Bank of Cyprus recorded a profit after tax of €71m for 2022, compared to €30m for 2021. Exceeding the targets of the latest forecasts of November 2022, the Bank recorded improved performance, while 2022 was also a record year for new lending.
During the presentation of the results at a press conference on Monday, the CEO of the Group, Panicos Nicolaou said that “we are pleased to announce a positive set of financial results for 2022, exceeding our targets and confirming the sustainability of our business model with well-diversified revenues and disciplined cost containment despite inflationary pressures”.
Profitability
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The Bank recorded profit after tax to €71m, compared to €30m in 2021. Return on Tangible Equity (ROTE) after tax and before non-recurring items stood at 11.3% for the year 2022, from around 10 % which was the last forecast in November, at €188m, up 107% year-on-year, supported by rising interest rates.
Total revenue in 2022 was €699m, compared to €581m in 2021. Net interest income was €370m, up 25% on the previous year. Non-interest income for 2022 included increased net fee and commission income, as well as exceptionally high insurance income, contributing a total of 47% to total income.
Total expenses amounted to €381 million, compared to €383 million for 2021, down 1% year-on-year, of which 50% related to personnel costs, 40% related to other operating expenses and 10% related to the special tax on deposits and other fees/contributions.
The cost-to-income ratio adjusted for the special tax on deposits and other levies/contributions for the year 2022 stood at 49%, compared to 60% in 2021.
“Capitalising on this strong performance we are today upgrading our ROTE target for 2023 to over 13% from over 10%, laying the foundations to commence meaningful dividend distributions from 2023 onwards, subject to regulatory approval and market conditions. The ROTE target upgrade is facilitated by our positive gearing to rising interest rates, the significant contribution from non-interest income whilst maintaining cost discipline, a healthy loan portfolio and solid capital position”, Nicolaou said in his statement.
Deposits
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Total deposits of the Bank at the end of 2022 amount to €19 billion, increased by 8% on an annual basis. BoC holds 37.2% of the market share in deposits. The cost of deposits remains low, with interest rates on time and notice deposits having increased by 10 bps from the third to the fourth quarter of 2022.
BoC holds a strong liquidity position with €7.6 bn placed at the ECB, well positioned to benefit from further interest rate increases. The CET1 Ratio rose to 15.4% and the Total Capital Ratio to 20.6%.
Loans
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With new lending recorded at €2.1 billion, up 17% year-on-year, 2022 was a record year for Bank of Cyprus since 2015, with business loans making up the vast majority of the portfolio. The Bank holds 40.9% of the loan market share.
It is also noted that 99% of the loans granted from 2016 onwards are performing. The portfolio of net performing loans amounts to €9.6 billion and is increased by 3% on an annual basis.
At the same time, the NPL ratio fell to 4%, from 12.4% in 2021, with the completion of Helix 3 in November and the sale of €0.6 bn.
More than a bank
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Nicolaou also emphasised the technological development of the Group, noting that “we are a technology company that happens to give loans, we are not just a bank”. Specifically, active internet and mobile banking users reached 412,000 at the end of the year, while 94% of total transactions are conducted digitally. In addition, as of January, mobile loans are being provided, with the aim of gradually replacing all activities carried out in stores digitally.
Highlighting the total offer of the Bank of Cyprus in the country, Nicolaou said that “in addition to being a financial blood donour” of Cyprus, the Bank of Cyprus offers more overall to Cyprus society, through the Oncology Center, to which more than €70 million has been donated since 1998, through the Support CY network, with over €880 million in contribution to society. He also highlighted the BoC Cultural Foundation, and IDEA, an NGO that acts as incubator accelerator for start-ups.
Source: Cyprus News Agency