Following the Bank of Cyprus, Eurobank reported its profits.
According to Cyprus' largest financial institution, its net profit after all taxes in the first quarter of 2024 totalled €383 million, up 50.1 per cent on the same period in 2023.
Effective management of operating expenses, combined with an increase in operating profit, led to a further improvement in the cost-to-income ratio to 19.9 per cent.
Net interest income increased by 13.7% compared to Q1 2023 to Jervo 571 million, mainly due to income from grants, bonds and overseas activities. Net interest margin increased year-on-year by 34 basis points to 2.87%.
Net fee and commission income increased 4.9% year-on-year in the first quarter of 2024 to €136 million, mainly driven by network and asset management income, 68 basis points higher than total assets. As a result of the above, organic revenue increased 11.9% year-on-year to €707 million. Total income rose 21.8 per cent year-on-year to €755 million in the first quarter of 2023.
Organic profit before provisions increased 16.5% year-on-year to €478 million and total profit before provisions increased 32% compared to the first quarter of 2023 to €526 million. Provisions for bad debts decreased by 5.5 per cent year-on-year to €71 million in the first quarter of 2023 and corresponded to 68 basis points.
As a result, organic operating profit before tax increased 21.4% year-on-year in the first quarter of 2024 to €407 million.
Despite inflationary pressures, rising energy prices and geopolitical events in the preceding months, Eurobank's net credit growth in 2023 totalled €143m.
The bank said that at the same time, the quality of the loan portfolio continues to improve. The non-performing loan ratio (NPE ratio based on European Banking Authority guidelines, ETA) fell to 3 per cent from 5.1 per cent in the first quarter of 2023.
Capital adequacy also remained strong in the first quarter of 2024, with the total capital adequacy ratio (CAD) increasing to 20.2% from 18.4% and the common equity ratio (CET1) rising to 17.2% from 15.5% a year earlier. Current loans increased organically by EUR 0.4bn in the first quarter of 2024. Total loan balances (before provisions) totalled €42.7bn.
Customer deposits decreased by €0.1bn in the first quarter of 2024 to €57.3bn. Savings and demand deposits accounted for 64 per cent of the total, while time deposits accounted for 36 per cent. At the end of the first quarter of 2024, the loan-to-deposit ratio was 72.5 per cent and the liquidity coverage ratio was 179 per cent.
Financial results for the first quarter of 2024 were very good. We achieved improved profitability and strengthened capital adequacy, record low non-performing loans (NPLs), thus building an excellent loan portfolio. Today we can say that we have successfully navigated the challenges we faced due to high inflation, volatility and uncertainty caused by the geopolitical environment, as well as the need for digital transformation and green transition," said Michalis Luis, CEO of Eurobank Cyprus.