Newsroom
Bank of Cyprus Group has reported a robust profit after tax of €220 million for the first half of 2023, a significant leap from the €43 million recorded in the same period of 2022. Notably, €125 million of these profits were achieved in the second quarter of 2023.
The bank's net Interest Income (NII) reached €358 million, showing an impressive 146% year-over-year increase. Effective cost management strategies have led to a 2% reduction in total operating expenses, resulting in an improved cost-to-income ratio of 32%.
Return on Tangible Equity (ROTE) surged from 4.9% in 1H2022 to 24.0% in the current period, primarily driven by strong NII growth. Despite the challenges posed by rising interest rates, the Bank of Cyprus maintained stable new lending at €1.1 billion.
The Non-Performing Exposure (NPE) ratio decreased by 7 percentage points year on year to 3.6%, or 0.8% on a net basis, with the coverage ratio enhanced to 78%, ensuring asset quality. The balance sheet remains highly liquid, with €9.1 billion placed at the European Central Bank.
The bank has successfully achieved its 2025 Minimum Requirement for Own Funds and Eligible Liabilities (MREL), following a €350 million senior preferred notes issuance in July 2023.
Bank of Cyprus demonstrated strong organic capital generation of approximately 220 basis points in the first half of 2023, with 120 basis points generated in the second quarter alone. The bank maintains a CET1 ratio of 16.0% and a Total Capital ratio of 21.1%.
The successful refinancing of €220 million in Additional Tier 1 (AT1) Capital Securities further underscores the bank's capital resilience. In June 2023, the bank paid a dividend with a payout ratio of 14% out of its 2022 earnings, marking the first dividend payment in 12 years.
Group Chief Executive Panicos Nicolaou attributed the increased profitability to rising interest rates and enhanced efficiency, noting that the bank is on track to achieve its 2023 targets. The bank's total income reached €511 million, with €358 million stemming from net interest income. Cost management efforts and a highly liquid balance sheet contributed to these positive outcomes.
Nicolaou highlighted that the Bank of Cyprus extended €1.1 billion in new loans during the first half of 2023, maintaining stringent lending criteria. He expressed satisfaction that the strong financial performance aligns with targets and sets the foundation for shareholder value creation and sustainable returns.
[Information sourced from CNA]
