• Target for dividend distribution of 50% of adjusted profitability for 2024, depending on market conditions and required approvals

• Strong new lending of €1.2 billion, increased by 10% year-on-year

• Performing loan portfolio of €10.1 billion, up 3% since December 2023

• Net profit of €270 million, up 23% year-on-year, of which €137 million in Q2 2024, up 4% quarter-on-quarter

• Basic earnings per share of €0.61 for H1 2024 (compared to €0.49 for H1 2023)

• Return on Tangible Equity (ROTE) of 23.7% for H1 2024

• Cash dividend payment of €112 million in June 2024 and start of share buybacks worth €25 million in April 2024

• Moody's upgraded the bank's long-term credit rating to Baa1 in July 2024, two notches above investment grade

The Bank of Cyprus reported a 23% increase in net profit, reaching €270 million for the first half of 2024, compared to the first half of 2023, and announced the upgrade of its financial targets for 2024 and 2025. The bank also reiterated its goal of distributing 50% of adjusted profitability for 2024, depending on market conditions and necessary approvals.

On a quarterly basis, net profit increased by 4% in Q2 to €137 million.

Basic earnings per share amounted to €0.61 for H1 2024, compared to €0.49 for H1 2023. Return on Tangible Equity (ROTE) was 23.7% for H1 2024.

New lending of €1.2 billion was up 10% year-on-year, while the performing loan portfolio of €10.1 billion was up 3% since December 2023.

In a written statement, the Group CEO Panicos Nicolaou said the bank has "achieved another quarter of strong profitability, demonstrating the sustainability of our business model."

"For the sixth consecutive quarter, we achieved a Return on Tangible Equity (ROTE) above 20%, significantly exceeding the targets set for 2024 in February 2024. This strong performance was supported by continued robust and resilient net interest income, disciplined cost management despite inflationary pressures, and low credit loss charges. Given the strong performance and the favorable macroeconomic environment, we are upgrading our financial targets for 2024 and 2025"

According to Mr. Nicolaou, "the quality of the loan portfolio remains healthy and continues to improve, with the NPL ratio falling below 3% for the first time."

NPLs decreased to 2.8% of total loans as of June 30, 2024, compared to 3.4% on March 31, 2024, and 3.6% on December 31, 2023. The NPL coverage ratio was 85% as of June 30, 2024, compared to 77% on March 31, 2024, and 73% on December 31, 2023.

"The Cypriot economy continues to show strength and resilience, despite geopolitical uncertainties. Cyprus's growth rate is expected to increase by approximately 2.9% in 2024, surpassing the eurozone average," noted the CEO of the Bank of Cyprus.

He also stated that "our strong financial and operational performance is reflected in higher credit ratings, as Moody’s, S&P, and Fitch recently proceeded with upgrades."

Regarding the upgraded financial targets, the Bank of Cyprus mentioned that supported by the favorable interest rate environment and the positive deposit trend, the net interest income target for 2024 has been upgraded from greater than €670 million to approximately €800 million. The upgrade is mainly due to the interest rate environment being more resilient than initially expected, with the rate of interest rate reduction extending.

For 2025, net interest income is expected to be lower than 2024 levels but remain strong, exceeding €700 million, based on the ECB deposit facility rate and 6-month Euribor at an average of 3.0%, reflecting mainly lower expected interest rates and higher deposit costs compared to 2024.

For 2025, the cost-to-income ratio adjusted for the special deposit tax is expected to be below 40%, mainly reflecting lower revenues due to the gradual reduction in interest rates.

Overall, the Group expects to achieve a ROTE of over 19%, which translates to over 24% when calculated on a CET1 ratio of 15% for 2024. For 2025, the Group expects to achieve a ROTE in the mid-teens, corresponding to high-teens levels when calculated on a CET1 ratio of 15%.

Regarding the loan portfolio quality, according to the Bank of Cyprus' H1 financial results, the Group's NPL ratio fell to 2.8% on June 30, 2024, indicating alignment with the 2024 target of an NPL ratio below 3%. The Group aims for an NPL ratio below 2.5% by December 31, 2025.

