Bank of Cyprus counts on overseas expansion to fuel future growth

Bank of Cyprus is counting on overseas expansion to fuel future growth in earnings as its earnings base stabilizes in Greece and Cyprus, while maintaining its position as one of the largest and most efficient banking organisations in Greece-Cyprus area.

BOC Chief Executive Officer, Andreas Eliades told more than 1300 shareholders present during the Bank’s Annual General Meeting that the new expansion drive into Romania, Russia and the Ukraine would generate the next big increase in profit growth.

Eliades, who together with Charilaos Stavrakis, the Bank’s Deoputy CEO and Yiannis Kypri, Group Chief General Manager is credited for achieving the biggest turnaround in the corporate history of Cyprus, insists to pursue an organic growth and expansion drive rather than risk everything on a major takeover or merger.

Under the helm of Eliades, when his Management team came to power in 2004, the value of the Bank of Cyprus shares has risen seven-fold and profits increased by more than five-times, while the Bank has hiked the dividend from zero to EUR 29 per share in 2006, for a near 50% dividend payout to shareholders.

Eliades said net profit climbed to EUR 317 mln in 2006 from EUR 67 mln in 2004, while in the first quarter of 2007, the Bank reported EUR 107 mln in net profit.

Bank of Cyprus targets for the coming three years to increase the contribution of its overseas operations to 70% of loan income, with Greece accounting for 50% and 20% from Romania, Russia and Ukraine.
The Group aims to increase the number of its branches in Greece to 200 by 2009.

Eliades also referred to the profit target for 2007, where the Bank expects EUR 415 mln in net profit, up 31% YoY compared to 2006 and for maintaining earnings growth of 25% in period 2007-2009.

Referring to the overseas operations, Eliades said the Bank commenced leasing operations in Romania and will open new branches by the end of the year.

In Russia, the group is targeting new branches until the end of the year and has already 30 staff.

“We shall be counting on our existing 30.000 Russian customers who already bank with us through our International Banking Unit to provide the base on which we can build a sustainable and profitable operation,” said Eliades.

He also confirmed that the Bank will soon make an important announcement regarding the acquisition and or opening of operations in the Ukraine.

“I have a big responsibility towards you for your strong support which gives us the strength to continue on our current course, which in the end will benefit you, our dear shareholders,” said Eliades, proud to have achieved an overwhelming show of support and strength at the AGM, where the Bank collected more than 60% voting proxies in favour of Management, which is seldom seen in a major and highly diversified shareholder base company like Bank of Cyprus.