BOC posts €56m in H1 after-tax profits (Update-1)

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By Stelios Orphanides

Bank of Cyprus, the island’s largest bank, said that it generated an after-tax profit of €56m in the first half of the year, as its profit in the second quarter shrank to €6m, in line with a profit warning issued on July 28.

The bank said that its net interest income dropped in the first six months of the year to €360m from €439m in the respective period of 2015, which led to a 10 per cent drop in overall income to €482m, the bank said. Total expenses rose 4 per cent to €202m.

The bank said that its outstanding emergency liquidity assistance from the central bank dropped to €1.5bn mainly on an increase in deposits which rose by €619m in the first six months of the year. The emergency funds from the European Central Bank fell by €9.9bn after peaking at €11.4bn in April 2013 and by €2.3bn since January.

The bank’s non-performing loans dropped to €12.5bn or 59.3 per cent of its portfolio from €13.3bn and 61 per cent a year before, it said. Loans with more than 90 days in arrears fell in the first six months of the year by €2bn, or by €1bn every quarter since December.

The bank posted in the second quarter a total of €96m in provisions for loan impairments compared to €62m the quarter before, Bank of Cyprus said.

Sources with knowledge of the situation said that the bank’s Real Estate Management Unit sold a total of €94m in properties acquired as part of restructuring agreements and is in negotiations to sell properties worth €45m.

The lender’s chief executive officer John Hourican said that the lender completed a total of €2.8bn in restructurings in the first six months of 2016 which helped the bank reduce its problematic portfolio by €2bn or 18 per cent. He added that the group’s core equity tier 1 capital ratio stood at 14.4 per cent at 30 June 2016.

“We expect to drive further reductions during the coming quarters,” Hourican was quoted as saying. “The bank was responsible for two thirds of the reduction of non-performing loans in Cyprus since January 2015”.

Hourrican added that Bank of Cyprus extended €1bn in new loans since January 2015.

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