UBS issues buy on BOC

UBS has started coverage of the shares of Bank of Cyprus with a “buy” recommendation and a price target of CYP 3.72, which is 37% above the Monday closing price of CYP 2.71.

UBS explains that the reason why its bullish on the BOC shares is because it expects a major improvement in the return on equity (ROE) of the Bank to 21% as the local market harmonises with the EU and as the liberalisation of the market gathers pace.

UBS is forecasting that the loan portfolio of the Bank will surge by 23% in Cyprus and 85% in Greece during the next five years as the Bank benefits from business shifting its way from the Cooperative movement.

The investment house is forecasting that profits during 2005 will reach CYP 70 mln, in 2006 climb to CYP 94 mln while in 2007 shoot to CYP 129 mln. The Bank’s revenue is seen at CYP 417 mln in 2005 and CYP 476 in 2006.