Bank of Cyprus Group reports €133m profit after tax for first quarter of 2024

The Bank of Cyprus Group has reported profit after tax of €133m for the first quarter of this year, up 40% year-on-year, while basic earnings per share were €0.30 for Q1 2024.

“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," Bank of Cyprus Group Chief Executive Panicos Nicolaou noted.

Presenting the Group's Financial Results for the quarter ended 31 March 2024, Nicolaou continued, "We proposed a total distribution of €137 mn in respect of 2023 earnings comprising a cash dividend of €112 mn and an inaugural share buyback of up to €25 mn, corresponding to an overall payout ratio of 30%, a material increase compared to the previous year. During the first quarter of the year, we delivered a ROTE of 23.6%, the fifth consecutive quarter with a ROTE over 20%, tracking ahead of our 2024 targets."

He also noted that the Group's 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."

"This was all supported by a Cypriot economy that continues to display strength and resilience against the backdrop of geopolitical uncertainty, Nicolaou continued, adding, "In the first quarter of 2024, GDP increased by 3.3% in Cyprus and is forecast to grow by c.2.9% in 2024, expected to outpace the Eurozone average."

The Group's balance sheet is characterised by a robust capital position, high liquidity and healthy asset quality, the Chief Executive also noted.

"Our regulatory CET1 ratio stood at 17.1% as at 31 March 2024 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," he said.

Nicolaou went on to noted that, "In April 2024 the Group successfully issued €300 mn MREL-eligible green senior preferred notes, thereby finalising our 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,” he concluded.

Key highlights from the results can be seen below:

Resilient economic outlook

• 3.3% GDP growth in 1Q2024; projected to grow by c. 2.9%1 in 2024 outpacing Euro area average
• Seasonally strong quarter of new lending of €676 mn, up 46% qoq and 8% you
• Gross performing loan book at €10.0 bn, up 2% qoq

Delivering ROTE of 23.6% in 1Q2024

• NII of €213 mn down 3% qoq, reflecting modest decline in Euribor, hedging and marginally higher cost of deposits
• Total operating expenses2 down 14% on prior quarter due to quarterly seasonality and broadly flat yoy; cost to income ratio2 reduced to 29% (vs 34% in 1Q2023)
• Profit after tax of €133 mn down 4% qoq and up 40% yoy; basic earnings per share of €0.30 for 1Q2024

Liquid and resilient balance sheet

• NPE ratio at 3.4% (0.8% on net basis) down 20 bps qoq
• NPE Coverage at 77% up 4 p.p. on prior year; cost of risk at 27 bps
• Retail funded deposit base at €19.3 bn, flat qoq and up 2% you
• Highly liquid balance sheet with €7.2 bn placed at the ECB; €1.7 bn TLTRO repaid in March 2024
• In compliance with 2024 final MREL target post successful issuance of €300 mn Green Senior Preferred Notes in April 2024

Robust capital and shareholder focus

• Regulatory CET1 ratio and Total Capital ratio of 17.1% and 22.0% respectively
• Including 1Q2024 profits net of distribution accrual, CET1 ratio at 17.6% and Total Capital ratio at 22.5%
• Organic capital generation3 of 128 bps in 1Q2024
• Tangible book value per share of €5.234 as at 31 March 2024 up 26% yoy