Vote of confidence from London investors
Bank of Cyprus is raising the bar on its financial goals for 2023-2024, sending a loud and clear message - both in Cyprus and beyond - about the robustness of its decisions as well as its commitment to achieving its strategic objectives.
These important announcements came from Bank of Cyprus' management team during the course of an Investor Update event that took place in London on Thursday, 8 June 2023. The announcements impressed investors and economic analysts alike.
Attending and addressing the highly successful event was Christakis Patsalides, special economic advisor to the President of the Republic.
Increase in ROTE
Investors were told that ROTE (Return on Tangible Equity) performance has been revised upwards, expected to come to 17% in 2023 and over 14% in 2024. For the record, last February Bank of Cyprus had announced that ROTE would be over 13% annually.
Net interest income is expected to exceed €650 million in 2023, and €625 million in 2024. In addition, it's anticipated that interest income in 2025 will be lower than that in 2024, reflecting the lower forecasts for the ECB's 2.5% deposit facility rate. The quality of Bank of Cyprus' loan portfolio meanwhile is expected to further improve in the absence - for the time being - of any signs of deterioration. Therefore the NPL ratio should drop below 3%. This performance is expected to help boost the Group's capital base, leading to robust capital indicators and healthy capital reserves.
Bank of Cyprus is the first lender in Cyprus and Greece to have received approval from the ECB for a dividend payout. The Bank aims to deliver consistent yield to its shareholders. The payment of dividends is expected to undergo a conservative incremental increase, so that the payout ratio will range from 30% to 50% of adjusted profitability before non-recurring items.
Bank of Cyprus CEO Panicos Nicolaou explained to investors how the organisation has set for itself a new trajectory, rid of the burdens of the past, and how it will make the most of its leadership position in the banking sector, evolving technologically and financially as it aims for sustainable profitability in the coming years.
Other than Mr Nicolaou, speakers at the event included Takis Arapoglou, Chairman, Eliza Livadiotou, Executive Director Finance; Demetris Nicolaou, Chief Digital Officer; and Louis Pohanis, Director Insurance Business.