The bank said that it had “high excess liquidity”, meaning deposits are significantly higher than loans.

Deposits reached €3.1 billion at the end of the first quarter, while the loan to deposit ratio is only 30%, compared with more than 130% for the Cypriot banking system as a whole.

Eurobank reportedly grabbed a lot of clients fleeing other banks in Cyprus during the 2013 crisis, which would explain its strong liquidity position.

In a statement issued when announcing the results, Eurobank said, “The positive results, the high level of service and quality of service have established Eurobank Cyprus as first bank in the areas Corporate Banking, Asset Management Retail Banking, International Banking and Capital Companies.”

The Greek subsidiary also has a very low non-performing loan ratio of just 6.1% based on the new regulations of the European Banking Authority (EBA).

This compares with more than 50% for the banking system as a whole.

With these positive figures it is no surprise that the bank reported a very high capital adequacy ratio of 28.4%, which it said is based on the new Basel III banking criteria.

Optimism on economy
Eurobank said it was “optimistic” about the Cyprus economy. “This optimism is based on the state of public finances, a successful exit of the country into the international markets, the positive performance of major sectors of the economy such as tourism and services … and in the course of economic sentiment indicators such as those recorded in official announcements.”

Alluding to issues in Greece, it said, “With competitive advantages of strong capital, excess liquidity, a conservative approach in terms of taking risks, the low NPL ratio and the low cost base, Eurobank Cyprus is shielded against any effects or challenges that may result from the macroeconomic environment.”

Source: InCyprus