Bank of Cyprus first-half net profit falls 13% as lower rates hit interest income, costs rise (updated)

Bank of Cyprus Holdings

05/08/2025 07:51

Adds details in paragraphs 3-6, CEO in paragraph 7, interim dividend in paragraph 8

Aug 5 (Reuters) - Cypriot lender Bank of Cyprus BOCH.CY on Tuesday reported a 13% year-on-year decline in net profit for the first six months of 2025, as lower interest rates reduced net interest income, while expenses rose compared to the previous year.

The bank said its first-half net profit stood at 235.8 million euros ($272.25 million), down from 271.4 million euros in the same period of last year, despite gains from non-interest income and loan growth.

Net interest income fell 12% to 368 million euros in the first half, as lower reference interest rates offset a 5% rise in gross performing loans and a 2% increase in customer deposits, which reached 20.9 billion euros.

Total expenses rose 6% to 197 million euros, driven by higher staff costs, with the cost-to-income ratio, excluding special levies, climbing to 36% from 30% a year earlier.

Non-interest income, including fees, insurance, and trading gains, rose 10% to 141 million euros, covering nearly 80% of the group’s total operating expenses, the bank said.

Return on tangible equity (ROTE) slipped to 18.4% from 23.7% a year earlier, but remained above the bank’s full-year target.

"Reflecting the strength of our performance in the first half, we reinforce our confidence in achieving a ROTE towards the upper end of our mid-teens range target in FY2025," Chief Executive Panicos Nicolaou said in a statement.

Bank of Cyprus also announced an interim dividend of 0.20 euros per share, representing a payout ratio of about 40% of first-half earnings, and said it is targeting a total 70% payout for 2025, at the top end of its 50-70% distribution policy.

($1 = 0.8661 euros)

 (Reporting by Antonis Pothitos; Editing by Kirsten Donovan)

 ((antonis.pothitos@thomsonreuters.com; +48 58 769 65 78;))