NICOSIA - There was more grief for the island’s troubled banking system yesterday as Bank of Cyprus posted a first-half net loss of €134 million hit by a Greek haircut and higher provisions for bad loans.
The bad news came as new chairman Andreas Artemis took the helm declaring that ‘hard work’ was required to overcome the debt crisis.
His task is to help restore public trust in a bank that has seen a spate of board resignations and unflattering leaks about how it does business.
Along with Popular Bank, BoC is blamed for pushing Cyprus into the EU support mechanism through taking unnecessary risks on toxic Greek bonds.
Both banks must now streamline and recapitalise with the approval of the Troika which will decide how much money they actually need to survive.
The bank reported a net loss of €107 million in the first half of 2011.
BoC said it significantly raised provisions for loan impairments to €568 million - a 210% increase on the same period a year ago - taking accumulated provisions in the first half to €2 billion.
Profit before provisions and before Greek sovereign bond impairments declined 6% to €360m.
Unable to meet European Bank Authority requirements on core regulatory capital, Bank of Cyprus sought €500 million from the government, while Popular Bank required €1.8 billion from the state.
The bank said its capital deficit, as defined by the EBA, was estimated at approximately €730 million.