn, it added.
“Although deposits in Cyprus remained unchanged during the first quarter of 2016, reflecting seasonality factors and the impact from the change in the foreign exchange rate of euro against US dollar, deposit inflows have picked up during April 2016,” Bank of Cyprus continued.