The Bank of Cyprus has announced a profit after tax of €353 million for the nine months ended September 30, 2025, showcasing strong financial performance amidst favourable economic conditions.
- The Bank of Cyprus has announced a profit after tax of €353 million for the nine months ended September 30, 2025, showcasing strong financial performance amidst favourable economic conditions.
- Moreover, the successful refinancing of €300 million in Tier 2 notes at a notably lower coupon rate of 4.25 per cent has bolstered its funding profile.
Bank of: Strong Financial Results
Bank of Cyprus CEO Panicos Nicolaou expressed satisfaction with the results, stating, “We are pleased to announce another set of strong financial results, generating in the first nine months of 2025 a profit after tax of €353m.”
This profit illustrates the bank’s resilience in net interest income, buoyed by the current interest rate environment, robust liquidity, and efficient cost management. The third quarter alone saw a profit after tax of €118 million, consistent with previous quarters.
Efficiency and Profitability Metrics
The Bank of Cyprus maintained a cost-to-income ratio of 35 per cent, indicative of ongoing efficiency enhancements. The return on tangible equity (ROTE) for the period reached 18.4 per cent, and basic earnings per share stood at €0.81, further highlighting the bank’s consistent profitability.
Increased Lending Activity
New lending surged to €2.2 billion in the first nine months of 2025, marking a significant 31 per cent increase year-on-year, largely driven by demand from international markets and corporate clients. The bank reported that gross performing loans rose to €10.71 billion, a 6 per cent increase since December 2024.
“During the first nine months of 2025, we saw healthy balance sheet growth in customer lending and deposits,” Nicolaou stated. He noted that the growth in gross performing loans was supported by a 4 per cent increase in loan growth across Cyprus, alongside the development of their international book, positioning the bank ahead of its target for a 4 per cent loan growth in 2025.
Improved Asset Quality
The bank’s non-performing exposure (NPE) ratio further improved, decreasing to 1.2 per cent, while the cost of risk was contained at 35 basis points. Additionally, the retail-funded deposit base rose to €21.5 billion, reflecting a 7 per cent annual increase, which signifies strong customer confidence.
Robust Capital Position
Maintaining a strong capital position, the Bank of Cyprus reported a Common Equity Tier 1 (CET1) ratio of 20.5 per cent and a total capital ratio of 25.4 per cent, figures that include third-quarter profits net of distribution accrual. The bank achieved organic capital generation of 326 basis points in the first nine months, demonstrating robust internal capital creation capacity.
Moreover, the successful refinancing of €300 million in Tier 2 notes at a notably lower coupon rate of 4.25 per cent has bolstered its funding profile.
Commitment to Shareholders
In line with its dedication to shareholder value, the Bank of Cyprus declared an interim dividend of €0.20 per ordinary share in October 2025. The bank reaffirmed its distribution target for 2025, aiming for a 70 per cent payout ratio, which emphasises its confidence in sustainable profitability.
“We have maintained a strong capital position, with a CET1 ratio and Total Capital ratio of 20.5 per cent and 25.4 per cent respectively as at September 30, 2025, generating 326 bps of capital organically and after accruing a distribution at a 70 per cent payout ratio,” Nicolaou added.
Positive Economic Outlook
Management expressed optimism regarding Cyprus’ economic prospects, noting that growth continues to exceed the Euro area average, supported by a robust domestic economy and favourable business conditions. According to the Finance Ministry’s latest projections, Cyprus’ GDP is expected to grow by 3.2 per cent in real terms in 2025, surpassing the Eurozone average growth rate.
“Capitalising on this strong performance, we are raising our 2025 ROTE target today to high-teens from mid-teens and we are reaffirming our distribution target of 70 per cent payout ratio in respect of 2025 earnings which is at the top-end of our distribution policy,” Nicolaou stated.
Future Strategies and Innovations
Looking ahead, Nicolaou expressed confidence in the bank’s execution of its strategy and its ability to deliver on targets. He indicated that updates on strategy and financial targets would be provided in the first quarter of 2026. The bank remains committed to supporting its customers and the broader Cypriot economy, with a focus on delivering attractive returns to shareholders.
When asked about the surge in new loan demand, Nicolaou attributed it to strong business and international sector activity while confirming that the loan base remains within Cyprus. He also addressed the impact of European Central Bank interest rate cuts on income, stating that despite these cuts, income remains stable due to increased loan and deposit volumes.
As the banking landscape in Cyprus evolves, Nicolaou acknowledged that competition will increasingly stem from technological advancements rather than traditional banking rivals. The bank is currently focusing on enhancing its digital transformation, with plans to provide comprehensive services through its digital application.
Upcoming innovations include the option for businesses to apply for loans via mobile and a chatbot application expected to launch in the first quarter of 2026, allowing customers to submit queries about the bank’s services.
