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Bank of Cyprus loss 1.8 billion euros on Greece, provisions

Staff writer |
Bank of Cyprus Group announced its financial results for the six months ended June 30, 2013. Loss after tax attributable to the owners of the company totalled 1,8 billion euros.

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Total Income for the six months ended 30 June 2013 was €500 mn, with Net Interest Income (NII) at €430 mn and Net Interest Margin (NIM) at 3,17%. Both NII and NIM are affected by the bail-in of depositors which impacted the Bank's deposit base and its cost of deposits.

Total income was negatively affected by losses related to foreign exchange and other financial instruments (€26 million) as well as by revaluation losses from investment properties (€34 million).

Total expenses were €285 million with staff costs and other operating costs €173 million and €112 million respectively and the cost to income ratio at 57,0%. Profit before impairments and restructuring costs was €215 million.

Provisions for impairment of loans were €539 mn, with the provisioning charge accounting for 3,9% of gross loans on an annualised basis. The elevated provisioning reflects the continued deterioration in the loan portfolio due to the advancing recession and the ongoing reduction in collateral values in Cyprus.

Loss before restructuring expenses, discontinued operations and the disposal of Greek operations totalled €314 million. Disposal of Greek operations resulted in a loss on disposal of €1,4 billion. For the acquisition of Laiki' operations the Bank issued shares to Laiki amounting to 18,1% of the Bank's share capital.

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