Bank of Cyprus announces €117m profit and record new lending of €842m in Q12025

“The Bank of Cyprus delivered another strong quarterly performance in the first 3 months of 2025,” Bank of Cyprus Group Chief Executive Panicos Nicolaou has said, announcing the Group Financial Results for the quarter ended 31 March 2025 which included €117m profit and record new lending amounting to €842m.

“Our key performance metric, Return on Tangible Equity, remained strong at 18.3%, above our full year target for midteens returns – despite the impact of falling interest rates,” he continued, adding, “Our business model remains efficient with a cost to income ratio of 34%1 whilst credit quality remained robust with NPEs remaining below 2% and cost of risk under 40 bps.”

As Nicolaou continued, the Group’s balance sheet “continues to benefit from a robust capital position and high liquidity. Strong organic capital generation of c.110 bps combined with a positive c.100 bps impact from CRR III initial implementation in January 2025, increased our CET 1 ratio and Total capital ratio to 19.9%2 and 25.0%2 respectively, including 1Q2025 profits, net of distribution accrual at 70% payout ratio3.”

Also, the Group’s performing loan book grew by 3% from December 2024 to €10.45b, supported by strong new lending, which was up 16% on the prior quarter.

“Our international loan book is now c.10% of our performing loan portfolio, up 34% year on year,” the CEO noted.

“As part of our strategy to expand our insurance operations and further improve our diversified business model,” Nicolaou continued, “we signed a binding agreement to acquire 100% of Ethniki Insurance Cyprus Ltd for a total consideration of €29.5m in April 2025. This in-fill acquisition further solidifies our leading positions in the Life and Non-Life insurance sectors in Cyprus and will bolster the contribution of Non-NII to the Group’s revenues.”

The Bank of Cyprus Group Chief Executive also noted that, “The Cypriot economy continues to demonstrate resilience and good growth, despite increased global economic uncertainty. The economy expanded by 3.4% in 2024, significantly outperforming the Eurozone average, with this trend expected to continue.”

“Whilst Cyprus’ direct exposure to higher US trade tariffs is limited, we remain alert to risks that Cyprus might experience indirect effects, via the European economy, Nicoalou underlined, adding, “The decisive management actions taken in recent years ensure that Bank of Cyprus faces the current heightened global economic uncertainty from a position of strength. This enabled us to recently upgrade our Distribution Policy with a 50-70% payout ratio4 starting from 2025. We will also consider the introduction of interim dividends.”

“Our strong performance in the first quarter provides us with confidence about our ability to achieve our 2025 targets. We remain fully focused on supporting our customers and the Cypriot economy while delivering attractive returns to our shareholders,” Nicolaou concluded.

Key Highlights for the quarter ended 31 March 2025

Economic growth to continue

• Cypriot economy is resilient and growing, despite increased global economic uncertainty
• Record new lending of €842m in 1Q2025, up 16% qoq
• Gross performing loans at €10.45b, up 3% vs December 2024

Attractive returns

• Profit after tax of €117m, up 9% qoq; Basic earnings per share of €0.27
• Cost to income ratio1 at 34%
• ROTE of 18.3%

Liquid and resilient balance sheet

• NPE ratio reduced to 1.8%
• Cost of risk at 39 bps
• Retail funded deposit base at €20.7b, up 1% vs December 2024

Strong organic capital generation

• CET1 ratio at 19.9%2 and Total Capital ratio at 25.0%2 , including 1Q2025 profits net of distribution accrual
• Positive impact of c.100 bps from CRR III initial implementation in January 2025
• Organic capital generation3 of 111 bps in 1Q2025

Distributions

• 50% payout ratio for 2024; €211m cash dividend to be paid on 25 June 20254 and €30m buyback launched in February 2025
• Distribution policy at 50-70% payout ratio from 2025
• Introduction of interim dividends to be considered

Strong 1Q2025 performance underpins confidence in outlook