Bank Of Cyprus (BOCHGR) Q3 2024 earnings summary

Executive summary

• Profit after tax for 9M2024 reached €401 million, up 15% year-over-year, with ROTE at 22.9% and EPS at €0.90, both ahead of 2024 targets.

• Net interest income rose 9% year-over-year to €624 million, supported by higher rates and strong liquidity, while non-interest income declined 9% year-over-year but was up 14% sequentially.

• Cost to income ratio remained low at 32% for 9M2024, with total operating expenses up 7% year-over-year, reflecting inflation and voluntary exit costs.

• NPE ratio reduced to 2.4% with 96% coverage; CET1 ratio at 19.1% including Q3 profits and accruals.

• Targeting a 50% payout ratio for 2024, with more than 10% distribution yield based on current share price.

Financial highlights

• Net interest income for Q3 was €204 million, stable quarter-on-quarter; nine-month NII was €624 million, up 9% year-on-year.

• Cost-to-income ratio for Q3 was 35% due to a voluntary exit plan; nine-month ratio at 32%, on track for sub-35% full-year target.

• Customer deposits grew 3% year-to-date to €19.99 billion; loan book grew 3% year-to-date to €10 billion.

• Profit after tax for 9M2024 was €401 million (+15% yoy); 3Q2024 profit after tax was €131 million.

• Tangible book value per share increased 20% year-on-year to €5.56.

Outlook and guidance

• 2024 targets reaffirmed: NPE ratio below 3%, cost to income ratio below 35%, and cost of risk at c.40 bps.

• High-teens ROTE targeted for 2025, based on a 15% CET1 ratio, despite anticipated ECB rate cuts.

• Distribution payout ratio for 2024 targeted at 50%, with >10% distribution yield; regulatory approval for dividend to be lifted from January 2025.

• Loan growth guidance remains low single-digit per annum for 2024-2025, supported by GDP growth.

• Net interest income for FY2024 guided at c.€800 million; CET1 generation >300 bps.