Bank Of Cyprus (BOCHGR) Q1 2025 earnings summary

Executive summary

• Maintained leading market position in Cyprus with a diversified business model across banking, insurance, and payment solutions, and profit after tax reached €117 mn in 1Q2025, up 9% sequentially, with ROTE at 18.3% and EPS at €0.27.

• Record new lending of €842 mn, up 16% quarter-on-quarter and 25% year-on-year, with gross performing loans at €10.45 bn, up 3% since December 2024.

• Retail funded deposit base increased to €20.7 bn, up 1% quarter-on-quarter and 7% year-on-year; CET1 ratio at 19.9% and Total Capital ratio at 25.0%.

• NPE ratio reduced to 1.8% with coverage at 122%, following successful NPE sales and robust credit quality; cost to income ratio at 34%.

• Announced acquisition of Ethniki Insurance Cyprus for €29.5 mn, expected to close in H2 2025, to further diversify income and strengthen insurance presence.

Financial highlights

• Net interest income for Q1 2025 was €186 mn, with a net interest margin of 3.13%, down 21 bps sequentially and 57 bps year-on-year.

• Non-interest income grew 10% year-on-year to €69 mn, driven by higher fees and insurance contributions.

• Total income was €255 mn, down 4% sequentially and 8% year-on-year; operating profit at €160 mn, up 5% quarter-on-quarter.

• Cost to income ratio at 34%, among the lowest in Europe, though higher than last year due to lower NII.

• ROTE exceeded 18%, with tangible book value per share up 15% year-on-year to €6.04.

Outlook and guidance

• Full-year 2025 guidance confirmed: NII expected below €700 mn, stabilizing above €650 mn in 2026; cost to income ratio ~40%, cost of risk at lower end of 40-50 bps, and organic capital generation ~300 bps.

• Loan book growth target of 4% for 2025 and 2026 maintained, supported by domestic and international expansion.

• Distribution policy upgraded to 50-70% payout ratio, with interim dividends under consideration.

• Confident in maintaining high-teens ROTE and robust capital ratios despite lower interest rate environment.