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(Alliance News) - Bank of Cyprus Holdings PLC on Tuesday announced a narrowed loss in the first half of 2019, while it will also be starting a restructuring.
Shares in Bank of Cyprus were down 4.3% at EUR1.60 in London during early morning trade.
The bank is making changes to its organisational structure, including shrinking the legacy portfolio and aiming at "digital transformation and cost reduction".
The bank posted a narrowed pretax loss of EUR15.7 million for the six months to June from EUR55.9 million the year before, and registered a EUR31 million underlying pretax profit before non-recurring items for the six months to June, 49% lower than a year before.
Bank of Cyprus reported a 3.8% drop in net interest income to EUR204.1 million, though the underlying figure income climbed 2.4% to EUR170 million.
Foreign exchange gains and net gains on financial instrument transactions and subsidiary disposals fell 38% to EUR26 million.
In June, Bank of Cyprus completed the sale of EUR2.7 billion of non-performing loans in Project Helix and agreed to sell its minority stake in CNP Cyprus Insurance Holdings Ltd.
As at June 30, the company's net loans and advances to customers totalled EUR10.95 billion, up 0.3% from EUR10.92 billion. Gross loans were 0.1% lower at EUR13.07 billion, and customer deposits fell 3% to EUR16.38 billion.
The firm's net interest margin for the six months was 1.88%, up from 1.86%. The cost to income ratio was 63%, rising from 56%, and the lender's common equity tier 1 ratio was 15.2%, compared to 14.9% at December's end.
The company also said the appointment of new Chief Executive Panicos Nicolaou has been approved by the European Central Bank and Nicolaou will assume the role at the start of September. He is replacing outgoing CEO John Hourican.
Turning back to the restructuring, Bank of Cyprus said the new structure is organised "along the structural areas of functions, business and legacy". The restructure is to be effective by the end of October, and includes a number of new roles and many changes.
First deputy CEO Christodoulos Patsalides is to oversee a new function, Regulatory Affairs, which will "further enhance the regulatory dialogue".
Local business lines, the bank said, "have been re-organised to create a clear distinction between Corporate, SME and Retail" and this will be headed by deputy CEO Charis Pouangare, who is to oversee International Banking as well.
Incoming CEO Nicolaou said: "I am excited to be taking over on September 1. John is leaving with the bank being entirely transformed from its position at the time he arrived and we are very grateful for the work he and my fellow executive team have done.
"There remains more to do and our initial focus will be to continue the good work he and the team have achieved. The strategy to de-risk the bank and strengthen the balance sheet remains as important today as it was in 2013."
"Together with the continued de-risking of the bank, my focus will be on ensuring our business model is best placed for the future and we will further rationalise and modernise the bank and identify ways to reduce the cost of running the bank," Nicolaou continued.
"As with all other European banks, the changed interest rate environment presents a challenge to our profitability levels. In response, we will remain focused on actively managing our funding costs and identifying ways to reduce our cost base, while looking for opportunities to enhance our revenue dynamics."
