In 2023, the Bank of Cyprus saw remarkable financial success with an after-tax profit of €487 million, significant Net Interest Income increase, and a strong Return on Tangible Equity of 24.8 percent. Non-Performing Exposure remained stable at 3.6 percent, showcasing the bank’s solid liquidity and capital strength with CET1 and Total Capital ratios at 16.5 percent and 21.5 percent, respectively.
What financial success did the Bank of Cyprus achieve in 2023?
In 2023, the Bank of Cyprus reported an after-tax profit of €487 million, a significant increase in Net Interest Income to €792 million, and a strong Return on Tangible Equity of 24.8 percent. Non-Performing Exposure ratio was stable at 3.6 percent, with substantial liquidity and capital strength reflected in CET1 and Total Capital ratios of 16.5 percent and 21.5 percent, respectively.
A Year of Profit and Growth
The Bank of Cyprus has released its financial statements for the year ending December 31, 2023, revealing an impressive after-tax profit of €487 million. This figure marks not only a testament to the bank’s resilience but also signifies its ascendancy towards becoming a well-capitalized and robust financial institution. Group CEO Panicos Nicolaou emphasized this transformation, commending the bank’s strong financial and operational management which played a crucial role in navigating the challenges of the year.
New lending surged to €2 billion, signaling a strong demand for credit and underlying economic vibrancy. The bank’s strategic approach, centered around disciplined cost management and asset quality, enabled it to thrive in a year fraught with rising interest rates and inflationary pressures. These financial successes are further reflected in the bank’s substantial Return on Tangible Equity (ROTE) of 24.8 percent for the fiscal year.
Financial Performance Highlights
In 2023, the Bank of Cyprus’s Net Interest Income (NII) experienced a significant boost, soaring to €792 million, which is more than double the previous year’s figure. The growth trajectory continued with a 3 percent quarter-on-quarter increase, peaking at €220 million in Q4 of 2023. Non-Net Interest Income (Non-NII) also reported a steady climb, reaching €300 million and covering a commendable 88 percent of the bank’s total operating expenses.
Efficiency improvements were evident as the bank managed to keep the cost-to-income ratio down to 31 percent despite a 5 percent increase in operating expenses from the previous year. The bank also showed prowess in increasing its basic earnings per share, which hit €1.09 by the end of 2023. This is a notable leap from mere €0.12 per share in 2022 and serves as a testament to the bank’s robust profitability and sustainable financial policies.
Stability and Capital Strength
The Bank of Cyprus has demonstrated unwavering stability with a steady Non-Performing Exposure (NPE) ratio, which closed the year at 3.6 percent. This stability was accompanied by an increase in NPE Coverage to 73 percent. These figures are indicative of the bank’s prudent risk management and commitment to maintaining a strong balance sheet.
The bank’s resilience is further highlighted by its liquid position, with €9.6 billion of its assets placed at the European Central Bank. A growing retail-funded deposit base, which saw a 2 percent year-on-year increase, signifies consumer trust and the bank’s liquidity strength. In terms of regulatory capital ratios, the Bank of Cyprus stands on solid ground with CET1 and Total Capital ratios at 16.5 percent and 21.5 percent, respectively.
Future Outlook and Economic Context
Underpinning the bank’s financial success is Cyprus’s broader economic performance. The country’s GDP grew by 2.3 percent in the fourth quarter of 2023, outpacing the Eurozone average. This economic resilience, coupled with the bank’s strategic foresight, has paved the way for the Group CEO to express confidence in the bank’s trajectory entering 2024.
The Bank of Cyprus has set clear targets for the upcoming years, focusing on continued profitability and measured growth. With revised ROTE targets of over 17.4 percent for 2024 and 16.4 percent for 2025, the bank is poised to build upon its strong foundation. These ambitious goals align with the bank’s dividend policy, which seeks to progressively approach a payout ratio between 30 and 50 percent.
As the financial landscape evolves, the Bank of Cyprus remains committed to supporting its customers and fostering the growth of Cyprus’s economy. Through prudent management and customer-centric strategies, the bank is well-positioned to navigate the future and deliver value to its stakeholders.
What financial success did the Bank of Cyprus achieve in 2023?
In 2023, the Bank of Cyprus reported an after-tax profit of €487 million, a significant increase in Net Interest Income to €792 million, and a strong Return on Tangible Equity of 24.8 percent. Non-Performing Exposure ratio was stable at 3.6 percent, with substantial liquidity and capital strength reflected in CET1 and Total Capital ratios of 16.5 percent and 21.5 percent, respectively.
How did the Bank of Cyprus perform in terms of lending and financial management in 2023?
In 2023, the Bank of Cyprus experienced a surge in new lending, reaching €2 billion, reflecting strong demand for credit and economic activity. The bank’s strategic approach centered around disciplined cost management, asset quality, and operational efficiency, contributing to its robust financial performance. With a cost-to-income ratio of 31 percent, the bank was able to increase its Net Interest Income and maintain a steady Non-Performing Exposure ratio.
What indicators reflect the stability and capital strength of the Bank of Cyprus in 2023?
The Bank of Cyprus demonstrated stability through a steady Non-Performing Exposure ratio of 3.6 percent and an increased NPE Coverage of 73 percent. Additionally, the bank’s liquidity strength was evident with a growing retail-funded deposit base and a significant portion of assets placed at the European Central Bank. The bank’s regulatory capital ratios were solid, with CET1 and Total Capital ratios at 16.5 percent and 21.5 percent, respectively.
What are the future outlook and targets set by the Bank of Cyprus in light of its financial success in 2023?
Looking ahead, the Bank of Cyprus has set clear targets for continued profitability and growth. With revised Return on Tangible Equity (ROTE) targets for 2024 and 2025, the bank aims to build upon its strong foundation. These ambitious goals align with the bank’s dividend policy, which seeks to approach a payout ratio between 30 and 50 percent. The bank remains committed to supporting its customers and the growth of Cyprus’s economy through prudent management and customer-centric strategies.
