Cyprus Business Now

The net interest income of the Cypriot banking system nearly doubled in the first quarter of 2023 compared to the corresponding period last year, showing an increase of 85.7 per cent or €182.71 million, according to a report released this week by the Central Bank of Cyprus (CBC).

At the same time, total profits of the banking system after tax increased in the first quarter of 2023 by an impressive rate of 2,400 per cent, reaching €217.78 million, up from just €8.70 million in the first quarter of 2022.

Specifically, the net interest income of the banking system, as a result of interest rate increases by the European Central Bank, amounted to a total of €395.87 million, up from €213.16 million in the first quarter of 2022.

Total interest income reached €486.92 million, up from €265.00 million in the first quarter of 2022, showing a significant increase of 83.7 per cent or €221.91 million.

Interest expenses amounted to €91.04 million in the first quarter of 2023, up from €51.84 million in the corresponding period last year.

Net operating income recorded a significant increase of 94.1 per cent in the first quarter of 2023, reaching €574.11 million, up from €295.78 million in the first quarter of 2022.

Administrative expenses amounted to €254.90 million, up from €204.37 million in the corresponding period last year. Personnel expenses decreased to €106.54 million, down from €127.91 million.

The Alpha Bank Group this week announced that the transfer of the Non-Performing Loans (NPL) and real estate portfolio has been completed, with a total gross book value of €2.3 billion.

In its announcement, Alpha Services and Holdings S.A. noted that, following the announcement of February 14, 2022, and in line with its strategy to reduce the stock of Non-Performing Loans, it has completed the transfer of the Non-Performing Loans and real estate portfolio in Cyprus (“Sky Portfolio”), with a total gross book value of €2.3 billion in the first quarter of 2023.

The Sky Portfolio is owned by SkyCAC Limited, a credit acquisition company of the Alpha Bank Group, and on June 16, all the shares of SkyCAC owned directly or indirectly by the Alpha Bank Group were transferred to a company affiliated with Cerberus Capital Management, L.P.

“The Sky Project represents the second-largest transaction of Non-Performing Exposures in Cyprus and the largest definitive transfer of a Non-Performing Exposures portfolio to date by a Greek bank,” the Group stated.

It also noted that as a result of the completion of the Sky Project, the Non-Performing Exposures Ratio of Alpha Bank Cyprus Ltd currently stands at approximately 5 per cent, “enabling it to focus on its business strategy and pursue growth opportunities in the Cyprus market”.

The financial impact of the Sky Project has been fully reflected in the pro forma financial results of the Alpha Bank Group for the first quarter of 2023, with an improvement in the Total Capital Adequacy Ratio, stemming from the divestment of the Sky Portfolio, estimated at approximately 15 basis points.

The Employers’ and Industrialists’ Federation (OEB) recently announced that it has been informed by the Services Promotion Sector of the Ministry of Energy, Commerce, and Industry that, as part of efforts to enhance the internationalisation of Cypriot service providers and promote Cyprus as an international business hub, it intends to participate in international service exhibitions with a state pavilion in 2024.

“During this challenging period for the global economy, and considering that the services sector is the driving force behind the development of the Cypriot economy, strengthening the export capabilities of Cypriot service businesses is a priority,” the federation said.

“It is worth noting that, in addition to traditional service sectors where Cyprus has historically been strong, such as professional services and shipping, OEB, following relevant market research, places particular emphasis on emerging sectors, such as information and communication technology, and healthcare, among others,” it added.

To this end, the federation invited interested businesses to submit their recommendations regarding the international service exhibitions which they believe to present the most favourable prospects for Cyprus’ efforts in boosting the internationalisation of its businesses.

Moreover, following the submission of proposals, the federation forwarded them to the relevant ministry for consideration.

“The final list of the events that Cyprus will take part in will be based on the approved budget for the year 2024,” the federation said.

Participation will be partially covered by the state. In summary, sponsorship will cover 85 per cent of the participation costs in the aforementioned exhibitions, €700 for advertising material, including posters, banners, brochures, and leaflets, as well as coverage of television and DVD rental costs.

The Cyprus Stock Exchange (CSE) ended Wednesday, June 21 with profits.

The general Cyprus Stock Market Index was at 118.20 points at 13:23 during the day, reflecting an increase of 0.14 per cent over the previous day of trading.

The FTSE / CySE 20 Index was at 71.49 points, remaining unchanged from the previous day.

The total value of transactions came up to €195,941.

In terms of the sub-indexes, the alternative and hotel indexes rose by 0.39 per cent and 1.52 per cent respectively.

Conversely, the main and investment firm indexes fell by 0.21 per cent and 0.87 per cent respectively.

The biggest investment interest was attracted by the Bank of Cyprus (+1.32 per cent), KEO (-3.23 per cent), Hellenic Bank (+0.78 per cent), Logicom (-2.68 per cent), and the Cyprus Cement Company (no change).