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Bank of Cyprus Q1 profit declines YOY as provisions increase

Bank of Cyprus Public Co. Ltd. reported first-quarter profit attributable to owners of the company of €2.2 million, down from €50.2 million in the first three months of 2016.

EPS fell year over year to 0.5 cent from 0.6 cent. The bank's annualized return on average equity dropped year over year to 0.3% from 6.5%.

Net interest income amounted to €156.4 million, down from €184.8 million in the year-ago period. Fee and commission income increased year over year to €45.8 million from €37.8 million, while fee and commission expense widened to €2.6 million from €1.8 million over the same period.

The annualized net interest margin was 3.33% in the first quarter, compared to 3.63% in the year-ago period.

Provisions for impairment of loans and advances to customers and other customer credit losses amounted to €84.1 million, compared to €46.9 million in the first quarter of 2016. Impairment of other financial instruments also rose to €23.3 million from about €976,000.

Loans in arrears for more than 90 days declined by €298 million during the first quarter, as a result of restructuring activity, debt-for-asset swaps and write offs. The loans accounted for 40% of the bank's gross loans as of March 31, compared to 41% at 2016-end.

Bank of Cyprus' transitional common equity Tier 1 ratio stood at 14.4% as of March 31, compared to 14.5% as of Dec. 31, 2016. On a fully loaded basis, the CET1 ratio stood at 14.0% at the end of March, compared to 13.9% at 2016-end.

The bank's funding from central banks, wholly related to ECB funding, totaled €870 million, as of March 31, compared to funding of €850 million at 2016-end, which comprised of emergency liquidity assistance of €200 million from the Central Bank of Cyprus and ECB funding of €650 million. The bank fully repaid its ELA in January.