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# Bank of Cyprus lifts 2026 return target as nine-month profit rises 9% to €383m
- URL: https://www.theglobalbanker.com/bank-of-cyprus-lifts-2026-return-target-as-nine-month-profit-rises-9-to-eur383m/
- Published: 2026-11-05T23:55:17.000Z
- Updated: 2026-11-05T23:55:17.000Z
- Description: Bank of Cyprus made a profit after tax of €383 million in the first nine months of 2026, up 9%, with a return on tangible equity of 18.9%.
- Author: TGB Editorial Team
- Tags: Banking News, Europe, #newsroom, #needs-photo

Bank of Cyprus reported profit after tax of €383 million for the first nine months of 2026 on Thursday, up 9% year on year, and upgraded its full-year guidance for return on tangible equity (RoTE) to the high teens. The bank said strong lending and deposit growth, robust fee income and disciplined cost management supported profitability. RoTE for the January to September period was 18.9%, and basic earnings per share rose 9% to €0.88.

Third-quarter profit after tax was €131m, broadly unchanged from the preceding quarter, and the cost-to-income ratio stood at 36%. "Capitalising on the strength of our performance, we are upgrading our RoTE guidance for 2026 to high-teens," said chief executive Panicos Nicolaou.

## LOANS, DEPOSITS AND CAPITAL

Gross performing loans reached €11.6 billion at the end of September, up 7% since the beginning of the year and 9% year on year, and Nicolaou said the expansion was driven mainly by domestic demand. The predominantly retail-funded deposit base rose to €23.5bn, 6% higher year to date and 9% above September 2025.

Asset quality remained robust, the bank said, with non-performing exposures at 1% of its portfolio. It recorded a net release of 14 basis points in its cost of risk, driven by reversals relating to specific customers.

The CET1 capital ratio was 20.6%, including retained third-quarter profits and after accounting for ordinary distributions at the upper end of the bank's policy, with a total capital ratio of 25.2% on the same basis. The bank generated 341 basis points of organic capital in the nine months and said this put it on course to exceed its full-year guidance of 350 to 400 basis points.

## ECONOMY AND ACQUISITION

Nicolaou said the Cypriot economy continued to expand despite ongoing geopolitical uncertainty, with official forecasts pointing to growth in gross domestic product of around 3% in 2026\. Those official projections had recently been upgraded from approximately 2.5%, the bank said, pointing to expected continued outperformance relative to the euro area.

In October 2026 the bank completed its acquisition of performing loans and deposits from Cyprus Development Bank, part of a strategy of growing through both organic expansion and acquisitions. It took over performing loans with a gross book value of approximately €130m and deposits of approximately €440m. The bank estimated a modest positive impact on its income statement and a negative effect on capital of approximately 30 basis points.

## SHAREHOLDER PAYOUTS

Under a distribution policy introduced in March 2026, Bank of Cyprus pays out between 50 and 70% of adjusted recurring profitability through cash dividends and share buybacks. It paid an interim dividend of €0.24 a share in October 2026, approximately €105m in total and a 20% increase year on year. For 2026 it is targeting an ordinary distribution at a 70% payout ratio plus a possible top-up dividend of up to 20%, bringing the total to as much as 90%.

For 2027 and 2028 the bank is targeting an ordinary distribution at 70% with a potential top-up dividend of up to 30%, a total payout of up to 100% a year. The board will consider any top-up each year alongside the full-year financial results, subject to market conditions and capital and liquidity planning. Tangible book value per share has risen 11% since December 2025 to €6.21.

## THE TGB VIEW

Bank of Cyprus reported a RoTE of 18.9% for January to September, while National Bank of Greece, which also operates in Cyprus through a local subsidiary, reported 15.7% before one-offs for the first nine months of 2026\. Bank of Cyprus gave a CET1 ratio of 20.6% including retained third-quarter profits and after accounting for ordinary distributions, and NBG reported a CET1 ratio of 17.5%. NBG's nine-month profit after tax was €996m, against €383m at Bank of Cyprus. The next step to watch is the full-year results, when the Bank of Cyprus board will consider any top-up distribution.

*Related: [Bank of Cyprus declares €0.24 interim dividend as SSM moves to drop approval rule](https://www.theglobalbanker.com/bank-of-cyprus-declares-eur0-24-interim-dividend-as-ssm-moves-to-drop-approval-rule/)*