Bank Of Cyprus (BOCHGR) H2 2024 earnings summary

Executive summary

• Delivered ROTE above 20% for two consecutive years, with profit after tax of €508 mn, up 4% year-over-year, and EPS of €1.14, up 5% year-over-year.

• Achieved record new lending of €2.4 bn in 2024, up 20% year-over-year, and gross performing loan book grew 4% to €10.2 bn.

• Maintained market leadership with 43% loan and 37.2% deposit market share, and leading positions in insurance and payment solutions.

• Upgraded distribution policy to 50-70% payout ratio starting 2025, with €211 mn cash dividend and €30 mn share buyback for 2024.

Financial highlights

• Net interest income rose 4% year-over-year to €822 mn, though 4Q2024 NII declined 3% sequentially due to lower rates.

• Non-interest income fell 9% year-over-year to €272 mn, mainly from lower insurance and transactional fees.

• Total operating expenses increased 8% year-over-year to €367 mn, driven by higher staff, IT, and marketing costs.

• Cost to income ratio remained low at 34% for FY2024.

• NPE ratio reduced to 1.9% with coverage at 111%; cost of risk at 30 bps, down 32 bps year-over-year.

• CET1 ratio at 19.2% and total capital ratio at 24.0% after proposed distributions.

• Tangible book value per share up 17% year-over-year to €5.775.

Outlook and guidance

• 2025 ROTE targeted at high-teens on a 15% CET1 ratio, with NII expected below €700 mn due to rate cuts, partially offset by 4% loan growth.

• Cost to income ratio expected at ~40% in 2025; cost of risk towards lower end of 40-50 bps.

• Distribution policy upgraded to 50-70% payout ratio, with interim dividends under consideration.

• NII expected to stabilise over €650 mn in 2026 as rates normalise.