Bank of Cyprus Q1 profits stable at €133 mln

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Bank of Cyprus Holdings announced €133 mln in first quarter profits on Thursday, up 40% year-on-year, but €5 mln short of the after-tax profits in the fourth quarter of last year.

At the same time, the bank said it will pay out a final dividend of 25c a share on 2023 earnings, which, combined with a share buyback plan worth €25 mln, helped the stock reach an all-time high of 371p on the London Stock Exchange and 424c on the Cyprus Stock Exchange.

The stock recorded an intra-day gain of 2% on both bourses and a year-to-date of about 20%.

“We had a strong start to the year underpinned by compelling financial results and the approval of a meaningful distribution, representing another important milestone in our strategic progress,” said Group CEO Panicos Nicolaou.

“We proposed a total distribution of €137 mln in respect of 2023 earnings comprising a cash dividend of €112 mln and an inaugural share buyback of up to €25 mln, corresponding to an overall payout ratio of 30%, a material increase compared to the previous year,” he said in a statement.

“During the first quarter of the year, we delivered a RoTE (return on tangible equity) of 23.6%, the fifth consecutive quarter with a RoTE over 20%, tracking ahead of our 2024 targets. Our performance was supported by continued strong net interest income, declining only modestly from the previous quarter, reflecting high rates and ample liquidity as well as our continuous focus on cost discipline and robust asset quality.”

Nicolaou said the Cyprus economy continues to display strength and resilience against the backdrop of geopolitical uncertainty. In the first quarter of 2024, GDP increased by 3.3% and is forecast to grow by 2.9% in 2024, expected to outpace the Eurozone average.

“Our balance sheet is characterised by a robust capital position, high liquidity and healthy asset quality,” the bank’s CEO said.

“Our regulatory CET1 ratio stood at 17.1% as at 31 March or 17.6% including profits in the quarter net of distribution accrual. Organic capital generation was again strong at c.130 bps. Our tangible book value per share improved by 26% year on year to €5.23, reflecting our delivery for shareholder value creation.”

Nicolaou added that in April, the Group successfully issued €300 mn MREL-eligible green senior preferred notes, thereby finalising MREL requirements and including a comfortable buffer.

“This issuance was the first ever green bond issuance for Bank of Cyprus, representing an important step to lead the transition of Cyprus to a sustainable future.

“Our positive set of financial results this quarter provides the foundations to deliver a ROTE of over 17% on a 15% CET1 ratio. We will review our financial targets alongside our 1H2024 financial results. We continue to execute our strategy, with a clear focus on supporting our customers, delivering shareholder value and assisting the development of the Cypriot economy,” the CEO concluded.