Eurobank Cyprus posted soaring profitability after tax for the first half of 2023 with net profits approaching to the profitability of full year 2022, due to rising interest rates and the high renumeration of its liquidity held at the ECB.

Eurobank Cyprus which is a subsidiary of Greek Eurobank SA, said in a statement that profit after tax for the first half of 2023 amounted to €90.8 million, increased by €53.6 million or by 144% compared with the first half of last year. Furthermore, Eurobank Cyprus’ profitability for the first half of this year is close to the bank’s profit for full year 2022 which amounted to €94.3 million.

In a bid to control soaring inflation, the ECB has embarked on monetary tightening cycle imposing nine rake hikes in 12 months, with Cypriot banks benefiting due to their large liquidity held at the ECB.

According to the bank, the effective management of operating costs along with higher operating profits, resulted in a further improvement of the bank’s Cost-to-Income ratio, which decreased from 32% in the first half of 2022, to 19% in the first half of 2023.

Eurobank Cyprus’ Capital Adequacy and Common Equity Tier 1 (CET1) ratios remained strong, increasing to 29.9% during the first half of 2023 and by 260 basis points compared to the period ended 31 December 2022, and remain “significantly higher than the minimum regulatory requirements set for 2023,” according to the bank.

The loans to deposits ratio (excluding loans secured by deposits) is 31%, with total deposits reaching €7,261 million, representing an increase of €58m since the beginning of the year, the bank added.

In a statement, Michalis Louis, Eurobank Cyprus’ Chief Executive Officer said “the first half of half of 2023 ended with a positive outlook, which allows the Bank to continue to support entrepreneurship, sustainable investments, and its private clients.”

Noting that Eurobank Cyprus’ key priority is to continue to evolve and provide high-quality specialised services to our customers, through a customer-centric approach, which has always been a core element of our modus operandi and differentiates Eurobank from the competition, Louis noted that within this framework, we proceeded, from 1 June 2023, with a reduction of our interest rate on mortgage loans by 50 basis points for a one-year period, in an effort to reward and support individual borrowers who are up to date with their loan repayment obligations.

He also said that "with a view to further increase the Bank’s activities, we have emphasized in upgrading our Private Banking division, providing integrated services and products through the Group’s presence in Cyprus, Greece, Luxemburg, and the UK."

“Eurobank has always held a leading position and provided innovative services in the field of Wealth Management and will continue to do so in the future,” he said.

Furthermore, Louis encouraged “the government to continue, without any hesitation, to prudently manage the country's public finances, while remaining committed to achieving a fiscal surplus, a significant reduction of public debt which unfortunately is still very high and continue to strive for an upgrade of Cyprus’ credit rating.”

“The positive image created in the past few years must be maintained and further strengthened in the period ahead. Any decisions must be very well thought out, since the current circumstances, both at the international and domestic level, do not allow for any complacency,” he concluded.