“This profitability was achieved within a quarter that was marked by a courageous reduction of interest rates. Our aim is to continue to converge Cyprus rates with the European average in order to help the economy regain its competitiveness,” said board Chairman Nicolas Hadjiyiannis.

“The Cooperative Bank that we are planning ahead will be even stronger and innovative so as to serve our thousands of members and customers,” he added.

However, despite lowering interest rates in order to help its cooperative clients, operational costs were reduced in the first quarter, while the bank has maintained its level of non-performing loans at 44.1% of its loanbook, far below the national level of above 50%.

The bank’s balance sheet increased by about €260 million from the previous quarter to €14.2 billion that includes €1.29 billion in own funds, with the Core Tier 1 capital adequacy ration dropping marginally from 13.6% to 13.3%.

The government bailed out the bank with a €1.5 billion capital injection last year and it is now nationalised, having merged all local Cooperative Credit Societies under one roof, but the group is not state-controlled and aims to consolidate the Cooperative sector further by selling off non-core assets and reducing its operational expenses.

With net interest income (NII) dropping to a quarter, from €378.9 million to €89.5 million, operating profits reached €59.9 million due to a continued reduction of costs that helped cut the cost-to-income ratio marginally to 37.2%.

The bank currently employs 2,670 people, 33 less than the previous quarter, and aims to reduce this number further to 2,580 by the end of 2017.

Total loans and other facilities reached €10.03 billion, down €100 million from the previous quarter, due to a fall in demand and continue deleveraging by retail and corporate customers.

NPLs increased by €200 million to €6.9 billion, while deposits also rose by €242 million to €12.6 billion.

Source: Financial Mirror