BoC slumps after profit misses estimates

Bank of Cyprus had its biggest decline in more than five years on Athens trading yesterday after reporting profit and forecasts that missed analysts’ estimates. Bank of Cyprus fell -1.10, or 11.8 percent, to -8.30, the biggest drop since November 2002. More than 22 million shares changed hands, making it the bourse’s most-traded stock. The company said after the close of trading yesterday that profits last year increased 55 percent to -485 million. That missed the -493 million median estimate of eight analysts surveyed by Bloomberg and a company target of -486 million. The stock was cut today to «hold» from «buy» by Gaelle Cibelly, an analyst at Deutsche Bank AG. She reduced the share-price estimate to -12 from -17. Bank of Cyprus was also cut to «market perform» from «outperform» by Antonio Ramirez, an analyst at Keefe, Bruyette & Woods Ltd. Profit in 2008 will rise about 11 percent to -540 million as the island’s adoption of the euro crimps fees and commissions and as the bank builds out its businesses in Eastern Europe and adds branches in Greece, the company said. «Our ‘hold’ rating is justified by the disappointing and weak guidance published by the group» as well as increased risk due to a planned expansion in countries such as Russia and Romania, Cibelly wrote in a note to investors. Increased demand for loans and financial services in faster-growing economies will help drive annual profits more than 25 percent higher in 2009 and 2010, the bank said. The stock was the fourth-best performer among the 20 biggest Greek companies last year, advancing 21 percent. It has shed 34 percent this year, giving the company a market value of -4.7 billion. The shares were maintained «overweight» by Paul Formanko, an analyst at JPMorgan Co, and «buy» by Ronit Ghose, an analyst at Citigroup Inc. (Bloomberg)