Bank of Cyprus reports modest profit for 2016

The Bank of Cyprus, the largest bank in this island nation, Thursday posted what it said was a "modest" after-tax profit of 64 million euros (67.2 million U.S. dollars) for 2016.

In a statement announcing provisional results for 2016, bank CEO John Hourigan said he was pleased "to have delivered a modest profit in 2016".

"We have started 2017 with the full repayment of Emergency Liquidity Assistance, a successful return to the debt capital markets and the successful listing of our shares on the London Stock Exchange," he said.

He added that the results were satisfactory and reflected the bank's strategy of continued de-risking.

Hourigan said non-performing loans were down by 2.9 billion euros or 21 percent of the total red loans on a year-on-year basis.

Bank of Cyprus was forced by Cyprus' international lenders to convert 47.5 percent of uninsured deposits over 100,000 euros into bank stock in March 2013, to replenish its depleted core capital, and also to take on the wound down Cyprus Popular Bank, known as Laiki, with all its assets and liabilities.

It had to repay 11.4 billion euros in Emergency Liquidity Assistance offered to Laiki by the European Central Bank before its demise.

Hourigan said that deposits in the bank in the fourth quarter grew by 867 million euros and, at the end of December its loan to deposit ratio stood at a healthy 95 percent, well inside the European averages.

He said that profitability in the fourth quarter of 2016 was strong at 148 million euros or 566 million euros for the full year, but in line with its on-going strategy it continued to direct the majority of its operating profit to de-risk its balance sheet and drive asset quality improvement.

"Underpinning the group's momentum is a recovering Cypriot economy. It was pleasing to note a 2.8 percent growth rate in the underlying economy for 2016. This allowed us grant new lending of more than 1 billion euros to the Cyprus economy in 2016," Hourigan's statement said. Endit