The Bank of Cyprus announced a 23% increase in post-tax profits, reaching pound 270 million for the first half of 2024, compared to the first half of 2023. The bank also upgraded its financial targets for 2024 and 2025, saying that its goal is to distribute 50% of adjusted profitability as dividends for 2024, depending on market conditions and required approvals.
On a quarterly basis, post-tax profits increased by 4% in the second quarter, reaching pound 137 million.
Earnings per share stood at pound 0.61 for the first half of 2024 (compared to pound 0.49 for the first half of 2023), while the Return on Tangible Equity (ROTE) reached 23.7% for the first half of 2024.
The new lending of pound 1.2 billion is up by 10% on an annual basis, and the portfolio of performing loans, amounting to pound 10.1 billion, has increased by 3% since December 2023.
Group Chief Executive Panicos Nicolaou, in a statement said “we are pleased to announce that we delivered another quarter of strong profitability, demonstrating
the sustainability of our business model”.
For the sixth consecutive quarter, he said, “we achieved a ROTE of over 20%, comfortably exceeding our 2024 targets set in February 2024”.
He explained that this strong performance was the outcome of resilient net interest income evolution, continued cost discipline amid inflationary pressures and a low cost of risk. “Overall, we recorded earnings per share of pound 0.61 during the first half, delivering strong shareholder value creation, with tangible book value per share improving by 21% year on year to pound 5.27”, he noted.
Our capital position remains robust, said Nicolaou, adding that rapid capital build-up drove the CET1 ratio to 18.3% and Total Capital ratio to 23.3% net of distribution accrual as at 30 June 2024. “Our asset quality is healthy and continues to improve with the NPE ratio falling below 3% for the first time”, he remarked.
Noting the Cypriot economy continues to display strength and resilience against the backdrop of geopolitical uncertainty
, Nicolaou said that in 2024, GDP is forecast to grow by 2.9% and is expected to outpace the Eurozone average.
“Our strong financial and operational performance is also being reflected in higher credit ratings, with recent upgrades from Moody’s, Fitch and S and P. This includes a two-notch upgrade from Moody’s to the Bank’s long-term deposit rating to Baa1, two notches above investment grade, representing the highest long-term deposit rating for the Bank since 2011”.
Capitalising on this strong performance, and on the back of a supportive macroeconomic environment, said Nicolaou, “we are upgrading today our 2024 and 2025 financial targets. We now expect that reported ROTE will exceed 19% for 2024, and be mid-teens in 2025, facilitating strong CET1 generation of over 300 bps per annum before distributions”.
He said the BOC’s commitment to delivering sustainable shareholder returns is demonstrated by the distribution of pound 137 mn in respect of 2023 earnings comprising a cash dividend of pound 112 mn that
was paid in June 2024 and a share buyback of up to pound 25 mn that was launched in April 2024. Looking forward, we are now targeting a distribution towards the higher end of our payout ratio range (i.e 50%) for 2024, subject to market conditions and required approvals.
Nicolaou also said that the Board has reached the view that a listing on the Athens Stock Exchange (ATHEX) in conjunction with a delisting from the London Stock Exchange (LSE), will yield a number of long-term strategic and capital market benefits.
Concluding, he said “we are pleased with the progress we have made so far but remain focused on delivering for all our key stakeholders. We continue to execute our strategy, solidifying our position of strength with a clear focus on supporting our customers, delivering shareholder value and supporting the growth of the Cypriot economy”.
Source : Cyprus News Agency