Bank of Cyprus is raising its 2026 return on tangible equity (ROTE) target to the high teens, from the mid-teens set at its March Investor Day. The upgrade follows nine-month results showing ROTE of 18.9% and net profit of €383m.
In the same vein, the Group is raising its organic capital generation target for this year to more than 400 basis points. It is also improving its forecasts for costs and credit risk. Its distribution policy is unchanged, with a target of up to 90% of 2026 earnings.
The nine-month results have already exceeded initial targets for returns and efficiency, as explained on the results conference call. ROTE of 18.9% is above the 18.4% recorded in 9M 2025. It reached 19.4% in the third quarter.
If equity is calculated on the basis of a 15% CET1 ratio, ROTE rises to 27.2%. The Investor Day target was above 20%, and the bank is maintaining it.
Bank of Cyprus: Performance and 2026 targets| Indicator | 9M 2026 | New 2026 target | March 2026 target |
|---|
| ROTE | 18.9% | High teens | Mid-teens |
| ROTE at 15% CET1 | 27.2% | Unchanged | >20% |
| Organic capital generation | 341bp | >400bp | 350–400bp |
| Cost/income | 36% | <40% | ~40% |
| Cost of risk | 14bp release | Small net releases | Lower end of 40–50bp range |
Net profit for the nine months came to €383m, up 9% year on year. The third quarter contributed €131m, the same as the second.
For 2026, the Group is targeting an ordinary distribution of 70%, at the upper end of its distribution policy, as well as an additional dividend of up to 20%, taking the total payout ratio to up to 90% of adjusted earnings before non-recurring items.
For 2027 and 2028, the Group has set a target ordinary payout ratio of 70%, with an additional dividend of up to 30%, taking total distributions to as much as 100% of the Group’s adjusted earnings before non-recurring items each year.
Additional dividends will be reviewed annually by the Board alongside the year’s financial results and will be subject to market conditions, as well as the outcomes of the Group’s current capital and liquidity planning strategy at the time. Distributions are expected to be mainly in cash, including interim dividends, while share buybacks may be considered where appropriate.
It should be noted that in October 2026 the Bank successfully completed the acquisition of a portfolio of performing loans, deposits and certain other assets and liabilities from Cyprus Development Bank Public Company Limited (CDB), following the fulfilment of certain conditions and receipt of all required regulatory and other approvals.
The transaction was priced close to par and its perimeter includes a portfolio of performing loans worth around €130m and deposits of around €440m. The transaction is expected to have a modest positive impact on the Group’s income statement, with a limited negative impact on capital of around 30bp.