Nicosia: Bank of Cyprus reported post-tax profits of £118 million for the second quarter of 2025, consistent with the previous quarter, bringing first-half net earnings to £235 million, a 13% decrease year-on-year. Despite the decline, the bank achieved a strong return on tangible equity (ROTE) of 18.4%, surpassing its 2025 target, driven by solid lending activity and robust liquidity.
According to Cyprus News Agency, the group’s financial results for the six months ending 30 June 2025 revealed basic earnings per share of £0.54, while the non-performing exposure (NPE) ratio fell to 1.7%. Regulatory capital levels remained robust, with a Common Equity Tier 1 (CET1) ratio of 20.6% and a total capital ratio of 25.8%.
Customer deposits rose 6% year-on-year to £20.9 billion, predominantly retail-based, with 55% covered by the deposit guarantee scheme. Customer deposits constituted 77% of total assets and 86% of liabilities as of end-June. Total equity (excluding minority interests) stood at £2.794 billion, a decrease from £2.92 billion at the end of March.
Net interest income (NII) for H1 2025 totaled £368 million, down 12% year-on-year, reflecting a normalization in interest rates. Second-quarter NII decreased 2% to £182 million. Total income for the half-year fell to £509 million from £549 million in H1 2024, despite a 10% increase in non-interest income, which reached £141 million. This increase included £88 million in net fee and commission income, £24 million from insurance activities, and £18 million in trading and investment gains.
Operating expenses rose 8% year-on-year to £181 million, with personnel costs accounting for £105 million. Total costs for Q2 2025 reached £102 million, up 7% from the previous quarter, primarily due to wage pressures.
In a written statement, CEO Panicos Nicolaou highlighted the Group’s sustained momentum. “We continued to demonstrate strong performance in the first half of 2025,” he said, attributing the robust ROTE to improved liquidity and strong loan demand. He noted that the bank expects to surpass its initial loan growth target of around 4% for the year.
The Group’s cost-to-income ratio stood at 36%, reflecting what Nicolaou called “an efficient business model.” Nicolaou also pointed to the Group’s strategic progress in diversifying its revenue streams. In July, Bank of Cyprus completed the £29.3 million acquisition of Ethniki Insurance Cyprus Ltd, expected to further reinforce its leadership in the domestic insurance market and boost non-interest income.
Reflecting the bank’s solid performance, an interim dividend of £0.20 per share was announced, representing a 40% payout ratio from first-half earnings. Nicolaou added that the Group is targeting a full-year payout ratio of 70%, the upper end of its 50-70% distribution policy. “We remain committed to supporting our customers and the broader Cypriot economy,” he said, “while continuing to deliver attractive returns to our shareholders.”
The group also participated in the 2025 EU-wide stress test conducted by the ECB’s Single Supervisory Mechanism, ranking among the top-tier institutions in terms of capital resilience under adverse scenarios. The bank highlighted improvements over the 2023 test, attributing the performance to strong capital buffers, consistent organic capital generation, and a resilient business model.