Bank of Cyprus Holdings PLC announced a reshuffle of its organizational structure as it posted a profit in the first half following the completion of a deal dubbed Project Helix, in which it had sold a loan portfolio with a gross book value of €2.8 billion, of which €2.7 billion were nonperforming loans.
As of part of the shakeup, the bank appointed Nick Smith as executive director for corporate finance solutions, focusing on exploring ways to ramp up the de-risking of its balance sheet. The bank also named Solonas Matsias director of operations and chief cost officer to run its cost-cutting push. Meanwhile, Despina Kyriakidou was named director of treasury.
Michalis Athanasiou, executive director for global corporate banking and markets, will also head the bank's specialized lines, including large corporate banking, project finance and loan syndication, international corporate banking and shipping and wealth, with a view to further diversify the bank's portfolio and to take on new revenue streams.
Separately, the bank said the European Central Bank has cleared Panicos Nicolaou's appointment as new group CEO. He will take on the role Sept. 1, succeeding John Patrick Hourican.
Nicolaou warned that the change in the interest rate environment would threaten the bank's profitability. He added that to contain its effects, the bank would manage its funding costs and continue to reduce its cost base.
The bank swung to a statutory post-tax profit attributable to owners of the company of €97.4 million in the first half from a year-ago loss of €54.0 million. EPS for the half was 21.8 cents, compared with a loss per share of 12.1 cents a year ago.
Net interest income fell to €204.1 million from €212.1 million a year ago. Fee and commission income rose year over year to €87.5 million from €85.3 million, so did fee and commission expense, to €13.0 million from €4.9 million.
Net foreign exchange gains came in at €14.1 million, a decrease from the year-ago €18.0 million. Net gains on financial instrument transactions and disposal/dissolution of subsidiaries and associates also dropped, to €12.2 million from the year-ago €37.4 million.
The bank booked credit losses to cover credit risk on loans and advances to customers of €108.9 million, compared with €253.0 million incurred a year ago. Credit losses of other financial instruments also declined, to €7.4 million from €3.3 million.
The bank also booked an income tax gain of €115.1 million, compared with a year-ago charge of €3.9 million.
Bank of Cyprus' nonperforming exposures ratio dropped to 33% as of June 30 from 36% as of Dec. 31, 2018. Its NPE coverage ratio, meanwhile, increased over the period to 50% from 47%. With the management shakeup, the bank said it would continue to actively seek ways to de-risk its portfolio, including more NPL book sales.
As of June-end, the bank's transitional common equity Tier 1 ratio was 14.9%, compared with 11.9% as of 2018-end. The bank's CET1 ratio, proforma for the sale of its stake in CNP Cyprus Insurance Holdings Ltd., was 15.2% at June-end.
- Author
- Adrian Jimenea
- Theme
- Banking
