Bank of Cyprus bolsters earnings

NICOSIA (Reuters) – The Bank of Cyprus posted a 98 percent rise in net profit for the first half of 2005 on the back of an improved insurance business and cost cutting at home, although growth was weaker in Greece. The bank, Cyprus’s largest and with a rapidly growing presence in neighboring Greece, said it would press ahead with plans to expand into the Balkans and Russia, ruling out acquisitions. Group net profit reached 31 million Cyprus pounds ($66.6 million) compared to 16 million in the same period of 2004, the bank said. Core profit, defined as profit before provisions for bad and doubtful debts and before tax, rose 29 percent to 81 million pounds. «The group financial results are very satisfactory and are in line with the announced three-year profitability targets, which assume a significant increase in profitability as well as a substantial improvement in key profitability ratios,» the bank said. In Cyprus, core profit rose 52 percent to 47 million pounds on the back of improved insurance operations and a drive to contain expenses, it said. Core profit from operations in Greece showed a considerably slower growth of 3 percent to 28 million pounds. The bank cited the significant cost of expanding its branch network, pushing operating expenses in Greece up 17 percent. There was also a higher increase in interest-paying deposits relative to the growth in loans and advances, it said. Profit from Greek operations represented 35 percent of the Group’s total profit. Core profit from the group’s UK and Australia operations grew 30 percent. Chief Executive Officer Andreas Eliades said the group had received preliminary approval from the Cypriot Central Bank to expand into Russia and Romania. «The aim of the group is to expand through organic growth. That will enable better assessment of risk and development would be based on a continuous review of the market,» Eliades told a news conference.