Overall financial results of Cypriot banks have recorded profits of €186.1 million for the first time since 2010.
After losses of more than €15 billion between 2011-2017, banks in Cyprus sent out a positive signal in 2018 after a year marked with the closure of the Cyprus Co-op Bank and the transfer of its assets and liabilities to Hellenic Bank. It was also a year of remarkable deleveraging of property loans by banks.
At the same time, bank asset write-downs were reduced to €569 million in 2018, compared to past years when they far exceeded €1 billion, striking profitability and capital.
The reduction of the banking sector and the closure of Co-op bank is reflected also in their interest income which was limited to €1.6 billion. It is the first time in years that bank interest income is less than €2 billion. But, nonetheless, it was enough to lead to organic profitability since interest costs were just €645.9 million.
Income from fees and commission also continued to fall, possibly because of the tighter regulatory environment as regards shell companies and foreign transactions in general.
As a result of the closure of the Co-op, overall assets of banks were reduced to €59.6 billion compared to €67.6 billion by the end of 2017. The size of Cypriot banks is now three times bigger than the country’s Gross Domestic Product. In 2010, Cypriot banks had overall assets of €154 billion.