Troubled bank of Cyprus posts €50m second quarter profit

Troubled Bank of Cyprus, the island's largest lender, said Wednesday it made 50 million euros ($66 million) net profit in the second quarter, its second successive quarterly gain after seven straight losses.
For the six months ending in June, the bank made after tax profits of 81 million euros, following a 31 million positive result in the three months to March.
The cost to income ratio for the first half dropped to 38 percent from 47 percent for 2013 as a whole.
However, customer deposits shrank 8 percent to 13.80 billion euros as of June 30 from 14.97 at end-December, Bank of Cyprus said.
The bank's shareholders will meet on Thursday to vote on a 1 billion euro capital increase via placement with institutional investors in Europe, North America and Russia, though some existing shareholders are unhappy with the plan.
In March last year, Cyprus signed up for a 10 billion euro bailout loan from the European Union and International Monetary Fund to rescue its troubled economy and unwieldy banking system.
The deal included closure of the island's second-largest bank, Laiki, and a 47.5 percent "haircut" on deposits above 100,000 euros at Bank of Cyprus.
The bank has since undergone major restructuring, including absorbing the good assets of the former Laiki Bank.
"We have made good progress in the implementation of our restructuring during the second quarter of 2014, and we continue to deliver against our strategic objectives," Bank of Cyprus CEO John Patrick Hourican said in a statement.
"The performance of the Cypriot operations, our core business, remains much stronger than the group's overall performance, supporting our efforts of shrinking to strength through the disposal of non-core operations and assets," he added.
The bank has sold non-core assets in Romania, the Ukraine and Serbia totalling 450 million euros.
Hourican called Thursday's EGM a "page turning" moment for the bank.
"This capital increase will boost the bank's Tier 1 ratio... to 15.1 percent, positioning the bank at the upper end of the capital league table for European banks," he said.
Parliament is scheduled to vote on Monday on a new law aimed at helping Bank of Cyprus and the island's other lenders speed up action to deal with the high level of non-performing loans, calculated at around 45 percent across the banking system.