Bank of Cyprus reported a strong post-tax profit of €401 million for the first nine months of 2024, with €131 million earned in the third quarter alone, marking a 15% rise from the previous year. This profit, translating to €0.90 per share, was primarily driven by steady net interest income and growth in new loans, positioning the Bank to exceed its 2024 financial goals.
For the period, net interest income (NII) totaled €624 million, a 9% increase year-over-year, with third-quarter NII stable at €204 million despite a 25-basis-point rate reduction. The Bank’s return on tangible equity (ROTE) reached 22.9%, underscoring its operational strength and profitability.
The Bank saw robust lending activity, issuing €1.7 billion in new loans, up 9% from last year. This increase brought the gross performing loan portfolio to €10 billion, a 3% rise since the end of 2023, as Cyprus’s economic growth is projected to surpass the Eurozone average with an estimated 3.7% GDP rise in 2024.
Operating expenses increased by 7% to €266 million, mainly due to inflation. However, the Bank maintained a low cost-to-income ratio of 32%, supported by its €7.5 billion ECB reserves, indicating a highly liquid and resilient balance sheet.
Meanwhile, the Bank’s non-performing exposure (NPE) ratio dropped to 2.4%, with a coverage ratio of 96%, demonstrating strong asset quality.
This quarter, Bank of Cyprus moved its stock listing from the London Stock Exchange to the Athens Stock Exchange (ATHEX), aiming to enhance both share liquidity and market visibility.
The Bank’s capital position remains solid, with a Common Equity Tier 1 (CET1) ratio of 19.1% and a Total Capital ratio of 24.3%, factoring in a planned 50% profit distribution. For the full year, the Bank is targeting a payout ratio of 50%, which aligns with the upper range of its distribution policy.
CEO Panicos Nicolaou emphasized the Bank’s focus on sustainable growth and value generation for shareholders, highlighting that its diversified business model and steady net interest income create a foundation for enduring earnings in a shifting rate environment.
Looking ahead, Nicolaou indicated that the Bank will soon review its financial targets and distribution policy for 2025, aiming for a high-teens ROTE on a CET1 ratio of 15%, adapting to the changing economic landscape and interest rate environment.
Source: Stockwatch Cyprus