Bank Of Cyprus Holdings Public Limited Company (BOCH) Q3 2024 earnings summary

Executive summary

• Profit after tax for 9M2024 reached €401 million, up 15% year-over-year, with EPS at €0.90 and ROTE at 22.9%, both ahead of 2024 targets.

• Net interest income rose 9% year-over-year to €624 million, supported by higher rates and strong liquidity, while non-interest income declined 9% year-over-year but increased sequentially in Q3.

• Cost-to-income ratio for 9M2024 remained low at 32%, with Q3 at 35% due to voluntary exit plan and inflation-driven expense growth.

• Asset quality improved, with NPE ratio reduced to 2.4% (0.1% net), NPE coverage at 96%, and cost of risk at 29 bps.

• Regulatory CET1 and total capital ratios at 19.1% and 24.3% including Q3 profits and 50% distribution accrual.

Financial highlights

• Net interest income for 9M2024 was €624 million (+9% yoy); Q3 NII at €204 million, stable quarter-on-quarter.

• Non-interest income for 9M2024 was €204 million (-9% yoy); Q3 non-NII at €75 million, up 14% sequentially due to one-off revaluation gain.

• Total operating expenses for 9M2024 were €266 million (+7% yoy), mainly due to staff and other operating costs.

• Gross performing loan book reached €10.0 billion (+3% since Dec 2023); new lending at €1.7 billion (+9% yoy).

• Tangible book value per share increased 20% year-over-year to €5.56.

Outlook and guidance

• Targeting a 50% payout ratio for 2024, aiming for over 10% distribution yield; regulatory approval for dividends expected to be lifted in January 2025.

• High-teens ROTE on 15% CET1 ratio reiterated for 2025, despite anticipated faster ECB rate cuts.

• Loan growth guidance remains low single-digit per annum for 2024-2025, supported by GDP growth.

• Non-interest income and fee growth expected to track economic growth; cost of risk to normalize at 40-50 bps in 2025.

• Net interest income for FY2024 guided at c.€800 million; CET1 generation >300 bps.