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S&P’s Credit Rating Upgrade Highlights Strengthened Position Of Bank Of Cyprus

by THEFUTURE.TEAM

June 19, 2024

In a significant development for Cyprus’ financial sector, Standard & Poor’s (S&P) has upgraded the long-term credit rating of the Bank of Cyprus to BB+, just one notch below investment grade, with a positive outlook. This upgrade reflects the bank’s enhanced capital position and robust profit-generation capacity, coupled with a reduction in economic risks within Cyprus.

Strengthened Capitalisation and Profitability

S&P’s upgrade follows a similar improvement in Cyprus’ sovereign credit rating, signifying broader economic stability. The agency cited the bank’s strengthened capitalisation and its ability to maintain solid profitability, even in a challenging economic environment. Despite the anticipated decline in favourable conditions due to high interest rates, S&P expects the Bank of Cyprus to sustain a resilient net interest margin of 350-400 basis points in 2024 and 2025.

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Cost Control and Sustainable Profitability

S&P also highlighted the importance of strict cost control measures in maintaining sustainable profitability. The bank’s cost-to-income ratio is projected to move towards 44-46% by the end of 2026, a significant improvement from the high of 66% observed between 2018 and 2022. This reflects the bank’s strategic focus on efficiency and cost management.

Risk Normalisation and Asset Quality

The agency noted an ongoing normalisation of risk costs, including provisions for recovered real estate assets, which are expected to drop below 80 basis points. This decline is set to further fortify profitability as interest rates stabilise. S&P anticipates the bank will maintain a return on tangible equity above 16% for 2024, and around 12-13% from 2025 to 2026.

Broad Sectoral Recovery

The upgrade also reflects a broader recovery within the Cypriot banking sector. Following years of significant non-performing loan (NPL) sales, securitisations, write-offs, and recoveries, the sector has largely absorbed the impact of the 2012 financial crisis. Although the NPL ratio remains higher compared to other European banks, it continues to decline, reaching 7.3% at the end of March 2024, with a coverage ratio of 53.3%.

Future Prospects

Looking ahead, S&P expects Cypriot banks to gradually expand their operations as legacy issues from problematic loans diminish. The sector is projected to see an average lending growth of 2.5% from 2024 to 2027, marking a shift from the deleveraging trend observed in recent years.

Revaia Closes €250M Growth Fund To Fuel European And Israeli Startups

by THEFUTURE.TEAM

April 3, 2025

Revaia, Europe’s largest all-women-led venture capital firm, has successfully closed its second growth fund at €250 million, over a year after securing the first €150 million tranche. Founded in 2019 by Elina Berrebi and Alice Albizzati, the Paris-based VC firm focuses on scaling European and Israeli startups in their Series B stages and beyond.

The firm, which has already backed prominent companies like Algolia, now valued at $2.3 billion, and cloud call center Aircall, follows a sector-agnostic approach but gravitates toward B2B companies that prioritize sustainability. Revaia ensures its investments meet Environmental, Social, and Governance (ESG) criteria, from energy usage to workplace relations and governance practices.

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The new €250M fund, designed to back 12 companies, will allocate investments between €10 million and €30 million, with a third of the capital reserved for follow-on investments and M&A opportunities. Six investments have already been made, signaling the fund’s active deployment.

Overcoming A Tough Market

Despite a challenging fundraising environment, Revaia’s track record convinced investors to commit to the new fund. Albizzati points out that their portfolio companies have grown on average 4x since their initial investments. “Fundraising is in slow motion,” she admits, but she adds that platforms like Revaia, with proven performance, continue to stand out in a market dominated by a few big players.

The last year saw large global VC firms like Balderton and Index raising funds in the billions. Nevertheless, Revaia’s backing from key investors such as the French public bank Bpifrance, as well as new LPs like JP Morgan, the European Investment Fund (EIF), and BNP Paribas Cardif, illustrates strong institutional confidence. Revaia’s international LP base has also grown, now comprising 30% of the fund, with notable European and US backers.

Political Shifts And European Growth

Despite global challenges, Albizzati believes that recent political shifts, particularly the US’s ‘America First’ rhetoric under former President Donald Trump, have reinforced the need for more European capital. “Our thesis has always been that Europe needs more late-stage and growth funds to support companies, especially as they scale,” she says. “The current political context validates this need even more.”

With its growing presence and commitment to backing sustainable growth, Revaia is positioning itself as a key player in Europe’s venture capital landscape, navigating an increasingly polarized market with a clear focus on building local champions.