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LONDON (Alliance News) - Bank of Cyprus Holdings PLC on Monday said its first quarter profit more than halved as the lender continues its scheme of reducing its non-performing loans.
Bank of Cyprus also said it will appoint Panicos Nicolaou to replace John Patrick Hourican as chief executive.
Nicolaou has been working with the bank since 2001, mostly within the Corporate Banking division.
Hourican is set to leave in September, with Nicolaou taking up the CEO-designate role in the meantime.
In the three months to March 31, the bank's profit before tax and non-recurring items was EUR25 million compared to EUR56 million the year before, a 53% decrease.
The lender's profit after tax attributable to shareholders was EUR95 million in the first period, a significant swing from a EUR67 million loss last year.
The swing was attributed to a EUR109 million gain on a change in tax legislation but saw a EUR21 million decrease on adjustments related to Project Helix.
Bank of Cyprus' net interest income decreased 3.8% to EUR102 million from EUR106 million in the corresponding period the year prior. The lender's total income decreased 17% to EUR176 million.
"Our results this quarter reflect continuing progress against our core objective of balance sheet repair. We have continued to make good progress towards completion of the sale of about EUR2.7 billion non-performing loans in Project Helix, including obtaining the required regulatory approvals from the European Central Bank for the significant risk transfer benefit from the transaction. We expect completion during the second quarter of 2019," said outgoing Chief Executive John Patrick Hourican.
The bank's net loans & advances at the end of the quarter stood at EUR10.96 billion compared to EUR10.92 billion at December 31. Gross loans were flat over the same period at EUR13.16 billion.
Bank of Cyprus held EUR15.39 billion in risk-weighted assets at the end of the period. The lender reported sixteen consecutive quarters of non-performing loan reduction, which now sit at EUR2.4 billion - down 70% since the end of 2014.
Bank of Cypru's CET1 ratio at the end of the period was 13.4% versus 11.9% at December 31.
In the first quarter, Bank of Cyprus' net interest margin was 2.27% compared to 2.38% the year before.
The lender's total expenses increased 9.4% to EUR105 million from EUR96 million the year before.
The decrease in income and rise in expenses saw the lender's cost-to-income ratio rise to 60% at March 31 compared to 46% the year before.
Hourican added: "2019 is a year in which management is putting in place the final significant steps to repair the balance sheet. We have also worked hard on revising our business model. Our digital transformation programme that started in 2017 is now beginning to clearly deliver an improved customer experience and our branch network is now half the size it was in 2013. But there is a need to further rationalise, further modernise and reduce the cost of running the bank. Considerable work is going on in this important area which is a key focus for management this year."
Shares in Bank of Cyprus were down 0.9% Monday afternoon at EUR1.36 each.