InsiderEconomyBoC: Covid-19 presents an “unprecedented external economic shock"

BoC: Covid-19 presents an “unprecedented external economic shock”


The coronavirus outbreak is first and foremost a health crisis, presenting an unprecedented external economic shock, Bank of Cyprus’ Chief Executive Officer Panicos Nicolaou said, with the Bank’s chairman Takis Arapoglu noting that the Covid-19 would slow the bank’s progress in addressing its main challenges.

“Cyprus and the world are coming to terms with a global pandemic that is changing the way we run our businesses and conduct our daily lives. COVID-19 is first and foremost a health crisis, presenting an unprecedented external economic shock,” Nicolaou told a virtual Annual General Meeting held digitally due to the Covid-19 measures.

His comments came as the Bank of Cyprus announced loss after tax amounting to €26 million for the first quarter of 2019 as the bank increased its provisions for credit loss to €64 million, including €28 million due to the impact of the Covid-19 crisis. The bank also said the coronavirus outbreak would delay its second large sale of a non-performing loan package called Helix 2. The bank’s NPL rate declined to 29% of total loans at end-March.

“The spread of COVID-19 is expected to have a significant impact both on the global and the Cypriot economy. The impact on the Cypriot economy will largely depend on the duration and the intensity of the pandemic,” Nicolaou said, adding the Bank’s priorities “during  these  unprecedented  times  are  clear: protect the health of our colleagues and customers, support them and the Cypriot economy,  while also ensuring the operational resilience of the Bank.”

Furthermore, Nicolaou said following a government decree for loan repayment moratoria, the bank has received loans amounting to €5.7 billion, namely €3.7 billion in corporate loans and €2 billion in retail credit facilities.

On his part, Takis Arapoglou, the Bank’s Chairman said that “significant progress has been achieved” in addressing the bank’s challenges, noting however that “unfortunately, the  advent of  the pandemic has  prevented us from progressing as fast as we wanted and could, but hopefully, with  perhaps some delay, we will get back on track  soon.”

“It is still early days in this crisis and forecasts on its duration and impact change virtually by the day. However, we believe that due to the excellent work done during the past few years, the Bank will be in a position to manage any foreseeable adverse situations.
“Our priority is clearly to create a world-class, highly performing European bank, free of old baggage which can meaningfully support our good customers and through them the Cyprus Economy  going  forward,” Arapoglou concluded.


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