The net profit of Bank of Cyprus after deducting all taxes amounted to 487 million euros in 2023.
This was announced by the management of the main financial institution of Cyprus on Monday, February 19.
By the way, in just one year, the bank managed to increase the figures by more than 8 times! For comparison, for the same period in 2022 Bank of Cyprus earned 57 million euros. According to the financial institution, profitability increased due to high-interest rates.
Bank of Cyprus' performance has been excellent. Net profit after paying all necessary taxes approached the €500 million mark," CEO Panicos Nicolaou said at a press conference to announce Bank of Cyprus' results.
Nicolaou emphasized that despite the rise in interest rates, the bank managed to issue an impressive number of new loans, which totaled 2 billion euros. Bank of Cyprus' loan servicing portfolio currently stands at €9.8 billion. Net interest income in 2023 reached €792 million, 114% higher than in 2022. At the same time, a peak of €220 million was recorded in the fourth quarter of 2023 (+3% compared to the same period in 2022).
Non-interest income of €300 million increased by 3% year-on-year and covered 88% of total operating expenses. Meanwhile, total operating expenses increased by 5% y-o-y in 2022 as measures to improve the efficiency of this ratio in 2022 partially offset inflationary pressures. The decline in the expense-to-income ratio soared to 31% (compared to 49% in 2022).
Regarding Bank of Cyprus' liquidity and balance sheet strength, the:
- The ratio of non-performing loans (NEDs) to total loans was 3.6% (1% after credit losses).
- The NED coverage rate was 73%.
- The deposit base, mainly retail, of €19.3 billion increased by 2% year-on-year and by about the same amount quarter-on-quarter.
- High liquidity on the balance sheet was recorded, with €9.6bn placed with the ECB.
Nicolaou also announced the bank's financial targets for 2024-2025. Among them:
The return on tangible equity (ROTE) target of more than 17% (calculated based on a Common Equity Tier 1 (CET1) ratio of 15%) for 2024 remains unchanged.
The target return on tangible equity (ROTE) of more than 16% (calculated based on a Common Equity Tier 1 (CET1) common equity ratio of 15%) for 2025 remains unchanged.
The net interest income target for 2024 is raised to more than €670 million.
Reduction of the ratio of past due loans to total loans to approximately 3% at December 31, 2024 and less than 3% at December 31, 2025.
The Group's dividend policy of a conservative gradual increase in the payout ratio between 30-50% is maintained.