BOCH shares gain on dividend news

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Shares in Bank of Cyprus Holdings, parent of the island’s leading lender, traded at recent highs on the London and Cyprus stock exchanges on Thursday, a day after the bank announced a 25c dividend and a €25 mln share buyback.

BOCH opened at 307p on the London Stock Exchange (CSE: 367c), having recorded an intra-day high of 316p, the best share price since it listed on the LSE at 285p on January 31, 2017, hitting rock-bottom 39.6p on September 30, 2020 and recovering above 300p at the end of 2023.

At end of day on Thursday it was trading at 309p/369c.

The 25c dividend on the €487 mln in after-tax profits for 2023, is the second reward to shareholders in well over a decade, following the 5c paid out for 2022.

CEO Panicos Nicolaou said in February when announcing the results for last year, that having paid out a dividend from 14% of profits for 2002, the aim was to increase the distribution to 30-50% over the next few years.

BOC said in an announcement on Wednesday that it had obtained approval from the European Central Bank to pay a cash dividend and to conduct a share buyback, demonstrating the Group’s strong financial performance and strategic progress.

The distribution corresponds to a 30% payout ratio for FY2023 and amounts to €137 mln, comprising a cash dividend of €112 mln and a share buyback of up to €25 mln.

Last year’s profit distribution amounted to €22 mln.

Subject to approval at the shareholders’ annual general meeting on May 17, the cash dividend of 25c a share (less 20% defence tax and GHS contribution) will be paid on June 14 to stock holders registered as at April 26. As of April 25, BOCH will be trading ex-dividend.

The bank said in its announcement that details will be provided in the AGM notice that will be published on April 12.

Dividend cheques

A spokesperson said that bank is considering all possible alternatives to avoid, if possible, the issuance of cheques for the dividend payout, that take time to be delivered by post and require a further deposit in the beneficiary’s account, whether with Bank of Cyprus, or any other commercial bank in Cyprus.

As regards the share buyback, this will take place on both the London Stock Exchange and the Cyprus Stock Exchange, and that two brokerage firms will be tasked with this transaction.

This is unrelated to the management’s plan to give bonuses to about 30% of its staff, all of whom also earned 11% in pay increases last year, based on the bank’s return to profitability.

Bank of Cyprus Holdings Chairman Takis Arapoglou

Bank of Cyprus Holdings Chairman, Takis Arapoglou, said that, “our ongoing commitment to delivering sustainable value to shareholders is demonstrated by our intended distribution comprising a significant cash dividend and our inaugural planned share buyback.

“The total quantum of cash dividend is around five times higher than last year’s dividend and reflects the Group’s strong financial and operational performance in 2023 which resulted in a rapid organic capital build-up.

“We are proud that the bank, now in its 125th year, is well-capitalised, diversified and generates sustainable profitability. We remain focused on delivering shareholder value whilst continuing to support our customers, Cyprus society and the growth of the Cypriot economy.”