NICOSIA --- The Bank of Cyprus has announced losses of 1.01b  euro after tax and the impairment of Greek Government Bonds (GGBs), according to the preliminary Bank of Cyprus Group’s Financial Results for the year ended 31 December 2011.

However, according to the preliminary financial results, the Group achieved the profitability targets set for 2011, excluding the impairment of Greek Government Bonds (GGBs), despite the continuing negative economic developments in the main markets in which it operates, and achieving increased profit before provisions and increased profit before tax and impairment of GGBs for 2011.

Specifically, profit before provisions and the impairment of GGBs reached 805 million euro, registering an increase of 11% compared to 725 million for 2010 and profit after tax excluding the impairment of GGBs reached 312 million compared to 306 million for 2010, noting an increase of 2%.

The Group has reduced the book value of its GGBs by 60% of their nominal value. The after tax impairment of GGBs, including related hedging costs, amounted to 1.323 million euro for 2011. On 31 December 2011 the book value after impairment of the GGBs held by the Group amounted to 975 million euro.

The Group is strengthening its capital base via the Capital Strengthening Plan which is expected to be completed in March 2012. The Plan includes a Rights Offering to raise up to 397 million euro and a voluntary exchange of Convertible Enhanced Capital Securities with ordinary shares of up to 600 million. In addition, the Group is proceeding with other actions to strengthen its capital adequacy ratios, including the effective management of risk weighted assets and the strengthening of its capital base from profits in order to comply with the required regulatory capital adequacy ratios.

In order to further strengthen its capital base and its liquid funds, on 16 December 2011 the Group signed a binding agreement to sell its subsidiary bank in Australia, Bank of Cyprus Australia Ltd. The sale has a positive contribution of around 77 million euro to the Group’s regulatory capital. The sale will improve the Group’s liquid funds by around 250 million euro.

Upon the completion of the Capital Strengthening Plan in its entirety, the pro-forma Core Tier 1 capital ratio and Tier 1 capital ratio as at 31 December 2011 would have been 9,1% and 10,5% respectively.

The Group currently operates through a total of 583 branches, of which 199 operate in Russia, 188 in Greece, 137 in Cyprus, 42 in Ukraine, 12 in Romania, 4 in the United Kingdom and 1 in the Channel Islands. Bank of Cyprus also has 6 representative offices in Russia, Romania, Ukraine, Serbia and South Africa.

The Bank of Cyprus Group employs 11.326 staff worldwide.

At 31 December 2011, the Group’s Total Assets amounted to 37,84 billion euro and the Shareholders’ Funds were 2,70 billion.