Europe

Bank of Cyprus Earnings Rise, Focus on Dividend

Bank of Cyprus, the target of a failed takeover offer by a U.S.-based investment fund, said Wednesday it plans to improve first-half earnings, further reduce labor costs and bad debt exposure, and pay dividends to shareholders. said it was.

Profit after tax for January to June surged to €50.75 million, up from €1.15 million a year earlier, with profit attributable to shareholders estimated at 11.2ca shares.

More than half of the profits were generated by non-banking operations such as insurance subsidiaries and credit card clearing houses.

The news pushed the price on the Cyprus Stock Exchange up 2.5 cents from the previous day to 127 cents, approaching a closing offer of 151 cents from Texas-based Lone Star.

The BoC Board has rejected three consecutive bids from Lone Star, arguing against the proposal. grossly underrated banking possibilities.

Minority shareholders have offered 200 cents of stock that would allow bank boards and institutional investors to reject the Lone Star deal, or to part with shares they received in exchange for lost deposits a decade ago. I’m angry about that.

The bid prompted the government to swiftly introduce legislation in parliament that could block systematic bank takeovers, as this would have a major impact on the local economy.

The bank is considered the leader with a claimed 41% market share of loans at €9.72 billion and currently has a 37% share of €18.45 billion in deposits.

Group CEO Panikos Nicolau said the bank’s profitability growth (return on tangible equity, ROTE) of 7.3% in the first half of the year puts it on track to achieve its target of double-digit ROTE in 2023 early. ‘I’m sure,’ he said.

“This lays the foundation for a meaningful return on dividend distributions expected in 2023 and beyond, subject to regulatory approvals and market conditions.”

The bank had not paid a dividend since 2011, when it received two self-funded bailouts from depositors.

By July of this year, the bank had reduced its workforce and accepted 550 employees. Voluntary retirement planThis includes a generous tax exemption bonus of EUR 200,000 per person and the Group’s workforce has been reduced by 16% to around 2,870.

Nicolau, who briefed journalists on the half-year results, said the plan was no longer subject to future job cuts. The branch office network has also been reduced by 25% this year.

Bad debt exposure decreased from 6.5% of the Group’s outstanding loans at the end of the first quarter to 5.7% at the end of the second quarter.

“We are on track to reach our target NPE ratio of approximately 5% by the end of this year and less than 3% by the end of 2025,” said Nicolaou.

The wholly owned subsidiaries Eurolife and General Insurance and the controlling interest in card clearing company JCC generated €26.4 million, representing 52% of the group’s after-tax profit.

 

post Bank of Cyprus Earnings Rise, Focus on Dividend first appeared financial mirror.

https://www.financialmirror.com/2022/08/31/bank-of-cyprus-profits-up-eyes-on-dividend/ Bank of Cyprus Earnings Rise, Focus on Dividend

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