Bank of Cyprus released the Bank's preliminary financial results for 2016. According to the report, profit after tax attributable to the owners of the Bank for FY2016 was €64 mn. Profit after tax attributable to the owners of the Bank for Q4 2016 totalled €2 mn, compared to a profit of €5 mn for Q3 2016.
In his statement, John Patrick Hourican, CEO, Bank of Cyprus Group, said that the Banks results this quarter were satisfactory and reflect their strategy of continued de-risking.
“We are pleased to have delivered a modest profit in 2016 and to have started 2017 with the full repayment of ELA, a successful return to the debt capital markets and the successful listing of our shares on the London Stock Exchange.”
He added that during the fourth quarter of 2016 the Bank saw continued positive momentum in risk reduction. The reduction in NPEs in the fourth quarter of €867 mn was nearly double the in-quarter reduction of €459 mn for loans where delinquency of greater than 90 days (90+ DPD) is recorded. In the full year 2016 the Bank achieved a €3.0 billion reduction (27%) in 90+ DPD and €2,9 billion reduction (21%) in NPEs. These are very pleasing reductions and we expect continued progress.
Deposit growth in the fourth quarter was extremely strong. Deposits in the fourth quarter grew by €867 mn and, at the end of December our loan to deposit ratio stands at a healthy 95%, well inside the European averages. This strong growth helped contribute to our ability to fully repay ELA so rapidly.
Underlying pre provision operating profitability in the fourth quarter was strong at €148 mn or €566 mn for the full year. In line with our on-going strategy, we continued to direct the majority of our operating profit to de-risk our balance sheet and drive asset quality improvement. The Bank expects this theme to continue in coming quarters. The Bank posted a profit of €2 mn in the fourth quarter and a full year profit of €64 mn.
At the end of 2016 the Group’s capital position was again improved. The Capital Ratio (CET1) was 14.7% and, when adjusted for the issue of the €250 mn subordinated bond in January 2017, the Group’s pro forma Total Capital ratio was c. 16%.
“Underpinning the Group’s momentum is a recovering Cypriot economy. It was pleasing to note a 2.8% growth rate in the underlying economy for 2016. This allowed us grant new lending of more than €1 bn to the Cyprus economy in 2016” he added.