Bank of Cyprus will make a decision on whether to proceed to a share capital increase or not at the end of June, after reporting its first profit in seven quarters on Friday, saying it was on track on deleveraging and improving the quality of its loan portfolio.
First-quarter profit after tax was 31 million euros after a 103-million-euro loss in the last quarter of 2013.
Profit after tax and before restructuring costs and discontinued operations came in at 72 million euros compared with a 38-million-euro loss in the last quarter of last year.
“These figures demonstrate we are beginning to make evident and tangible progress,” John Hourican, a former RBS senior executive appointed chief executive officer at the bank after its near-meltdown last year, said at a results presentation.
Bank of Cyprus recapitalized by converting large deposits into equity, affecting many wealthy individuals, particularly Russians.
It was also forced to assume the assets of now-defunct Laiki Bank and launched extensive deleveraging from non-core markets, bringing its Core Tier 1 capital ratio – an indicator of financial strength – to 10.6 percent.
In the second quarter of this year it disposed of its Ukrainian operations, an investment in Romania and loans in Serbia, reducing its risk profile and improving its core equity by a further 0.3 percentage points, the bank said.
For the first time in 16 quarters there was a quarterly decline in loans in arrears for more than 90 days, but Hourican said more needed to be done by Cypriot authorities to cut the problem loan book, calling for legislative changes.