Strong profitability and efficiency
Bank of Cyprus results for 2025 confirm another year of strong and high-quality profitability, allowing the lender to maintain elevated shareholder distributions. Profit after tax reached €481 million for the year, including €128 million in the fourth quarter.
Return on tangible equity stood at 18.6%, while basic earnings per share reached €1.10, keeping performance at high levels despite a lower interest-rate environment. The cost-to-income ratio remained low at 37% on an adjusted basis, reflecting disciplined expense management and operational efficiency.
Loans and deposits drive growth
Growth in lending and deposits played a decisive role in sustaining profitability. Performing loans rose to €10.9 billion, up 8% year on year and above the initial growth target of around 4%.
New lending reached a record €3.0 billion, marking a 23% annual increase driven mainly by strong demand from businesses and international operations. This momentum highlights the resilience of domestic economic activity and the bank’s ability to support investment plans and development initiatives.
Deposits also increased by 8% year on year to €22.2 billion, with the majority coming from retail banking. The stronger deposit base, combined with higher lending, supported stable net interest income of €731 million on an underlying basis.
Although the net interest margin fell to 2.94% from 3.53% in 2024, balance-sheet expansion and asset quality helped offset part of the pressure.
Asset quality, liquidity and capital strength
Loan portfolio quality remains particularly strong. The non-performing loan ratio declined further to 1.2%, while the cost of risk stood at just 33 basis points, indicating limited new arrears formation.
Total credit losses, impairments and provisions dropped by 36% year on year on an underlying basis, strengthening the bank’s resilient balance-sheet profile.
Liquidity levels also remain robust. The liquidity coverage ratio reached 321%, with a surplus of €9.2 billion. Cash and central-bank deposits exceeded €7.9 billion, while investments at amortised cost totalled €4.8 billion, providing flexibility for funding needs and future opportunities.
On the capital front, the common equity tier 1 ratio stood at 21.0% and the total capital adequacy ratio at 25.9% after dividend provisions. Organic capital generation reached 436 basis points, while tangible book value per share increased 6% year on year to €6.10.
Shareholder distributions at 70% payout
The payout ratio for 2025 reached 70%, the top end of the bank’s distribution policy. Total dividends amount to €305 million, including €87 million already paid as an interim dividend and €218 million proposed as a final dividend subject to shareholder approval.
The full distribution will take place in cash, marking a significant increase compared with the previous year and reinforcing the commitment to strong shareholder returns.
CEO: Another year of strong performance
Chief executive Panicos Nicolaou said 2025 marked another year of strong profitability supported by solid financial and operational performance. He highlighted profit after tax of €481 million, return on tangible equity of 18.6%, and a CET1 ratio of 21.0% backed by a high-quality balance sheet.
He added that net interest income remained resilient due to loan and deposit growth despite lower interest rates, while cost discipline, strong liquidity and asset quality also supported performance.
Loans and deposits both grew by 8% year on year to €10.9 billion and €22.2 billion respectively, exceeding the lending growth target and delivering record new lending of €3.0 billion.
Nicolaou noted the proposed final dividend of €0.501 per ordinary share brings total 2025 distributions to €305 million, or €0.701 per share, fully in cash. Over the past two years, total distributions have reached about €550 million.
He also pointed to strong organic capital generation of 436 basis points, lifting CET1 to 21.0% and total capital adequacy to 25.9%, while tangible book value per share rose to €6.10.
As Cyprus’s largest financial institution, serving three quarters of the population, the bank operates in an economy expected to grow by 3.1% in 2026 compared with 1.2% across the eurozone, based on finance ministry forecasts.
The bank will brief investors on 3 March 2026, presenting strategic priorities and updated financial targets. Nicolaou reaffirmed the commitment to supporting customers and the wider economy while delivering sustainable shareholder value.
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