NICOSIA, Oct. 25 (Xinhua) -- Bank of Cyprus (BOC), the eastern Mediterranean island's systemic lender that was at the center of a cataclysmic banking resolution at the start of the 2013 near melt down of the economy, has come out of the crisis strong and is expanding, CEO John Hourican told an annual general meeting of shareholders on Tuesday.
As an indication of the bank's strong position, Hourican said the bank will be able to repay in full an 11.4-billion-euro(12.41 billion U.S. dollars) Emergency Liquidity Assistance debt to the European Central Bank early next year.
The ELA debt is a legacy of the former Cyprus Popular Bank which was wound down in early 2013 and folded into BOC by international lenders who bailed out Cyprus under a 10-billion-euro financial arrangement.
"From a high in April 2013 of 11.4 billion we are now at less than 1 billion. We hold more liquid assets than ELA and we expect to fully extinguish the remaining ELA early next year," Hourican told shareholders recounting progress in the first 1,000 days after the crisis.
He also said that the bank's core capital (Tier one) stood at 14.4 percent, a level that compares well with European banks generally, and is not expected to raise any additional equity.
However, it considers exploring the possibility of introducing Tier two capital to further strengthen its balance sheet and supplement its equity capital base.
"This is another positive and deliberate action on our recovery journey," he added.
Hourican said BOC was responsible for approximately two thirds of the reduction of non-performing loans of the whole banking system though having only a 40 percent share of the lending.
Non-performing loans stood at over 50 percent of the total loan portfolio of all banks at the height of the crisis and Hourican said it will be with the banking system for a long time to come.
Concerning BOC's own non-performing loans, Hourican said they fell by 18 percent or 2 billion euros during the first six months of 2016.
Hourican also said that listing BOC on London Stock Exchange is an ongoing effort. Bank sources said that this may be done early in 2017.
Bank of Cyprus Board Chairman Dr Josef Ackerman, a Swiss banker who had been a CEO of Deutsche Bank, said BOC and the Cypriot economy are proceeding hand in hand.
He said the Cypriot economy outperformed all projections and has achieved a 2.7 percent growth in the first six months of this year after having been in the red for 12 consecutive quarters up to the last quarter of 2015.
This he said, has been achieved despite adverse international setbacks, such as the deterioration of the economy in Greece and Russia and to a lesser extend the Brexit decision.
"In parallel, the ongoing intensified negotiations on the political reunification of Cyprus between the two community leaders offer, in case of a hoped-for successful outcome, major eventual potential economic benefits," he said.
But he cautioned that this also poses major transitional challenges that deserve close attention.
He suggested that the existing EU policy, legal and administrative framework can serve as an ideal basis for the functioning of a federal state in Cyprus.
