Announcement
Payout ratio of 30% for FY2023
Distribution to shareholders
Proposed cash dividend and intention
to commence share buyback
Nicosia, 20 March 2024
Group
Profile
The Bank of Cyprus Group is the leading banking and financial
services group in Cyprus, providing a wide range of financial
products and services which include retail and commercial banking,
finance, factoring, investment banking, brokerage, fund management,
private banking, life and general insurance. At 31 December 2023,
the Bank of Cyprus Group operated through a total of 64 branches in
Cyprus, of which 4 operated as cash offices. The Bank of Cyprus
Group employed 2,830 staff worldwide. At 31 December 2023, the
Group's Total Assets amounted to €26.6 bn and Total Equity was €2.5
bn. The Bank of Cyprus Group comprises Bank of Cyprus Holdings
Public Limited Company, its subsidiary Bank of Cyprus Public
Company Limited and its subsidiaries.
Bank of Cyprus Holdings Public
Limited Company ('BOC Holdings', or the 'Company' and together with
its subsidiaries, the 'Group') is pleased to announce that it has
obtained approval from the European Central Bank ('ECB') to pay a
cash dividend and to conduct a share buyback programme
(together, the 'Distribution'),
demonstrating the Group's strong financial performance and
strategic progress.
The Distribution corresponds to a
30% payout ratio1 for FY2023 and amounts to
€137 mn in total, comprising a cash
dividend of €112 mn
and a share buyback of up to €25 mn. The payout ratio1
for FY2023 of 30% is in line with the Distribution Policy and
represents a material increase compared to the previous year (14%
payout ratio1 for FY2022).
The Distribution reflects the
Group's robust capital position, ample liquidity and continuation
in the delivery of sustainable shareholder value.
Overall, the CET1 ratio on a
transitional basis stands at 17.4%2 as at 31 December
2023 reflecting the 30% payout ratio1 for the year ended
31 December 2023.
Distribution
Policy
The Group aims to provide a
sustainable return to shareholders. The Group's Distribution is
expected to build prudently and progressively over time, towards a
payout ratio1 of 30-50% including cash dividends and
buybacks, taking into consideration market conditions as well as
the outcome of capital and liquidity planning.
Cash
Dividend
The Board of Directors of BOC
Holdings has resolved to propose to the Annual General Meeting
('AGM') that will be held on 17 May 2024 for approval, a final cash
dividend of €0.25 per
ordinary share in respect of earnings for
the year ended 31 December 2023, a five-fold increase compared to
€0.05 in prior year.
Subject to approval at the AGM, the
cash dividend is expected to be paid on 14 June 2024 to those
shareholders on the Company's share register on 26 April 2024
('Record date'3) with an Ex-Dividend date4 on
25 April 2024. Further details will be provided in the AGM Notice
that will be published on or around 12 April 2024.
Intention of Commencement of
a Share Buyback Programme
Furthermore, the Group announces
today that following the ECB's approval, it intends to commence a
programme to buy back ordinary shares in the Company for an
aggregate consideration of up to €25
mn. It is expected that, once launched, the
programme will take place on both the London Stock Exchange and the
Cyprus Stock Exchange.
The launch and implementation of the
share buyback programme will comply with the Company's general
authority to repurchase the Company's ordinary shares as approved
by shareholders at the Company's AGM on 26 May 2023, which is
subject to renewal at the AGM scheduled to take place on 17 May
2024, and with the terms of the approval received from the
ECB.
Further details concerning the
proposed share buyback programme will be announced in due
course.
Mr.
Takis Arapoglou, Chairman of the Group commented:
'Our ongoing commitment to
delivering sustainable value to shareholders is demonstrated by our
intended distribution comprising a significant cash dividend and
our inaugural planned share buyback.
The total
quantum of cash dividend is around five times
higher than last year's dividend and reflects the Group's strong
financial and operational performance in 2023 which resulted in a
rapid organic capital build-up.
We are proud that the Bank, now in
its 125th year, is well-capitalised, diversified and
generates sustainable profitability. We remain focused on
delivering shareholder value whilst continuing to support our
customers, Cypriot society and the growth of the Cypriot
economy.'
For further information, please
contact Investor Relations at investors@bankofcyprus.com.
1.
The payout ratio is calculated on Group's adjusted
recurring profitability, defined as profit after tax before
non-recurring items (attributable to the owners of the Group)
taking into account distributions under other equity instruments
such as the annual AT1 coupon.
2.
Compared to the previously reported CET1 of 16.5%
that included a dividend accrual at the top end of the Group's
dividend policy in line with Commission Delegated Regulation (EU)
No 241/2014 principles.
3.
Record date refers to the date of the share
register where shareholders are eligible for the proposed
dividend.
4.
Ex-dividend date refers to the day where the
Company's stock begins to trade without the value of the subsequent
dividend.