Tuesday, November 15, 2016

Bank of Cyprus continues to improve on its results

Bank of Cyprus:

“We are pleased that the positive momentum continued in the third quarter of 2016, strengthening further our CET1 ratio and accelerating the reduction of non-performing loans and the increase in deposits compared to the previous quarter. We reduced the stock of non-performing loans for a sixth consecutive quarter and by €2,6 bn or 23% during the nine month period. We have completed €3,4 bn of restructurings with the success of the restructurings performed starting to yield results. For the first time, the reduction of NPEs during the three months ended 30 September 2016 exceeded the reduction of 90+ DPD loans mainly as a result of restructured loans meeting the NPE exit criteria following satisfactory performance. The reduction of problem loans is expected to continue.

We are satisfied that our funding conditions continue to improve. We have repaid €3,0 bn of ELA year to date to a current level of €0,8 bn and full repayment now looks like a realistic near-term target. At the same time our deposits grew by €896 mn in the third quarter and our loans to deposit ratio stands at 102% as at the end of September 2016. Our good underlying operating profitability continued in the third quarter at €138 mn and we have directed this to support faster derisking of our balance sheet, through increased provisions, a trend which we expect to continue into 2017. The profit after tax for the third quarter was €5 mn and for the nine months ended 30 September 2016 was €62 mn.

The Group’s capital ratio (CET1) was further strengthened by 60 basis points during the nine month period and stands at 14,6% at 30 September 2016. We remain focused on operating as an accelerator for growth in the real Cypriot economy. Since the beginning of the year, we granted over €1 bn of new loans to promising sectors of the domestic economy through our core operations and to entrepreneurs in the UK through our UK subsidiary. New loans of €763 mn were granted to Cypriot households and businesses this year and we are actively seeking to provide more credit to viable businesses and consumers.”

Things continue to improve at the Bank of Cyprus. The other news is that the management will be pushing to list the shares in London. I think that once the London listing happens the improving conditions at the bank should be reflected in a higher stock price.   

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