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Bank of Cyprus swings to FY'17 loss


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Bank of Cyprus swings to FY'17 loss

Bank of Cyprus Holdings Plc reported a full-year 2017 preliminary unaudited consolidated loss attributable to owners of the company of €551.9 million on a statutory basis, compared to a profit of €63.7 million a year earlier.

Loss per share was 123.7 cents, compared to year-ago EPS of 14.3 cents.

Net interest income dropped on a yearly basis to €582.7 million from €686.2 million. Fee and commission income amounted to €190.6 million, up from €176.9 million in the previous year, while fee and commission expense came in at €10.2 million, virtually unchanged from a year ago.

The annualized net interest margin, on an underlying basis, was 3.02%, down from 3.47% in the prior-year period.

Provisions for impairment of loans and advances to customers and other customer credit losses more than doubled to €952.9 million from €433.6 million in 2016. Impairment of other financial instruments fell year over year to €6.5 million from €11.3 million, while impairment of nonfinancial instruments rose to €59.0 million from €36.2 million.

As of Dec. 31, 2017, the bank's fully loaded common equity Tier 1 ratio stood at 12.2% on an underlying basis, compared to 13.9% at the end of 2016.

The Cypriot lender said it has maintained good momentum in nonperforming exposures reduction, having lowered its NPE stock by €2.2 billion since the beginning of 2017 to €8.80 billion, and by about 41% since December 2014.

"During 2017 we increased coverage levels against nonperforming exposures to 48%, above the EU average and in line with our medium-term target. We remain confident of continuing the positive progress in reducing our NPE stock during the coming quarters," CEO John Hourican said.

The bank also confirmed its expectations for 2018, including an EPS target of 40 cents, a CET1 ratio above 13.0% and an organic NPE reduction of around €2 billion.

"In 2018 we expect a normalized cost of risk that should result in a return to profitability and allow an organic rebuild of capital," Hourican added.

The bank noted that it is currently under a dividend distribution prohibition, which will continue in 2018, following the final 2017 Supervisory Review and Evaluation Process decision by the ECB received in December 2017.

Bank of Cyprus Holdings is the parent of Bank of Cyprus Public Co. Ltd.