The Bank of Cyprus announced profits of €353 million for the first nine months of 2025, compared to €401 million for the same period last year. Third-quarter profits remained steady at €118 million, similar to the previous quarter.
The annual decline in profits is attributed to a drop in net interest income, which fell 12% year-on-year to €548 million (from €624 million in the first nine months of 2024). This reflects the reduction in reference interest rates, partially offset by hedging actions, the ongoing increase in liquidity from rising deposits, and growth in the loan portfolio.
7% Increase in Non-Interest Income
Non-interest income rose by 7% year-on-year to €219 million (from €204 million in 2024), consisting of:
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€133 million in net fees and commissions,
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€26 million in net trading and financial instrument gains,
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€36 million from insurance operations,
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€8 million from property revaluations and sales,
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€16 million in other income.
The increase mainly reflects an €8 million insurance compensation, included in other income. Excluding this, non-interest income rose 4%, due to higher fees and property-related gains.
Net fees and commissions increased 2% to €133 million, mainly from higher non-transaction-related service fees.
The net interest margin decreased to 2.98% (from 3.60% in 2024), reflecting lower interest rates.
Net trading and financial gains totaled €26 million, slightly down from €27 million last year. This includes €22 million in FX trading gains (of which €12 million came from client FX trades) and €5 million from financial instruments. Client FX income remains a stable profit source, while the rest are considered volatile.
Insurance operations contributed €36 million, up 4% year-on-year, mainly due to higher premium income and the contribution of Ethniki Insurance (Cyprus) Ltd, acquired in July 2025. This offset increased claims from the Limassol fires in July 2025.
Total income fell 7% year-on-year to €767 million, mainly due to lower interest income.
3% Increase in Expenses
Total expenses rose 3% to €301 million (from €292 million in 2024), consisting of:
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52% personnel costs (€156 million),
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39% other operating expenses (€116 million),
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9% special levy on deposits and other fees (€29 million).
The cost-to-income ratio (adjusted for levies) increased to 35% (from 32% in 2024), reflecting lower revenues from interest rates.
Loan impairment charges rose to €28 million (from €22 million), due to more conservative assumptions amid global uncertainty.
Strong Capital Adequacy
Capital levels remain strong:
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CET1 ratio: 20.5%
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Total capital ratio: 25.4%
The Bank generated 326 basis points of organic capital during the nine months, confirming continued balance sheet strengthening.
Dividends and Share Performance
Earnings per share stood at €0.81. An interim dividend of €0.20 per share was paid in October 2025. The Bank maintains its 70% payout ratio target for 2025.
Loans and Liquidity
Lending activity grew strongly, with €2.2 billion in new loans, up 31% year-on-year, driven by business and international banking demand.
The performing loan portfolio reached €10.71 billion (+6% YTD), while non-performing loans (NPLs) fell further to 1.2%.
Deposits rose 7% to €21.5 billion, further strengthening liquidity.
CEO Statement – Focus on Strong Returns
“We achieved another quarter of strong profitability, with €353 million in after-tax profit for the nine months ended 30 September 2025,” said CEO Panicos Nicolaou.
“Our Return on Tangible Equity (ROTE) was 18.4%, based on a strong capital base (CET1 above 20%), low-risk balance sheet, resilient net interest income, high liquidity, and cost efficiency — as shown by our 35% cost-to-income ratio and an NPL ratio of 1.2%.”
He added that new lending reached €2.2 billion, up 31%, supported mainly by corporate and international banking demand. The loan portfolio grew 6%, surpassing the 2025 growth target of 4%, while deposits rose 7% to €21.5 billion.
“Our capital base remains strong, with CET1 at 20.5% and total capital ratio at 25.4%, generating 326 basis points of organic capital. Tangible book value per share rose 6% year-on-year to €5.86, after the interim dividend of €0.20 per share. Total 2025 cash dividends amount to €0.68 per share,” Nicolaou noted.
He also emphasized that Cyprus continues to experience resilient and growing macroeconomic conditions, with GDP growth forecast at 3.2% in 2025, outpacing the Eurozone average.
The Bank therefore upgraded its 2025 ROTE target from mid-teens to high-teens, expecting to exceed 20% ROTE based on a 15% CET1 ratio.
“Our disciplined strategy execution and consistent goal achievement strengthen our confidence in future prospects. We plan to update our strategic and financial targets in Q1 2026, while maintaining our commitment to supporting customers, the economy, and delivering strong shareholder returns,” he concluded.