Cyprus Hellenic’s profit hit by provisioning for bad loans
Cypriot lender Hellenic Bank posted a net loss of 46 million euros in the first half of 2013, on increasing provisioning costs for loans that soured during a financial crisis.
Hellenic, 19.2 percent owned by the Church of Cyprus, reported a net profit of 14.8 million euros in the first half of 2012.
The lender did not have the exposure its Cypriot peers Laiki and Bank of Cyprus had to Greece, which plunged into economic crisis in 2010. The resulting crisis in Cyprus rattled the island’s banking sector and consumer confidence.
Cyprus wound down Laiki Bank in March and imposed losses on insured deposits exceeding 100,000 euros to recapitalise Bank of Cyprus. The bail-in process was part of a broader set of conditions for the island to qualify for 10 billion euros in aid from the EU and the International Monetary Fund.
Under the deal, Cypriot banks, Hellenic included, were forced to dispose of their Greek units which were bought by Greece’s Pireaus Bank..
Hellenic said it sold its Greek operation for 29 million euros, and covered a 118 million euro net negative difference between assets and liabilities acquired.
The bank has announced a bid to raise 294 million euros through a share and bond issue to increase its core tier 1 capital to over 9 percent by the end of October.
[Reuters]
