ECONOMY

In Brief

Bank of Cyprus sticks to full-year guidance NICOSIA (Reuters) – Bank of Cyprus, Cyprus’s largest lender, posted a 39 percent fall in first-half net profits, weighed down by higher costs and slower loan growth, and said it was sticking to full-year guidance. The bank said yesterday it stuck to guidance of 300-400 million euros ($429-$573 million) net profits for 2009. Bank of Cyprus reported net first-half profits of 148 million euros. Net interest income grew 1 percent to 388 million euros, while pretax profit fell 44 percent to 161 million. Quarter on quarter, the bank increased net earnings 34 percent to 85 million euros in the three months to June. On a quarterly basis, second-quarter net interest income rose 14 percent to 207 million euros, a sign of more normal conditions in deposit markets, the bank said. The bank said it was taking measures to offset the negative impact of the financial crisis. «Such measures include the repricing of selected loan and deposit products and services, management of nonperforming loans, increase in non-interest income, cost containment and prudent expansion of the group in the new markets that offer higher margins,» it said. The bank said there was a small increase in loans and deposits, reflecting weak demand for lending. There was a 1 percent increase in loans and a 2 percent increase in deposits in the year to June. Bank of Cyprus operates in Cyprus, Greece, Russia, Ukraine, Australia, Romania and Britain. Bulgaria wants stronger links with new highways SOFIA (Reuters) – Bulgaria plans to build three highways in the next four years to end the Balkan country’s geographic isolation and revive its shrinking economy, Construction Minister Rosen Plevneliev said. The new center-right government inherited an infrastructure neglected due to years of corruption, political bickering and bad management. It now aims to streamline administration and fight graft to ensure the European Union does not block the 1.7 billion euros ($2.44 billion) it has earmarked for roads and regional development by 2013. Brussels has already frozen hundreds of millions in aid due to concerns about Bulgarian fraud. «Bulgaria has the label of the most corrupt country in the European Union. It has arrogantly refused to take any measures… Until that changes there will be no EU funds,» Plevneliev told Reuters. Alpha placement Alpha Bank, Greece’s third-largest lender, yesterday placed to 6.14 million treasury shares with an institutional investor at 12.12 euros each. The placement, which represents 1.49 percent of the bank’s common voting shares, raised 74.4 million euros ($106 million). The bank did not disclose who the buyer was. (Reuters) Five-year bonds Investors should buy Greek and Belgian five-year bonds against equivalent German debt as the differences in yield have further room to narrow amid improved risk appetite, UniCredit SpA said. «For some combination of issuer/maturity, yield spreads to Germany have reverted back to the pre-Lehman levels and there is no upside potential left,» Luca Cazzulani, a fixed-income strategist in Milan at UniCredit wrote. (Bloomberg)