BoC eyes bigger role in your financial future

Beyond its moves into the insurance sector, Bank of Cyprus is actively exploring additional ways to increase the bank’s overall value. According to information obtained by Kathimerini, the bank is seeking partnerships or acquisitions of companies or groups to strengthen its wealth management division.

Following its acquisition of Ethniki Insurance Cyprus, aimed at growing its insurance operations and expanding its market share in Cyprus, the bank is now turning its attention to another strategic area: wealth management. This division is seen as a key driver of non-interest income. Wealth management is expected to become a new battleground among Cyprus’ banks, with competition in the sector likely to intensify.

In the current economic climate, where inflation is stabilizing, interest rates are falling, and deposits are no longer generating the returns they once did, banks are focusing more on meeting the investment needs of their clients. Bank of Cyprus is no exception. It aims to position itself more strongly in the investment services space to maintain its upward trajectory.

So far, no final decision has been made on whether the bank will proceed with a strategic partnership or a full acquisition, but the first option is currently viewed as more realistic.

Strong profits fueling strategic shifts

Bank of Cyprus’ strong financial position, reflected in its €117 million profit for the first quarter of 2025, gives it the confidence and flexibility to move ahead with structural changes that strengthen its operating model. This approach was evident in the acquisition of Ethniki Insurance Cyprus and could be repeated if rumors about another potential insurance company buyout in Cyprus prove true.

Broadly speaking, the bank is focused on creating long-term value and maintaining its positive momentum. In its latest financial results, the bank said it remains focused on growing revenue through optimal capital management, including expanding into insurance and digital services, to diversify income through non-banking activities.

It also noted that it is pushing to improve revenues through initiatives that carry lower capital requirements, with an emphasis on fee and commission income, insurance operations, and other non-banking services. The bank is also leveraging its digital capabilities in these efforts.

€69 million in non-interest income

Bank of Cyprus generated €69 million in non-interest income in the first quarter of 2025, up from €68 million in Q4 2024 and €63 million in Q1 2024. This represents a 1% increase quarter-on-quarter and a 10% increase year-on-year.

The breakdown includes

€44 million in net fees and commission income,
€9 million in net foreign exchange and financial instruments trading gains,
€12 million from insurance operations,
€1 million in profits from revaluation and sale of investment properties and inventory,
€3 million in other income.

The quarterly increase was mainly driven by a seasonal dip in fee income, which was partially offset by growth in insurance revenue and gains from property-related transactions. The annual increase is attributed to stronger fee and commission income, higher insurance profits, and better trading performance. These non-interest revenues covered nearly 80% of the group’s total operating expenses.

Dividend decisions expected after H1 results

Bank of Cyprus is expected to decide on potential interim dividends after it announces its half-year results. As stated in its financial disclosures, the bank’s decisions on future dividends, whether interim or final, including proposed payout amounts and the balance between cash distributions and share buybacks, will take into account market conditions as well as the bank’s capital and liquidity planning at the time.

To recap, the bank previously proposed a total distribution of €241 million for 2024, €211 million in cash dividends, and up to €30 million in share buybacks. This 2024 payout represents 50% of the group’s adjusted profit, excluding one-off items, for the year ended 31 December 2024.

*This article was translated from its Greek original