* Cypriot bank makes first profit in seven quarters
* Bank of Cyprus recapitalised on deposits last year
* Bank says less skipping on loan payments
NICOSIA, May 30 Bank of Cyprus, which
recapitalised by seizing some depositors' funds last year,
reported its first profit in seven quarters on Friday, saying it
was on track on deleveraging and improving the quality of its
First-quarter profit after tax was 31 million euros ($42
million) after a 103 million loss in the last quarter of 2013.
Profit after tax and before restructuring costs and
discontinued operations came in at 72 million euros compared
with a 38 million euro loss in the last quarter of last year.
"These figures demonstrate we are beginning to make evident
and tangible progress," John Hourican, a former RBS senior
executive appointed Chief Executive Officer at the bank after
its near-meltdown last year, said at a results presentation.
Bank of Cyprus recapitalised by converting large deposits
into equity, affecting many wealthy individuals, particularly
It was also forced to assume assets of now-defunct Laiki
Bank and launched extensive deleveraging from non-core markets,
bringing its core tier 1 capital ratio - an indicator of
financial strength - to 10.6 percent.
In the second quarter of this year it disposed of its
Ukrainian operations, an investment in Romania and loans in
Serbia, reducing its risk profile and improving its core equity
by a further 0.3 percentage points, the bank said.
For the first time in 16 quarters there was a quarterly
decline in loans in arrears for more than 90 days, but Hourican
said more needed to be done by Cypriot authorities to cut the
problem loan book, calling for legislative changes.
The bank said it was also too early to say whether a
slowdown on people failing to repay loans was a sustainable
Bank of Cyprus has appointed HSBC to act as advisors to
review and advise on its restructuring process. Hourican said
the process was ongoing, and declined to be specific on any
Asked to comment on local reports the bank was considering a
capital increase ahead of European stress tests, and to a report
on Britain's Sky News that a listing on the London Stock
Exchange was also among potential options, he said:
"It is no secret the bank has appointed HSBC to review the
options and structure," Hourican said. "As part of that exercise
they are reviewing all options including funding and capital
At the "appropriate time" the bank would inform the broader
public, he said.
(Reporting by Michele Kambas; Editing by Ruth Pitchford and