ECONOMY

In Brief

Q1 interest income boosts Cypriot lender Bank of Cyprus Pcl, the biggest lender on the eastern Mediterranean island, said first-quarter profits climbed 29 percent after interest income increased. Net income rose to 81 million euros ($99.5 million) in the three months to March 31 from 63 million euros a year earlier, the Nicosia-based bank said yesterday in an e-mailed statement. Bank of Cyprus, which also has operations in Greece, Russia, Australia, Ukraine, Romania and the UK, expects 2010 profits of 300 million to 400 million euros with a positive contribution from all of its markets. Income from lending advanced 33 percent to 242 million euros in the first quarter after the bank adjusted its pricing policy «to the new economic environment,» the lender said. Interest income from Greece rose 58 percent to 77 million euros. (Bloomberg) Bulgaria puts off ERM-2 application until 2011 BUCHAREST (Reuters) – Bulgaria has delayed until next year its plans to apply for the pre-euro ERM-2 waiting room, Finance Minister Simeon Djankov said yesterday, as the European Union’s poorest country battles prolonged recession. Bulgaria stumbled on its way to join the two-year obligatory waiting room for euro hopefuls in April when it revealed a hidden 2009 budget gap, hurting its credibility and reviving concerns about fiscal transparency in the region. «We can’t apply for ERM-2 this year; we have to wait. But starting on January 1 of next year we will be ready to move. Our intention is to apply next year,» Finance Minister Djankov said at a financial seminar in Bucharest. He did not elaborate. The center-right GERB party, which came to power last July, had hoped that Bulgaria could adopt the euro by 2013, but the recession, coupled with a spiking fiscal deficit and hurdles in the eurozone, have made that goal unrealistic, analysts say. Bank levy Banks should pay a levy to help prevent future bailouts and shield taxpayers from the burden of multibillion-euro rescues, the European Union’s top financial chief proposed yesterday. European governments are currently battling a debt crisis that has caused the euro to slide sharply against the dollar. The crisis was partly caused by the huge price that states paid to rescue their financial systems over the past two years. EU Internal Market Commissioner Michel Barnier said yesterday it is «not acceptable» that taxpayers should pay for costs that should be borne by banks. He suggested that banks should pay a charge toward a fund in their country that would help to pay for the costs of shoring up a bank that is teetering on the edge of collapse. (AP) Turkey weighs Intralot, the world’s second-largest lottery systems provider, is seen as posting a 30 percent drop in first-quarter net profits tomorrow, hurt by a less lucrative Turkish contract and recession in southeast Europe. Analysts polled by Reuters forecast on average net profits of 15.5 million euros ($19 million) versus 22 million in the same period last year. «Although the Turkish sports betting market continues its growth trend, Intralot will log an unfavorable year-on-year comparison as the company was running the contract under a higher commission structure during January-February 2009,» National P&K Securities said in a note. (Reuters) Lehman compensation Citigroup Inc’s Greek unit plans to offer compensation to clients advised by the bank to buy investments linked to Lehman Brothers Holdings Inc. Citibank Greece, which has operated in the country since 1964, will offer customers 70 percent of the nominal value of their Lehman investments «as a sign of good will and good faith,» even though the bank has «no liability nor any legal obligation» to do so, the Athens-based lender said yesterday in an e-mailed statement. Lehman filed for bankruptcy in September 2008, owing more than $600 billion. The firm’s collapse shocked financial markets and sparked lawsuits by former clients around the world whose assets were frozen in bankruptcy proceedings. Greek authorities in 2009 fined Citibank International Plc a total of almost 1.6 million euros ($2 million) in three separate sanctions for alleged infringements related to transparency between 2004 and 2007. Citibank has appealed all of the penalties. (Bloomberg)