Key Highlights for the nine months ended 30 September 2024 Strong economic growth continues
• Cyprus GDP to grow by c.3.7%1 in 2024 outpacing Euro area average
• Strong new lending of €1.7 bn, up 9% yoy
• Gross performing loan book at €10.0 bn, up 3% since December 2023 Delivered ROTE of 22.9%
• NII at €624 mn up 9% yoy; 3Q2024 NII remains strong at €204 mn, similar to 2Q2024 despite the 25 bps reduction in interest rates
• Total operating expenses2 up 7% yoy to €266 mn, impacted by inflation
• Cost to income ratio2 remains low at 32%; 3Q2024 cost to income ratio2 at 35% and includes the impact of a small scale Voluntary Staff Exit Plan
• Profit after tax of €401 mn up 15% yoy, of which €131 mn in 3Q2024
• Basic earnings per share of €0.90 for 9M2024 (vs €0.78 for 9M2023) Liquid and resilient balance sheet
• NPE ratio reduced to 2.4%3 (0.1%3 on a net basis)
• NPE coverage at 96%3 ; cost of risk at 29 bps
• Retail funded deposit base at €20.0 bn, up 4% yoy and 1% qoq
• Highly liquid balance sheet with €7.5 bn placed at the ECB Robust capital and shareholder focus
• Regulatory CET1 ratio and Total Capital ratio at 18.6% and 23.7% respectively
• Including 3Q2024 profits net of 50% distribution accrual, CET1 ratio and Total Capital ratio increase to 19.1% and 24.3% respectively
• CET1 generation4 of 355 bps in 9M2024; of which c.140 bps in 3Q2024
• Targeting 50% payout ratio5 for 2024 at the top-end of Distribution Policy
• Tangible book value per share of €5.56 6 as at 30 September 2024 up 20% yoy
Listing on ATHEX and delisting from LSE in September 2024 to improve stock liquidity and enhance market visibility
Group Chief Executive Statement
“We continue to generate strong financial and operational results and are well positioned to deliver sustainable earnings as economies transition to a declining interest rate environment.
Our resilient net interest income, diversified business model, ample liquidity and strong asset quality have been pivotal in achieving strong profitability. We delivered the seventh consecutive quarter of ROTE of over 20% on a rapidly growing equity base. Overall, we reported a profit after tax of €401 mn for the first nine months of 2024, equivalent to €0.90 earnings per share, and 22.9% ROTE tracking well ahead against our 2024 targets, translating into strong growth of tangible book value per share.
We have generated 355 bps organic capital in the 9M2024, tracking ahead of our target to deliver over 300 bps this year. Our CET1 ratio and Total Capital ratio at 19.1% and 24.3% respectively remain robust, after accruing for our planned 50% distribution, based on 2024 profits1 . We are delighted that the current regulatory approval requirement for dividend payments is expected to be lifted in January 2025, based on our draft SREP4 letter. Our asset quality remains healthy demonstrated by an NPE ratio of 2.4%2 whilst coverage exceeded 95%.
The Cypriot economy continues to display strength and resilience against the geopolitical developments. In 2024, GDP is now forecast to grow by c.3.7%3 significantly outpacing the Eurozone average. We continue to support the domestic economy by extending €1.7 bn of new loans in the first nine months of the year, an increase of 9% compared to the same period last year. This led to an increase in our performing loan book by 3% since the beginning of the year to €10.0 bn.
In the third quarter we successfully executed our plan to list on the Athens Stock Exchange (ATHEX) in conjunction with a delisting from the London Stock Exchange (LSE). We expect the ATHEX listing to improve the liquidity of the Bank’s shares as well as the Bank’s market visibility.
Looking ahead, we will continue to execute on those levers under our control. We reiterate our target of achieving a high-teens ROTE on a 15% CET1 ratio for 2025, despite lower market rate expectations since we guided in August 2024. We will update our detailed financial targets, and we will review our distribution policy alongside our full year 2024 financial results in the context of prevailing market conditions.
Given our strong capital generation, our diversified business model and supportive macroeconomic environment, we maintain our commitment to support our customers and the broader economy, re-invest in the business and deliver attractive shareholder returns.”
Panicos Nicolaou
