26/08/2003 16:12
The net profits of the Popular Bank for the first half of 2003 have showed a small increase of 4.4% compared to the corresponding period of 2002. The increased debts offset the bad debts and the salaries and have resulted to six-month profits of CYP 6.5 million compared to CYP 6.2 million in the corresponding period of 2002.
This increase is attributable to the upward trend of the net interest margin, which has increased from 2.75% in December 2002 to 2.8% in June 2003. The impact from the increase in the net interest margin is reflected in the operating income of the Group, which has showed an increase of 7.4% reaching CYP 94.2 million (2002: CYP 87.7). The income from the net interests amounts to CYP 62.8 million (2002: 56.7) despite the enforcement of stricter regulations by the Central Bank. According to the new regulations, interest receivable on advances which are more than nine months in arrear is not recognized as income in the Profit and Loss Account.
Provisions for bad and doubtful debts have showed an increase of 102.3% reaching CYP 22.1 million compared to CYP 10.9 million in the corresponding period of 2002. According to the announcement, the increased provisions reflect the prevailing uncertainty on the impacts from the reduction in tourist arrivals and the weak signs of recovery in the world economy.
Staff costs for the first half of 2003 have also showed an increase of 12.1%. The payroll of the Popular Bank increased from CYP 35.1 million to CYP 39.5 million, mostly due to the increases from the renewal of the union contract. It is worth noting that the increase in payroll for Cyprus reached 14.2%.
Prospects
For the full year 2003, the Bank anticipates that there will be an increased operating profitability. As regards to the future, the Group expects that the Cyprus’ accession in the EU will benefit the Cyprus economy and the banking sector.
This increase is attributable to the upward trend of the net interest margin, which has increased from 2.75% in December 2002 to 2.8% in June 2003. The impact from the increase in the net interest margin is reflected in the operating income of the Group, which has showed an increase of 7.4% reaching CYP 94.2 million (2002: CYP 87.7). The income from the net interests amounts to CYP 62.8 million (2002: 56.7) despite the enforcement of stricter regulations by the Central Bank. According to the new regulations, interest receivable on advances which are more than nine months in arrear is not recognized as income in the Profit and Loss Account.
Provisions for bad and doubtful debts have showed an increase of 102.3% reaching CYP 22.1 million compared to CYP 10.9 million in the corresponding period of 2002. According to the announcement, the increased provisions reflect the prevailing uncertainty on the impacts from the reduction in tourist arrivals and the weak signs of recovery in the world economy.
Staff costs for the first half of 2003 have also showed an increase of 12.1%. The payroll of the Popular Bank increased from CYP 35.1 million to CYP 39.5 million, mostly due to the increases from the renewal of the union contract. It is worth noting that the increase in payroll for Cyprus reached 14.2%.
Prospects
For the full year 2003, the Bank anticipates that there will be an increased operating profitability. As regards to the future, the Group expects that the Cyprus’ accession in the EU will benefit the Cyprus economy and the banking sector.
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