ECONOMY

Bank of Cyprus on track to meet first-half targets

Bank of Cyprus (BoC), which last week announced the 370-million-euro acquisition of a Russian bank, is on track to meet its goals in the first half of the year despite adverse international economic conditions, its CEO said yesterday. Andreas Eliades said its three-year business plan, announced in February, is progressing as normal. «In the first half of the year we are continuing in the direction stated in February,» Eliades told reporters. Talk of Greek banks revising profit targets downward has been growing recently as the economy shows signs of slowing and rising inflation hits consumption, a key driver of economic growth. BoC’s three-year plan targets after-tax profit growth of more than 25 percent per year for 2009 and 2010. The Cypriot-based lender last week announced the acquisition of an 80 percent stake in Russia’s Uniastrum Bank, the country’s ninth-largest lender, based on network size. Eliades said that the newly acquired bank will complement its existing subsidiary in Russia, targeting small to medium-sized retail customers. «The (Russian) bank has made important steps in the area of private investors,» he said. According to BoC figures, the percentage of outstanding consumer loans against gross domestic product (GDP) in Russia stood at 10.2 percent at the end of last year versus 51.9 percent in the eurozone. Growth in the Russian economy is expected to hit almost 8 percent this year versus 8.1 percent in 2007. This compares with a projected 3.5 percent GDP growth rate for Greece in 2008. The takeover deal is expected to be completed by the end of the year and will most likely add to Bank of Cyprus earnings per share in the first year. The acquisition will result in BoC’s network expanding to 553 branches from the current 331. The Russian bank is expected to contribute just over 9 percent of group operating revenues with 27.5 percent and 58.3 percent coming from Greece and Cyprus respectively. [email protected] Piraeus sticking to plan Piraeus Bank, the country’s fourth-biggest lender, denied Greek press reports that it may change its business plan targets. «Piraeus Bank’s course is according to its business plan,» Theodoros Pantalakis, vice chairman and managing director, said yesterday in an e-mailed statement. «The discussion that has appeared lately in the press, as regards the revision of business plans, particularly in the banking sector, doesn’t concern Piraeus Bank.» (Bloomberg)