Co-ops post €37m in first quarter profit

CO-OP banks posted a net profit of €37.1m in the first quarter of the year, it was announced on Thursday, despite reductions in interest rates and a €22.4m hike in provisions for bad debts.

“The profit we are announcing today was achieved in a quarter marked by the courageous reduction in borrowing rates,” Co-operative Central Bank chairman Nicolas Hadjiyiannis said, adding that the objective was to converge the island’s rates with the European average.

Total provisions at the end of March rose to €3.04bn, maintaining a provisioning rate of 44.1 per cent for loans that have not been serviced for over 90 days.

Based on the target of the co-op’s restructuring scheme, the provisioning rate must exceed 60 per cent by 2017.

Net proceeds from interest rates reached €89.5m, down due to the significant drop in interest rates.

Operating profit was €59.9m, an improvement compared with previous quarters due to cuts in expenditure.

Co-ops said loans and other advances in Q1 were €10bn.

Non-performing loans rose by €200m to €6.9bn, compared with the end of 2014.

Co-ops aim to reduce NPLs to below €4.5bn in 2017.

Deposits in Q1 recorded an impressive rise of €242m to €12.6bn.

“We remain focused on our vision, to create a better day for our country, through the noble values of the co-operative movement, which, our fellow citizens need today, more than any other time,” Hadjiyiannis said.

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