THE Co-operative Central Bank, the state-owned lender that controls 18 local co-operative banks, expects to post a net profit of up to €30m in the first quarter of the year, the Cyprus News Agency reported on Friday, citing the bank’s chief executive officer.
The lender, which received a €1.5bn capital injection from the government more than two years ago and a further €175m in December, saw its delinquent loans drop for the first time since 2014 below the 50 per cent margin, CEO Nicolas Hadjiyiannis said.
“Net profit in the first quarter is expected to range between €25m and €30m,” which is expected to help the bank’s core tier 1 equity ratio rise close to 16 per cent,” he said.
The Co-op’s 90 days past due loans fell by €280m in January to March, while non-performing loans dropped by €200m in the same quarter after falling in the second half of 2015 by €600m, Hadjiyiannis said. “Non-performing loans dropped for the first time below 50 per cent”.
The Co-operative Central Bank, which plans to list on the Cyprus Stock Exchange by the end of 2018 with the issue of new shares, generated a net loss of €122.7m last year after increasing its provisions for loan impairments by €527m to almost €3.5bn. The bank’s non-performing loans stood in December at €7.6bn or 59 per cent of its portfolio.
“We have restructured 13,000 loans in the past 15 months which are serviced to 80 per cent,” which was facilitated by a drop in interest rates, Hadjiyiannis said. He added that the coverage ratio of delinquent loans is 53 per cent.
“We have a mountain of liquid assets to help us deal with non-performing loans in the medium term to the benefit of the organisation, the customers and the country,” he said adding that the bank also introduced a unit staffed with 45 workers to assist the management of loans with up to 90 days in arrears, as part of the bank’s strategic plan.