Nicosia: Bank of Cyprus announced on Monday net profits of £117 million for the first quarter of 2025, marking an increase of 9% on a quarterly basis. The bank also reported a record new lending figure of £842 million, reflecting a 16% rise compared to the previous quarter.
According to Cyprus News Agency, the bank’s key performance indicator, Return on Tangible Equity (ROTE), remained high at 18.3%, surpassing its target for 2025. The Common Equity Tier 1 (CET1) ratio and Total Capital Ratio stood at 19.9% and 25%, respectively, incorporating earnings for the first quarter of 2025, with adjustments for a related distribution provision. Operating profit reached £160 million, up 5% on a quarterly basis, while total expenses decreased by 17% to £90 million.
The bank’s performing loan portfolio rose by 3% since the start of the year, reaching £10.45 billion. The Non-Performing Loans (NPL) ratio improved to 1.8%. Additionally, the distribution ratio was maintained at 50% for 2024, with a scheduled cash dividend of £211 million set for payment on June 25, 2025, and share buybacks totaling £30 million commencing in February 2025. The bank announced a distribution policy with a payout ratio of 50-70% from 2025 onwards and is considering introducing interim dividends.
Bank of Cyprus Group Chief Executive Panicos Nicolaou expressed satisfaction with the bank’s performance, citing an efficient business model with a cost-to-income ratio of 34% and credit quality remaining robust. He highlighted a 3% growth in the performing loan portfolio, supported by a 16% increase in new lending on a quarterly basis. International lending now represents approximately 10% of the loan portfolio, having grown 34% year-on-year, achieving the bank’s target.
Nicolaou underscored that the bank’s strategic management actions have positioned it strongly amid global economic uncertainties. On an annual basis, however, profits after tax decreased by 12%, and total income fell by 8% to £255 million.
The report also noted a rise in total customer deposits, which amounted to £20,702 million by March 31, 2025, marking a 7% annual increase. The loan-to-deposit ratio stood at 50%, slightly up from 49% at the end of 2024. The Liquidity Coverage Ratio (LCR) improved to 330%, well above regulatory requirements.
In a move to strengthen its market position, Bank of Cyprus has proposed a final cash dividend of £0.48 per ordinary share, nearly double that of the previous year, pending approval at the upcoming Annual General Meeting. The bank also initiated a buyback program to reduce its share capital.
Nicolaou commented on the resilience of the Cyprus economy, which grew by 3.4% in 2024, outpacing the Eurozone average. He noted the anticipated interest rate cuts by the ECB and the bank’s expectations for a rate of 1.5% by the end of 2025.
On the acquisition front, Nicolaou confirmed the strategic acquisition of Ethniki Insurance Cyprus to bolster the bank’s position in the insurance sector. He also touched on the challenges of establishing new banking organizations in Cyprus and mentioned the bank’s approach to voluntary exit plans.