Return on Tangible Equity (ROTE) stands at 21.3% for the first three months of the year
The profits of the Bank of Cyprus for the first quarter of 2023 amounted to to €95 million, compared to €75 million for Q4 2022 and €17 million for Q1 2022. Return on Tangible Equity (ROTE) stands at 21.3% for Q1 2023, compared with 17.3% for the fourth quarter of 2022 and 4.0% for the first quarter of 2022.
The Common Equity Tier 1 (CET1) ratio with transitional provisions stood at 15.2% at 31 March 2023 compared to 15.2% at 31 December 2022, restated. The creation of organic capital for the first quarter of 2023 amounted to 90 bp. During the first quarter of 2023, the Common Equity Tier 1 (CET1) ratio was positively affected by income before provisions and negatively by the final introduction of the transitional provisions of IFRS 9 and other transitional arrangements, provisions and impairments and other changes . Additionally, the Common Equity Tier 1 (CET1) ratio was positively impacted by the €50 million dividend distributed to the Bank in February 2023 by the life insurance subsidiary. The Total Capital Adequacy Ratio stood at 20.3% at March 31, 2023 compared to 20.4% at December 31, 2022 as adjusted.
The Group's borrowings amounted to €10,278 million at 31 March 2023, compared to €10,217 million at 31 December 2022, up 1% from the previous quarter, as repayments partially offset new borrowing.
New lending in Cyprus in Q1 2023 was seasonally strong at €624m (compared to €444m for Q4 2022 and €622m for Q1 2022), up 41% quarter-on-quarter and roughly flat year-on-year, while maintaining strict lending criteria. The quarterly increase is also due to seasonality in demand. The new lending provided during the first quarter of 2023 consisted of loans to large companies amounting to €297 million, loans to individuals (retail banking) amounting to €186 million (of which housing loans amounting to €108 million), loans to SMEs amounting to €77 million and loans in the shipping and international operations sector amounting to €64 million
Non-Performing Loans at 3.8%
EBA-based non-performing loans (EBA-based NPLs) decreased by €22 million, or 5%, in Q1 2023, compared to a decrease of €607 million in Q4 2022 (from of which approximately €550 million related to Project Helix 3), to €389 million at 31 March 2023 (compared to €411 million at 31 December 2022). The decrease in Q1 2023 is mainly due to a net organic decrease in NPLs of €22m (inflows of NPLs based on EBT minus outflows of NPLs based on EBT) compared to €57m on 31 December 2022. As a result, NPLs represent 3.8% of total loans as of March 31, 2023, compared to 4.0% as of December 31, 2022.
NPL coverage ratio stands at 73% as of March 31, 2023, compared to 69% as of 31 December 2022. Taking into account collateral at fair value, NPLs are fully covered.
The Group's total customer deposits stood at €18,974m at 31 March 2023 (compared to €18,998m at 31 December 2022) roughly flat in the first quarter and up 7% year-on-year. Customer deposits are mostly from individuals and around 60% of deposits are protected by the deposit guarantee fund. The Bank's market share of deposits in Cyprus stood at 37.3% at 31 March 2023, compared to 37.2% at 31 December 2022. Customer deposits constituted 75% of total assets and 82% of total liabilities at 31 March 2023 (at the same levels as 31 December 2022). The loan-to-deposit (L/D) ratio (after provisions) stood at 53% at 31 March 2023 (compared to 52% at 31 December 2022 on a like-for-like basis), unchanged from the first quarter.
The cost-to-income ratio adjusted for special tax on deposits and other fees/charges for Q1 2023 was 34%, compared to 39% for Q4 2022 and 60% for Q1 2022. Both the quarterly and the annual decrease of 5 p.e.m. and 26 a.m. respectively, it is due to higher total revenues.
Staff costs amounted to €46 million for the first quarter of 2023, down 4% year-on-year, as a result of the Voluntary Retirement Plan which took place in c ΄ quarter 2022, and partially offset by inflationary pressures. Personnel costs were up 9% quarter-on-quarter mainly due to cost-of-living adjustments (automatic indexation (ATA)) (equivalent to around 50% of the annual increase in inflation for the year ending 31 December 2022) , salary increases and from the provision for staff benefits of approximately €2 million (variable remuneration).
The Group employed 2,883 people on 31 March 2023 compared to 2,889 people on 31 December 2022 and 3,395 people on March 31, 2022.