Bank of Cyprus: Steadily within targets

The Bank of Cyprus Group maintained a satisfactory level of profitability despite the negative economic environment, said the group in a press release (see the attached document).rnrnThe Group’s focus on traditional banking business, its prudent credit policy and the risk management applied by the Group, ensure that the Group is effectively shielded from the current global financial crisis and enable it to generate satisfactory profitability. At the same time, the maintenance of its strong liquidity, the strengthening of its capital adequacy and the disciplined growth of its operations, provide support to the Group during this global financial crisis.rnrnProfit after tax for the first quarter of 2009 amounted to €63 mn whereas the return on equity for the same period amounted to 12,4%. During the first quarter 2009, the Group maintained its efficiency by containing its cost to income ratio at a satisfactory 57,7% despite the dynamic expansion of its network in Greece, Russia, Romania and Ukraine during 2008. Specifically, the Group increased its branch network significantly, from 305 branches at 31 March 2008 to 589 at 31 March 2009. Despite the unprecedented global financial crisis and the continuing instability of the money markets, the Group maintained its strong liquidity position (loans to deposits ratio 90%) and its low reliance on wholesale funding (wholesale funding to total assets was 14%). In addition, the high quality of the loan portfolio was maintained despite the negative economic environment, with the ratio of non-performing loans to total loans standing at 4,3% at 31 March 2009.rnrnTheodoros Aristodemou, Chairman of Board of Directors: “The Bank of Cyprus Group, with a history of 110 years, is supported by solid foundations, following a prudent credit policy, carefully planned strategic expansion, systematic and effective risk management, and thereby has achieved its strong liquidity and has shielded itself against any negative consequences of the international crisis.rnrnIn a particularly challenging and negative environment, the level of profitability of the first quarter of the current year is deemed satisfactory and together with its strong liquidity, healthy loan portfolio and the satisfactory return on equity allow us to view the future with certainty and optimism, aiming as always to create added value for our shareholders, our customers, our employees and society.”rnrnAndreas Eliades, Group Chief Executive Officer: “In a period where international financial market faces the biggest crisis in its recent history, Bank of Cyprus operated and continues to operate with caution and prudence following a rational and balanced policy with particular emphasis on effective risk management. At the same time it continues its expansion achieving satisfactory profitability for the first quarter of 2009. The bank’s strong liquidity and healthy capital adequacy is able to support its customers in these difficult times faced by the economy. The Bank of Cyprus Group has proved that continues its course standing on solid foundations, and is justifiably characterised as an organisation of trust.”rnrnSupplementary statement by BoC RomaniarnrnBank of Cyprus (Romania) is still 4 months short from reaching its 2-year anniversary since launching operations in Romania. By the end of 2007 the Bank had a portfolio of €270 mln and a deposit base of €20 mln. In the 15 months since then, the Bank of Cyprus Group more than doubled its Romanian loan portfolio (Q1/09 at €553 mln) while its deposit base quadrupled (Q1/09 at €80 mln).rnrnNotably €150 mln of credits were disbursed after September 2008, i.e., in crisis conditions, a fact that shows the Bank’s support to the business community of Romania and the Group’s commitment in the country. At the same time the Bank’s network increased from 2 branches to 11, while another 3 branches in the second quarter are in progress.rnrnThe profitable results of Q1/09 (€2 mln) from the Group’s activity in Romania, validates its strategic intent: Bank of Cyprus is a financial intermediary with full respect towards all its stakeholders, i.e., shareholders, depositors, and borrowers. We grew prudently so far and we will continue to do so in the future. rnrnBank of Cyprus (Romania)rn