Bank of Cyprus announces losses of more than €2 bn for 2013
The Bank of Cyprus said on Friday the company’s losses after tax for the year ended 31 December 2013 totalled €2.040 mn, registering a decrease of 8% compared with €2.214 mn in 2012. Loss after tax for the fourth quarter of 2013 totalled €93 mn.
In its Preliminary Financial Results for 2013 the Bank said that non-performing loans (NPLs) calculated based on the new definition of the Central Bank of Cyprus effective from 1 July 2013, totalled €14.042 mn at 31 December 2013 (compared to €13.131 mn at 30 September 2013) and accounted for 53% of gross loans.
Loans past due for more than 90 days totalled €13.003 mn at 31 December 2013 (compared to €12.983 mn at 30 September 2013) and accounted for 49% of gross loans.
The provision coverage ratio of loans in arrears for more than 90 days was improved to 38% from 37% at 30 September 2013, while taking into account tangible collateral, these loans are fully covered by provisions and tangible collateral.
The Bank said that loan quality challenges continue into 2014, with loans in arrears for more than 90 days showing signs of stabilisation, but with the new definition NPLs continuing to rise.
BoC said the core tier 1 capital ratio was sustained at 10,2% at 31 December 2013, at the same level as 30 September 2013.
Provisions for impairment of loans for the year ended 31 December 2013 were €1.067 mn, with the provisioning charge accounting for 3,9% of gross loans. Provisions for impairment of loans for the fourth quarter of 2013 were €268 mn, compared to €261 mn for the third quarter of 2013.
Bank of Cyprus CEO, John Patrick Hourican, said in a statement that “the on-going challenging economic conditions continue to pressure the loan book, necessitating additional provisions that resulted in further losses for the fourth quarter of 2013”.
He added that “despite these losses, the Core tier 1 capital ratio was sustained at 10,2% at 31 December 2013, due to the reduction in risk weighted assets”.
“Focusing on arresting asset quality deterioration, making progress on non-core disposals and maintaining capital ratios are core to building a strong platform for the safe return of depositors” he noted.
The Group, he said, “is proceeding steadily with the implementation of its restructuring plan and is ahead of plan on a number of fronts”.
According to BoC CEO there were customer deposit inflows during the fourth quarter of 2013, evidencing growing confidence of customers towards the Bank. “The stability in our deposit base and improved liquidity have allowed the release of the 6-month blocked deposits ahead of plan. Depositors with released funds have generally stayed with the Bank and indeed the retention of deposits exceeded expectations” he said.
At 31 December 2013, gross loans and deposits were €26,7 bn and €15,0 bn respectively, with a net loans to deposits ratio of 145% (compared to 146% at 30 September 2013).
The Emergency Liquidity Assistance (ELA) funding has been reduced to €9,56 bn at 31 December 2013, down from €9,86 bn at 30 September 2013, whereas ECB funding totalled €1,4 bn at 31 December 2013.
Total income was €1.174 mn, with net interest income at €999 mn and net interest margin at 3,62%. Total income for the fourth quarter of 2013 was €314 mn, with net interest income at €274 mn and net margin income at 3,87%.
Total expenses for the year ended 31 December 2013 were €552 mn and the cost to income ratio was at 47%. Total expenses for the fourth quarter of 2013 were €130 mn, 5% lower compared to the third quarter of 2013.
Profit before impairments, restructuring costs and discontinued operations was €622 mn, while profit before impairments, restructuring costs and discontinued operations for the fourth quarter of 2013 was €184 mn.
Loss from continuing operations (defined as loss before restructuring costs, discontinued operations and the disposal of Greek operations) for 2013 totalled €426 mn. Loss from continuing operations for the fourth quarter of 2013 totalled €77 mn.
The disposal of Greek operations in the first quarter of 2013 resulted in a combined loss on disposal and from discontinued operations of €1.456 mn.
Restructuring costs for the year ended 31 December 2013 totalled €158 mn, of which €121 mn relate to the cost of the two Voluntary Retirement Schemes (VRS) implemented during the year.
On 25 March 2013, the Cypriot government and the Eurogroup reached an agreement on a financial assistance facility of up to €10 bn to be granted to Cyprus, conditioned upon the implementation of an extensive programme of policy reform.
In its statement on 25 March 2013, the Eurogroup noted that Laiki (second largest bank in Cyprus) would be resolved, that Bank of Cyprus would be recapitalised via a bail-in of its depositors and that none of the programme’s money would be used for the Bank’s recapitalisation.
The Bank said that due to the Eurogroup decisions, the sale of the banking and leasing operations of the BoC in Greece and acquisition of the operations of Cyprus Popular Bank in Cyprus, the figures and financial results of the Group are not comparable with past financial results
Leave a Reply