ECONOMY

Bad loans make investors nervous

Shares in Bank of Cyprus (BoC) tumbled 7.05 percent yesterday to 4.09 euros, a day after the lender reported a 38 percent drop in 2009 net profit to 313 million euros. Brokers said the figure was in line with expectations, adding that higher provisions for bad loans had made investors nervous about the bank’s asset quality. BoC said nonperforming loans (NPLs), credit in arrears for more than three months, rose to 5.6 percent at the end of the year from 5.2 percent in September. ‘The higher figure for provisions shows the bank is adopting a more cautious approach for 2010. This was interpreted as a sign of weakness by markets,’ said a broker. Analysts cited management as saying that they expect NPLs in Greece to rise to 7.0 and 7.5 percent in 2010.