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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.

The Future Forbes Realty Global Properties

Electronic Rent Payments To Become Mandatory In Cyprus From July 2026

The New Mandate

From 1 July 2026, all rent payments for property located in Cyprus must be made through electronic payment methods, according to an announcement by the Cyprus Tax Department. The requirement is set out in Article 48A of the Law on Tax Collection and Receipts (Law No. 4/1978).

Universal Compliance Requirements

Both individuals and legal entities will be subject to the new regulation, regardless of the amount of rent or the type of property involved. Accepted payment methods include bank transfers, debit cards, credit cards and other recognised electronic payment channels.

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Enhancing Transparency And Efficiency

Under the new rules, rent payments will no longer be accepted through non-electronic methods. Implementation of the measure forms part of the broader transition toward electronic transactions in the property rental sector.

Preparing For A Digital Future

Property owners, tenants and businesses are expected to ensure that payment arrangements comply with the new requirements before the rules take effect on 1 July 2026. All qualifying rental payments made after that date must be made using electronic payment methods.