Bank of Cyprus Plc, the country’s largest lender, said first-quarter profit rose almost fourfold because of a change in accounting for derivatives on Greek government debt and a deferred tax benefit on the securities.
Net income in the three months to March 31 increased to 295 million euros ($382.4 million) from 74 million euros in the same period of 2011, the Nicosia-based bank said in an e-mailed statement today.
Excluding the derivative and tax items, profit was 99 million euros. The tax benefit relates to the writedown in the value of its holdings in Greek government debt, the lender said.
The cost to income ratio for the quarter improved from 50.9 percent to 42 percent helped by a 17 percent drop in wage costs and a 4 percent reduction in other operating expenses, according to the statement.
The bank reported a core Tier 1 ratio, a measure of financial strength, of 6.8 percent following a capital increase plan. The lender said it estimates it needs another 200 million euros in capital to reach the European Banking Authority’s core Tier 1 target of 9 percent.
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