Bank of Cyprus First-Half Loss Widens on Provisions, Bonds
The net loss in the six months to June 30 widened to 134 million euros ($167.5 million) from a loss of 107 million euros in the same period of 2011, according to an e-mailed statement today from the Nicosia-based lender.
Bank of Cyprus, which sought aid from the Cypriot government in June to meet capital requirements, said the capital shortfall was defined by the European Banking Association on June 30 at about 730 million euros.
The bank said it increased provisions for bad loans to 568 million euros from 63 million euros in the first half last year mainly due to the deteriorating economic environment at home and in Greece, its largest overseas market. Loan provisions for Cyprus rose to 208 million euros from 62 million euros and in Greece they increased to 317 million euros from 95 million euros.
The bank said it recorded an additional loss of 109 million euros in the six months on its holding of Greek government debt compared with the year earlier period.
The lender will submit a recapitalization and restructuring plan for approval both by Cypriot authorities and the so-called troika of the European Central Bank, European Commission and the International Monetary Fund that will be directly linked to capital needs, according to the statement.
These needs will be assessed in the context of a stress- testing exercise in cooperation with the troika and the authorities, the bank said.
Cyprus on June 25 became the fifth euro-area country to seek external aid. The country’s loan agreement will be partly based on the capital requirements of the Cypriot financial system.
To contact the editor responsible for this story: Jerrold Colten at email@example.com