Bank of Cyprus announced on Monday net profits of €117 million for the first quarter of 2025, up by 9% on a quarterly basis.
The Bank also announced a record new lending of €842 million in the first quarter of 2025, up by 16% on a quarterly basis.
The key performance indicator, Return on Tangible Equity (ROTE), remained high at 18.3%, above the Bank’s target for 2025.
The Common Equity Tier 1 (CET1) ratio and Total Capital Ratio stood at 19.9% and 25%, respectively, including earnings for the first quarter of 2025, with a reduction for a related distribution provision.
Operating profit amounted to €160 million, up 5% on a quarterly basis, while total expenses amounted to €90 million, down 17%.
The performing loan portfolio stood at €10.45 billion, up 3% since the beginning of the year, while the Non-Performing Loans (NPL) ratio to loans decreased to 1.8%.
The distribution ratio stood at 50% for 2024, consisting of a cash dividend of €211 million to be paid on June 25, 2025, while share buybacks will amount to €30 million, commencing in February 2025.
The Bank announced a distribution policy with a payout ratio of 50-70% from 2025 onwards, while considering the introduction of interim dividends.
Commenting on the results, Bank of Cyprus Group Chief Executive Panicos Nicolaou said that the Bank delivered a strong performance in the first quarter of 2025. “Our business model remains efficient with a cost to income ratio of 34% whilst credit quality remained robust with NPEs remaining below 2% and cost of risk under 40 bps”, he added
He also noted that “our performing loan portfolio increased by 3% since the beginning of the year to €10.45 billion, supported by strong new lending, which increased by 16% on a quarterly basis.”
He added that international lending now accounts for approximately 10% of our performing loan portfolio, up 34% year-on-year, noting that the 10% target for international lending has been achieved and “we have now exceeded €1 billion and our target is to reach €1.5 billion in the medium term.”
He explained that international lending relates to large Greek companies, international syndicated loans and shipping (Cypriot and Greek shipowners).
“The decisive management actions taken in recent years ensure that Bank of Cyprus faces the current heightened global economic uncertainty from a position of strength,” noted the Bank’s CEO.
According to the Bank of Cyprus’ financial results for the first quarter of 2025, on an annual basis, profits after tax are down 12%, while total income is down 8% to €255 million.
On an annual basis, operating profits are down by 13%, while total expenses are up 3%.
Net interest income amounted to €186 million, down by 6% on a quarterly basis and 13% on an annual basis.
The Group’s total customer deposits amounted to €20,702 million on March 31, 2025 (compared to €20,519 million on December 31, 2024 and €19, 260 million on March 31, 2024), up 7% on an annual basis and 1% since the beginning of the year.
As at 31 March 2025, according to the Bank of Cyprus, customer deposits are mainly retail-funded and 55% of deposits are protected by the deposit guarantee fund. The Bank’s market share of deposits in Cyprus stood at 37.5% as at March 31, 2025, compared to 37.2% as at December 31, 2024.
Customer deposits amounted to 77% of total assets and 87% of total liabilities as at 31 March 2025 (compared to 77% of total assets and 87% of total liabilities as at 31 December 2024).
The loan-to-deposit ratio (after provisions) stood at 50% on March 31, 2025, compared to 49% on December 31, 2024, on the same basis, up 1 p.p. from the beginning of the year.
The Group’s gross loans amounted to €10,600 million on March 31, 2025, compared to €10, 374 million on December 31, 2024, up 2% since the beginning of the year, mainly due to increased demand for corporate loans and reflecting seasonality in such demand.
The Group’s performing loan portfolio increased by 3% since the beginning of the year and amounted to €10.45 billion, in line with the 2025 target of a 4% increase on an annual basis.
According to the Bank of Cyprus, new lending in Cyprus in the first quarter of 2025 amounted to €842 million (compared to €727 million in the fourth quarter of 2024 and €676 million in the first quarter of 2024), up 16% on a quarterly basis and 25% on an annual basis.
Bank of Cyprus is the largest lender in Cyprus with a market share of 43.1% as at 31 March 2025, compared to 43.0% as at 31 December 2024.
On March 31, 2025, the Group’s Liquidity Coverage Ratio (LCR) stood at 330% (compared to 309% on December 31, 2024), well above the minimum regulatory requirement of 100%. The liquidity surplus in the LCR as at 31 March 2025 amounted to €8.2 billion (compared to €8.1 billion as at 31 December 2024, roughly unchanged on a quarterly basis).
Distribution ratio of 50% for 2024
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The Bank’s Board of Directors has resolved to propose to the Annual General Meeting to be held on May 16, 2025, for approval, a final cash dividend of €0.48 per ordinary share in respect of earnings for the year ended December 31, 2024, almost doubled compared to €0.25 per ordinary share in prior year.
The dividend, subject to approval by the AGM, will be paid in cash on June 25, 2025, to shareholders registered on the register on May 27, 2025 (the “Record Date”), while the Ex-Dividend date has been set for May 26, 2025.
In addition, in February 2025 the Company launched a buyback programme to buy back ordinary shares in the Company for an aggregate consideration of up to €30 mn for which approval by the ECB has been received. The purpose of the Programme is to reduce the Company’s share capital and therefore shares purchased under the Programme will be cancelled
Cyprus economy
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Nicolaou said that “the Cyprus economy continues to demonstrate resilience and good growth, despite increased global economic uncertainty”. He added that “the economy expanded by 3.4% in 2024, significantly outperforming the Eurozone average, with this trend expected to continue.”
“Whilst Cyprus’ direct exposure to higher US trade tariffs is limited, we remain alert to risks that Cyprus might experience indirect effects, via the European economy,” he stressed.
Responding to a related question, Nicolaou said that the economy remains in surplus, there are no delays in loan repayments, which are paid normally at the end of the month, adding that “without wanting to be overly optimistic, things are going very well so far,” but that there must be, among other things, surpluses, capital, and good loan coverage for the future, which are included in the scenarios prepared by the bank.
Regarding further interest rate cuts by the ECB, Nicolaou said that “when we make a forecast for the future, we believe that the interest rate will fall to 1.5% at the end of 2025” and “we are not making the forecast based on current interest rates.”
Regarding the record lending, the Bank’s CEO said that this was due to a combination of factors, including the good performance of the economy, the reduction in interest rates, and the expected further reduction in interest rates.
Acquisition of Ethniki Insurance Cyprus
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Regarding the acquisition of Ethniki Insurance Cyprus, Nicolaou said that “it is a small acquisition, but part of our strategy to strengthen our leading position in the life insurance and general insurance sectors, while increasing the contribution of non-interest income to the bank’s total income.”
He noted that this means a 15% increase in the Group’s annual insurance premiums and a 10% increase in the Group’s net results relating to insurance.
Regarding the efforts to establish the new Cooperative Bank, Nicolaou said that he did not know all the details to be able to respond, while noting that “it is always a difficult and complex undertaking to create a new banking organization, especially for small markets such as Cyprus.”
Regarding a possible new voluntary exit plan, Nicolaou said that the Bank would not come up with a large plan but rather small plans involving 40 to 45 people.