Shares in Bank of Cyprus opened lower this morning after closing on Tuesday at their highest level this week despite posting a poor performance when quarterly results were released.
The Cypriot lender, which is led by Irishman John Hourican, posted first-quarter profit before tax and restructuring costs of €15 million, down 79 per cent on the same quarter in 2016. Meanwhile, post-tax profit dropped 96 per cent to close the quarter at €2 million.
Results for the three months to the end of March 2017 showed that the company’s total income dropped 4 per cent to €233 million.
Bank of Cyprus is the largest credit provider in Cyprus, with a 39.1 per cent market share, and said that group loans at the end of March 2017 totalled over €20 billion. In the same period, the bank reduced its non-performing exposures by €662 million, or a reduction of 6 per cent.
“The bank continues to make good progress in its journey back to strength. Our results this quarter reflect our strategy of continued attention to balance sheet de-risking and, consequently, we continued to direct substantially all our operating profitability to increased coverage levels on delinquent exposures. Despite this, and despite accommodating the €18 million non-recurring Competition Commission fine which we intend to contest vigorously, the bank posted a modest positive result in the quarter,” said Mr Hourican.
‘Cypriot economy recovering’
“We are pleased to see the Cypriot economy continuing to recover and to note that we continue to maintain strong market shares in lending and deposit-taking in Cyprus,” he added.
The bank’s transitional common equity tier 1 capital ratio dropped 0.1 basis point to 14.4 per cent in the first quarter of 2017 on the same period last year.