The CET1 and Total Capital Adequacy Ratios, after the relevant provision for distribution, stood at 18.3% and 23.3%, respectively, as of June 30, 2024.

Shareholders' equity attributable to the owners of the Company was €2,387 million as of June 30, 2024, compared to €2,381 million on March 31, 2024, and €2,247 million on December 31, 2023.

Total revenues for H1 2024 amounted to €549 million (compared to €511 million for H1 2023, up 7% year-on-year), due to the increase in net interest income as explained above. Total revenues for Q2 2024 amounted to €273 million, compared to €276 million for Q1 2024.

Net interest income for H1 2024 amounted to €420 million, compared to €358 million for H1 2023, up 17% year-on-year. The annual increase was mainly due to the increase in interest rates on liquid assets and loans, partly offset by the low increase in the cost of term deposits and funding costs, as well as the increased cost from hedging activities.



Non-interest income for H1 2024 amounted to €129 million (compared to €153 million for H1 2023, down 16% year-on-year). The annual decrease was mainly due to lower net gains from forex trading and financial instruments, as well as lower net fee and commission income.

Non-interest income for Q2 2024 amounted to €66 million (compared to €63 million for Q1 2024, up 5% quarter-on-quarter).

Net interest income for Q2 2024 amounted to €207 million, compared to €213 million for Q1 2024, down 3% quarter-on-quarter. The quarterly decrease reflects ongoing hedging actions to reduce the sensitivity of net interest income to interest rate fluctuations, and higher funding costs following the issuance of a €300 million senior preferred green bond in April 2024, as term deposit costs remained low.

Operating profits for H1 2024 amounted to €363 million, compared to €331 million for H1 2023, up 9% year-on-year, reflecting mainly the significant increase in net interest income. Operating profits for Q2 2024 amounted to €179 million, down 2% quarter-on-quarter, due to the decrease in total revenues and the increase in total expenses as explained above.

Total expenses for H1 2024 amounted to €186 million (compared to €180 million for H1 2023, up 4% year-on-year), of which 52% was personnel costs (€96 million), 38% other operating expenses (€71 million), and 10% special deposit tax and other levies/contributions (€19 million). The annual increase was due to higher personnel costs.

Total expenses for Q2 2024 amounted to €94 million (compared to €92 million for Q1 2024, up 1% quarter-on-quarter).

Total operating expenses for H1 2024 amounted to €167 million (compared to €162 million for H1 2023, up 4% year-on-year), mainly due to higher personnel costs. Total operating expenses for Q2 2024 amounted to €86 million, compared to €81 million in Q1 2024.

The Group's total customer deposits amounted to €19,723 million as of June 30, 2024 (compared to €19,260 million on March 31, 2024, and €19,337 million on December 31, 2023), up 2% quarter-on-quarter and year-to-date.

The Bank's market share in Cyprus deposits was 37.5% as of June 30, 2024, compared to 37.5% on March 31, 2024, and 37.7% on December 31, 2023.

The loans-to-deposits ratio (after provisions) stood at 51% as of June 30, 2024 (compared to 52% on March 31, 2024, and 51% on December 31, 2023), remaining roughly stable year-to-date.

The Group's loans amounted to €10,318 million as of June 30, 2024, compared to €10,276 million on March 31, 2024, and €10,277 million on June 30, 2023, remaining roughly stable year-on-year.

New lending in Cyprus during Q2 2024 amounted to €551 million (compared to strong new lending of €676 million in Q1 2024, positively impacted by seasonality, and €462 million in Q4 2023), down 18% quarter-on-quarter.

New lending for H1 2024 amounted to €1,227 million, up 10% year-on-year, mainly due to increased demand for business loans.

As of June 30, 2024, the Real Estate Management Unit (REMU) managed repossessed properties with a book value of €790 million, compared to €836 million on March 31, 2024, and €973 million on June 30, 2023, and remains on track to achieve its target of reducing this portfolio to approximately €0.5 billion by December 31, 2025.

During H1 2024, REMU completed property sales (and transfers) of €57 million (compared to €68 million in H1 2023), with gains from property sales of approximately €3 million in H1 2024 (compared to gains of approximately €4 million in H1 2023).