Bank of Cyprus: Project Helix & Non Performing Loans in 2019

Results for Bank of Cyprus’ 2018 annual profit-loss report was recently published, showing losses after tax of just over EUR €100 million, which, even though is a negative figure, experts have been quick to point out noteworthy improvements on the 2017 fiscal year losses of EUR €549 million.

As we go into Quarter 2 of 2019, economists are optimistic about Cyprus overall growth; the islands capital position has strengthened as a result of the agreement for the sale of just under EUR €3 billion of non-performing loans (NPLs) through Project Helix; which is going to be concluded later this month.  

How 2018 Figures Foreshadow 2019 for Bank of Cyprus

Towards the end of 2018, rumours about Cyprus’ need for recapitalisation stopped as positive figures were recorded:

  • Common Equity Tier 1 ratio was found to be 15%
  • Total Capital ratio at 18%.
  • Total gross income of EUR €791 million.
  • Positive operating profit of EUR €385 million.
  • Provisions for 2018 were reduced by 78% from 2017. (EUR €167m compared to EUR €779m in 2017).

Bank of Cyprus Chief Executive Officer Mr Hourican who is resigning later this year made some comments about his last months in post: “2019 will be a significant year in the transformation of the Bank and one in which we will make momentous progress on a number of fronts against our objective of balance sheet de-risking and refocusing the business in supporting the growing Cyprus economy.”

Project Helix & Selling the Islands' NPLs

Mr Hourican stated that BoC’s balance sheet repair was accelerated through the agreement for the sale of EUR €2.7 billion non-performing loans specifically as a result of Project Helix.

“This portfolio sale complements our organic non-performing loan reduction, which amounted to EUR €1.3bn for the full year. During the first quarter of 2019, we have been working hard to reduce NPLs by almost EUR €300 million, which marks the 15th consecutive quarter of organic reductions in NPLs.”

The Cyprus government have adopted strong approach for continuing the improvement in the asset quality position of the lender and to keep tackling the residual EUR €4.5 billion of non-performing loans currently drowning the lender.

During the Quarter 4 of 2018, the lender’s deposits in Cyprus remained broadly stable, registering a surplus liquidity of EUR €3.1 billion as the end of the 2018 financial year. Figures for 2019 debt recovery in Cyprus remain optimistic as project Helix is fully underway.


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