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Next Previous BOC: Earnings of € 21 million with a new loan record for the first quarter HOME • INSIDER • BUSINESS • BOC: Earnings of € 21 million with a new loan record for the first quarter < start>
& nbsp & nbspInsider & nbsp; & nbsp;
Profits after tax of € 21 million for the first quarter of 2022, compared to € 8 million in the first quarter of 2021, were recorded by the Bank of Cyprus. At the same time, it recorded a decrease in the percentage of NPLs to loans to 6.5% (2.7% after credit losses).
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Specifically, in a statement by the CEO of the Group, Panikos Nikolaou stated that, “The first quarter was characterized by an economic recovery, which we supported, as it turns out, by granting a record new loans of € 618 million. This marked the third consecutive quarterly increase. at an accelerating rate. Our new lending in the first quarter reached higher levels than the corresponding period before the pandemic, while maintaining strict lending criteria. However, economic growth is expected to slow to 2.7% for the year, affected by increased geopolitical risks, before accelerating to 3.8% in 2023, according to the Stability Program of the Ministry of Finance 2022-2025. Rising energy prices, which have led to inflationary pressures and disruptions in the global supply chain, have worsened further since the outbreak of war in Ukraine.
In the first quarter of the year, we had total revenues of € 146 million and operating profits of € 50 million. Despite inflationary pressures, we kept our total operating expenses (adjusted for excise duty on deposits and other fees/contributions) for the quarter at € 86 million, at the same levels as in the previous quarter, reflecting our ongoing efforts to limit spending. The quarterly cost of credit debt recorded a small increase in the first quarter of 2022 and reached 44 basis points, reflecting the revision of the macroeconomic outlook, but remaining within the limits of our target range. We recorded profits of € 27 million after tax and before non-recurring items, with a corresponding return on tangible equity (ROTE) of 6.7%. The total result for the quarter amounted to net profits of € 21 million
The Bank's capital position remains strong and significantly above regulatory requirements. As of March 31, 2022, Overall Capital Adequacy Ratio amounted to 20.3% and the Class 1 Common Shares Capital Index (CET1) amounted to 15.2%, with transitional provisions and on an adjusted basis. Our liquidity also remains strong and we continue to operate with a significant liquidity surplus of over € 6 billion, with the Liquidity Coverage Ratio (DPR) amounting to 296%. Deposits in our balance sheet increased by 1% during the quarter and amounted to € 17.7 billion.
The normalization in our balance sheet continued in the first quarter, with a further organic reduction of NPLs of approximately € 100 million, resulting in the reduction of the NPL percentage for loans to 6.5%, adjusted for NPL sales. We remain on track to meet our target of reducing the NPL rate on loans to around 5% by the end of the year and below 3% by the end of 2025.
Our plan for the future is clear. We have implemented a dynamic strategy, utilizing our strong customer base and the trust of our customers, our market leadership and the further development of our digital know-how and infrastructure. As a result, we remain clearly focused on creating value for our shareholders and laying the groundwork for dividend distribution. Since we shared with you our revised medium-term strategic goals in February, the external environment has changed. As a result, we now expect to achieve higher levels of tangible return on equity (ROTE) for each year starting in 2023, and to achieve a tangible return on equity of more than 10% a year earlier than originally expected. “
< p> Summary results of Bank of Cyprus
Stable macroeconomic data, reflected in the growth of the loan portfolio
• Growth rate of + 5.6% 1 for the first quarter of 2022. It is expected to slow to + 2.7% 2 in 2022 due to geopolitical developments p>
quarter 2022
Durable profitability from organic activities
• Total revenues of € 146 million, increased by 7% on an annual basis. Increase in net income from fees and commissions by 13% and decrease in net interest income by 7% on an annual basis, as expected, reflecting sales of NPLs
• Profit after tax and before non-recurring amounts of € 27 million, increased by 65% on an annual basis. Return on Tangible Equity (ROTE) after tax and before non-recurring items of 6.7%
• Profit after tax of € 21 million for the first quarter of 2022 compared to € 8 million in the first quarter of 2021
Operating efficiency
• Total operating expenses3 of € 86 million for the first quarter of 2022, increased by 4% on an annual basis
• Cost-to-income ratio3 to 59% for the first quarter of 2022, reduced by 1 p.m. on an annual basis
Strong capital position and liquidity
• Class 1 Common Equity Index (CET1) 15.2% 4.5 and Overall Capital Ratio
Satisfaction 20.3 4.5%, due to the gradual implementation of the transitional provisions of IFRS 9
• Deposits amounting to € 17.7 billion, increased by 1% on a quarterly basis. Significant liquidity surplus of € 6.4 billion
Average single-digit NPL on loans5
• Reduction of NPL on loans to 6.5% 5
& nbsp; (2.7% 5.6 after credit losses), lower by 1 p.m. on a
quarterly basis
• MES coverage ratio at 60% 5
. Borrowing credit losses of 44 bp
