Popular Bank Posts 9-month Losses of 1.67 Bln Euros, Sues Greece
Cyprus Popular Bank said it has losses of 1.67 billion euros for the first nine months, compared to losses of 292 million for the same period last year. It has also launched a lawsuit against Greece through the firm Skadden, Arps, Slate, Meagher and Flom LLP seeking equal treatment in relation to other banking institutions in the country. Access to liquidity and capital support for Greek banks would help CPB to offset losses on Greek sovereign debt, said the bank.
Greek banks are due to receive massive recapitalisation funds in December and the first quarter of 2013 from the European Financial Stability Fund (EFSF). The next bailout payment is set at 43.7 billion euros, with 23.8 billion earmarked for the banks.
But Cyprus' banks, heavily interdependent on Greek business, have suffered in the aftermath of the Private Sector Involvement (PSI) deal struck with Greece's lenders. In CPB's case, the bank is waiting for a 1.8 billion-euro refinance through Cyprus' own bailout application, currently being negotiated with the Troika.
Revenues for CPB in the first nine months stood at 638 million euros versus 839 million a year ago, a drop of 24 percent. Net interest income decreased by 21 percent annually to 469 million euros. Net fee and commission revenue dropped 12 percent to 119 million euros, said the bank.
CPB's cost-cutting programme is showing results, with total operating expenses falling to 449 million versus 472 million, said the bank.
CPB has closed branches in Greece and Cyprus, and has reduced the number of local branches by 11 since June 2012. It now has 95 branches from 106 previously.
Further branch closures are expected by the end of the year, said CPB.
Staff cuts have resulted in savings of 23 million after retirements and staff cuts.
CPB was nationalised earlier this year after turning to the state for financial aid after massive losses on its exposure to Greek debt.