Bank of Cyprus' strategy for 2026 is built on three pillars, with the priority not being acquisitions per se, but the creation of value for its shareholders, the bank's Deputy CEO & Chief of Business Operations, Dr Charis Pouangare, said in an interview with InBusinessNews as part of the IN Business Forecasting 2026 series.
The banker went on to clarify that "if opportunities arise, they will be targeted, small-scale and aligned with the strategy and risk profile, mainly in sectors such as insurance, technology and asset management".
With regard to the banking sector, Pouangare points out that it is entering 2026 from a particularly strong standpoint, with non-performing exposures (NPEs) at very low levels and capital strengthened.
As key challenges for the sector, he highlights investment in technology and human capital, while at the same time maintaining healthy capital buffers and sustainable profitability levels.
As regards tax reform, the Deputy CEO says that "a stable, predictable, transparent and digitalised tax framework sends a clear message to foreign investors that Cyprus remains a destination that is safe, credible and business-friendly".
How do you believe the Cypriot economy will perform in the coming year and what are its prospects? What are the main risks?
The Cypriot economy has proven that it can grow at rates higher than the European average, even during periods of intense international uncertainty.
In recent years, we have seen strong growth, low unemployment and record tourism revenues and foreign direct investment, confirming the momentum and resilience of our economic model.
The main risks remain external. Geopolitical tensions, trade wars, tariffs and uncertainty in financial markets can affect the European economy and, by extension, the Cypriot economy.
At the same time, internal challenges such as toxicity and populism in the public sphere increase political and operational risk.
The answer lies in prudent economic policy, stability of rules and the swift implementation of structural reforms. And certainly not in legislative measures that affect the stability of the financial sector, such as new taxes.
How do you expect the banking sector to evolve in 2026? Trends and challenges?
The Cypriot banking sector enters 2026 from a particularly strong position. Non-performing exposures are at very low levels, while capital is strengthened.
At the same time, however, competition is intensifying—both from fewer but larger banks and from fintech companies that are claiming a share in payments and banking transactions more broadly.
There are three dominant trends: digitalisation, revenue diversification towards non-interest income (insurance, fees, asset management), and rising customer expectations for simplicity, speed and personalised services.
The challenge for the banking sector is to continue investing in technology and human capital, while at the same time maintaining healthy capital and sustainable levels of profitability.
For the Bank of Cyprus, the priority is not acquisitions themselves, but value creation for shareholders
At the Bank of Cyprus, we are optimistic that this is something we are already achieving, as we anticipated market developments years ago and today we are in an advantageous position despite intense competition.
Will we see the trend of mergers and acquisitions intensify in the banking sector as well?
We are already seeing significant moves, with Greek banking groups acquiring banks in Cyprus, as well as cross-border scenarios at Eurozone level.
These developments constitute a vote of confidence in the Cypriot economy and lead to a more concentrated and more competitive banking environment.
For the Bank of Cyprus, the priority is not acquisitions per se, but the creation of value for shareholders. If opportunities arise, they will be targeted, small-scale and aligned with the strategy and risk profile, mainly in sectors such as insurance, technology and asset management.
At the same time, the Bank maintains its significant role in the domestic system, something we strive to demonstrate on a daily basis by giving substance to the concept of the "Common of Cypriots".
What are your organisation’s plans and growth strategy for 2026?
Our strategy is built around three pillars:
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Sustainable profitability and strong capital, enabling us to continue our attractive dividend policy, invest in human capital and infrastructure, and further enhance the competitiveness of our pricing policy.
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Revenue diversification, with a strengthening of income not linked to lending interest rates, such as insurance activities, among others.
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Technological innovation, through the continuation of the significant investments we have made in recent years, always with the objective of improving the customer experience. Changes may be visible to the customer or may not be, but they certainly differentiate the overall experience.
How do you assess the impact of the new tax reform on the economy, businesses and investment attraction?
Tax reform is a critical opportunity to reinforce a framework that is already considered attractive and stable. If its final form is correct, it can enhance Cyprus' competitiveness by ensuring stable core tax rates over a multi-year horizon.
Clearly, for certain issues, a transitional period will be needed before changes are implemented. It is also very important to invest in the digitalisation of procedures in order to reduce bureaucracy.
A stable, predictable, transparent and digiatalised tax framework sends a clear message to foreign investors that Cyprus remains a destination that is safe, credible and business-friendly.
It should be noted that this environment is a prerequisite for sustainable, high value-added investments.
Decision-makers must therefore understand that tax stability is more important than tax attractiveness, meaning that any changes should be careful and well-considered, as there is no room for reversals.
