Insider Business Bank of Cyprus: 2018 losses of €104m, capital of 18.3%

Bank of Cyprus: 2018 losses of €104m, capital of 18.3%

Bank of Cyprus on Monday announced preliminary annual after-tax losses of €104m for 2018 and said that the bank was well capitalised with a CET ratio of 15.4% and a total capital ratio at 18.3%

Announcing the results for 2018, the Bank also said that NPLs have fallen by €4b and now stood at €4.8b. The NEP ratio is at 36% and coverage at 47%.

The bank spoke of a significant liquidity surplus of €4.4 b. Deposits are stable at €16.8 b.

CEO John Hourican spoke of an important year in the transformation of the Bank and one in which it had made significant progress on a number of fronts against the objective of balance sheet de-risking and refocusing the business in supporting the growing Cypriot economy.

“Balance sheet repair was accelerated through the agreement for the sale of c.€2.7 b non-performing loans in Project Helix. We have made good progress towards completion, including syndicating down the Bank’s participation in the senior debt to €50 m from the initial level of €450 m and in so doing, significantly de-risking the Bank’s residual exposure to the portfolio sold,” he said.

“This portfolio sale complements our organic non-performing exposure (NPE) reduction, which amounted to €1.3 b for the full year. During the fourth quarter, we reduced NPEs by €217 m, broadly in line with the guidance, marking our fifteenth consecutive quarter of organic reductions in NPEs. Since the peak in 2014, and including the sale of the Helix portfolio, we have now reduced the stock of NPEs by 68% to €4.8 b pro forma for Helix, covered by 47% provisioning, above the EU average,” he added.

Hourican said BoC remained committed to making further material progress in 2019 and to continue supporting a growing Cyprus economy.

“We have a clear strategy for continuing the improvement in the asset quality position of the Bank and to further deal with the residual c.€4.8 b of non-performing loans. This includes Estia, a government scheme for the resolution of NPEs backed by primary residence, expected to be launched around the end of the first quarter 2019 that will positively impact c.€900 m of NPEs. “

And he concluded: “We recognise, however, that there is still much to do, and we remain as focused as ever on continuing to seek solutions, both organic and inorganic, to make the Bank a stronger, safer, Cyprus-focused institution, capable of supporting the local economy.”

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