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Profits of € 30 million in 2021 for Bank of Cyprus

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The Bank of Cyprus' profits after tax for 2021 closed at € 30 million, according to the Group's Preliminary Financial Results for 2021, which were announced today. & Nbsp;

In a statement, the & nbsp; CEO of Bank of Cyprus, Panikos Nikolaou, stated: & nbsp;

“In 2021, the Cypriot economy recorded a strong recovery, after a period of reduced economic activity due to the pandemic, which led to an improved environment in which the Bank performed well. During the year we continued to support the country's return to growth, providing new loans of € 1.8 billion, an increase of one third over the previous year and a steady recovery in pre-pandemic levels. We recorded profits for the year despite the restructuring costs. Having achieved the significant benchmark of the single-digit NPV percentage, we are currently reviewing our medium-term strategic goals, emphasizing value creation for our shareholders, including increasing the target for return on equity from 7% to over 10% foundations for return to dividend distribution, depending on performance and after obtaining the necessary approvals.

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Financial Performance in 2021

During the year, we had total revenues of € 581 million and operating profits of € 198 million, while the cost of credit debt was reduced by half, to 57 bp. We recorded profit after tax and before non-recurring items of € 91 million. The final result for the year was net profit of € 30 million, after non-recurring restructuring costs of € 61 million. In 2021, we carefully managed the base We kept our operating expenses below € 350 million. The cost-income ratio rose to 60%, at the same level as the previous year. The NPL percentage for loans decreased to 7.5% on an adjusted basis, much earlier than previously expected, after the completion of the NPP sale of € 1.3 billion (Project Helix 2) and the agreement for the sale of a further NPP of € 0.6 billion (Project Helix 3 ), with a positive effect on capital ratios and our results. In 2021 we also recorded an organic decrease in NPLs of approximately € 400 million. In total, in 2021, we reduced NPLs by 75% on an adjusted basis. During the year, we further strengthened the Bank's capital position. As of December 31, 2021, our capital ratios (with transitional provisions) amounted to an Overall Capital Adequacy Ratio of 20.8% and a Class 1 Common Equity Ratio (CET1) of 15.8%, on an adjusted basis. In April 2021, we successfully refinanced the Tier 2 Tier 2 bond and proceeded with the first issue of a high repayment priority bond eligible for MREL of € 300 million.

Shaping the Bank for the Future

Our strategic pillars remain the same. Revenue enhancement with optimal asset management, improving the operating model through further synergies, ensuring portfolio quality, and building organizational resilience through a strategy for a sustainable future. Our transformation plan will enable us to succeed in these strategic pillars, utilizing our customer base across the country. We are also at an advanced stage of development of a digital platform that will allow us to offer our customers services beyond banking and create new revenue streams. The further redefinition of the Group, our positive performance during the year, and the stable growth prospects for the Cypriot economy, allowed us to review our medium-term goals. We expect to reduce the NPV to around 5% by the end of 2022 and to below 3% by the end of 2025. We remain focused on creating value for our shareholders and increasing the medium-term return on equity and raising the target to over 10%. Sustainable development will continue to be embedded in our culture. We are committed to achieving a neutral carbon balance by 2030 and a zero by 2050, while supporting customers and society in this transition. The Bank has the commitment, the size and the scope to lead the change in Cyprus in the coming years.


Our vision for the future of the Bank is clear and we remain committed to continue to play our role in the economic development of the country, which together with the development and implementation of the Development and Sustainability Plan for Cyprus, is expected to be strong. . We remain confident that our strategy will bring about sustainable profitability and create value for our shareholders in the medium term. “

Highlights for the year ended December 31, 2021

Positive end result

• Profits after tax and before non-recurring items of € 91 million

• Profits after tax amounting to € 30 million

Careful Cost Management

• Total operating expenses1 amounting to € 347 million, at approximately the same levels on an annual basis

• Cost to revenue ratio1 at 60%, at the same levels on an annual basis

Strong Capital Position and commencement of issuance of bonds eligible for MREL

• Class 1 Common Equity Index (CET1) 15.8% 2.3 and Overall Capital Adequacy Ratio 20.8% 2.3

< p> • Successful refinancing of Tier 2 bond at significantly lower interest rate

• Initial issue of a high repayment priority bond eligible for MREL amounting to € 300 million. Achieving compliance with the MREL interim requirement for January 1, 2022

• Reduction of MED percentage to loans to 7.5% 2 (3.1% 2.4 after credit losses), after the sale of MES signed in November 2021 (Helix 3)

Revised Medium Term Strategic Objectives

Return on Tangible Equity (ROTE) & gt; 10% for 2025 MED rate on loans approximately 5% by the end of 2022 and & lt; 3% by the end of 2025 Determining the path for dividend distribution5 from 2023 onwards Announcement of ESG6 Objectives: Achieving Climate Neutrality (Carbon Neutral) by 2030 and Achieving Net Zero Balance (Net Zero) by 2050

Highlights for the quarter ended December 31, 2021

Strong Recovery Continues

• Growth rate of 6.0% 1 for the fourth quarter of 2021, higher than the eurozone average of 4.6%

• New borrowing of € 471 million for the fourth quarter of 2021 and a total of € 1.8 billion for in the year 2021, increased by 33% on an annual basis, recovering to pre-pandemic levels

Positive Performance from Operational Activities

• Total revenue of € 154 million for the fourth quarter of 2021, increased by 11% on a quarterly basis. The increase is mainly due to higher non-interest income

• Operating profit of € 55 million for the fourth quarter of 2021, increased by 33% on a quarterly basis

• Profit after tax and before non-recurring items of € 27 million for quarter 2021

• Small-scale targeted Voluntary Retirement Plan with a non-recurring cost of € 16 million. Gross annual cost savings of approximately 3%

• Profit after tax of € 10 million for the fourth quarter of 2021 Operational Efficiency

• Total operating expenses2 amounting to € 87 million for the fourth quarter of 2021, approximately at the same levels on a quarterly basis

μ. on a quarterly basis, supported by the increase in non-interest income

Strong Capital Position and Liquidity

• Category 1 Common Equity Index (CET1) 15.8% 3.4 and Overall Capital Adequacy Ratio 20.8% 3.4

• Deposits amounting to € 17.5 billion, increased by 2% on a quarterly basis. Significant liquidity surplus of € 6.4 billion

Single Rate of MES to Loans

• Reduction of MES to loans to 7.5% 4 & nbsp; (3.1% 4, 5 after the credit losses)

• Agreement for sale of NPLs (Helix 3) amounting to € 0.6 billion in November 2021

• Organic reduction of NPLs of approximately € 400 million for the year 2021

• 96% of the serviced loans6 under the suspension of capital and interest payments that ended with the payment of an installment until February 8, 2022, showed no arrears

Source: www.philenews.com

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