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(Alliance News) - Bank of Cyprus Holdings PLC on Wednesday posted a sharply widened loss for 2019 and said that it expects to record increased organic provisions in the first quarter of 2020 due to the challenging economic conditions resulting from the Covid-19 pandemic.
The bank also said it will delay the sale of its non-performing loan portfolio due to the "prevailing market and operational conditions".
CEO Panicos Nicolaou said: "Whilst we are currently seeing lower transactional income and lower demand for loans, the on-going economic uncertainty means that we do not have sufficient visibility about the likely future impact of Covid-19 on the group's operations or financial results, and are therefore currently not in a position to provide guidance for the current financial year.
"Following the outbreak of Covid-19, we are now focused on arresting any potential asset quality deterioration. Once economic conditions normalise, we expect to resume our efforts to improve our asset quality position by seeking solutions, both organic and inorganic, to make the bank a stronger and safer institution, capable of continuing to support the local economy".
The company recorded a pretax loss of EUR180.6 million for 2019, sharply widened from EUR33.4 million pretax loss a year ago.
Total annual revenue fell 10% to EUR910.6 million from EUR1.01 billion, with net interest income declining 13% to EUR366 million. Fee and commission income fell 2.2% to EUR171.7 million.
The sharply widened loss was attributed to one-off costs relating to the completion of a voluntary staff exit plan and losses relating to sales of non-performing loans.
The bank's non-performing loans portfolio stood at EUR3.88 billion at 2019-end compared with EUR4.09 billion at September 30 , 2019, and EUR7.42 billion at 2018-end.
Group gross loans for the year totalled EUR12.82 billion versus EUR15.90 billion. Customer deposits remained broadly flat during the year at EUR16.69 billion.
Bank of Cyprus said its Common Equity Tier 1 capital ratio stood at 14.8% at 2019-end versus 15.2% at September 30, 2019, and 11.9% at 2018-end.
Shares closed up 2.3% at EUR0.66 each in London on Wednesday.
By Tapan Panchal; tapanpanchal@alliancenews.com
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