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Bank of Cyprus Receives Notable Ratings Upgrade By Fitch

by News Editor

March 18, 2025

In a remarkable financial development, Fitch Ratings has elevated the ratings of the Bank of Cyprus Public Company Limited (BoC) from ‘BB+’ to ‘BBB-‘, indicating a strong positive outlook. This upgrade underscores the bank’s enhanced asset quality and robust capitalization.

The rating improvement is largely attributed to the bank’s strategic reduction in problematic legacy assets, such as non-performing exposures (NPEs) and net foreclosed properties. This has enabled a healthier capital structure with reduced encumbrance by unresolved problem assets.

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Fitch notes that despite lowering interest rates, BoC’s profitability remains solid thanks to its competence as the largest domestic bank in Cyprus. With consistent deleveraging, it is poised for ongoing financial stability.

Prospective Economic Growth For Cypriot Banks

The favorable outlook anticipates better business and financial prospects amidst Cyprus’s economic growth, with decreasing unemployment and lower private sector debt. BoC’s plans to expand into wealth management and insurance activities stand to gain from these economic trends.

Expectations are that the ratio of BoC’s problem assets will drop below 5% within two years, thanks to diminishing NPE portfolios and active disposals of foreclosed assets. Last year, the bank’s operating profit/risk-weighted assets (RWA) ratio was a robust 5.4%, indicating a sustainable path forward.

Financial Strength And Stability

By the end of 2024, BoC boasted a common equity Tier 1 (CET1) ratio of 19.2%, with a notable buffer over regulatory demands. The bank’s CET1 encumbrance by problem assets fell significantly owing to further disposals.

Supported by a strong Cypriot deposit base, BoC maintains excellent liquidity. Looking ahead, while a downgrade is improbable, Fitch warns that any economic downturn in Cyprus could impact ratings. However, further elevation of the operating environment for Cypriot banks could enhance BoC’s business profile.

If you’re curious about technological advancements in Cyprus, read AI At Work: Cyprus Among Europe’s Most AI-Skeptical Nations.

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Aradippou Municipality Accelerates Energy Independence With €4 Million Solar Farm Investment

The Larnaca suburb of Aradippou is set to witness a transformative leap in renewable energy with the announcement of a new solar farm venture worth over €4 million. This strategic investment underscores the municipality’s commitment to sustainability, energy autonomy, and its integral role in Cyprus’ green transition.

Strategic Investment In Renewable Energy

The municipality has initiated a tender for the development of the solar farm, a project slated for completion over the next 18 months. Once operational, the facility will generate 3.61 megawatts of energy, firmly positioning Aradippou at the forefront of renewable energy innovation. This initiative is exclusively financed by the municipality’s own resources, marking a decisive step towards long-term environmental stewardship and cost-effective energy solutions.

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Path To Energy Autonomy

With this expansion, Aradippou enhances its existing network of renewable energy projects. The new solar installation will complement current assets, including a large solar facility and recently introduced zero-emissions vehicles under the European Union’s Ecorouts programme. These efforts collectively demonstrate the municipality’s firm resolve to embrace a comprehensive approach to energy independence.

A Vision For A Greener Future

Mayor Christodoulos Partou emphasized the broader implications of the project: “We have a responsibility to invest in initiatives that safeguard our environment, lower energy costs, and lay the groundwork for a modern, resilient future for our residents.” His remarks reflect a broader municipal strategy where the green transition is not merely an aspirational plan but a tangible, consistently executed policy initiative.

This forward-looking project reinforces Aradippou’s dedication to energy resiliency and sustainable urban development, positioning the municipality as a leader in the global drive toward greener cities and a more secure energy future.