If anyone can, Hourican can? Bank of Cyprus announces quarterly figures

Bank of Cyprus Group announced €50 mn after tax profit for the quarter ended 31 March 2016. This coupled with the announcement on 15 June 2016, that Moody’s Investors Service has changed the outlook to positive from stable on Bank of Cyprus’ (BoC) Caa3 long-term deposit ratings, has boosted the Bank of Cyprus Group’s reputation and provided some good news for the Mediterranean country’s financial status after the damaging banking crisis of 2013.

According to John Hourican, Bank of Cyprus Group Chief Executive Officer:

‘’ We are satisfied with the overall progress we made during the first quarter of 2016.
We continue to drive loan restructuring momentum from the previous quarter by completing €1,5 bn of restructurings during the quarter. We made very good progress in reducing the stock of loans with arrears greater than 90 days by €1,0 bn or 9% during the quarter and we expect to drive further reduction during the coming quarters of 2016.

Our funding position continues to improve. We intend to fully repay ELA (Emergency Liquidity Assistance) as soon as we can. It was pleasing that we were able to make meaningful progress towards this ambition in the year to date. ELA now stands at €2,8 bn, €1 bn lower since the beginning of the year.

The net interest margin remains healthy and the cost to income ratio for the quarter was a satisfactory 40%. Profit before provisions and impairments and profit after tax for the first quarter of 2016 were €145 mn and €50 mn, respectively.

We have bolstered the Group’s capital ratio (CET1) by 30 basis points to 14,3% due to organic capital generation and decrease of risk weighted assets.’’

This coupled with the announcement on 15 June 2016, that Moody’s Investors Service has changed the outlook to positive from stable on Bank of Cyprus’ (BoC) Caa3 long-term deposit ratings, has boosted the Bank of Cyprus Group’s reputation and provided some good news for the Republic’s financial status after the damaging banking crisis of 2013.

The rating agency affirmed all ratings of the Bank and upgraded its long-term Counterparty Risk Assessment (CRA) to Caa1(cr) from Caa2(cr). The upgrade reflects changes in the bank’s liability structure, which saw an increase in deposits and decrease in secured funding, mainly ELA.

A statement from Moody’s said ‘The change of outlook on BoC’s Caa3 long-term deposit ratings to positive reflects the bank’s progress in restructuring its stock of problematic loans. It also reflects Moody’s expectations that the bank will be profitable in 2016 following five loss-making years, and the significant reduction in the bank’s reliance on ELA funding, which the rating agency expects will be fully repaid during 2017.’

For the Bank of Cyprus’ official statement click here: http://www.bankofcyprus.com/Documents/Investor%20Relations/Press%20Releases/ENG/1Q2016%20FinancialResultsAnnouncement_ENG_Final.pdf

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