The Bank of Cyprus has revealed that it was seeing “steady progress” as it continued to return to full strength despite recording a loss of €554m in H1 2017.
The bank stated that its first half results reflected its previous policy of absorbing all its operating profitability in further de-risking the balance sheet.
A deliberate decision by the board to allocate a further €500m of the bank's capital through increased provisioning to further accelerate risk reduction was also put in place.
“[This] resulted in a loss of €554m for the first six months of the year,” said John Patrick Hourican, chief executive officer of Bank of Cyprus.
“We expect to continue to utilise the operating profit of the bank in the remainder of 2017 for further balance sheet de-risking and – post the introduction of IFRS 9 on 1st January 2018 – to be in a position to present a more normal credit cycle charge.”
John said that capital levels remained adequate despite the incremental provisions, while momentum in its risk reductions continued in the second quarter.
“Deposits remained broadly stable in the first half of the year and now fully fund the loan book.
“The focus has now shifted from deposit gathering to ensuring the deposit base has an appropriate shape to meet both LCR and NSFR liquidity requirements.”
John said the bank was pleased that the Cypriot economy continued to grow and is now the second fastest-growing economy in Europe.
He added: “New lending of the group in the six months was €1.1bn, more than double the new lending in the corresponding period in the previous year.”
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