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Bank of Cyprus ups 2011 loss on Greek writedown

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A bigger writedown on Greek bonds widened Bank of Cyprus audited annual net loss to 1.37 billion euros from a preliminary 1.01 billion, Cyprus biggest lender said on Tuesday.

The bank said the final results included a 74 percent writedown on its Greek bonds, compared to 60 percent in preliminary results announced in February, Reuters reported.

The pre-tax impairment of Greek government bonds, including related hedging costs, amounted to 1.729 billion euros, representing 83 percent of their nominal value, it said.

Excluding the impairment, it achieved a 2 percent rise in profit to 312 million euros, unchanged from the preliminary figure.

Cypriot banks have reported record 2011 losses on exposure to Greek sovereign debt and need to be recapitalised by mid-year under a deadline set by the European Banking Authority.

The exposure is one of the key reasons cited by credit ratings agencies for repeated downgrades of the Cypriot economy, two of which now class Cyprus sovereign debt as junk.

Bank of Cyprus said it has increased its group Core Tier 1 capital by 592 million euros. It aims to complete capital strengthening by June 18 by placing up to 237 million euros in rights not exercised by their holders.

On Monday Cypruss finance minister said up to 1.5 billion euros may be needed to recapitalise the islands banking system, and this was likely to be restricted to just one bank.

Second-largest lender Cyprus Popular Bank needs to find more than 1 billion euros in fresh capital by the end of June.. Among Cypriot banks, it is the most exposed to Greek sovereign debt.
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