BANK OF CYPRUS SEES AFTER TAX LOSS OF €100m in Q2 and €126m for 1H

 Cyprus Mail 29 October 2020 - by Andrew Rosenbaum

Bank of Cyprus sees losses after provisioning for NPLs.

The Bank of Cyprus has seen a loss after tax of €100 million in the second quarter of this year, and a loss of €126 million in the second half of the year, the bank said in a statement on Thursday. Results met analyst forecasts, however.

The bank also saw an underlying profit after tax on organic operations of €4 million. Before provisioning, total income was at €143 million and there was a positive operating result of €56 million.

Provisioning for Non-Performing Loans accounted for most of the losses. There were provisions/net loss relating to Non-Performing Exposure (NPE) sales (including restructuring expenses) of €104 million in the second quarter of 2020,, including Helix 2 (sales of NPLs) loss of €68 million and loan credit losses of €21 million for potential future NPE sales, the statement said.

NPEs were reduced to €2.6 billion (€1.1 billion net) pro forma for Helix 2. Gross NPE ratio reduced to 22 per cent (11 per cent net) and coverage maintained at 58 per cent, pro forma for Helix 2

The Bank of Cyprus retained its good capital and strong liquidity position. Its Total Capital Ratio of 17.9 per cent and CET1 ratio of 14.4 per cent are solid positions.
Deposits were at €16.3 billion for the quarter, broadly flat from the previous quarter; there is significant surplus liquidity of €3.9 billion. New lending of €238 million for the second quarter was down by 47 per cent from the previous quarter). This was impacted by COVID-19 lockdown, the statement said.

And total operating expenses were reduced to €81 million for the second quarter of 2020; these were down by 18 per cent year-on-year and by 3 per cent quarter-on-quarter.

Group Chief Executive Panicos Nicolau commented: ““In the second quarter of the year, we faced the current peak of the health pandemic crisis in Cyprus, followed by the gradual easing of the restrictive measures leading to increased economic activity. The global impact from the pandemic, however, continues to affect the economy and uncertainty remains.”

“Despite the lockdown, we have continued to deliver on our strategic priorities of strengthening our balance sheet and improving our asset quality and efficiency, while supporting our customers, colleagues and community through COVID-19.  We have continued to support the Cypriot economy by granting €689 mn new loans in the first half of the year, via prudent underwriting standards; 98% of new exposures in Cyprus since 2016 are performing.”