Bank of Cyprus reported profit after tax of €383 million for the first nine months of 2026, a 9% increase from a year earlier, as growth in lending and deposits, resilient fee income and cost discipline supported earnings. The lender raised its full-year return on tangible equity (RoTE) outlook to the high teens.
RoTE reached 18.9% for the nine months ended September 30, while basic earnings per share rose 9% to €0.88. Third-quarter profit was €131 million, broadly unchanged from the previous quarter. The cost-to-income ratio stood at 36%.
Follow THE FUTURE on LinkedIn, Facebook, Instagram, X and Telegram
“We continue to execute our strategy by delivering solid lending and deposit growth, whilst maintaining cost discipline and prudent underwriting standards,” chief executive Panicos Nicolaou said.
Credit And Deposit Growth Strengthen The Franchise
The bank’s gross performing loan portfolio reached €11.6 billion at the end of September, up 7% since the start of the year and 9% year over year. Growth was driven mainly by domestic demand, as the lender continued to finance businesses and households.
Deposits rose to €23.5 billion, an increase of 6% year to date and 9% from September 2025. The bank said its predominantly retail-funded deposit base provides a stable source of funding for lending and other operations.
Asset quality remained strong: non-performing exposures accounted for 1% of the portfolio. The bank recorded a 14-basis-point net release in its cost of risk, reflecting reversals related to specific customers, while maintaining what it described as prudent underwriting standards.
Capital Generation Supports Shareholder Returns
Bank of Cyprus generated 341 basis points of organic capital in the first nine months of 2026, putting it on course to exceed its full-year target of 350 to 400 basis points. Its transitional CET1 ratio was 20.3% at September 30; including third-quarter profits and accrued ordinary distributions at the upper end of policy, the ratio was 20.6%. The corresponding total capital ratio was 25.2%.
Tangible book value per share rose 11% from December 2025 to €6.21, following payment of an interim dividend. In October, the bank paid €0.24 per share, or about €105 million in total—20% more than the interim dividend a year earlier.
The bank’s distribution policy provides for ordinary distributions of 50% to 70% of adjusted recurring profitability, through dividends and potentially share buybacks. For 2026, it is targeting an ordinary payout of 70%, with a possible additional distribution of up to 20%, subject to the board’s assessment of market conditions, capital and liquidity. For 2027 and 2028, it is targeting a 70% ordinary payout and may consider an additional distribution of up to 30%.
The 2025 distribution was €0.70 per share, or approximately €305 million, equivalent to a 70% payout ratio. Based on the share price at the end of 2025, that distribution represented a 9% dividend yield.
Cyprus Economy Provides A Supportive Backdrop
Nicolaou said Cyprus’ economy remained resilient amid geopolitical uncertainty, with forecasts pointing to growth of about 3% in 2026, up from earlier projections of around 2.5%. He cited low unemployment, tourism’s recovery toward 2025 levels and the country’s strong fiscal position, including consecutive budget surpluses since 2022.
The bank said it would continue to support customers and the wider economy while pursuing sustainable shareholder returns. That outlook, alongside its lending and deposit growth, underpins its higher RoTE guidance for the year.
CDB Acquisition Adds To Balance-Sheet Growth
In October, Bank of Cyprus completed its acquisition of performing loans and deposits from Cyprus Development Bank Public Company Limited. The transaction included loans with a gross book value of about €130 million and deposits of approximately €440 million, acquired for consideration close to par.
The bank expects the deal to have a modest positive effect on income and a limited negative impact of about 30 basis points on capital. The acquisition forms part of its strategy to expand through both organic growth and selected transactions.
Capital Requirements Remain A Key Consideration
The bank said its capital ratios remained above applicable supervisory requirements. Its minimum phased-in CET1 requirement was 11.93% at the end of September, while the minimum total capital requirement was 16.52%. Capital ratios also reflect supervisory provisions related to non-performing exposures and repossessed real estate.
Bank of Cyprus reported improved performance in the 2025 European Central Bank banking stress test compared with the 2023 exercise, citing its capital position, profitability and resilient business model. The bank also said its capital planning incorporates changing regulatory buffers and requirements.
“Capitalising on the strength of our performance, we are upgrading our RoTE guidance for 2026 to high-teens,” Nicolaou said, adding that the bank remained committed to its targeted shareholder distributions.
