Bank of Cyprus CEO Declares 2023 a Milestone Year with Dividend Payment Highlighting Success
In a significant announcement that underlines its resurgence and financial health, the Bank of Cyprus has declared a notable dividend payout for 2023. At its annual general meeting, CEO Panicos Nicolaou revealed a dividend of €22.3 million, marking a 14 percent payout ratio of the adjusted recurring profits for the year 2022. This move not only confirmed the bank’s robust transformation but also spotlighted its diversified and profitable stance in the banking and financial services sector.
Nicolaou took the opportunity to reflect on the bank’s accomplishments, especially highlighting the issuance of €220 million AT1 capital securities. This successful issuance, drawing interest from around 240 institutional investors and being 12 times over-subscribed, underscored the bank’s restored credibility and economic resilience on the international stage. The issuance, celebrated as the Best Financial Institution Bond in South East Europe by EMEA Finance, marked a re-opening of the euro-denominated AT1 debt market after previous market closures due to geopolitical uncertainties.
The CEO underscored Cyprus’ economic stamina amidst challenges, with a noteworthy GDP growth of 2.5 percent in comparison to the euro area’s growth, considerably aided by a surge in tourism. The island welcomed 3.8 million tourists, with revenues eclipsing €3 billion, surpassing pre-pandemic levels and illustrating a robust economic rebound. Additionally, Cyprus enjoyed a comparatively lower inflation rate, contributing to a favorable economic outlook.
Emphasizing the bank’s strategic initiatives, Nicolaou championed the remarkable reduction in non-performing exposures (NPEs) and improved capital ratios that have positioned the bank for sustained profitability. The year 2023 saw the bank attain a Return on Tangible Equity (ROTE) of 24.8 percent and a significant leap in profit after tax to €487 million, far exceeding initial targets.
The CEO was particularly proud of the augmented shareholder returns, with a substantial increase in distribution from the 2023 earnings, amounting to €137 million. This figure includes a proposed cash dividend of €112 million and an inaugural share buyback program, signifying a confident stride towards rewarding stakeholders.
Looking ahead, Nicolaou outlined the bank’s continued focus on digital transformation, aiming to enhance customer experience and operational efficiency through innovations like the Quickhub digital branch and the Jinius Ltd digital platform. These advances signify a shift towards more intuitive and customer-centric banking services, aligned with global digital trends.
In addressing the bank’s social and environmental responsibilities, Nicolaou reaffirmed the institution’s commitment to ESG principles, celebrating the bank’s contributions towards the oncology center and societal support networks. Furthermore, the bank’s stride towards gender equality in executive roles and its notable AA rating in the MSCI ESG Ratings assessment underscore its dedication to sustainable and inclusive growth.
Concluding the meeting, both Nicolaou and Group Chairman Takis Arapoglou reflected on the bank’s transformative journey and its readiness to navigate future challenges. Their foresight into maintaining a diversified business model, prioritizing high-quality lending, and deepening the bank’s ESG agenda highlight a strategic path towards long-term success and stakeholder value creation.
In summary, 2023 has been hailed as a milestone year for the Bank of Cyprus, signifying a period of groundbreaking achievements and setting a strong foundation for future endeavors. With a committed leadership, the bank is poised to continue its trajectory of growth, sustainability, and innovation, reinforcing its position as a leading financial institution in Cyprus and beyond.
