The Bank of Cyprus has announced a robust financial performance for the third quarter of 2023, demonstrating significant profitability and operational efficiency gains. The bank reported a pretax profit of €153 million for Q3 2023, marking a 3.4% increase from the previous quarter and a substantial jump from €59 million in the same period last year.
Key highlights of the bank's financial outcomes include:
- A sharp rise in net interest income (NII) by 9.2% to €214 million, propelled by higher interest rates.
- An impressive after-tax profit totaling €349 million for the nine-month period ending September 30, 2023.
- Earnings per share reached €0.78, while return on tangible equity (ROTE) surpassed 20%.
- The cost-to-income ratio was significantly reduced to 31%, down from 54% last year.
The bank's strategic financial management has led to a robust net interest margin of 3.63%. Despite a slight dip from the second quarter's CET1 ratio of 15.6%, the bank maintained a stable CET1 ratio at 15.2%. This financial stability is further evidenced by Moody's (NYSE:MCO) upgrade of the bank to investment grade and an improved Long Term Deposit rating.
Amidst a challenging economic environment characterized by inflation and rising interest rates, the Bank of Cyprus has successfully extended new loans worth €1.6 billion and grown its retail-funded deposit base to €19.3 billion. The Total Capital ratio stands strong at 20.4%, with organic capital generation recorded at 345 basis points.
The bank's focus on asset quality has paid off, as there are "no material signs of asset quality deterioration," according to their latest statements. Proactive measures are in place to monitor and provide for potentially vulnerable sectors and individuals, ensuring continued resilience.
Shares of the Bank of Cyprus traded slightly lower at 259.70 pence each on Monday morning in London. However, the bank remains optimistic about Cyprus's economic prospects, predicting "strong" economic growth backed by a Q2 GDP growth rate of 2.3%. With ambitions to achieve a net interest income exceeding €650 million for the full year and maintain an equity ratio over 17%, the Bank of Cyprus is positioning itself for sustained growth in the coming months.
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