Takis Arapoglou announces increase in Bank of Cyprus’ profit distribution rate to shareholders

Chairman of the Board, Takis Arapoglou, has assured shareholders that the Bank of Cyprus will continue to increase the profit distribution rate, offering a high dividend yield, using surplus capital prudently and selectively for future organic and inorganic growth.

In his speech at the Group's annual general meeting, Arapoglou made special reference to the course taken by the bank from 2023 - a landmark year as he characterised it - to date, emphasising, among other things, that "our decision to transfer the main trading of our shares from the London Stock Exchange to the Athens Stock Exchange in 2024 increased the liquidity of our shares, significantly expanded the size and quality of our investment base and, combined with our continued strong financial performance, further increased the capitalisation of our company to over €2.0 billion."

At the same time, he indicated that "the ability to reward our shareholders in a generous, steadily growing and sustainable manner is the best recognition and reward for our success in the long process of radical restructuring of the Bank of Cyprus."

"We focused on drastically cleaning up our balance sheet, maintaining high liquidity, increasing capital, improving operational efficiency and increasing revenue, as well as on significant investments, in order to successfully compete with the best in the digital transformation race," Arapoglou underlined.

Referring to geopolitical and other challenges, such as the war in Ukraine and the Middle East, the US trade war and interest rates, the Chairman of the Board of Directors of the Bank of Cyprus expressed the assessment that the tariffs will not substantially and directly affect the Cypriot economy, which - he stressed - is expected to remain resilient.

"Similarly, we remain confident that Bank of Cyprus's excess capital adequacy and high liquidity will protect it from any problems arising from developments in global trade and market risks, allowing us to continue to meet the objectives of our guidelines," he said.

In his speech, Arapoglou also made special reference to the staff of Bank of Cyprus, assuring them that "we will continue to focus our efforts on your generous reward, creating and distributing great value to everyone in the years to come."

Read the full speech of the Chairman of the Board of Directors of Bank of Cyprus, Takis Arapoglou, translated from the original Greek below:

Dear shareholders,

At the risk of repeating myself, let me begin by reminding you of some important historical facts.

2023 was a landmark year, in which Bank of Cyprus, after 12 full years and before all peer banking groups in the region, finally received permission from the regulatory authorities to restart the payment of dividends, albeit of a small amount - with a dividend yield of 14% - for the profitable results of 2022.

This was followed in 2024, during which the dividend distribution (which combined the payment of a cash dividend and the first share buyback program) for the 2023 results increased to 30% of profits, demonstrating the Bank's steadily increasing and sustainable profitability and strong capital adequacy.

For the current year 2025 and with the lifting of regulatory restrictions on dividend distribution, we have further increased the distribution rate to 50% (again through a combination of cash dividend and share buyback program), for the Bank's results for 2024. At the same time, we have increased the target range of the distribution rate from 2025 onwards, to 50-70%.

Finally, our decision to transfer the main trading of our shares from the London Stock Exchange to the Athens Stock Exchange in 2024 has increased the liquidity of our shares, significantly broadened the size and quality of our investor base and, combined with our continued strong financial performance, further increased our company's market capitalisation to over 2.0 billion euros.

The ability to reward our shareholders in a generous, steadily growing and sustainable manner is the best recognition and reward for our success in the long process of radical restructuring of the Bank of Cyprus.

We focused on drastically cleaning up our balance sheet, maintaining high liquidity, raising capital, improving operational efficiency and increasing revenue, as well as making significant investments, in order to successfully compete with the best in the digital transformation race.

All of the above achievements are clearly not a result of higher interest rates, as some would be quick to argue.

High interest rates have certainly played a positive role, however the fact that our guidance forecasts indicate that we will continue to offer consistently high returns in the future, even after interest rates stabilise at much lower levels, indicates the success of the bold restructuring initiatives we have undertaken in recent years.

We intend to continue to increase our profit distribution rate, offering a high dividend yield, prudently and selectively using surplus capital for future organic and inorganic growth, always depending on market conditions and sustainable profitability.

A few words about issues we cannot control, but must actively monitor.

We are closely monitoring global geopolitical events in Ukraine and the Middle East, without having a clear picture of how long it will take for them to be resolved in a sustainable and peaceful manner.

So far, these events have not negatively affected Cyprus or its economy, which continues to outperform most European countries in all measurable indicators, comfortably maintaining the investment grade credit rating of both the country and its major banks.

The imposition of trade tariffs by the new US administration caused intense political, economic and financial turmoil around the world, causing chaos in the markets.

It is still early to assess the real impact of this tariff war on economies and markets, while the serious uncertainty that has been created leads to a constantly changing and complex environment, which does not allow us to make safe predictions about its final outcome.

Otherwise, interest rates, in view of the steady decline in inflation, decreased almost in parallel in Europe and the US throughout the year until the third quarter of 2024.

Then, persistent inflationary pressures in the US halted the pace of interest rate cuts, although the most recent economic data in early Q1 2025 suggested that the Fed may have more room to ease monetary policy further in order to ensure a “soft landing.”

In Europe, the ECB continued to cut interest rates in early 2025 at a much slower pace than previously, in order to support the economies of the main EU countries facing difficulties.

Now, with the trade war expected to intensify inflationary pressures, the Fed is more likely to keep interest rates higher for longer, contrary to politicians’ desire to the contrary, while in Europe the ECB will likely continue to cut interest rates to curb recessionary pressures unless inflation starts to rise due to tariffs.

Regarding Cyprus, we believe it is fairly safe to say that the tariffs will not substantially and directly affect the country's economy, which is expected to remain resilient.

Similarly, we remain confident that Bank of Cyprus's excess capital adequacy and high liquidity will protect it from any problems arising from developments in global trade and market risks, allowing us to continue to meet the objectives of our guidelines.

Dear shareholders,

After this small, but very important digression, let's return to the Bank of Cyprus.

We tend to forget that these complex and bold restructuring initiatives of recent years were implemented by people, our hard-working staff members, and it is they and their hard work that I would like all of us to recognise and celebrate today, to thank and congratulate them for their achievements and their dedication to serving our valued customers.

Over the past few years, the profile of our staff members has evolved dramatically, both in number, following extensive voluntary retirement programs, and in specialization, due to the advent of the digital age and intensive training.

Their adaptability to increasingly stringent regulatory and compliance requirements has been exemplary.

In recognition of their valuable contribution, we have carefully designed their best reward programs with the aim of retaining and motivating everyone with transparency and meritocracy, knowing full well how much we depend on them to strengthen the image of Bank of Cyprus as the employer of first choice in the country.

For all of the above and on behalf of the Board of Directors of Bank of Cyprus, I would like to once again congratulate the CEO Panicos Nikolaou and his entire executive team for their excellent cooperation with the Board of Directors of the Bank, as well as for the impeccable execution of our strategic plans and I wish them to continue with the same zeal and success during the current year.

In closing, I would also like to express my warm thanks to all my colleagues on the Board of Directors of Bank of Cyprus for the hard work and team spirit with which they have contributed so much to the success of the Bank.

Rest assured that we will continue to focus our efforts on rewarding you generously, creating and distributing great value to everyone in the years to come.

Thank you for your continued trust and support.

(Source: InBusinessNews)